Risto Vahimets, Andra Rubene, Marius Matonis
M&A IN THE BALTICS − WHAT WILL HAPPEN IN 2013?
Once upon a time, at the beginning of 2011, I predicted in this very same newsletter that the M&A market in the Baltics will return to normal very soon. Although the year 2011 was very successful for TARK GRUNTE SUTKIENE M&A team – we were advising 5 out of TOP 10 Baltic M&A transactions – I was wrong. And even though we have had a lot of interesting work during 2012 – I was still wrong. Things have not returned to normal and all of us in the M&A business have started to question what the so called normal market is.
When we come to the present and the future, it is obviously extremely interesting to peek into what will follow. Unfortunately the best we can do is to predict based on the trends that are visible or that we believe are visible based on our previous experience. There is a good chance that nothing will repeat itself as it was in the past.
But enough of waivers and bravely ahead to the future now!
My first prediction is that the wave of restructuring related M&A will continue. I believe so because there are still a lot of companies that are struggling with high levels of debt caused by earlier leveraged acquisitions or aspirations to grow very quickly. Some of those companies will initiate deals themselves by selling certain businesses in order to reduce debt or will increase equity for the same reasons. For some companies, the financing parties will gently (or not so gently) give directions.
Another reason for restructuring related M&A to continue is the need to iron out bad management decisions of 2007-2008 in terms of acquisitions of real estate or industries with no real synergies by otherwise successful companies.
Restructuring related M&A will continue to be the most challenging type of legal work requiring knowledge of law in the fields of M&A, finance and bankruptcy, but also excellent knowledge of economy.
The second trend that is rising is the interest of private equity and fund type of players in infrastructure and energy industries. There seems to be a rising consensus that new solutions and/or concentration in these fields will drive global economy to exit the current low tide. The PE/fund players may do series of acquisitions and will try to develop a standardized approach to be efficient in what they do. Certain assets may allow this to be successful even in our small markets. Due to the large size of infrastructure and energy companies, these transactions must be put in the larger regional or global context and should not be looked at as if they were Baltic only.
Other than those two trends, I would not predict anything noteworthy. Transaction activity will remain mediocre as long as the European financial crisis does
not show definite signs of being solved. Inflation may be the key for solving high levels of debt – it is too early in my opinion to predict how inflation and money printing will influence our local M&A markets. On global level also technology and IT may draw transactions, but our markets are too small for this to cause a trend to rise.
With these introductory words TARK GRUNTE SUTKIENE ever strong M&A team welcomes you all to the year 2013!
Head of Baltic M&A
TARK GRUNTE SUTKIENE
ESTONIAN LEGISLATIVE UPDATES
AMENDMENTS TO ESTONIAN RESTRICTIONS ON ACQUISITION OF IMMOVABLES ACT
On 4 March 2012, amendments to the Restrictions on Acquisition of Immovables Act came into effect. Hereunder we have presented the most substantial amendments that will most probably have an effect on Estonian M&A transactions from 2012 onwards.
Pursuant to the amendments to the Restrictions on Acquisition of Immovables Act, a citizen of Estonia or another country which is a contracting party to the EEA Agreement or a member state of the Organisation for Economic Cooperation and Development has the right to acquire an immovable which contains agricultural or forest land without restrictions. Previously the authorisation was granted only if the person resided in Estonia permanently for a period of at least six months or was engaged in the manufacture of agricultural produce or forest management for at least one year. Also, a legal person of the contracting state is entitled to acquire an immovable which contains less than ten hectares of agricultural land, forest land or agricultural and forest land in total without restrictions. A legal person is entitled to acquire ten hectares of forest land if the legal person has been engaged in forest management or production of agricultural products for three years immediately preceding the year of making the transaction for acquiring an immovable. A legal person who may acquire an immovable only with the authorisation of the county governor is entitled to grant the use of the land to another person.
ESTONIAN 2012 CASE LAW
THE SUPREME COURT EXPLAINS THE NOTION OF “TRANSFER OF AN ENTERPRISE” PURSUANT TO THE ESTONIAN COMMERCIAL CODE
The Supreme Court has in its judgment No 3-2-1-131-11, dated 21 December 2011, clarified the notion of “transfer of an enterprise”, reminding that a transaction where the members of a directing body of the transferor and acquirer and also the owners are the same might be considered to be the transfer of an enterprise. It is enough to identify the similarities in the economic activities of the transferor and acquirer in order to establish the transfer of an enterprise. In addition, it is necessary to establish whether the acquirer needs the know-how of the employees of the transferor; however it is not important whether the majority of the employees are transferred to the new employer.
