Category: Austria

CMS has advised Swiss ABB E-mobility AG on its Series A investment into Austrian property technology company Payuca. KPMG Law advised Payuca.

Financial details were not disclosed. 

ABB E-mobility is a Swiss electric vehicle charging solutions provider with electric vehicle chargers in over 85 markets.

Payuca is an Austrian property technology company providing a parking application that enables people looking for parking spaces in Vienna to find and use free parking spaces in private underground garages.

The CMS team included Partners Alexander Rakosi, Jens Winter, and Dieter Zandler, Lawyers Lisa Oberlechner, Johannes Scharf, and Marlene Wimmer-Nistelberger, and Associates Thomas Liegl, Andreas Lichtenberger, and Shima Babanzedeh.

The KPMG Law team included Partners Wendelin Ettmayer and Elisabeth Wasinger, Attorneys-at-Law Pablo Essenther and Lisa Jobst, and Associate Michael Lins.

Schoenherr, working with Travers Smith and Roschier, has advised Inflexion on the acquisition of a majority stake in European financial technology company Nomentia from PSG Equity and Verdane.

The transaction remains contingent on regulatory approval.

Nomentia is a European treasury and cash management software provider delivering a portfolio of solutions around bank connectivity, payments, cash visibility and forecasting, trade finance, and risk and reporting.

Inflexion Private Equity Partners is a UK-based private equity firm.

Verdane and PSG Equity are growth investment firms.

Schoenherr’s team included Partner Sascha Hoedl, Counsel Teresa Waidmann, Attorneys at Law Zurab Simonishvili, Nina Zafoschnig, and Johannes Frank, and Associates Markus Fasching, Alexander Pabst, and Anna Visontai.

Schoenherr could not provide additional information on the deal.

BPV Huegel, working with Linklaters, has advised the Macquarie European Infrastructure Fund 4 on the sale of its Energie Steiermark stake to the Province of Styria for EUR 525 million. DSC Doralt Seist Csoklich and, reportedly, Schiefer Rechtsanwaelte advised the Province of Styria.

According to BPV Huegel, “Energie Steiermark is one of the largest energy distribution and service companies in Austria, with subsidiaries in Slovenia, the Czech Republic, France, and Germany. Headquartered in the province of Styria, Energie Steiermark operates a 31,300-kilometer electricity grid network and a natural gas supply network of around 4,200 kilometers.”

Energie Steiermark also provides district heating, e-mobility services, and electricity generation from renewable energy sources, including wind, hydropower, solar, and biomass plants. “The business aims to significantly expand Energie Steiermark’s role for clean energy within the grid through additional investment in smart grid infrastructure alongside the deployment of new wind, solar, and hydropower capacity,” BPV Huegel reported.

BPV Huegel’s team included Partners Thomas Lettau, Christoph Nauer, Christian Schneider, Nicolas Wolski, and Gerhard Fussenegger, Attorney at Law Johannes Mitterecker, and Associates Tamara Tomic and Anna Zirkler.

The DSC Doralt Seist Csoklich team included Partner Peter Csoklich.

A decade ago, Austrian law firms stood out in terms of their regional presence in CEE. Wolf Theiss Partner Claus Schneider and CMS Managing Partner Johannes Juranek share insights into the growth trajectory of these regional law firms and the current landscape of the Austrian legal market.

Ten Years Ago, Today

In the past, according to Schneider and Juranek, Austrian law firms saw particular prospects and likely advantages linked to the expansion. “The Austrian legal landscape was once fragmented, but law firms recognized the need for expansion to provide better legal services to clients,” Juranek says. “A decade ago, the main focus was on corporate and commercial mandates, specifically M&A and real estate,” he notes, adding that the cross-border transactions and demand from domestic and international clients led “many firms to expand into the CEE region and Europe/Asia.”

“The CEE/SEE region has – already starting in the early 1990s – been a focus geography for law firms like ours given the growing investor interest attracting many big international players,” Schneider adds. “Backed by the enlargement of the EU in the early 2000s, GDP growth was expected in most CEE countries due to stable and rapidly growing economies, strong appetite for TMT, real estate, consumer and energy targets, and a strong M&A market.”

