Category: Austria

Brandl Talos has advised Kompas and Herbst Kinsky has advised Ventech on co-leading the USD 11 million Series A investment round into Prewave. Act Legal WMWP reportedly advised Prewave on the round.

Prewave’s early-stage investors AWS Gruenderfonds, IST cube, Seed + Speed, Segnalita, Speedinvest, and the Working Capital Fund also participated in the Series A.

According to Brandl Talos, “Prewave is a spin-off from the Vienna University of Technology and was founded in 2017 by Lisa Smith and Harald Nitschinger. The company uses an AI-powered platform to analyze millions of online sources in more than fifty languages to find, categorize, and directly address the risks that might impact supply chains.”

Kompas is a Danish venture capital firm focusing on businesses that partake in digital transformation and industrial automation.

Ventech is a Paris-based European & Chinese early-stage investment fund that invests in the digital economy.

The Brandl Talos team included Partners Roman Rericha, Associate Partner Raphael Toman, Attorney at Law Adrian Zuschmann, and Associate Elena Ciresa.

Herbst Kinsky’s team included Partner Philipp Kinsky and Associates Angelika Kurz and Carmen Walser.

Binder Groesswang has advised Linde Verlag on the establishment of its digital subsidiary Linde Digital with the participation of Venionaire Capital.

“Linde Digital is to develop new digital business models and thus significantly strengthen the publisher’s digital skills,” Binder Groesswang informed. “As private equity and venture capital specialist in the start-up and digital sector, Venionaire Capital has found an ideal partner for the project.”

Founded in 1925, Linde Verlag is a publisher in the fields of tax, business, and law. Venionaire Capital is a corporate finance and venture capital advisory.

“We look forward to supporting a successful family business like Linde Verlag in its digital transformation, we really appreciate the trust placed in us and we take on the responsible entrepreneurial task with full vigor,” Venionaire Capital CEO Berthold Baurek-Karlic commented.

The Binder Groesswang team included Partner Christian Zwick, Lawyer Christoph Schober, and Trainee Lawyer Johannes Varga.

On 14 September 2022 the European Commission (“EC“) published a proposal for a Regulation on an emergency intervention to address high energy prices (“Emergency Intervention Regulation” or “EIR“). The EIR requires EU Member states to implement three different measures: (i) Reduction in demand for electricity, (ii) Capping market revenues for the generation of electricity from inframarginal technologies (renewables, nuclear and lignite), and (iii) Collection of a monetary solidarity contribution from the fossil fuel industry. The EC says that the intervention measures can be based on Art 122 of the Treaty of the Functioning of the European Union (“TFEU”) which establishes a competence for crisis intervention in the energy sector. However, it is questionable if the EC’s view is going to withstand a judicial review since Art 122 TFEU has a very limited scope of application and some of the proposed intervention measures appear to go far beyond that scope.

Renewable energy producers and fossil industry will probably consider taking legal action against proposed market interventions

The EC claims that Art 122(1) TFEU provides a legal basis for adopting the emergency intervention measures described above. It is therefore worth looking into this treaty provision in more detail: Pursuant to Art 122(1) TFEU, the European Council “may decide […] upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy“. Art 122 TFEU therefore appears to establish a legislative competence of the European Council to adopt specific measures to manage a (energy) crisis. However, it can be argued that Art 122 TFEU does not refer to any kind of energy crisis. It is rather limited “to severe difficulties in the supply of certain products, including energy”. Also, Art 122 TFEU explicitly refers to measures which are to be set in the “spirit of solidarity between Member States”. This could restrict the application of Art 122 TFEU to a situation in which one or more Member States face security of supply issues whereas other Member States could help to resolve or mitigate those issues. In any case, when interpreting the scope of Art 122, it is important to consider that Article 122(1) is the only basis for binding measures in the field of economic policy. It is therefore an exception to the general rule according to which the economic policy remains within the competence and responsibility of the EU Member States (Art 120, 121 TFEU). The exceptional character of Art 122 TFEU requires a restrictive handling.

