Land Purchase Broker's Commission Case

CourtCourt of Appeal of Munich (Germany)
Federal Republic of Germany, Superior Provincial Court (Oberlandesgericht) of Munich
Land Purchase Broker's Commission Case1

Sovereign Immunity Foreign States Purchase of building for use as consulate of foreign State Claim for broker's commission Whether foreign State entitled to jurisdictional immunity Restrictive theory of sovereign immunity Acts iure imperii and iure gestionis Whether claim interferes with proper functioning of consulate The law of the Federal Republic of Germany

Summary: The facts:The plaintiff2 brought an action for payment of broker's commission arising out of the provision of a building for use as a consulate by the defendant State.3 The Provincial Court of Munich held that the foreign State was subject to German jurisdiction but that the claim was unfounded because the plaintiff had not proven that the broker's activity had contributed to the purchase of the property in question. The plaintiff appealed.

Held:The appeal was admissible but unfounded.

A foreign State was not entitled to immunity from domestic jurisdiction with regard to its non-sovereign activities and the purchase of property for use as a consulate building and the broker's activity connected with such purchase were not within the sphere of a State's sovereign activities. The success of the claim would not have interfered with the proper functioning of the consulate. Nevertheless the appeal had to be rejected because it had not been proven that the broker's efforts had produced any results.

The following is the text of the judgment of the Court:

This litigation concerns a claim for broker's commission against a foreign State. The claim arises from the provision of a building for the accommodation of the Consulate-General of the defendant State. This claim has been assigned to the plaintiff.

The plaintiffs appeal is admissible but unfounded. This Court agrees with the view taken by the Provincial Court (Landgericht) that no proof has been adduced that the broker's activity of the assignor led directly or contributed to the conclusion of a contract for the purchase of property for the defendant. Since a claim for commission does not exist it could not be assigned to the plaintiff.

The involvement of the defendant State in the proceedings adds a foreign element to the case and the appellate court must also decide

the following questions of international procedural law and private international law:

The court of first instance correctly decided that the defendant State...

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