Schneider also highlights that, “in the aftermath of the financial crisis, the Austrian-based banking group Hypo Alpe Adria was nationalized, it returned its banking license, its operations were wound down, and its assets were eventually realized. In this context, a great many Austrian (and foreign) law firms were busy advising the nationalized Hypo banks and its legal successor Heta Asset Resolution, as well as a multitude of counterparties including creditors and interested acquirers of ex-Hypo assets.” According to him, Wolf Theiss was involved, “advising, among others, with the biggest creditor group in the restructuring of its claims against Heta,” advising “international investors such as US private equity fund Advent International and the EBRD in the acquisition of the Austrian banking holding, six network banks, and three leasing companies in Croatia, Slovenia, Serbia, Bosnia, and Montenegro with a balance sheet total of EUR 8.4 billion,” as well as advising “the DDM Group, a multinational investor and manager of distressed assets, together with B2Holding, a leading player in debt purchase and debt collection, on purchasing a portfolio of distressed assets in Croatia from Heta Asset Resolution and its Croatian affiliates with a total face value of EUR 800 million.”

Consequently, Schneider says, “ten years ago, Wolf Theiss opened its Warsaw office because Poland was a major market then and, of course, still has great potential now. After the firm’s headquarters in Vienna, the Polish office is now the second largest – together with the office in Romania.”

A Decade of Progress

Both Schneider and Juranek point out that, ten years later, Austria remains a vibrant market attractive for both local and international law firms. “Today, Austria is home to a highly competitive legal market, where both international and local law firms offer specialized services,” Juranek points out. “Industries such as finance, tech, life sciences, start-ups, and data compliance drive demand for these services.” According to him, although the CEE market is considered saturated, “the current focus is on quality legal services that meet the specific needs of clients.”

Schneider further highlights that the current legal market has an emphasis on green/sustainable investments, “with a focus on ESG, renewable energy projects, investment into green transitions, the current upward trend expected in restructuring, alternative finance, and regulatory work.” According to him, “having a regional strategy now truly pays off in terms of providing top-notch services to clients with cross-border mandates.”

Consolidating Local Offices

Schneider and Juranek observe that, regarding their future expansion strategy, law firms are primarily prioritizing the consolidation of local offices over expanding their networks, given the current legal environment.

Juranek notes that “as a member of a global network with over 70 locations worldwide,” the CMS emphasis is “on consolidating our existing offices, rather than expanding the network,” as “the goal is to ensure that the clients receive the best possible legal services.” According to Juranek, the law firm is “servicing an increasing number of multi-national clients who need a fast international capacity to fulfill their needs. The increased volume of international cases which require in-depth local knowledge justified the expansion in the CEE area.”

For Schneider, Wolf Theiss’ current focus lies in strengthening the existing network of 13 CEE/SEE offices. “The existing close cooperation across our 13 offices is continuously enhanced by a permanent focus on efficiency between them, with a strong emphasis on knowledge and talent management,” he notes. “This requires creating an environment for the potential to thrive. Our growth is mainly based on the promotion of promising young lawyers from within the Wolf Theiss network, but also on strategic lateral hires.”

“For example,” he says, “in the past six months, we have welcomed two new partners to our Polish team who bring strength in key areas such as corporate and M&A and energy. In 2022, we also brought in three new real estate partners to further strengthen our regional offering in this area – one in Poland, one in Bulgaria, and one in Romania – in anticipation of not just the continued need to service clients in multiple jurisdictions in the region, but also in cases of companies moving their hub of operations away from Vienna and into the region. One of our main focuses is to build up strong local teams which are essential to lead and drive matters.”

Former Weinrauch Lawyer Wolfgang Gabler has joined the Real Estate team in Taylor Wessing’s Vienna office as a Partner.

