В недавно опубликованном решении немецкого суда освещаются важные отношения в сфере международных экономических санкций. Важность этой публикации трудно переоценить, главным образом, потому что это первое опубликованное судебное решение, касающееся правового режима международных экономических санкций. Основной смысл упомянутого решения сводится к следующему: международные экономические санкции, установленные иностранным государством, не защищаются немецким законом и судом, если их нарушение не является нарушением одновременно и немецкого законодательства, или европейского права, или публичного порядка Германии, или договора.
In a decision rendered by the Regional Court of Hamburg already in December 2014 but published only recently a German court addressed for the first time the relevance of a license from the US Office of Foreign Assets Control (OFAC) for cover claims under an insurance contract subject to German law. The facts of the case were that the Claimant, a German assured, had been insured with a German insurer for marine cargo risks since decades. Damage occurred in the course of transport of a cargo of licorice powder from Iran to Germany. The parties agreed that the damage as such would be covered under the policy conditions. The defendant insurer, however, referred to the fact that in the past it had been affiliated with a US insurance group with the consequence that it now would have to adhere to trade and commercial sanctions in respect of Iran as controlled and enforced by OFAC. The Defendant referred to a sanctions clause forming part of the insurance policy and pleaded that on basis of German statutory provisions there would be no valid cover claim. Alternatively the defendant insurer applied to stay the German action until OFAC had decided on the permissibility of the payment. Further and alternatively the Defendant insurer applied to allow the action only if OFAC issued a license for payment. The Hamburg court refused to stay the German proceedings and allowed the claim in full and unconditionally. The Court addressed the policy sanctions clause, which unfortunately was not quoted in the judgment, only with one sentence, namely that it only referred to sanctions and embargoes of the European Union but not the U.S.A. Referring to the jurisprudence of the highest German civil court, the Federal Court of Justice, the Hamburg Court further held that legal transactions in breach of statutory prohibitions would be void under German law, but only if such statutory prohibitions were binding law in Germany. This would not apply to statutory prohibitions in US sanctions laws. The Court further held that contract would not be void for breach of public policy, stating that the export of licorice powder from Iran would not be contrary to the German public policy. Finally, and as a second basis for allowing the claim, the Court held that the Claimant also had a claim for damages. The defendant insurer had breached an ancillary duty under the insurance contract by affiliating itself with a US group of companies without notifying the Claimant that according to its view this would have consequences for the existing insurance contract. The Court denied staying the German proceedings until a decision of OFAC for the reason already mentioned above, namely that US embargo provisions were of no relevance to the decision of the Court hence a decision by OFAC was held not to be a prerequisite for the Court’s own ruling. Whilst German law allows adjusting a contract in case of a fundamental change of circumstances after its conclusion, in this case the change occurred exclusively within the insurer’s own sphere and, thus, excluded an adjustment. All risks possibly resulting from the insurer’s affiliation with a US group of companies would have to be borne by the insurer and were not to prejudice the assured.
This judgment is the first published German judgment on sanctions clauses. Its importance does not concern the sanctions clause as such, the terms of which are not even touched upon. It is important because it sets out the effect of a sanctions clause on an insurer with US exposure if US sanctions are not mentioned in the sanctions clause. This judgment shows that insurers with US exposure may not find protection under German law. Generally, foreign sanctions and prohibitions are irrelevant under German law. Legal transactions in breach of foreign sanctions provisions are not void pursuant to § 134 BGB; a void transaction requires the violation of statutory provisions in force in Germany, i.e. either German or EU law. Foreign sanctions provisions may be of relevance, however, if their breach were contrary to German public policy. Indeed, this had been held in two older German Federal Court judgments but it is fair to say that in the present case the Hamburg Court was right in holding that even if the import of the licorice powder from Iran to Germany constituted a breach of foreign sanctions laws by no means would such a breach reach the level required for being in conflict with German public policy. All insurers active in Germany and subject to German law and jurisdiction which have a US exposure or which are US insurers with German branches or subsidiaries should be aware that in the absence of a sanctions clause referring to US law they will run the risk of being ordered to settle claims in Germany which might cause problems under US sanction laws. Sanctions clauses referring to US sanctions have so far not been tested in German courts. They have been discussed in legal literature where it is partly argued that they are invalid under the civil law provisions. In this context it should also be taken into consideration that the German Ministry for Economic Affairs and Energy which is in charge of sanctions in Germany, declared last year that in its opinion the English sanctions clause LMA 3100, which also refers to US sanctions, was in breach of German foreign trade law. We recommend that all insurers with US exposure active in the German market should take legal advice how to handle the situation. Dabelstein & Passehl have been dealing with sanctions issues since years. Please feel free to contact Dieter Schwampe at email@example.com.