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Who Gets the Bribe? – The German Perspective on Civil Law Consequences of Corruption in International Contracts

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The Impact of Corruption on International Commercial Contracts

Part of the book series: Ius Comparatum - Global Studies in Comparative Law ((GSCL,volume 11))

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Abstract

This contribution analyzes the civil law consequences of corruption in international contracts under German law. Firstly, the relevant German criminal law is briefly summarized because there are points of intersection between criminal and civil law. Secondly, the most important legal relationships in civil law are identified and analyzed on the basis of the relevant statutory provisions and German case law. Thirdly, three typical problems will be presented in order to further illustrate the functioning of the German civil law on corruption. Against this background, a central concern of German civil law becomes apparent: Who should get the bribe when it comes to litigation.

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Notes

  1. 1.

    See B Groß and T Reichling, ‘Weshalb sich Korruption nicht mit den Mitteln des Ordnungswidrigkeitenrechts bekämpfen lässt’ (2013) wistra 89 ff, arguing that in most cases of corruption the conditions of sec 130 are not fulfilled.

  2. 2.

    Art 1 No 3 of the Law of 13 August 1997 on Combating Corruption (Gesetz zur Bekämpfung der Korruption), Official Journal (Bundesgesetzblatt) 1997 I 2038, taking effect on 20 August 1997.

  3. 3.

    K Kühl, in K Kühl and M Heger (eds), Lackner/Kühl Strafgesetzbuch Kommentar, 27th edn (Munich, Beck, 2011) sec 299 para 1 ff.

  4. 4.

    R Sethe, ‘Zivilrechtliche Rechtsfolgen der Korruption am Beispiel von Bankgeschäften’, (1998) Wertpapiermitteilungen (WM) 2309, at 2312.

  5. 5.

    German Act on the Second Protocol of 19 June 1997 on the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union (Gesetz zu dem Zweiten Protokoll vom 19. Juni 1997 zum Übereinkommen über den Schutz der finanziellen Interessen der Europäischen Gemeinschaften) of 22 August 2002, Official Journal 2002 I 3387, taking effect on 21 October 2002.

  6. 6.

    Art 2 § 1 German Act on the Protocol of 27 September 1996 on the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union (Gesetz zu dem Protokoll vom 27. September 1996 zum Übereinkommen über den Schutz der finanziellen Interessen der Europäischen Gemeinschaften [EU-Bestechungsgesetz – EUBestG]) of 10 September 1998, Official Journal II 2340; Art 2 § 1 German Act on the Convention of 17 December 1997 on Combating Bribery of Foreign Public Officials in Business Transactions (Gesetz zu dem Übereinkommen vom 17. Dezember 1997 über die Bekämpfung der Bestechung ausländischer Amtsträger im internationalen Geschäftsverkehr [Gesetz zur Bekämpfung internationaler Bestechung – IntBestG]) of 10 September 1998 Official Journal II 2327; for a recent case applying German criminal law extraterritorially see eg Federal Court of Justice (Bundesgerichtshof), judgment of 29 August 2008, BGHSt 52, 323 ff – Siemens/Enel.

  7. 7.

    Convention on the protection of the financial interests of the European Communities, OJ C 316 of 27 November 1995; First Protocol of 27 September 1996 to the Convention on the protection oft he European Communities’ financial interests, OJ C 313 of 23 October 1996; Second Protocol of 19 June 1997 to the Convention on the protection of the European Communities’ financial interests, OJ C 221 of 19 July 1997.

  8. 8.

    OJ C 195 of 25 June 1997.

  9. 9.

    Joint Action 98/742/JHA of 22 December 1998 adopted by the Council on the basis of Art K.3 of the Treaty of the European Union on corruption in the private sector, OJ L 358 of 31 December 1998.

  10. 10.

    Implemented into German domestic law by Art 1 of the German Act on the Convention of 17 December 1997 on Combating Bribery of Foreign Public Officials in Business Transactions (Gesetz zu dem Übereinkommen vom 17. Dezember 1997 über die Bekämpfung der Bestechung ausländischer Amtsträger im internationalen Geschäftsverkehr [Gesetz zur Bekämpfung internationaler Bestechung – IntBestG]) of 10 September 1998 Official Journal II 2327.