According to Taylor Wessing, “Wolfgang has more than 15 years of experience in all areas of real estate law, including litigation.” Before joining Taylor Wessing, Gabler spent a year with Weinrauch, four and a half years with Fellner Wratzfeld & Partner, and five years with Hule Bachmayr-Heyda Nordberg.

“After many years of practicing law with a focus on Austria, I am looking forward to being able to work in a transnational or globally networked way,” commented Gabler. “Taylor Wessing as an international law firm with 1,200 lawyers worldwide is an ideal basis for this.”

Wolf Theiss, working with Baer & Karrer, has advised Farner International on the transaction that saw The Skills Group becoming part of European agency group Team Farner. Haider Obereder Pilz reportedly advised the sellers.

According to Wolf Theiss, “Vienna-based communications agency The Skills Group, one of Austria’s leading PR agencies, as well as its digital subsidiary Datenwerk and marketing agency All Channels Communication Austria, are changing hands. They will become part of Team Farner, a growing, pan-European communications agency group headquartered in Switzerland.”

According to the firm, “Swiss-based Farner, founded in 1951, started a partnership with Waterland Private Equity in January 2022. Under the umbrella brand Team Farner, integrated communications providers from a wide range of European countries will form a joint owner-led agency group with the objective to establish a leading integrated European communications provider as a trusted partner for clients for national as well as international campaigns.”

In 2022, Wolf Theiss and Baer & Karrer also advised Farner on its acquisition of the Vienna-based Kobza Media Group (as reported by CEE Legal Matters on November 23, 2022).

The Wolf Theiss team included Partner Florian Kusznier, Counsel Stefan Wartinger, Consultant Karin Spindler-Simader, Senior Associates Christopher Juenger, Gregor Grablowitz, Anna Schwamberger, and Philipp Wrabetz, and Associates Klemens Kendler, Miranda Ellison, and Pascal Gstoettner.

This article is part of a series on developments in Austrian environment and climate change law in 2022 and, in particular, focuses on case law developments. For further details on legislative developments see, “Key developments in Austrian environment and climate change law in 2022: part one – legislation“.

2022 was not only a busy year for the legislature, marked by the late effects of the covid-19 pandemic and Russia’s military activity in Ukraine, but also for the supreme courts. Case law in environmental and climate change law mainly dealt with the expansion of renewable energy and infrastructure, the party status of environmental organisations and subtleties in waste law.

Supreme Administrative Court

This section provides an overview of the most important case law of the Supreme Administrative Court, as the highest instance of legal protection in administrative law in Austria.

In 2022, the Court remained true to its friendly approach to environmental organisations, briefly summarised below.

• First, the Court stated that – unlike other parties under Austrian law – environmental organisations (EOs) do not have to prove an interest in legal protection when filing an appeal regarding a violation of EU environmental law. The Court noted that, in general, it is permissible under national law to make a remedy available to individuals only in the case of a violation of subjective rights. However, based on EU environmental law, such a limitation may not be applied to EOs. For more information see, “Court further strengthens participation rights of environmental organisations”.
• However, the legal consequences of the delayed filing of an application for restitution in integrum apply to EOs too, provided that the EO has had a reasonable opportunity to inform itself about the approval procedure before the contested decision was issued. Since the objection of the time limit for appeal does not contradict the principle of effectiveness, according to the Court there is no need to obtain a preliminary ruling from the European Court of Justice (ECJ).
• Furthermore, the Court decided on the requirements for an eligible complaint by EOs in approval procedures under the Austrian Water Rights Act (WRA). EOs must refer to the provision of the WRA in question in a complaint and submit why they assume that a project violates this provision. In addition, EOs can also have the question of an Environmental Impact Assessment (EIA) obligation reviewed in the appeal procedure and have party status in the respective procedure, provided that the EIA obligation is claimed to be “conceivable”. For more information see, “New Supreme Administrative Court decision on Augarten lowering regarding specific rights of recognised environmental organisations”.

