Agreement Between the Government of the Republic of
Austria and the Government of the Republic of Germany and of the Free
State of Bavaria Concerning the Donaukraftwerk-Jochenstein-Aktiengesellschaft
(Danube Power-Plant and Jochenstein Joint-Stock Company)
Concluded on 13 February 1952; in force, 13 February 1952
The Government of the Republic of Austria and the Governments of the Federal Republic of Germany and of the Free State of Bavaria, desiring to promote the joint development and utilization of water power on the frontier section of the Danube, have agreed as follows:
ARTICLE 1. The Rhein-Main-Donau-Aktiengesellschaft (Rhine, Main and Danube Joint-Stock Company) of Munich, as an undertaking of the Federal Republic of Germany and of the Free State of Bavaria, and the Osterreichische Elektrizitdtswirtschafts-Aktiengesellschaft (Verbundgesellschaft) (Austrian Electric Power Joint-Stock Company (Consolidated Network Company)) of Vienna, as fiduciary for the Republic of Austria, shall establish, as principal shareholders, the Donaukraftwerk-Jochenstein-Aktiengesellschaft (Danube Power-Plant and Jochenstein Joint-Stock Company). This company shall construct a dam on the Danube at Jochenstein and utilize it as efficiently as possible for the production of power. In so doing it shall at its own cost and in good time take every precaution to avoid any material obstruction of navigation.
Construction and operation of the dam
ARTICLE 2. (1) The Jochenstein dam shall consist of:
(a) As a power-plant installation, a river power-plant together with a weir, drainage facilities and the other power-plant facilities auxiliary thereto;
(b) As a navigation installation, two sluices having a minimum breadth of twenty-four metres each, shore works and the other facilities necessary thereto.
(2) Beyond the common-frontier section of the Danube, the area of the dam shall include:
(a) On the German side, above the Krauelstein bridge, the section of the Danube as far as the Kachlet power-plant, with a total height of fall at mean water of about 2.0 metres, and the corresponding section with the result that the backflow of the dam at mean water ends at the Kachlet plant.
(b) On the Austrian side, below the mouth of the Dandelbach, a section of the Danube long enough to ensure an auxiliary height of fall of 1.20 rnetres at mean water on the sinking of the tail water at the power-plant.
(3)The Danube Power-Plant and Jochenstein Joint-Stock Company shall prepare the construction plans on the basis of the preliminary work already jointly carried out by the Rhine, Main and Danube Joint-Stock Company and the Consolidated Network Company; in the case of the plans for the navigation installation and the hydraulic works required for the power-plant installation, it shall obtain the approval of the competent Federal Ministries on both sides.
(4) The power-plant installation referred to in paragraph 1 shall also include a pump storage station connected with the river power-plant, should such a station be constructed by the Company in agreement with the competent Ministries of the two sides, the Rhine, Main and Danube Joint-Stock Company and the Consolidated Network Company.
(5) If the pump storage station referred to in paragraph 4 is not constructed, the Rhine, Main and Danube Joint-Stock Company or the Consolidated Network Company shall be entitled to construct a pump storage station connected with river power-plant for the purpose of increasing their shares of the power produced (see article 14). The other side shall not thereby be placed at an economic disadvantage.
ARTICLE 3. (1) The Company shall construct the power-plant installations as its own property and the navigation installation as the property of the Federal Republic of Germany or the Republic of Austria in accordance with the situation of those installations in relation to the German-Austrian frontier.
(2) The Contracting Parties shall, to the extent necessary for the construction and operation of the dam place their property and property rights at the disposal of the Company without special compensation.
(3) The Contracting Parties shall authorize the Company to acquire on behalf of the Federal Republic of Germany of the Republic of Austria, property and property rights required for the construction and operation of the navigation installation, to administer the property and rights so acquired and to conduct all business relating thereto. Under the terms of this authorization, the Company shall be permitted to engage in legal transactions with itself.
(4) All other business shall be transacted by the Company on its own behalf.
(5) The entire cost of construction of the dam shall be borne by the Company.
ARTICLE 4. (1) On completion of the dam, the Federal Republic of Germany and the Republic of Austria shall assume responsibility for the operation, maintenance and replacement of those installations which belong to them (see article 3, paragraph (1)).
(2) Before the completion of construction, a set of operating instructions shall be prepared or approved:
(a) For the navigation installation by the German and Austrian Federal Ministries having jurisdiction over the operation thereof;
(b) For the weir by the Competent German and Austrian authorities on the recommendation of the Company.
(3) The Company shall bear the cost of operating and maintaining the power-plant installation and, until such time as the assumption of responsibility provided for in paragraph (1) has become effective, the cost of operating the navigation installation.