For more information please contact:
Head of Baltic M&A
LATVIAN LEGISLATIVE UPDATES
AMENDMENTS TO THE COMMERCIAL LAW RELATED TO RESTRICTIONS ON TRANSACTIONS OF A COMPANY WITH ITS RELATED PERSONS
On 10 July 2012, amendments to the Latvian Commercial law on restrictions on transactions of a limited liability company and a joint stock company with their related persons became effective.
The Commercial Law introduces a new definition for related persons. Firstly, a related person is a relative up to the second degree of kinship, spouse, brother-in-law up to the first degree of affinity or a person sharing a common household with the founder, shareholder, management or supervisory board member. Secondly, a related person is another commercial company, the majority of the shares or investments in which belong to the respective shareholder, management or supervisory board member. Thirdly, a related person is another capital company in which the respective shareholder, management or supervisory board member is the management or supervisory board member.
Transactions of companies with related persons must be additionally approved or, in cases where the company has a sole shareholder – concluded in writing.
Failure to ensure the required approvals may cause invalidity or challenge of the transactions, as well as may cause basis for claims for losses from the management board.
The restrictions do not apply to the transactions carried out in the ordinary course of business for the ordinary market value, free of charge transactions, if the acquirer is a company, transactions carried out through auctions, stock exchange transactions or transactions based on a court’s ruling.
AMENDMENTS TO THE FINANCIAL INSTRUMENTS MARKET LAW RELATED TO DISCLOSURE OF INFORMATION ON SIGNIFICANT TRANSACTIONS OF AN ISSUER WITH ITS RELATED PERSONS
On 10 July 2012, amendments to the Financial Instruments Market Law providing for disclosure of internal auditors reports on significant transactions between the issuer of transferable securities admitted to trading on a regulated market and its management or supervisory board members or related persons became effective.
EXTENSIVE AMENDMENTS TO THE FINANCIAL INSTRUMENTS MARKET LAW
On 25 April 2012, extensive amendments to the Financial Instruments Market Law in relation to public offerings and admission of securities to trading on a regulated market, operation of brokerage companies and credit institutions offering investment and related services in Latvia became effective.
The definition of financial instruments is supplemented with structured finance products. The definitions of an issue prospectus and a prospectus are clarified, specifying the person preparing the issue prospectus or prospectus. The definition of qualified investors is extended to professional clients and eligible counterparties.
The amendments also specify the date of commencement of validity of the prospectus, providing that this is the date when the regulatory authority has registered the prospectus. The prospectus is valid for 12 months from this date.
In order to ensure wider and faster access to information included in a prospectus, the amendments require that the prospectus be constantly available electronically on the web.
In order to ensure certainty for the issuer on when exactly it may commence a cross-border offering, the amendments provide that the regulatory authority responsible for approval of the prospectus must inform the issuer simultaneously with sending of a certificate of approval of a prospectus to the regulatory institution of the country, where the public offering is envisaged.
The list of significant events when the issuer of transferrable securities admitted to trading on a regulated market must publicly disclose information is clarified.
A shareholder (except for credit institutions and insurance companies) acquiring a qualifying holding in an investment brokerage company must prove its financial stability by demonstrating sufficient free capital and legality of its income.
Investment brokerage companies and credit institutions must inform the Financial and Capital Market Commission also about transactions with OTC derivatives, if their underlying assets are financial instruments admitted to trading on a regulated market, as well as about transaction with financial instruments admitted to trading on regulated markets not only in Latvia and EEA but also in any other country world-wide.
The obligations of investment brokerage companies have been extended, requiring also calculation of the risk capital taking into account all high-risk transactions, not only those included in the trading portfolio.
Investment brokerage companies must also evaluate capital adequacy for existing and potential risks inherent in their operations.
LATVIAN 2012 CASE LAW
LIABILITY OF A MANAGEMENT BOARD MEMBER FOR LOSSES CAUSED TO A COMPANY
The judgment of the Senate of the Supreme Court of 25 January 2012 in case SKC – 25/2012 established that a management board member is liable for the losses caused to the company unless he or she proves that, in the particular situation, he or she has acted as an honest and diligent manager, i.e. there has not been even a slight negligence in his or her actions.