  11. 11.

    Ratified on 12 November 2014.

  12. 12.

    For the status of the Convention see http://conventions.coe.int/Treaty/en/Treaties/Html/173-1.htm.

  13. 13.

    Signed but not ratified by Germany, http://conventions.coe.int/Treaty/Commun/ChercheSig.asp?NT=174&CM=&DF=&CL=ENG.

  14. 14.

    eg Imperial Court (Reichsgericht), judgment of 26 January 1915, RGZ 86, 146 ff.

  15. 15.

    Upper Regional Court (Oberlandesgericht) Stuttgart, judgment of 10 February 2010, IPRspr 2010 no 33, 71, para 35; Federal Court of Justice (Bundesgerichtshof), judgment of 6 May 1999, BGHZ 141, 357 ff, para 10.

  16. 16.

    Federal Court of Justice (Bundesgerichtshof) judgment of 6 May 1999, BGHZ 141, 357 ff, para 10; see also Federal Court of Justice (Bundesgerichtshof), judgment of 8 May 1985, BGHZ 94, 268 ff.

  17. 17.

    Upper Regional Court (Oberlandesgericht) Karlsruhe, judgment of 2 August 2005, (2007) Blutalkohol 44, 49 f.

  18. 18.

    Local Court (Amtsgericht) Offenbach, judgment of 20 February 1991, (1992) Neue Juristische Wochenschrift – Rechtsprechungsreport (NJW-RR) 1204 f.

  19. 19.

    Upper Regional Court (Oberlandesgericht) Karlsruhe, judgment of 2 August 2005, (2007) Blutalkohol 44, 49 f.

  20. 20.

    Federal Court of Justice (Bundesgerichtshof), judgment of 8 May 1985, BGHZ 94, 268 ff.

  21. 21.

    Local Court (Amtsgericht) Offenbach, judgment of 20 February 1991, (1992) Neue Juristische Wochenschrift – Rechtsprechungsreport (NJW-RR) 1204 f.

  22. 22.

    Regional Court (Landgericht) Darmstadt, judgment of 6 February 1992, docket no 6 S 155/91 (unpublished, see NJW-RR 1992, 1205).

  23. 23.

    Federal Court of Justice (Bundesgerichtshof), judgment of 5 December 1990, (1991) Wertpapiermitteilungen (WM) 645 ff.

  24. 24.

    Federal Labour Court (Bundesarbeitsgericht), judgment of 21 June 2012, BAGE 142, 188.

  25. 25.

    eg Federal Labour Court (Bundesarbeitsgericht), judgment of 14 July 1961, BAGE 11, 208; see also Federal Court of Justice (Bundesgerichtshof), judgment of 18 December 1990, (1991) Wertpapiermitteilungen (WM) 595, in respect to the claim of a client against his tax advisor who had accepted bribes from a third party and then had advised the client in favour of the third party.

  26. 26.

    Claim for breach of contract: secs 280(1), 241(2) German Civil Code; tort claim: sec 823(2) German Civil Code in connection with secs 263(1), 266(1), 299 German Criminal Code, and sec 826 German Civil Code, see eg W Acker, D Froesch and J Kappel, ‘Zivilrechtliche Ansprüche in Korruptionsfällen und ihre kommerziellen Folgen – wer haftet wem?’ (2007) Betriebsberater (BB) 1509.

  27. 27.

    Federal Labour Court (Bundesarbeitsgericht), judgment of 21 June 2012, BAGE 142, 188 ff.

  28. 28.

    Federal Labour Court (Bundesarbeitsgericht), judgment of 14 July 1961, BAGE 11, 208 ff.

  29. 29.

    Imperial Court (Reichsgericht), judgment of 26 January 1915, RGZ 86, 146 ff; see also Imperial Court (Reichsgericht), judgment of 26 October 1923, RGZ 107, 208 ff.