Renewable energy

Moreover, in line with the legal developments regarding the expansion of renewable energy, the case law of the Court also focused on climate protection. There have only been a few decisions by the Court that would stop the expansion of renewable energy power plants. Most complaints against renewable energy power plants have already been rejected or dismissed by the administrative courts. However, two decisions of the Court are worth mentioning.

• On the one hand, the Court ruled that project applicants may submit several applications for permits for wind park projects at the same site at the same time and that it is up to them to decide which project to choose.
• On the other hand, the Court did not admit an appeal against a decision of an administrative court which gave priority to a large hydropower plant in Tyrol in a dispute under the WRA. Thus, priority was given to the larger plant, which better met the requirements for the expansion of renewable energy and climate protection.

Railroad expansion

In addition to the expansion of renewable energy, the Court also dealt with the expansion of infrastructure. For example, the development of the Westbahn railroad (a four-track expansion with sectional rerouting of the existing currently two-track western railway line in the Linz – Marchtrenk section) was approved. According to the Court, contrary to the appellant’s appeal, the basic approval granted under the EIA Act did not have to be subjected to a strategic environmental assessment.

Waste law

In waste law matters, the Court maintained its strict interpretation regarding the end of waste status according to Austrian law and case law.

In the opinion of the Court, sewage sludge produced during wastewater treatment is waste, even if it is incinerated after mechanical dewatering in an incineration plant and a residual waste incineration plant, and the resulting heat is used in the form of steam for the energy supply of paper and pulp production. The Court held that the Austrian legal situation, according to which the end of the waste status only occurs upon fulfilment of certain generally defined prerequisites, is in line with EU law.

Furthermore, according to the Court, it is in line with EU law that – if no criteria for the end of waste status have been established at EU level for a particular type of waste – the end of waste status depends on whether there are criteria for a particular type of waste established on a national level. A waste holder cannot, therefore, demand that the competent authority establishes the end of waste status.

In this context, however, a recent decision of the ECJ on several questions referred by an Austrian regional administrative court could turn the question of the end of waste status in a different direction. According to the ECJ, uncontaminated excavated soil of the highest quality is not to be classified as waste. If such excavated material is subjected to a recovery process and all criteria under the EU Waste Framework Directive are met, it can be assumed that the waste status of this material has ended. One of the reasons given by the ECJ for the decision was that the use of excavated soil as a construction material – provided it meets strict quality requirements – has a significant benefit for the environment, as it contributes to waste prevention, the protection of natural resources and the development of a circular economy.

Since the ECJ ruled that the Austrian provisions on the concept of waste are too strict, at least in the case of uncontaminated excavated soil, and thus are contrary to EU law, it remains to be seen how the Austrian legislation and case law will react to this decision.

Constitutional Court

The Constitutional Court issued only a few decisions of interest to environmental law in 2022.

In September 2022, the Constitutional Court annulled a zoning plan adopted in 2003 because it violated an ordinance concerning green zones. Since the zoning plan had been in existence for about 20 years, various buildings and businesses had been erected in this area, which would now be unlawful. In practice, the existing buildings may, in principle, remain in place, but planned new buildings or extensions are now inadmissible due to the lack of a valid zoning plan.

It is also interesting to note the Constitutional Court’s line of case law on the party status of EOs – in contrast to that of the Court. According to the Constitutional Court, EOs do not have party status because this requires “genuine” subjective public rights. Therefore, the only place where a violation of subjective environmental protection provisions under EU law can be asserted is before administrative courts.

Comment

Looking back, 2022 brought exciting court decisions. Combined with the Austrian legislature’s ambitious goals for an energy turnaround, project applicants, authorities and the courts will be kept busy for a long time to come.

By Sarah Wolf and Jutta Mayer, Associates,  Schoenherr

Herbst Kinsky has advised AG Capital on the acquisition of majority stakes in Intelia and Embers and on the merger of the companies into a new group of companies. 

Financial details were not disclosed.

According to Herbst Kinsky, “this merger will create the largest independent contact center provider in Austria. The previous owners of the companies will remain onboard as shareholders. Intelia and Embers are among the largest customer care providers in Austria and specialize in high-quality outbound, inbound, and back-office services.”