Against this background it is questionable if the fact of soaring prices within the EU gives enough reason to apply Art 122 TFEU and to impose the proposed measures in the form of a Council Regulation (without the involvement of the European Parliament). Of course, the current increase of electricity prices will harm the European economy. Financially weak households and vulnerable customers are massively hit by the current price developments. However, Art 122 TFEU explicitly addresses difficulties in the supply of energy and the wording of Art 122 TFEU appears to exclude measures to compensate for soaring energy prices. Currently, there is no physical supply shortage or immediate threat of such shortage which would require immediate action to safeguard consumers from being cut-off from supply. On the other hand, it can be argued that there is a risk of supply shortages in the upcoming winter and, therefore, the proposed emergency measures to reduce electricity demand in winter is necessary to prevent or mitigate the risk of a supply crisis. Thus, the proposed measures to reduce demand for electricity might be in line with Art 122 TFEU (although we believe that such measure could also be based on another provision of the TFEU, namely Art 194 TFEU, which regulates the competences of the EU in the field of energy policy). However, the above reasoning does not work for the proposed introduction of revenue caps and solidarity contributions since they do not directly address the formation of energy prices. Prices will remain and develop as always, with or without revenue caps and solidarity contributions. Also, the demand in electricity and natural gas will not change by introducing revenue caps and taxes on market revenues. Whereas capping and taxing and subsequent re-distribution of revenues to final consumers may be perceived appropriate from a social point of view, it is however debatable from a legal point of view, if such measures can be introduced based on Art 122 TFEU. And even if these measures can be based on Art 122 TFEU, it remains to be seen if the principle of proportionality is properly observed since Art 122 TFEU allows for “appropriate” measures only. A proportionality assessment is also mandatory as the revenue cap imposed on renewable energy producers interferes with the fundamental right to property.

Conclusion

The legal basis of the proposed revenue caps and solidarity contribution appears to be disputable. Renewable energy producers and companies active in the fossil fuel industry are recommended to conduct a thorough analysis in order to assess if there is a (strong) case to appeal the proposed intervention measures.

By Bernd Rajal, Partner, Schoenherr

Wolf Theiss has advised the Aramis Group on its acquisition of Onlinecars.

The Aramis Group is a European online used car sales company. Onlinecars is an Austrian refurbished vehicle sales company.

According to Wolf Theiss, the “Aramis Group and Onlinecars are highly complementary in terms of their strategic and operational features as well as their entrepreneurial culture. With Onlinecars’ leading position in Austria for B2C online used car sales, its web platform, a refurbishing center, and three customer centers, the company will enable the Aramis Group to make a solid market entry in Austria and to ramp up its further expansion in Central Europe.”

The Wolf Theiss team included Partners Christian Mikosch and Karl Binder, Counsels Paulina Pomorski and Stefan Wartinger, Senior Associates Michael Kienzl, Anna Schwamberger, and Harald Strahberger, Associates Nikolaus Wollner, Dominik Mayrhofer, and Miranda Ellison, and Legal Trainee Daniel Schmidt.

Wolf Theiss did not respond to our inquiry on the matter.

In its most recent decision in connection with the Fauna-Flora-Habitat Directive (the Habitats Directive), the Supreme Administrative Court (SAC) found that environmental organisations (EOs) – contrary to the principles of process prerequisites in the Austrian legal system – do not have to prove an interest in legal protection.

Thus, an EO is entitled to object to violations of EU environmental law irrespective of the question of a violation of subjective rights. Unlike other formal parties, EOs do not lose their interest in legal protection.

This article critically examines the decision of the SAC.

Facts

A forest owner applied for the felling of several Swiss stone pine trees in his forest. The forest is located in the outer zone of the Hohe Tauern National Park, which is a Natura 2000 area according to the Habitats Directive. The authority approved the felling of the Swiss stone pines in August 2014.

However, the forest owner did not fell these trees and applied for the felling of other trees in the same forest, which was approved by another decision of the authority in August 2016. The forest owner used this second permit from August 2016, between August and October 2016.

In mid-October 2016, after the forest owner had already felled the trees, an EO filed a complaint against the two decisions of August 2014 and August 2016.

