Right to equality of arms
In an order published today, the First Senate of the Federal Constitutional Court dismissed a constitutional complaint in which the complainants challenged a preliminary injunction issued in civil proceedings before the complainants had the opportunity to be heard in court.
The constitutional complaint proceedings, which arise from initial proceedings concerning fair competition and trademark law, centre on the preconditions for an admissible claim of a violation of the right to equality of ‘arms’ by way of constitutional complaint.
The constitutional complaint is inadmissible. Complainant no. 1 has not sufficiently substantiated its standing. It cannot be inferred from its submission that the challenged preliminary injunction rests on the alleged violation of the right to equality of ‘arms’. Complainants no. 2 to 4 have sufficiently substantiated their standing and the exhaustion of legal remedies before the ordinary courts. However, it does not follow from their submission that a recognised legal interest continues to exist given that the preliminary injunction has, in the meantime, been reversed in the ordinary court proceedings.
The decision was unanimous.
Facts of the case:
Complainant no. 1, a limited liability company, sells energy drink powders. Complainants no. 2 to 4 are its managing directors.
Upon the application of a competitor of complainant no. 1, the Regional Court ordered complainant no. 1 as well as complainants no. 2 to 4, by way of preliminary injunction issued through an order without conducting an oral hearing, to refrain from making certain comparative advertising claims and from using certain EU trademark-protected signs. Prior to issuing the preliminary injunction, the Regional Court did not give complainant no. 1 or complainants no. 2 to 4 an alternative opportunity to be heard.
In response to an objection filed by complainant no. 1 and complainants no. 2 to 4, the Regional Court upheld the preliminary injunction to the extent that it is directed against complainant no. 1. However, the Regional Court reversed the preliminary injunction in respect of complainants no. 2 to 4 on the basis that these complainants were not proper parties to the proceedings.
Complainant no. 1 and complainants no. 2 to 4 lodged their constitutional complaint, which is solely directed against the preliminary injunction, after filing their objection before the Regional Court but prior to the Regional Court issuing its decision on the objection. They allege that the Regional Court violated their right to equality of ‘arms’ under Art. 3(1) in conjunction with Art. 20(3) of the Basic Law (Grundgesetz – GG) by issuing the preliminary injunction both without conducting an oral hearing and without giving the complainants an alternative opportunity to be heard.
Key considerations of the Senate:
The constitutional complaint is inadmissible.
I. Complainant no. 1 has failed to sufficiently substantiate its standing to claim a violation of the right to equality of ‘arms’, which is the only violation that the complainant alleges.
1. a) In civil proceedings, the right to equality of ‘arms’ – as a manifestation of the general right to equality (Art. 3(1) of the Basic Law) and the rule of law principle (Art. 20(3) of the Basic Law) – guarantees that parties in court have equivalent procedural positions. To the extent provided for under the respective code of procedure, the parties to the proceedings are to be accorded equal opportunities to make use of all relevant instruments in substantiating their claim and to autonomously apply all necessary means to defend themselves against any claims made by the opposing party.
b) A finding as to a violation of the right to equality of ‘arms’ is, in principle, only possible if the ordinary court decision which is challenged by the constitutional complaint rests on the alleged failure to sufficiently respect the right to equality of ‘arms’. An ordinary court decision rests on a violation of the right to equality of ‘arms’ if it cannot be excluded that – had the equivalence of the parties’ procedural position been safeguarded – the ordinary court would have assessed the facts of the case or a key legal aspect differently or the decision as a whole would have been more favourable to the complainant.
c) If a constitutional complaint alleges a violation of the right to equality of ‘arms’ in the form of a lack of the opportunity to make a submission in the ordinary court proceedings, the requirements for substantiating that the ordinary court decision rests on a violation of the right to equality of ‘arms’ are comparable to those that apply in case of an alleged violation of the right to be heard. Generally, these requirements are only met if complainants substantiate what they would have submitted – in an admissible manner – in the ordinary court proceedings had the right to equality of ‘arms’ been respected.
