Germany: Federal Constitutional Court orders concerning service of punitive damages claims 34 ILM 975

A German company, subsidiary of a US company, had its seat in Berlin. The American company concluded a distribution agreement of pharmaceutical products with TMI, another American company. TMI brought a suit before a US court against the US company and its subsidiary in Berlin, asking damages and punitive damages, the complain was asked to be served in Germany under the Hague Convention on service Abroad of Judicial and Extra judicial Documents in Civil and Commercial matters. The petition was granted by the German Government, but the German company appealed the decision

The German court recognised that punitive damages as foreign to the German legal system the German law also recognise that such damages can serve certain ends such as deterrence. To serve the petition under the Hague Convention arising from a complain coming from the US that is seeking punitive damages is not bar under German Constitutional law. The service could only be refused if it endangers the sovereignty or security of Germany