The competent regional administrative court rejected the complaint of the EO as inadmissible for lack of legal interest. The court based its decision on the facts that:

• the decision of August 2014 had been amended by the second decision of August 2016 and was therefore no longer relevant; and
• regarding the decision of August 2016, the forest owner had already felled the trees before the EO filed the complaint.

Because the felling could not be reversed, the answer to the question as to what effects the felling would have had on the protected area would only have theoretical significance. Therefore, the EO as a “formal party” lacked the legal interest to set aside the decision. Hence, already at the time of filing the complaint, the EO no longer had an interest in legal protection.

The EO then appealed to the SAC.

Decision

The SAC overturned the contested decision and first stated that the interest in legal protection is a prerequisite for proceedings concerning the enforcement of subjective public rights. In the case of an appeal against a decision, the interest lies in the annulment of the decision. As a rule, however, such an interest is no longer present if it makes no difference whether the decision remains in force or is revoked.

In the present case, the EO’s right to appeal is based on its role in verifying compliance with EU environmental law. Therefore, the EO must represent those interests which result from the environmental protection regulations under EU law.

In this regard, the SAC referred to case law of the European Court of Justice (ECJ). The ECJ had already ruled on the environmental impact assessment (EIA) that member states can limit the legal protection of individual persons to the exercise of subjective rights. However, such a restriction cannot be applied to EOs, because this would disregard the objectives of the EIA Directive, which provide for access to a review procedure before a court for concerned members of the public. EOs would therefore have to be able to invoke those national legal provisions which transpose the environmental provisions of EU law, as well as the directly applicable environmental provisions of EU law.

Against this background, the SAC stated that the EO’s right to appeal when enforcing environmental regulations under EU law may not be restricted due to a lack of interest in legal protection. The EO may assert violations of environmental regulations under EU law irrespective of the question of the violation of subjective rights. In this respect, EOs differ from other formal parties, whose right to appeal is also not linked to subjective rights, but which must have an interest in legal protection.

Comment

Following recent case law, the SAC further extended the rights of environmental organisations in its decision. This is contrary to the traditional principles of the Austrian legal system.

First, it is noteworthy that, according to the Forest Act, only the forest owner or a party with a right of disposal is entitled to party status in the felling permit procedure. The Forest Act does not expressly grant party status to an EO as a formal party. The SAC has already stated that the protection forest in question is a natural habitat type of community interest according to the Habitats Directive. Therefore, the question of the compatibility of the requested felling with the protected areas of the Habitats Directive must be considered in the felling proceeding. This follows that EOs have a right to participate in the official procedure.

Secondly, in the Austrian legal system one of the prerequisites for administrative court proceedings is an interest in legal protection. Accordingly, an appeal may only be filed if there is a possibility that the contested decision will interfere with the rights of the appellant. The possibility of infringement of rights does not exist if it makes no difference to the legal position of an appellant whether the decision of the court is upheld or overturned. Therefore, in the previous case law of the SAC, an appellant was not entitled to a mere determination of the unlawfulness of the contested decision.

In the subject decision, the SAC is now apparently granting EOs unrestricted access to the courts, while other parties must stay within the boundaries of the Austrian legal system. Whether this special position of EOs is actually beneficial with regard to environmental protection remains to be seen.

The decision shows that despite the efforts made under EU law to ensure effective environmental protection, this is still far from being achieved in practice. In the case at hand, the trees have long since been felled. This cannot be reversed. The decision of the SAC also fails to provide any information on whether the felling of the trees was permissible. This must now be examined again by the authority years later and quite abstractly from the concrete case.

In conclusion, this jurisprudence results in enormous legal uncertainty for project applicants because, even years later, they have to reckon with a permit becoming invalid or even having to pay fines subsequent to unlawful action.

By Sarah Wolf, Associate, Schoenherr

BPV Huegel has advised Cloudflight Austria on its acquisition of Upper Austrian Mobile Agreements. Waitz Rechtsanwaelte advised the seller Harald Weinberger on the deal.

