The Federal Court of Justice (BGH) decided on January 25, 2024, under case number IX ZR 19/22, that without authorization from the German Federal Bank, frozen funds and economic resources cannot be seized under Regulation (EU) 2016/44.
The case involved G. GmbH, which secured an arbitration award against the Libyan state fund L., entitling it to a payment of €1,806,075 plus interest and costs. The plaintiff, the sole shareholder of G. GmbH, sought to enforce the arbitration award. The Higher Regional Court of Frankfurt am Main allowed provisional enforcement to secure the claim, and the plaintiff requested the seizure of an alleged claim of L. against the defendant.
The Federal Court of Justice applied several legal provisions: Section 804(1) of the German Code of Civil Procedure (ZPO), which concerns the conditions for enforcement, and Article 1(b) and (d) and Article 11(2) of Regulation (EU) 2016/44, which governs restrictive measures in light of the situation in Libya and states that frozen funds and economic resources cannot be seized without authorization from the competent authority.
The court found that the seizure of L.’s claim was conducted without the necessary authorization from the German Federal Bank. According to Article 5(4) of Regulation (EU) 2016/44, frozen funds and economic resources are unseizable without such authorization. The court referred to the European Court of Justice (ECJ) ruling on November 11, 2021 (C-340/20), which established that security measures involving frozen funds also require authorization.
In conclusion, the Federal Court of Justice overturned the decision of the Higher Regional Court of Frankfurt am Main and dismissed the plaintiff’s claim due to the lack of necessary authorization from the German Federal Bank for the seizure of the frozen funds.