German court sides with Iranian metal firm’s subsidiary in sanctions-linked contract dispute
The Regional Court of Bonn (LG Bonn, Urteil vom 14.05.2019 – 10 O 505/18) ruled in favor of a German subsidiary of an Iranian metal conglomerate after a German telecommunications provider terminated their contracts over U.S. sanctions concerns. The telecommunications provider claimed that maintaining the business relationship posed reputational risks and potential non-payment issues due to Iran-related sanctions.
However, the court found the extraordinary termination of the contracts unjustified, siding with the Iranian-linked company’s subsidiary. Though regular termination of certain contract components was upheld, the ruling underscores European legal protections for sanctioned entities within the EU, despite U.S. pressure.
The identity of the involved parties was not publicly disclosed during. Tehran Bureau requested this information from the Regional Court of Bonn on 14 Oct 2024, and was still awaiting a response as of publication time.
This ruling was later upheld by the Cologne Higher Regional Court (7 February 2020, Case 19 U 118/19). The court confirmed the Bonn court’s decision, emphasizing that the EU Blocking Statute does not impose a mandatory obligation to continue business relationships. The telecommunications provider’s termination was deemed lawful, as no specific reason was required under the ordinary termination clauses of the contract.
Tehran Bureau submitted a request for file inspection to the Cologne Higher Regional Court 5 July 2024. The court acknowledged receipt of request regarding 19 U 118/19 on 8 July 2024. However, in a response dated 18 July 2024, the court denied the application, citing the limitations of regional information access laws, which exclude judicial matters from their scope.
This denial underscores the legal boundaries that restrict public access to certain types of judicial documents. In their decision, the court cited the independence of the judiciary as a key reason for the denial. Unlike administrative documents, court records are not automatically available to the public, and access is often limited to the involved parties or those able to demonstrate a compelling public interest.