German Supreme Court throws out appeal concerning Schürmann Complex Bonn

20 July 2003 21:59 - Royal BAM Group nv

Royal BAM Group announces that Germany’s Federal Supreme Court in Karlsruhe has thrown out the appeal brought by the German Government against the decision of the Higher Regional Court at Cologne given on 27 April 2001 in the case relating to the Schürmann Complex in Bonn. HBG’s pro forma appeal from the lower court’s decision will also not be heard.

This means that the court decision of April 2001 is upheld. The regional court took the view that the government as client and HBG as contractor should share liability equally for the cost of rectifying the damage to the Schürmann Complex which occurred when the River Rhine overflowed its banks in December 1993.

The German government claimed damages of approximately €200 million, plus interest, from HBG. In a previous session, the regional court had proposed an out-of-court settlement which for HBG would have meant paying €50 million, with the two parties dropping all further claims against each other. The government rejected this proposed out-of-court settlement. HBG did not express an opinion. A settlement of the kind proposed by the regional court would not affect the Group’s financial position.

HBW Beton- und Wasserbau GmbH – a subsidiary of HBG – was contracted by the German government as part of several joint ventures to build the complete basement complex for the Schürmann Building. This contract was worth €65.4 million. This substructure was built under two separate subcontracts, which were completed at the end of 1992 and in the course of 1993.

It is gratifying for Royal BAM Group that the regional court’s judgment has been upheld. This judgment overturned that of the court of the first instance, in which HBG had been found to bear full liability. Now that the legal responsibility has been established in the courts, the amount of the damages must be decided. This will be a matter for the court at Bonn in the first instance.