Settlement in Sight for Austrian Airlines in Legal Dispute with Investor Mohamed Bin Issa Al Jaber
In recent news, Lufthansa subsidiary Austrian Airlines (AUA) is facing significant costs due to a long-standing legal dispute with investor Mohamed Bin Issa Al Jaber. The dispute dates back to 2008 when negotiations were held for the Saudi Arabian-Austrian businessman Al Jaber to acquire a 20 percent stake in AUA for 150 million euros. However, it was later revealed that AUA was in financial trouble, prompting Al Jaber to withdraw from the agreement. This led to a lawsuit being filed by AUA against Al Jaber, resulting in a counterclaim from the investor.
In April 2023, the Vienna Commercial Court ruled in favor of Al Jaber, stating that the withdrawal from the participation agreement was justified due to misleading information provided by a former AUA board member. This resulted in a loss of over EUR 200 million rather than the anticipated profit of EUR 3.3 million. Despite an appeal by AUA being rejected by the Vienna Higher Regional Court in January of this year, the airline has decided not to file any further appeals and is now engaging in settlement negotiations at the highest level with the involvement of its parent company, Lufthansa.
It is now reported that AUA is prepared to settle with Al Jaber, which may involve a mid-double-digit million sum along with additional legal and procedural costs. Although both parties involved have chosen not to comment on the ongoing talks, it is seen as a positive step for AUA and its new leadership under CEO Annette Mann.
The outcome of these negotiations will determine the final resolution of the long-standing legal dispute between AUA and Al Jaber. If successful, this settlement will allow AUA to move forward and focus on its operations rather than continuing its legal battle with its former investor.
In conclusion, while this settlement may result in significant costs for Austrian Airlines subsidiary Austrian Airlines (AUA), it represents an opportunity for closure and moving forward with their business operations under new leadership.
