Austrian Supreme Court On The Enforcement Of Gambling Claims: (International) Jurisdiction Of Austrian Courts To Enforce Claims Against Third Parties in Malta

Starting Point

According to now-established case law, gamblers residing in Austria can generally reclaim their losses from online gambling with providers not licensed in Austria.

However, the enforceability of such judgements is another matter: Many providers are based outside Austria, particularly in Malta. Enforcement of Austrian judgements is complex here. The Maltese legislature has responded to the judgements of Austrian (and German) courts with ‘Bill No 55’ according to which Maltese courts may not enforce such foreign rulings. Malta justifies this deviation from the principle of mutual recognition and enforcement under the Brussels Ia Regulation by arguing that the gambling monopoly - on the violation of which the repayment claims are based – is in violation of the freedom to provide services. The ECJ has not yet ruled on the validity of Bill No 55.

Cross-Border Enforcement By Austrian Courts?

Against this background, attorneys representing gamblers have been trying for a long time to enable the enforcement of Austrian judgements in domestic enforcement proceedings. However, according to the prevailing view in Austria, enforcement measures do not fall within the scope of the Brussels Ia Regulation. The principle of territoriality precludes cross-border enforcement proceedings. Therefore, enforcement must generally be sought in the state in which the enforcement measure is to take place.

Nevertheless, in previous cases, the Austrian Supreme Court did not consider the service of a prohibition of payment on a foreign third-party debtor to be an infringement of territoriality (see RIS-Justiz RS0106937). Such act would be effective in Austria while its effects abroad would have to be examined under the law of the state concerned. However, the (international) jurisdiction of Austrian courts to issue such a prohibition of payment against foreign third-party debtors (Forderungsexekution) has so far regularly been linked to a connecting factor in Austria. This is the case, for example, if at least the main debtor is domiciled in Austria.

Austrian Supreme Court: Enforcement In Malta Unreasonable

In the case at hand (ASC 3 Nc 72/24d), the enforcing creditor had obtained an Austrian judgement for repayment of losses from online gambling against a Maltese gambling provider (main debtor). In order to enforce the judgement, the creditor intended to attach the gambling provider's account balance held with a bank that was also based in Malta (third-party debtor). Both the main debtor and the third-party debtor were therefore domiciled abroad, meaning that there was no domestic connection on the debtor's side. Nevertheless, the ASC affirmed the international jurisdiction of Austrian courts for the enforcement of the claims against the third-party debtor. Enforcement in Malta would be unreasonable in view of Bill No 55, which is why the ASC could determine an Austrian court as having jurisdiction in accordance with section 28 para 1 item 2 JN (Ordination).

In this regard, the ASC refers to its decisions from April and July 2024 (3 Nc 10/24m; 3 Nc 35/24p; 3 Nc 36/24k; 3 Nc 37/24g), which had denied the international jurisdiction of Austrian courts for such an enforcement - the same third-party debtor was involved in each case. It appears that the reason given back then, as far as can be seen, was the lack of connection to Austria. In the current decision, it is not explained by the ASC why this would now be different. However, the ASC notes that the determination of the jurisdiction of an Austrian court does indicate whether the enforcement is likely to be successful.

Practical Implications

If the enforcement of the claim is authorised, the Austrian court determined by the ASC issues a prohibition of payment and requests the third-party debtor to submit a third-party declaration. Upon service of the prohibition of payment, under Austrian law, the claim of the main debtor against the third-party debtor (account balance) is attached. The enforcing creditor can in principle demand payment to him in the amount of the enforced claim. If the third-party debtor does not comply with this, the creditor can file a third-party claim against the third-party debtor (Section 308 Austrian Enforcement Act).

At this point, however, it becomes clear why the ASC had good reason to doubt the practical effects of jurisdiction in Austria. The enforcing creditor may only file a third-party claim in the jurisdictions that would also have been available to the main debtor (gambling provider) against the third-party debtor (Maltese bank) to pursue the underlying claim (account balance). If – as in the case in hand – neither the main debtor nor the third-party debtor is domiciled in Austria and their legal relationship has no other connection to Austria, the Austrian courts will generally not have jurisdiction. It is not possible to file a third-party claim in Austria under these circumstances

The effect of the prohibition of payment issued and the request to issue a third-party declaration in Malta is subject to Maltese law. In view of Bill No 55, it is unlikely that the Maltese authorities will actively assist with enforcement. In this context, it is worth noting that, according to the ASC, a prohibition of payment issued against foreign third-party debtors is indeed permissible, but conversely, a prohibition of payment issued by foreign courts against domestic third-party debtors is invalid in Austria (see OGH 3 Ob 58/16z).

Conclusion

The ASC’s new judgement regarding the cross-border enforcement of claims against a Maltese third-party debtor appears, at first glance, to open up a new enforcement path for creditors of judgements arising from gambling claims. However, the practical effectiveness of this approach is likely to be limited.

Note: This blog is for general information purposes only and in no way constitutes legal advice from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal advice. Binder Grösswang Rechtsanwälte GmbH accepts no liability of any kind for the content and accuracy of the blog.

Please note: This blog is for general information purposes only and in no way constitutes legal advice from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal advice. Binder Grösswang Rechtsanwälte GmbH accepts no liability of any kind for the content and accuracy of the blog.