(4) As from the date on which the assumption of responsibility provided for in paragraph (1) becomes effective, the Federal Republic of Germany and the Republic of Austria shall bear the costs of those navigation installations which belong to them; provided that the Company shall each year reimburse the costs attributable to:
(a) The operation, maintenance and replacement of the sluice installations;
(b) Necessary ice-breaking services;
(c) The maintenance of the control section below the dam (see article 2, paragraph (2) (b)), to the extent that they are occasioned by the artificial deepening thereof.
Legal status of the Company
ARTICLE 5. (1) The Company shall be established as a joint-stock company under German law on the basis of the annexed articles of association.
(2) Amendments to the articles of association other than of a drafting nature shall require the approval of the Contracting Parties.
ARTICLE 6. (1) The voting capital stock of the Company shall be taken up in equal parts by a German and an Austrian group of shareholders.
(2) In addition to the founders, only the following may be shareholders of the Company:
(a) On the German side:
The Federal Republic of Germany, the Free State of Bavaria and the Rhine, Main and Danube Joint-Stock Company;
(b) On the Austrian side:
The Republic of Austria, Federal Lander, the Consolidated Network Company (see article 5 of the Second Nationalization Act, BGBI. No. 81/1947), special companies (see article 4 of the Second Nationalization Act) and Land companies (see article 3 of the Second Nationalization Act).
(3) The Company may issue preferred shares without voting rights to persons other than those named in paragraph (2) in accordance with the regulations governing joint-stock companies. The Contracting Parties shall ensure that the holders of preferred shares are not granted voting rights under article 116, paragraph (2), of the Joint-Stock Companies Act.
ARTICLE 7. The German and the Austrian sides shall each endeavour to ensure that the members of its group of shareholders shall at the general meeting grant the consent required under article 6, paragraph (2), of the articles of association for the transfer of shares of a member of the other group as constituted under article 6, paragraph (2), sub-paragraphs (a) and (b), of this Agreement if the other side so requests.
ARTICLE 8. The board of management and the board of directors shall be made up of an equal number of representatives of the German and the Austrian voting shareholders.
ARTICLE 9. (1) The provisions of article 23 of the articles of association shall apply, mutatis mutandis, to the internal auditors, the special auditors and the annual auditors.
(2) The auditors appointed by the Austrian Audit Office shall have the same authority with respect to the Company as the annual, internal and special auditors.
(3) In addition, at the request of the Austrian Audit Office, orders shall be given, by virtue of article 23, paragraph (2) of the articles of association, by agreement between the German Federal Minister of Transport, the Bavarian State Ministry of Finance and the Austrian Audit Office.
ARTICLE 10. (1) Either the German or the Austrian side may ask that the Company be dissolved if essential provisions of this Agreement have been seriously infringed by the other side or if dissolution is advisable for other compelling reasons.
(2) In such a case, the Contracting Parties shall jointly consider whether the purpose of the Agreement can be achieved by amending or supplementing the existing provisions thereof.
(3) If the Company is dissolved, an agreement, in which the interests of the Contracting Parties and the shareholders are taken into account, shall be reached concerning the continued operation of the undertaking as a whole.
ARTICLE 11. If the majority required in the board of directors or the general meeting for the adoption of a decision on an important company matter is not obtained, the Contracting Parties shall arrange a settlement.
ARTICLE 12. (1) The long-term ratio of the Company's internal financing to its external financing shall be 1 : 2.
(2) The two groups of shareholders as defined in article 6, paragraph (2), sub-paragraphs (a) and (b), shall each contribute to raising half of the external financing which the Company itself is unable to raise. The obligations of the Contracting Parties shall be governed by the provisions of article 23, paragraph (2).
(3) The Contracting Parties undertake to give the Company and the two groups of shareholders all possible assistance in obtaining financing. The competent authorities of each of the Contracting Parties shall do everything possible to ensure that, where necessary, a State surety is provided for that part of the Company's external financing raised by its group of shareholders.
ARTICLE 13. The two groups of shareholders as defined in article 6, paragraph (2), sub-paragraphs (a) and (b), shall contribute equally to the fulfillment of the Company's purpose. The criteria for determining whether such contributions are to be regarded as equal shall be established by agreement between the two groups of shareholders. In establishing such criteria, account shall be taken of price and wage rates in the two States and of all other factors relevant to an evaluation of the contributions.
