Dispute arising from distribution agreement – Mandatory mediation attempt before initiating legal proceedings

Austrian Supreme Court 19.07.2023, 3 Ob 128/23d

On July 19, 2023, the Austrian Supreme Court confirmed that, under Austrian law, the claimant has to make an attempt at mediation before initiating legal proceedings; otherwise, his legal action may be dismissed ex officio. This requirement also applies to claims that arise after termination of the distribution agreement.

In the case at hand, a car dealer and repairer filed a lawsuit against the car manufacturer after failing to reach an agreement on the repurchase price of the goods following termination of their distribution agreement (see Section 3(2) of the Austrian Automotive Sector Protection Act – KraSchG). The car dealer had not made an attempt at mediation pursuant to Section 7(1) KraSchG before initiating legal proceedings. An attempt at mediation is mandatory. Without going into the merits of the asserted claims, the Austrian Supreme Court confirmed that the lawsuit must therefore be formally dismissed.

For car manufacturers or importers seeking to enforce claims arising from a distribution agreement in Austria, this means that mediation must be attempted before filing a lawsuit. And if the car manufacturer or importer happens to be the defendant and the claimant has not made an attempt at mediation, the car manufacturer or importer can immediately raise a procedural objection.

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