Background
Facts
Decision
Comment
According to Section 63(1) of the Notaries Code, when drawing up a notarial deed, a party whose language capabilities are insufficient to understand the document and its consequences fully must be assisted by a sworn and court-certified translator (who must be present when the deed is drawn up). If this requirement is not complied with, the document will be denied the legal status of a public deed (under Section 66 of the code).
In a recent decision(1) the Supreme Court was called on to determine, among other things, under what circumstances a party is assumed to have sufficient knowledge of the German language within the meaning of Section 63(1) of the code. In particular, the court considered from which point of view the lack of language skills has to be determined, that is:
- ex ante or ex post;
- from the notary's point of view; or
- based on objective criteria.
A share purchase and transfer agreement with respect to shares in an Austrian limited liability company (GmbH) was executed by the purchaser, a Hungarian national, in the form of an Austrian notarial deed (the mandatory form requirement under Section 76 of the Limited Liability Company Act). Some time after execution of the share purchase and transfer agreement, the purchaser claimed that the agreement was invalid, arguing that when signing the agreement he was unable to understand the contract, and in particular that the share acquired by him was only paid up in half so that the company could require him to pay up the remainder of his share.
The Supreme Court held that the question of 'sufficient knowledge' can not be determined in general, but with reference only to the specific subject matter of the notarial deed in question. Based on the protective purpose of Section 63(1) of the code, it is decisive whether the specific party concerned is able to understand what the notary public has read out to be able to approve the contents of the agreement when executing the deed.
The court also held that under the wording of Section 63(1) of the code, the requirement to call in a translator is not subject to subjective ex ante criteria. Hence, whether a translator must be called in, and thus whether a notarial deed is valid, does not depend on whether the notary public is able to recognise ex ante the sufficient or insufficient language skills of the party.
Therefore, an adequate verification of the language skills by the notary public creates only an assumption that a person has sufficient knowledge of the language as required under Section 63(1) of the code. Nevertheless, the party remains free to prove subsequently that, contrary to the notary's assessment, it did not have sufficient language skills to understand the contents of the notarial deed at the time of execution.
In practice, this means that whenever there is only residual doubt as to the language skills of one of the parties, the advice as counsel to the other party must be to insist on the involvement of a court-appointed and certified translator.
For further information on this topic please contact Heidrun Halbartschlager at Schoenherr by telephone (+43 1 534 370), fax (+43 1 534 376 100) or email ([email protected]).
Endnotes