On the 20.05.2014, the Supreme Court of Austria has partially upheld an action concerning the forced conversion of Greek bonds.

The claimants, who had acquired Greek bonds through an Austrian depository bank amounting to 17.000 EUR, required fulfillment of the terms and conditions of the agreement or damages in case of non-fulfillment from the Greek State. Additionally, they claimed damages due to the encroachment on their property right. The latter claim was rejected by the Supreme Court because, according to the court, the Greek State was exercising sovereign authority while creating the act of conversion and could therefore invoke the objection of State immunity, leading to lack of domestic jurisdiction.

As an emitter of bonds, however, the state was acting as a private entity; the claim of the plaintiff was therefore based on a contractual basis, making an immunity objection inadmissible. The complaint has now been sent back to the Austrian regional court which has to forward it to the Greek State before beginning the trial. The respondent is then given the chance to decide whether he wants to engage in the action in front of the Austrian courts.