2. Based on these standards, complainant no. 1 has not sufficiently substantiated that the challenged preliminary injunction rests on the alleged violation of the right to equality of ‘arms’.
In particular, there is no submission indicating that it cannot be ruled out that the Regional Court could have assessed the facts of the case or a key legal aspect differently or that its decision as a whole would have been more favourable to complainant no. 1 if the equivalence of the parties’ procedural position had been safeguarded by providing the opportunity to submit a statement in the preliminary injunction proceedings prior to the issuance of such injunction. Moreover, complainant no. 1 does not substantiate what it would have submitted had it been given sufficient opportunity to make a statement.
To the extent that complainant no. 1 refers in this regard to Chamber decisions of the Federal Constitutional Court, these decisions do not give rise to standards which deviate from the Senate’s applicable case-law. Moreover, not all Chamber decisions actually dispense with such requirement.
II. In respect of complainants no. 2 to 4, the constitutional complaint also fails to meet the relevant substantiation requirements.
1. Complainants no. 2 to 4 have sufficiently substantiated their standing.
2. They have also sufficiently substantiated the exhaustion of legal remedies before the ordinary courts.
a) In respect of preliminary injunctions issued in ordinary court proceedings, the legal remedies that must be exhausted prior to lodging a constitutional complaint generally include the legal remedies provided for in preliminary injunction proceedings by the relevant code of procedure. Not only is it necessary to exhaust the available legal remedies, complainants must also wait for the ordinary courts to deliver their decisions. However, the requirement of the exhaustion of legal remedies does not preclude a decision on the merits by the Federal Constitutional Court if the legal remedies under ordinary law have not been exhausted at the time when the constitutional complaint is lodged but have been exhausted by the time that the Federal Constitutional Court renders its decision.
b) Based on these standards, complainants no. 2 to 4 have sufficiently substantiated the exhaustion of remedies. While the Regional Court had not yet decided on the complainants’ objection against the preliminary injunction when the constitutional complaint was lodged, in the meantime, the Regional Court reversed the preliminary injunction in respect of complainants no. 2 to 4. Complainants no. 2 to 4 have thus exhausted all legal remedies available to them under the Code of Civil Procedure (Zivilprozessordnung – ZPO), obtaining a favourable decision on the merits.
3. However, complainants no. 2 to 4 have failed to sufficiently substantiate that they have a recognised legal interest.
a) As a general precondition of admissibility for a constitutional complaint against a decision, there must be a recognised legal interest in the decision’s reversal. If, at the time that the Federal Constitutional Court renders its decision, the challenged decision is no longer in force and can thus no longer be reversed or the challenged decision no longer has an onerous effect on the complainant, there may still be exceptional cases in which a continuing legal interest in an isolated declaration that the decision at issue violated the complainant’s fundamental rights or rights equivalent to fundamental rights is sufficient for the Federal Constitutional Court to issue such a declaration. If a continued legal interest is recognised based on a risk of repetition, such risk must also affect the complainants themselves.
b) Based on these standards, complainants no. 2 to 4 have failed to sufficiently substantiate their legal interest.
At the relevant time of the Federal Constitutional Court’s decision, there is no recognised legal interest in reversing the preliminary injunction. Given the reversal of the preliminary injunction by the ordinary court following the complainants’ objection, there no longer is an ordinary court decision in force which could be reversed by the Federal Constitutional Court.
Complainants no. 2 to 4 have not sufficiently substantiated that there continues to be a legal interest in the Federal Constitutional Court issuing an isolated declaration that the preliminary injunction violated the complainants’ right to equality of ‘arms’. In particular, the complainants failed to show that they themselves are threatened by a risk of repetition, namely the risk of the same preliminary injunction or a comparable preliminary injunction under the law on fair competition and trademark law being issued.