Court reviews investment control


For the first time in the history of German foreign direct investment (“FDI”) control, Berlin Administrative Court repealed two decisions of the German Federal Ministry for Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz, “BMWK”) in 2023.

The first decision concerned the acquisition of an interest in PCK Raffinerie GmbH in Schwedt. The company is the operator of the most important crude oil refinery in eastern Germany, supplying 95% of Berlin und Brandenburg with fuels. Austrian acquirer Alcmene GmbH, whose parent company is based in Guernsey, had notified the BMWK of the transaction for investment control purposes. However, a dispute about the validity of the purchase agreement arose between the acquirer and the seller, and the BMWK discontinued the procedure by means of a “decision”, stating that according to the seller’s submissions the share purchase agreement had become invalid. In the absence of a legal transaction, the BMWK saw no reason for the FDI procedure to continue. Alcmene took legal action against this decision.

By its judgment of 7 November 2023 (case No. VG 4 K 536/22), Berlin Administrative Court decided that the BMWK should not have discontinued the procedure against the will of Alcmene. As a general rule, an investment screening procedure initiated due to a notification filed by an acquirer may be discontinued only with that acquirer’s consent. The law provides no legal basis for a “discontinuation decision” to the detriment of the filing party. Furthermore, the Court decided that, as a result of the expiry of the statutory screening deadline, the purchase agreement was approved by default. Even where the validity of the contract is disputed between parties, the approval by default still applies. Something different may apply where it is obvious that the acquisition can no longer be implemented. However, this was not the case in the case at hand.

The second decision was about the acquisition of Heyer Medical AG, a German manufacturer of anesthesia equipment and ventilators, by the Chinese Aeonmed group. Closing of the transaction had already occurred in 2019. When the BMWK learnt of the transaction in April 2020, it contacted the companies involved, thereby prompting the acquirer to file an application for a certificate of non-objection with the BMWK. In August 2020, the BMWK initiated a screening procedure and prohibited the transaction in 2022. The reason given by the BMWK was the significance of ventilator technology during the Covid-19 pandemic.

By its judgment of 15 November 2023 (case number VG 4 K 253/22), Berlin Administrative Court overturned the prohibition. Firstly, according to the Court, the BMWK had failed to properly hear the acquirer with respect to numerous facts which the BMWK had cited to justify the prohibition. Secondly, the BMWK hat opened the screening procedure too late. The period during which a prohibition was possible at the time had already expired when the procedure was opened. The application for a certificate of non-objection did not cause the period to begin again.

These judgments significantly strengthen companies‘ procedural rights in FDI proceedings. In particular, the hearing requirement is likely to increase the transparency and predictability of proceedings.

Noerr represented Alcmene GmbH in the FDI procedure and before Berlin Administrative Court.


This article is part of the Competition Outlook 2024. You can find all Competition Outlook articles here.

Competition Outlook 2024
Antitrust & Competition