BGH gives private investors encouragement

In a decision of Dec. 13, 2012 (III ZR 282/11, the decision is available on the website of the BGH under www.bundesgerichtshof.de – „Entscheidungen“), the German Federal Supreme court has given private investors some encouragement – even though – at least in the moment – only at a procedural level: The plaintiff demands from the defendant, the international rating agency Standard & Poor’s, damages because of the purchase of certificates of „L.B.V.“, an affiliate of Lehman, gone bankrupt in September 2008. The prospectus had claimed that the issuer as well as Lehman had obtained a rating of A+ by the defendant.

Even though the BGH has reversed the decision by the Frankfurt Court of second instance (Oberlandesgericht) which had affirmed jurisdiction of the Frankfurt courts due to procedural mistakes, it stressed at the same time that it fully upholds its view that the jurisdiction of German courts (according to Section 23 of the Civil Code) requires, besides the defendant owning assets within the district of the court, only that the plaintiff resides within Germany.