The liability of a management board member for losses caused to the company is established if three preconditions are fulfilled: (i) the actions of the management board member contradict reasonable commercial practice; (ii) the company has incurred losses; (iii) there is a causal link between the actions of the management board and the losses caused to the company.
Civil law provisions regulating tort liability may be applied in relations with third parties when the management board member has caused losses to a third party by committing a wrongful act.
LIABILITY OF FORMER MANAGEMENT BOARD MEMBERS FOR LOSSES CAUSED TO THE COMPANY AS A RESULT OF CALCULATION OF ADDITIONAL TAXES AND DUTIES
The judgment of the Senate of the Supreme Court of 8 February 2012 in case No SKC – 622/2012 established that the taxes and duties of an insolvent company which have been calculated but have not been paid to the State Revenue Service (SRS) should not be regarded either as already caused losses or as lost profits. Although the obligation to pay these taxes affects the “retained earnings” section on the balance sheet and may lead to a negative figure, unpaid taxes and duties cannot be treated as lost profits because tax evasion is not a legitimate way of increasing the company’s profit. The liability of management board members and employees may not be established based on the documents of the SRS because the SRS does not assess the personal actions of management board members and employees at fault.
LIABILITY OF A FORMER MANAGEMENT BOARD MEMBER FOR LOSSES CAUSED TO A COMPANY AS A RESULT OF TRANSACTION OF A COMPANY WITH HIMSELF OR HERSELF
The Senate of the Supreme Court in its judgement of 23 February 2011 in case SKC-100/2011 established that failure of the management board member to notify the shareholders meeting about the sale of the shares owned by the company to the management board member himself or herself is unlawful and against interests of the company, as he or she has acted with the company’s property in his or her own interests without co-ordinating of such actions with the shareholders meeting and thereby caused losses to the company.
The company is entitled to freely determine the value of the shares, including the liquidation value, and claim the losses from the management board member that has determined the value of the shares as the nominal value corresponding to the difference between the liquidation value and nominal value. For doing so the company does not need to challenge the contract of the sale of the shares concluded on behalf of the company unilaterally by the management board member in conflict of interests without the required co-ordination, as such contracts do not contain the company’s intent with respect to the value of the shares.
The company is also entitled to claim the losses from the management board member in the amount of cash withdrawn from the company’s bank account by the management board member without submission of paid invoices, cheques and other source documents proving use of the cash in the interests of the company.
BRINGING OF A CLAIM OF A COMPANY ON THE BASIS OF AN UNAUTHORISED MANAGEMENT
The Senate of the Supreme Court in its judgement of 6 April 2011 in case SKC-130/2011 established that although the preconditions for bringing the company’s claim against its management board members is the shareholder meeting’s decision to bring the claim and elect representatives of the company, who will bring and maintain the claim, the shareholder meeting is entitled to confirm bringing of claim and representatives after the claim has already been brought by the company’s management board on the basis of the Civil Law concept of unauthorized management. Consequently the company’s claim against its former management board member may be brought by the current chairman of the management board provided the shareholders meeting confirms bringing of the claim prior to commencement of hearing of the case.
INCLUDING A PERSONAL GUARANTEE IN ANOTHER DOCUMENT DOES NOT AFFECT ITS VALIDITY
In case SKC – 36/2012 the Senate of the Supreme Court did not agree with the appellant that the representation in an agreement stating that “I, the manager – name, surname, personal code, as a private person, undertake full personal liability as the debtor itself for fulfilment of this agreement” must not be interpreted as the will of the appellant to guarantee fulfilment of the obligations of the company due to lack of a separate signature of the manager confirming that he as a natural person guarantees fulfilment of the obligations of the company.
In the opinion of the Senate, the manager expressed the guarantee for fulfilment of the obligations of the company in writing by indicating his name and surname and personal code, thereby identifying himself as the party to the guarantee contract. With its single signature, the manager has confirmed the provisions of the contract both as the manager and as a private person.