  30. 30.

    Imperial Court (Reichsgericht), judgment of 1 June 1932, RGZ 136, 359 ff.

  31. 31.

    Upper Regional Court (Oberlandesgericht) Düsseldorf, judgment of 20 June 1989, (1990) Baurecht (BauR) 618 ff.

  32. 32.

    Federal Court of Justice (Bundesgerichtshof), judgment of 17 Mai 1988, (1988) Wertpapiermitteilungen (WM) 1380 ff.

  33. 33.

    See eg M Schwab, in Münchener Kommentar zum BGB, 6th edn (Munich, Beck, 2013) sec 817 para 55; J Kappel and F Kienle, ‘Finanzielle Risiken für Schmiergeld zahlende Unternehmen’ (2007) Wertpapiermitteilungen (WM) 1441, 1443 ff; U Unger, ‘Mehrfache Zahlungspflichten des “schmierenden” Unternehmens als Korruptionsfolge’ 2008 Corporate Compliance Zeitschrift (CCZ) 201, 205.

  34. 34.

    In particular, it appears unsettled to what extent it is justified to attribute the payment of a bribe to the company whose employee bribes the principal’s employee whereas the receiving of the bribe by the principal’s employee is not attributed. On a more general level it appears unsettled how to deal with cases of agency (Stellvertretung) if there are corrupt agents on both sides. The doctrinal discussion appears to ground on a triangular setting of facts in which there is the bribe-payer as such acting for himself on the one hand and on the other hand the bribed agent representing the principal. In that case it is plausible to sanction the bribe-payer. However, it is less plausible to punish the bribe-payer if the bribe results from the acting of an agent violating eg the company’s clear-cut internal codes of conducts against corruption and criminal law. Further, one may hold that the principal is entitled to reclaim its payment only if the value of the bribe-payer’s performance is deduced, see eg, arguing on general grounds of the law of unjust enrichment W Flume, Allgemeiner Teil des Bürgerlichen Gesetzbuches, 4th edn (Berlin, Springer, 1992) § 18 10, 391; see also, with a different reasoning, EG Busz, ‘Der Vergütungsanspruch aus einem durch Submissionsbetrug erlangten Auftrag’ (2003) Neue Zeitschrift für Bau- und Vergaberecht (NZBau) 65, 70. See also M Weller, ‘Perspektiven des Europäischen Kollisionsrechts: Private Enforcement durch Internationales Privatrecht? Wirkungen von Korruption auf internationale Verträge’ (2014) WiVerw 130 ff, in particular discussing implications of the interpretation of sec 817 German Civil Code for choice of law under Art 9 Rome I Regulation.

  35. 35.

    Federal Court of Justice (Bundesgerichtshof), judgment of 6 May 1999, BGHZ 141, 357 ff; see also Federal Court of Justice (Bundesgerichtshof), judgment of 4 November 1999, (2000) Wertpapiermitteilungen (WM) 21 ff (right of principal to approve the main contract that was negatively affected by bribery, approval by the principal may be inferred from circumstances and need not be declared expressly); Federal Court of Justice (Bundesgerichtshof), judgment of 10 January 1990, (1990) Wertpapiermitteilungen (WM) 516 ff; Upper Regional Court (Oberlandesgericht) Brandenburg, judgment of 25 August 2011, (2011) Immobilien- und Baurecht (IBR) 644.

  36. 36.

    Note that economic analysis of bribery in Germany comes to the result that the validity of the main contract is preferable, see eg H Schlüter and M Nell, ‘Rechtswirksamkeit auf Schmiergeld beruhender Hauptverträge – Eine ökonomische Analyse’ (2008) Neue Juristische Online Zeitschrift (NJOZ) 223; see also M Nell, ‘Contracts Induced by Means of Bribery: Should they be void or valid?’, BGPE Discussion Paper No 42 (February 2008).

  37. 37.

    Upper Regional Court (Oberlandesgericht) Frankfurt, judgment of 9 February 2009, (2009) Baurecht (BauR) 1604 ff.

