GÖRG obtains access to books and accounts of RECARO Aicraft Seating GmbH & Co. KG for BARDAWIL

21.01.2015

[Berlin, ] GÖRG Partnerschaft von Rechtsanwälten mbB obtained an order from the Higher Regional Court of Stuttgart (Germany) on behalf of its client BARDAWIL Aviation granting access to the books and accounts of the German aircraft seat manufacturer RECARO Aircraft Seating GmbH & Co. KG.

BARDAWIL is a leading provider of aviation products and services in the Middle East and has served as RECARO's Middle East representative since 1995. Operating from Dubai, BARDAWIL had acquired numerous customers in the region, among these QATAR Airways, ETIHAD and EMIRATES.

RECARO terminated the representation agreement with BARDAWIL in 2011 and refused BARDAWIL's subsequent request to provide BARDAWIL with summaries of RECARO's books and accounts. RECARO based its refusal on terms of that agreement which precluded any right to request such information.

BARDAWIL then applied to the Heilbronn District Court requesting access to RECARO'S books and accounts. The District Court rejected the application in January 2014. BARDAWIL's subsequent appeal to the Stuttgart Higher Regional Court was successful. The court overturned the decision of the District Court, ordering RECARO to grant access to its books and accounts (decision dated 19 January 2015, 5 U 18/14). The Higher Regional Court pointed out that any waiver of a representative's right under applicable German law would require an explicit contractual provision. Such a provision was not agreed to and therefore BARDAWIL was entitled to request accounts summaries pursuant to § 87c of the German Commercial Code (HGB). In such accounts, RECARO is obliged to disclose all relevant sales notwithstanding RECARO's own views on whether commissions are payable on these sales. In particular, RECARO is not entitled to disregard its obligation to pay commissions by relying on RECARO's own "self-assessment" of sales. Since RECARO had refused to provide an extract accounts summary, it was now ordered to grant access to its books and accounts.

The court has not permitted RECARO to file a further appeal before the Federal Court of Justice (BGH). The total value of all claims in dispute in this and other matters amount to up to EUR 30 million.

GÖRG regularly represents clients in international litigation and arbitration proceedings. Partner Daniel Fuchs frequently advises on matters involving the Middle East (e.g. JENOPTIK AG transactions in Saudi Arabia and Oman; see GÖRG’s press releases from 20 September 2012 and 13 May 2011), but also in domestic litigation matters (e.g. Toll Collect GmbH, see GÖRG’s press release dated 20 September 2010).