THE VALIDITY OF A GUARANTEE IN CASES WHERE THE PRINCIPAL DEBTOR CEASES TO EXIST
In case SKC – 86/2011 the Senate of the Supreme Court concluded that when guaranteeing obligations, the guarantor undertakes the risk to be liable to the creditor for the debtor’s debts also in case the debtor encounters financial difficulties. Consequently, this obligation of the guarantor to be liable to the creditor for the obligations of the insolvent debtor directly corresponds to the aim of the guarantee. Whereas release of the guarantor from this obligation only because of the poor financial condition of the debtor leading to its insolvency, contradicts the aim of the guarantee.
In the case when the principal debtor ceases to exist and is deleted from the Commercial Register as a result of completion of insolvency proceedings, the guarantee will transform from an accessory obligation into an independent obligation while a claim of creditors against the guarantor will transform from a claim accessory to the principal claim into an independent claim.
For more information please contact:
Head of M&A (Latvia)
LITHUANIAN LEGISLATIVE UPDATES
AMENDMENTS TO THE LAW ON COMPANIES OF LITHUANIA
New form of legal entity (small partnership) was introduced
Amendments to the Law on Companies, effective as of 1 September 2012, introduced a new form of legal entity in the Republic of Lithuania – a small partnership. A small partnership is oriented towards small (family) business, seeking to fill the gap between a sole proprietorship and a private limited liability company.
A small partnership is a legal entity with limited civil liability the establishment of which is not subject to the minimal capital requirement (differently from, for example, a private limited liability company, the minimal authorised capital of which is equal to LTL 10,000). Only natural persons (10 at most) can be members of a small partnership.
A member of a small partnership has the right to receive payments as profit disbursed in advance (i) from the funds of the small partnership for his or her personal needs; (ii) as a share of profit of the small partnership for a period shorter than a financial year.
The possibility to pay interim dividends was introduced
The amendments to the Law on Companies, which came into effect as of 1 March 2012, establish an option to pay dividends to the shareholders of a public or private limited liability company for a period shorter than a full financial year. Such dividends may be paid if the following conditions are met: (i) the set of interim financial statements for the period shorter than a full financial year is approved; (ii) the amount of profit (loss) for the period shorter than a full financial year is positive (without loss); (iii) the amount allocated for payment of dividends does not exceed the amount of profit (loss) for the period shorter than a full financial year, undistributed profit (loss) of the preceding financial year at the end of the preceding financial year, less a portion of profits generated within the period shorter than a full financial year, which must be allocated to reserves in compliance with the law or the articles of association; and (iv) the company has no outstanding obligations that have fallen due before the adoption of the decision and would be capable of discharging its obligations for the current financial year after payment of dividends.
Limitations were set on annual bonuses
In addition to current restrictions that prohibit a company from allocating more than 1/5 of the net profit of the reporting financial year for annual bonuses, the amendments to the Law on Companies, effective from 6 January 2012, also prescribe that a portion of profits of the reporting financial year to be allocated for annual bonuses to members of the board and the supervisory board may not exceed 1/3 of the profit allocated for payment of dividends.
LITHUANIAN 2012 CASE LAW
THE SUPREME COURT PRONOUNCED ON THE CONCEPT OF TRANSFER OF A BUSINESS OR ITS PART
The Supreme Court of Lithuania (civil case No. 3K-3-40/2012) summarised the case law of the Court of Justice of the European Union (hereinafter, the EU Court of Justice) and pinpointed the main criteria based on which the Court of Justice stated in specific cases that there was a transfer of an undertaking or a business falling under Directive 2001/23/EC (“the Directive”).
The EU Court of Justice emphasized that the Directive is aimed at ensuring the continuity of labour relations in case of transfer of an undertaking, a business or its part, when the transfer results in the change of the employer; this is not in any way affected by transfer or non-transfer of the title to certain assets. The Court of Justice specified that solely the transfer of assets used for the activities of an undertaking, business or its part cannot be regarded as the transfer of the undertaking, business or its part; the transfer of an undertaking, business or its part can be stated only if the undertaking, business or its part is transferred as an operating economic entity. According to the Court, the fact that the accepting person took over the undertaking, business or its part as an operating economic entity would be proved by the fact that the accepting person is given every possibility to continue the same activity of the undertaking, business or its part that was performed before the transfer.
The EU Court of Justice noted that none of the criteria for transfer of an undertaking or business cannot be regarded as the main one when ruling on the transfer of an undertaking or business – in order to establish this circumstance national courts have to perform an analysis of all constituent elements, taking into account the peculiarities of each specific case at hand, and to evaluate them in their entirety. Besides, the circumstances of the case are to be examined in connection with the aim of the Directive – to maintain labour relations and to continue the activity (business) of the transferred undertaking.