According to the firm, “AG Capital is an independent private equity company based in Vienna, founded in 2021 by a team around the two managing directors Karl Lankmayr and Daniel Jennewein and C-Quadrat Investment AG. As an entrepreneurial partner, AG Capital provides buy-out and growth capital for innovative small and medium-sized enterprises in Austria and neighboring countries. AG Capital’s target companies have a turnover of around EUR 10 million or more and a sustainably profitable business model with further development potential.”

Herbst Kinsky’s team included Attorneys at Law Wolfgang Schwackhoefer, Alexander Lotz, Christoph Ludvik, and Constantin Hofer and Associate Irmgard Nemec.

Herbst Kinsky did not respond to our inquiry on the matter.

Herbst Kinsky has advised Star Capital Partners on obtaining a majority shareholding in the Myflexbox Austria corporate start-up – a spin-off from Salzburg AG fur Energie, Verkehr, und Telekommunikation – in the course of a capital increase. 

The transaction remains contingent on regulatory approval.

Founded in 2018 as a pilot project of Salzburg AG, the Myflexbox start-up develops smart lockers that enable parcels to be delivered, collected, returned, and sent contactlessly.

According to Herbst Kinsky, “Star Capital is a London-based private equity firm focused on developing strategic asset-based businesses in Western Europe. The PE firm was founded in 1999 and invests primarily in companies with an enterprise value between EUR 50 million and EUR 1 billion.”

“The focus on an open smart-locker network in combination with clever software solutions creates a highly efficient logistics infrastructure for customers and parcel service providers that enables a reduction of carbon dioxide and inner-city traffic,” Star Capital Partner Philipp Gensch said.

Herbst Kinsky’s team included Attorneys at Law Carl Walderdorff, Christoph Ludvik, and Valerie Mayer and Associates Leopold Gottsauner Wolf, Valentin Krenkel, and Irmgard Nemec.

Editor’s Note: After this article was published, KPMG Law affiliate Buchberger Ettmayer Rechtsanwaelte confirmed it had advised Salzburg AG – previously the sole shareholder of Myflexbox – on the issuance of new shares representing a majority stake in Myflexbox to Star Capital. The firm’s team included Partners Stefan Arnold, Counsel Pablo Essenther, Associate Thomas Androsch, and Junior Associates Michael Lins and Michael Hauer.

2022 was a busy year marked by the late effects of the covid-19 pandemic and the Russia-Ukraine conflict. The latter has led to the rethinking of energy matters. Austrian legislation in 2022 was, therefore, characterised above all by new developments and amendments in energy law, with a focus on the expansion of renewable energy. This article is part of a series on developments in Austrian environment and climate change law in 2022 and, in particular, focuses on legislative developments.

Under the Austrian Federal Constitution, legislative competence for Austrian environmental law is shared between the federal and the nine provincial legislatures. As a so-called “cross-sectional matter”, environmental law is regulated in numerous legal acts (laws and ordinances) on a federal and a provincial level. As an EU member state, Austria is also obliged to consider the requirements of EU environmental law.

Due to this systematic fragmentation of legislative competencies, it is a great challenge to remain up to date with the latest legislation. This is especially true for environmental law, which is the subject of much discussion in both the European Union and nationally due to current developments and crises. Therefore, this article provides a general, but by no means exhaustive, overview of the most current legislative developments in 2022 at the federal and provincial levels.

Federal level

The most important areas of environmental law (especially in the fields of environmental impact assessment, waste law, water law and climate protection law) are primarily regulated by the federal legislature. Despite the current (energy) crises and announced reforms, the government presented and sent for review only draft legislation in 2022. The long-announced and expected major amendments in environmental law regulated by the federal legislature failed to materialise.

At the beginning of 2022, the National Emission Allowance Trading Act (NEHG) was passed, enacting a carbon dioxide tax in Austria. Based on the NEHG, the NEHG Implementation Ordinance was issued in September 2022, which regulates the technical design and organisational implementation of the procedures of the national NEHG.