Cloudflight Austria, a subsidiary of Deutsche Beteiligung, is a full-service provider for industrial digital transformation in Europe. Cloudflight’s focus includes artificial intelligence, cloud applications and operations, embedded software development, human-machine interface design, and e-commerce solutions.

Founded in 2009, Upper Austrian Mobile Agreements employs a comprehensive consulting approach for digital strategy and business model development. 

BPV Huegel’s team included Partners Elke Napokoj, Sonja Duerager, and Michaela Pelinka, Attorney at Law Walter Niedermueller, and Associate Daniel Grimmer.

Waitz Rechtsanwaelte’s team included Senior Partner Kornelia Waitz-Ramsauer, Junior Partner Doris Atzmueller, and Associate Martina Kovacevic.

Cloudflight’s in-house team included Christoph Oberhaus, Markus Helmle, and Benjamin Wolfinger.

Schoenherr, working with Noerr, has advised Nord Holding on the acquisition of a majority stake in the Heizkurier Group from Odewald KMU. Heuking and Ebner Stolz reportedly advised the sellers on the deal.

Nord Holding is a German private equity company with over 50 years of experience and EUR 2.5 billion in assets under management.

Heizkurier is an equipment-as-a-service provider for mobile heating and cooling solutions based in Wachtberg, Germany. 

According to Schoenherr, “Heizkurier’s existing management and founders will continue to hold shares in the company. Together with the existing management, Heizkurier intends to further expand its leading market position and continue the dynamic growth of recent years. In addition, the considerable ESG potential of the company – in particular through its contribution to climate neutrality in the building sector – is to be further focused in line with the ESG goals of NORD Holding.”

Schoenherr’s team included Partner Michael Magerl, Attorney at Law Victoria Zeppitz, and Associate Stefan Holzinger.

Noerr’s team included lawyers in Berlin, Munich, Duesseldorf, and Frankfurt.

As early as November 2018, the Austrian government announced that it planned to develop a hydrogen strategy. But the Austrian energy sector had been left waiting ever since the formal kick-off in March 2019. In the meantime, the EU and several member states presented their hydrogen strategies. Finally, on June 2, 2022, the Austrian government revealed its own plan of action.

The Latest Hydrogen News from Brussels

Russia’s invasion of Ukraine has not only caused suffering and trauma for millions but has also sent shockwaves through the entire European energy sector. Politicians all over Europe are questioning their countries’ (in)dependence on/from Russian oil and gas, leading the EU to devise its REPowerEU plan.

The main pillars of REPowerEU are saving energy, producing clean energy, and diversifying Europe’s energy supply. On the issue of hydrogen, REPowerEU foresees the creation of an EU Energy Platform to enable the common purchase of gas, LNG, and hydrogen. EU-wide hydrogen projects are supposed to be launched before the summer and the EU hydrogen targets for 2030 have been doubled. 10 million tons of renewable hydrogen should be produced annually in the EU by 2030, with another 10 million to be imported.

Further, two (long-awaited) consultations on delegated acts clarifying EU rules on renewable hydrogen have been launched. They try to clarify when hydrogen is categorized as “renewable.” Once adopted, the delegated acts will complete the EU’s overall proposal for a regulatory framework for renewable hydrogen (in the next renewable energy directive). However, they bear potential for discussion:

The most controversial topics may be the principles of additionality and temporal correlation. Simply put, after a transitional period, by 2026 only hydrogen produced using electricity from newly constructed, unsubsidized renewable energy plants will be classed as “green”. This is to ensure that additional renewable electricity capacity is built, rather than using existing plants, and that hydrogen is not subsidized twice.

Temporal correlation – in the interest of grid operators – requires that electrolyzers produce hydrogen only when the electricity needed for hydrogen production can be generated almost simultaneously. Many experts say that this is stricter than necessary and may delay the development of the hydrogen industry significantly. It remains to be seen how the EU Commission will react to this criticism.