For more information please contact:
Head of M&A (Lithuania)
EU LEGISLATIVE UPDATES
FINANCIAL TRANSACTION TAX AND COMMON CONSOLIDATED CORPORATE TAX BASE IN EUROPEAN UNION
Please find below a brief introduction to the specific measures that the European Union (EU) is developing in order to rectify the current difficult economic situation. These two new measures are a financial transaction tax (FTT) and a common consolidated corporate tax base (CCCTB). The above topics are vital in the EU and therefore also in the Baltics.
European Union Financial Transaction Tax (FTT)
The European Commission has made a proposal to introduce the FTT within the 27 member states of the EU by 2014. The FTT is seen as a means to cope with the economic and financial crisis. The FTT will ensure that financial institutions make a fair contribution to covering the costs of the crisis and to avoid fragmentation in the internal market for financial transactions.
The EU plans to develop a common system of the FTT which will concern all financial transactions (incl. M&A transactions) – the purchase and sale of financial instruments, such as company shares, bonds, money-market instruments, units of undertakings for collective investment, structured products and derivatives, and the conclusion or modification of derivatives agreements. The FTT will apply to a financial transaction if the following preconditions are met: at least one party to the transaction is established in a Member State and a financial institution established in a Member State is a party to the transaction, acting either for its own account or for the account of another person or in the name of a party to the transaction. Every financial institution which is established in a Member State and fulfils at least one of the requirements must pay the FTT.
Considering the above, it might happen that both parties to a transaction are required to pay the FTT at the rate applicable in the Member State of establishment of the financial institution concerned on a single financial transaction. Each party to the transaction will become jointly and severally liable for the payment of the tax due to a financial institution on account of that transaction.
The FTT will impact financial transactions between financial institutions charging minimum rates of 0.1% for all financial transactions other than those concerning derivatives agreements and 0.01% for all financial transactions concerning derivatives agreements.
The FTT will become chargeable at the moment the transaction occurs. The cancellation or rectification of a financial transaction has no effect on chargeability. However, the above does not apply in cases of errors.
Common Consolidated Corporate Tax Base (CCTB)
The European Commission has developed an opportunity for the EU market to increase the competitiveness and also for the market to become more attractive for foreign businesses looking to set up operations by eliminating tax obstacles to EU cross-border activities. The CCCTB is a set of rules which are used to calculate taxable profits by companies with operations in different Member States. This means that companies will comply only with one single EU system for computing their taxable income according to the CCCTB.
Pursuant to the new rules, the parent company will be responsible for filing the consolidated tax return for all activities in the EU and this tax return will be used to establish the tax base of the group. The CCCTB will make it possible for companies to consolidate profits and losses from their operations across the EU.
These rules adopt a “profit and loss” approach rather than a “balance sheet” approach. As noted before, a single consolidated tax return will be used to establish the group’s tax base. After calculation of the tax base, it will be apportioned between the Member States in which the group has economic activities. The apportionment of the tax base is done according to a specific formula which consists of three equally-weighted factors – sales, assets and labour. Then the Members States will tax, at their domestic corporate tax rate, the profits allocated to the company or permanent establishment residing in their territory for tax purposes.
A fundamental question about the CCCTB is whether the system should be obligatory or voluntary. The European Commission is of the opinion that the CCCTB must be voluntary during the initial running phase but afterwards should be obligatory for companies which fulfill certain prerequisites. It can be stated that if the parent company (principal taxpayer) joins the CCCTB, the subsidiaries will be bound by this choice. It must be noted that for a subsidiary to qualify for the CCCTB group, it must meet two conditions. This means that the parent must hold the following rights in order for the subsidiary to qualify:
(i) a right to exercise more than 50% of the voting rights; and
(ii) an ownership right amounting to more than 75% of the company’s capital or more than 75% of the rights giving entitlement to profit.
MAJOR M&A PROJECTS OF THE LAW FIRM IN 2011-2012
- We advised Pro Kapital in the sale of one of the largest shopping centres in Tallinn, Kristiine Keskus, to Citycon group for ca 105 million EUR. This deal is a landmark transaction for being one of the largest real estate transactions in Estonia ever and for setting a benchmark for other post-recession real estate deals.