In July 2022, the Federal Ministry for Climate Protection, Environment, Energy, Mobility, Innovation and Technology (BMK) sent the highly anticipated draft amendment to the Environmental

Impact Assessment (EIA) Act for review. The amendment reached the National Council on 11 January 2023. Of particular interest to project applicants is the planned increase in the speed of procedures, which is to be achieved by improving the structure of the approval and appeal procedure. Particular attention is being paid to fast-track procedures for energy turnaround projects (renewable expansion projects).1 In addition to promoting the expansion of renewable energy, the legislature intends to implement Supreme Court rulings and adjust regulations due to pending EU infringement proceedings regarding the implementation of the EU EIA Directive.

Also eagerly awaited was the enactment of the Federal Act on the Phase-out of Fossil-fuelled Heat Supply (RHA), which was presented to the National Council on 2 November 2022. In view of Austria’s goal to be climate neutral by 2040, the BMK has developed a phase-out plan for fossil fuels (ie, oil, gas, liquified petroleum gas and coal) in space heating in the draft RHA Act.2

There have also been various amendments to the Federal Act on the Expansion of Energy from Renewable Sources (Renewable Energy Expansion Act). These mainly concern:
• technical and editorial adjustments;
• changes resulting from the notification procedure with the European Commission under state aid law; and
• simplifications for small photovoltaic plants (up to 20 kilowatts peak).

Provincial level

In 2022, almost all provincial legislatures responded to infringement proceedings against the Republic of Austria for its failure to fully implement Directive 2018/2001 on the promotion of the use of energy from renewable sources, and amended their respective provincial electricity laws.3 The amendments were also necessary due to a previous amendment to the basic provisions of the Federal Electricity Industry and Organisation Act and the implementation of a Renewable Expansion Act Package at the federal level. The states have enacted similar provisions, which can be summarised as:
• anchoring the principle of “energy efficiency first”;
• introducing a simplified procedure for repowering existing plants;
• streamlining the administrative process by establishing a new point of contact for permit applicants at the respective provincial governments;
• issuing a procedure manual; and
• creating a mediation procedure.4

Apart from this, the following 2022 provincial-level amendments should be highlighted (not exhaustive):

• Salzburg Nature Conservation Act;
• Burgenland Regional Planning Act;
• Lower Austrian Waste Management Act;
• Vienna Energy and Climate Law Implementation Act;
• Tyrolean Gas, Heating and Air Conditioning Act; and
• Styrian Regional Planning Act.

Outlook for 2023

The above-mentioned legislative projects already show that environmental legislation in 2023 (especially at the federal level) cannot be overlooked. In addition to the amendment to the EIA Act and the enactment of the RHA Act, the government announced the enactment of another new law very recently – the Renewable Energy Expansion Acceleration Act. While the exact content of the new law is not yet known, it is intended to simplify and accelerate the approval process for renewable projects that do not require approval under the EIA Act.

Not yet announced, but already expected, is the new enactment to the Climate Protection Act, which was last revised in 2017. The Climate Protection Act sets annual caps on greenhouse gas emissions by sector (eg, waste management, energy and industry, and buildings). However, due to the lack of agreement among the governing parties, the commitment period expired in 2020, which led to missing annual caps since 2021 and sharp criticism of the government.

Finally, it should be noted that the current term of government ends in the fall of 2024 and that, according to its current programme, the government still intends to tackle further environmental legislation. These include the amendment to the Act on the Remediation of Contaminated Sites with the aim of ensuring faster, more efficient and safer remediation of contaminated sites, as well as the improvement of the Emission Control Act – Air and the amendment to the Pyrotechnics Act. It remains to be seen whether all these legislative projects will be addressed in 2023.

Comment

Looking back, 2022 brought exciting legislative proposals that demonstrate a will to change. However, if the ambitious goals for an energy turnaround are to be achieved, the Austrian legislature will have to step up a gear in 2023.

By Jutta Mayer and Sarah Wolf, Associates, Schoenherr