The Austrian Hydrogen Strategy

Numerous legal hurdles are complicating the implementation of hydrogen projects in Austria. These include approval procedures for industrial plants and zoning plans. A hydrogen project below the thresholds of the one-stop-shop environmental impact assessment needs permits from several regulatory authorities, making the process highly bureaucratic – not to mention the lack of experience of expert witnesses. Environmental impact assessment processes, however, are unfit for many hydrogen projects because they are designed for facilities posing more severe environmental impacts than electrolyzers do.

The strategy addresses many critical aspects like a quota for the sale of renewable gas, carbon dioxide pricing for non-EU emission trade, simplification of zoning and building permits, carbon contracts for difference, a statistical system for hydrogen production, and acknowledging the need for certification to make green hydrogen tradeable. Moreover, it defines the institutional capacities in federal ministries that will implement the strategy.

So, although there is a commitment to renewable hydrogen and a prioritization of certain areas (steel and chemical industries, mobility, and public transport), it is a strategy in the narrow sense and presents no specific measures that establish more legal certainty.

One of the most important factors for the success of hydrogen projects seems to be subsidization, because hydrogen produced in Austria from renewable sources is not economically viable. There is good news in that respect too. The Austrian Renewable Expansion Act introduced investment subsidies of up to EUR 40 million annually. Up to 45% of the direct costs for the construction of the plant may be subsidized. However, such funding is unavailable for plants built and operated by grid operators (although they are allowed to operate electrolyzers for conversion services) or that add hydrogen to natural gas in the public gas grid. In addition, the strategy foresees a EUR 125 million Austrian contribution to “Important Projects of Common European Interest” for the hydrogen value chain until 2026, and there is funding for projects to use renewable hydrogen in industrial plants under the Transformation of the Economy program.

So, it is positive that Austria finally has a pathway to integrate hydrogen into its energy transition ambitions. Its success, however, depends on implementation steps that still remain unclear.

By Thomas Hamerl, Partner, CMS Vienna, and Co-Head of Energy & Climate Change, CMS RRH, and Marco Selenic, Associate, CMS Vienna

This Article was originally published in Issue 9.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

E+H has announced that Christoph Lejsek and Florian Sagmeister have been promoted to Partner on July 1, 2022.

Specializing in M&A, real estate, and energy, Lejsek has been with E+H since 2014 and was promoted to Lawyer in 2019. Lejsek studied law at the University of Vienna, and business administration at the Vienna University of Economics and Business Administration.

Sagmeister has expertise in TMT/IP, as well as competition law. He joined the firm in 2013 as a Trainee. He was promoted to Associate in 2014 and to Attorney-at-Law in 2019. In 2013 he also was a Trainee at Dorda Rechtsanwalte. Sagmeister studied law at the University of Vienna.

“E+H has been growing for years – our strategy is constant and our success confirms that we are on the right track,” E+H Partner Dieter Thalhammer commented. “With Lejsek and Sagmeister, we were able to welcome two long-time colleagues to the Partner team – that makes us very happy and means a lot to us.”

Schoenherr, working with WSS Redpoint, has advised Ancla Logistik on its merger with Logsta and the simultaneous conversion of existing revenue-based venture debt provided by Round2 Capital to Logsta. Brandl Talos, working with Ypog advised Logsta. Herbst Kinsky reportedly advised Round2 Capital.

According to Schoenherr, “through this merger, Ancla and Logsta aim at becoming the largest direct-to-consumer fulfillment provider in Europe. Together the firms employ more than 600 people in nine different locations in Germany, Austria, the UK, France, and the USA, and handle more than 4 million shipments annually.”

Founded in 2006, Ancla is a German owner-managed logistics company. Logsta is an Austrian logistics company. Round2 provides financing to European digital business models.

The Schoenherr team advising Ancla was led by Partners Thomas Kulnigg and Christoph Moser and included Attorneys-at-Law Andreas Lengger and Angelika Fischer.

The Brandl Talos team included Partner Roman Rericha and Attorney-at-Law Adrian Zuschmann.

Editor’s Note: After this article was published, Herbst Kinsky confirmed it had advised Round2 Capital. The firm’s team was led by Attorney-at-Law Johannes Frank and included Associate Irmgard Nemec.