- We advised Northern Europe private equity group EQT Infrastructure Fund in the purchase of shares in Fortum Termest AS’s parent company Fortum Alpha B.V. As a result of the transaction, EQT Infrastructure Fund also acquired a 100% indirect holding in Fortum Termest AS. The total value of the transaction was about 200 million EUR.
- We advised Tele2 Eesti in the purchase of shares of Televõrgu AS for 25 million EUR from the state-owned energy giant Eesti Energia. Televõrgu AS, being one of Estonia’s leading telecommunications companies, operates a nationwide fibre-optic telecommunications network and offers wireless internet access services named Kõu.
- We advised a leading electronics service provider Eolané in the acquisition of a 100% holding in AS Elcoteq Tallinn (now AS Eolane Tallinn) from the bankruptcy estate of Elcoteq SE. AS Eolane Tallinn is a contract manufacturer and original design manufacturer of electronic products.
- We advised Neste Oil in the sale of its 93.85% holding in the Estonian subsidiary AS Reola Gaas, a company mainly engaged in the sale of LPG. The buyer was Alexela Group.
- We advised SEB bank on the acquisition of a mortgage loan portfolio from Allied Irish Bank plc Riga branch, a complex transaction involving a long term mortgage secured residential loan portfolio.
- We advised the investment management company SEB Wealth Management in the acquisition of the assets of AS Hipo Fondi, a group company of the Mortgage and Land Bank of Latvia within the scope of its restructuring.
- We advised Eco Baltia in the IPO of its shares and listing on the Warsaw Stock Exchange and the dual listing on the Riga Stock Exchange/Nasdaq OMX.
- We advised Moller Auto Baltics and Moller Real Estate Baltics in the acquisition of three companies – Motors Latvia SIA, Miera auto SIA and Venta Motors SIA. The fact that the seller,Kittner Group, is insolvent complicated the structuring of the transaction and work on the acquisition documentation. The transaction involved the acquisition of the target companies established in Latvia and of real estate in Estonia by a Norway based purchaser.
- We advised the vendor Nordic Capital Fund V in the performance of a vendor’s due diligence of a leading provider of electronic payment solutions in Europe focusing on payment services to merchants in Latvia having subsidiaries in Estonia and Lithuania, being part of the Point Transaction Systems group of companies, in drafting of the report and providing of legal due diligence for the purposes of a private offering.
- We advised BaltCap in connection with the acquisition of Šeimos Medicinos Klinika, a fast growing network of family health care centre in Lithuania. The funds of BaltCap will facilitate the growth of the network and further add-on acquisitions.
- We advised LitCapital in investment into Brolis Semiconductors, a Lithuanian laser technology start up that specializes in the design and development of long-wavelength mid-infrared laser diodes. Brolis Semiconductors’ founders are scientists with the background in nanoelectronics, finishing their PhD studies at the Walter Schottky Institute, Technische Universität München, where they were engaged in the research of complex semiconductor compounds’ growth technology and these compounds’ application in the development of novel optoelectronic devices.
- We advised LitCapital in investment into NNL LT, a third party logistics group. Main business activities of NNL LT are logistics, warehousing, and expedition services. NNL LT is comprised of two companies – Nordnet UAB and Tehoreal UAB.
- We advised a potential bidder in connection with the acquisition of Finasta Bank and Snoras Leasing, the companies sold by the Snoras Bank which went bankrupt in 2011. Snoras Leasing is a leading consumer financing company, while Finasta is a bank positioned to advise private investors.
- We advised the selling shareholders in connection with the sale of Unipakas, a leading parcel service company, to the Eesti Post, the Estonian national post company.
- We advised PriceOn, a technology start-up, in connection with the accepting investment from pigu.lt, a leading on-line shop belonging to Čili Holdings.
- We advised Impuls LTU, the biggest sports club chain in Lithuania, in connection with the long term lease of two new major sports clubs.
- We advised shareholders of Coffee Inn, leading coffee chain, in connection with the sale of minority shareholding to BaltCap to finance further expansion of the company.
This legislative review is for information purposes only and does not reflect all aspects of legal regulation. Please note that the overview of the case law given in this newsletter is for information purposes only. Please be informed that the rules formulated by courts can be not applicable if the factual circumstances of a dispute were different from factual circumstances in those cases where such rules were formulated. For full legal advice please contact our law firm by phones or e-mails indicated in our webpage.