  38. 38.

    Upper Regional Court (Oberlandesgericht) Munich, judgment of 19 February 2002, (2002) Neue Juristische Wochenschrift – Rechtsprechungsreport (NJW-RR) 886 ff; see also Upper Regional Court (Oberlandesgericht) Munich, judgment of 16 April 2007, (2007) OLG-Report (OLGR) München 496 ff (construction of the Allianz Arena in Munich).

  39. 39.

    Schlüter and Nell (n 36), 231.

  40. 40.

    Upper Regional Court (Oberlandesgericht) Düsseldorf, judgment of 13 January 1994, (1994) OLG-Report (OLG-R) Düsseldorf 219.

  41. 41.

    Imperial Court (Reichsgericht), judgment of 26 January 1995, RGZ 86, 146 ff.

  42. 42.

    Imperial Court (Reichsgericht), judgment of 1 June 1932, RGZ 136, 359 ff.

  43. 43.

    Federal Court of Justice (Bundesgerichtshof), judgment of 6 May 1999, BGHZ 141, 357 ff.

  44. 44.

    Federal Court of Justice (Bundesgerichtshof), judgment of 17 May 1988, (1988) Wertpapiermitteilungen (WM) 1380 ff.

  45. 45.

    Upper Regional Court (Oberlandesgericht) Frankfurt, 9 February 2009, (2009) Baurecht (BauR) 1604 ff.

  46. 46.

    Upper Regional Court (Oberlandesgericht) München, 19 February 2002, (2002) Neue Juristische Wochenschrift – Rechtsprechungsreport (NJW-RR) 886 ff.

  47. 47.

    Upper Regional Court (Oberlandesgericht) Düsseldorf, 13 January 1994, (1994) OLG-Report (OLGR) Düsseldorf 219.

  48. 48.

    Sec 8(2) German Act against Unfair Commercial Practices (Gesetz gegen den unlauteren Wettbewerb); sec 1004(1) Sentence 2 German Civil Code.

  49. 49.

    See Transparency International, http://www.transparency.org/whatwedo/tools/integrity_pacts/4/ (24 January 2014): “essentially an agreement between the government agency offering a contract and the companies bidding for it that they will abstain from bribery, collusion and other corrupt practices for the extent of the contract”. An example for the use of such integrity pacts in Germany is the ongoing construction of Berlin’s new international airport – according to Transparency International’s information a EUR 2.4 billion project. This pact was agreed between the company that runs the airport, Flughafen Berlin-Schönefeld GmbH, and Transparency’s chapter in Germany, op cit.

  50. 50.

    O Meyer, ‘Combating Corruption by Means of Private Law – The German Experience’, in O Meyer (ed), The Civil Law Consequences of Corruption (Baden-Baden, Nomos, 2009) 145, 163 ff.

  51. 51.

    O Meyer, ‘Die Bekämpfung der Korruption als Aufgabe für das Privatrecht’, in D Zetsche et al (eds), Recht und Wirtschaft – Jahrbuch Junger Zivilrechtswissenschaftler 2007 (Stuttgart, Boorberg, 2008) 83, 101 ff.

  52. 52.

    But see also above n 34 raising doubts as to whether this sanction is available at all.

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  1. EBS University for Economics and Law, Chair for Civil Law, Civil Procedure and Private International Law, Gustav-Stresemann-Ring 3, 65189, Wiesbaden, Germany

    Matthias Weller

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Editors and Affiliations

  1. UNIDROIT, Rome, Italy

    Michael Joachim Bonell

  2. Centre of European Law and Politics, University of Bremen, Bremen, Germany

    Olaf Meyer

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Weller, M. (2015). Who Gets the Bribe? – The German Perspective on Civil Law Consequences of Corruption in International Contracts. In: Bonell, M., Meyer, O. (eds) The Impact of Corruption on International Commercial Contracts. Ius Comparatum - Global Studies in Comparative Law, vol 11. Springer, Cham. https://doi.org/10.1007/978-3-319-19054-9_8

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