ARTICLE 14. (1) The Company shall supply the Rhine, Main and Danube Joint-Stock Company and the Consolidated Network Company, as consumers, each with one-half the generable power corresponding to the natural water yield at any given time less the power needed for the dam ex transformer station. If the technical facilities of the Company are unable to provide a direct equal distribution of power, the Consolidated Network Company shall ensure by power exchange that so far as possible the two consumers receive the amount of power to which they are entitled in relation to the natural water yield. Any costs occasioned in this connexion shall be determined and charged off. The Contracting Parties shall ensure that the agreements necessary for the exchange of power can be concluded and executed and that the necessary transmission installations in their territory, to the extent that such exist, are made available.
(2) If the delivery of power to one consumer is terminated by the Company because of non-fulfilment by that consumer of its obligations, the Company shall offer to the other consumer the power thus made available and shall charge off the proceeds against the obligation for the reimbursement of production costs which is still incumbent upon the consumer to which delivery has been terminated.
(3) If a group of shareholders as defined in article 6, paragraph (2), sub-paragraphs (a) and (b), raises less than 50 per cent of the required external financing, the Company shall, as a temporary departure from the provisions of paragraph (1), deliver a quantity of current corresponding to the actual share of financing that has been raised. Further details shall be set out in an agreement between the Rhine, Main and Danube joint Stock Company and the Consolidated Network Company.
(4) The Company shall be reimbursed in advance by each consumer for the financing charges on loans credited to the share of financing raised by the relevant group of shareholders (see article 12, paragraph (2)) and for the taxes and charges levied in the territory of the relevant consumer's State; in addition, the company shall receive from each consumer 50 per cent of its other production costs, including an appropriate rate of interest on its capital resources. The crediting of the aforementioned loans shall be decided upon by the board of directors at the time when the loan is approved.
(5) As a general principle, each consumer shall make payment in the currency of its State to the branch of the Company in its State. So far as possible, the Company shall allocate its production costs in such a way that they are payable half in German marks and half in Austrian schillings.
(6) The voting shareholders, by a majority representing at least three quarters of the voting capital stock, outside the general meeting, lay down procedures for the determination of production costs and may suspend the payment of interest on the Company's capital resources.
ARTICLE 15. The administrative authorities shall apply the laws in force on the German and on the Austrian side in the manner most conducive to the accomplishment of the Company's tasks.
ARTICLE 16. (1) The Contracting Parties shall, to the extent of their jurisdiction, ensure that the water rights and water-right permits which, on the basis of the construction plans (see article 2, paragraph (3)) and in pursuance of the relevant water-rights proceedings of the two sides, are found to be necessary for the construction and operation of the Jochenstein dam are granted or, where they have expired, are, upon request, renewed. They shall not grant to third parties, except by mutual agreement, water rights or water-right permits relating to the area of the Jochenstein dam or the area below it which would be disadvantageous to the dam.
(2) The water-rights proceedings shall be carried out on the German and on the Austrian side independently in accordance with the legislation in force, but on a basis of mutual consultation and, so far as possible, mutual support.
(3) The Water-right permits granted by the two sides shall be as equal in scope as possible, be non-conflicting and, if possible, be issued simultaneously; in particular, neither side may claim reversionary rights, water taxes or water-use charges. Claims by the Rhine, Main and Danube Joint-Stock Company for compensation on account of the blocking of the Danube power-plant at Kachlet (see article 2, paragraph (2), subparagraph (a)), shall be settled in accordance with the water-rights procedure.
(4) The Contracting Parties shall proceed as provided in paragraphs (1) to (3) if one of the shareholders as defined in article 6, paragraph (2), sub-paragraph (a) or (b), constructs a pump storage station in pursuance of article 5.
(5) The provisions of paragraphs (1) to (4) shall apply, mulatis mutandis, to all other administrative proceedings relating to the construction, maintenance and operation of the Jochenstein dam, in particular proceedings relating to navigation rights.
ARTICLE 17. (1) The Company shall be taxed in accordance with the legislation of each State, on the basis of the following provisions.
(2) For the purposes of taxation, the Company's assets and trading capital shall be considered to be divided equally between Germany and Austria.
(3) For the purposes of taxation on each side, income shall be considered to comprise the Company's total income minus the income falling to the other side. Half of the income shall fall to the German and half to the Austrian side. However, any excess in the payments made by the consumer of one side in pursuance of article 14 shall be regarded as income only in that consumer's State, and the additional tax liability so equalized shall be regarded as an operating expense only in that State.
(4) For the purposes of turnover taxes, the production and delivery of electricity shall be deemed to have taken place in the State in which the power is consumed.
(5) No company tax and no purchase tax, including surtaxes, shall be levied on property acquired for the construction of the Jochenstein dam. In addition, each of the two sides shall grant the Company the tax allowances permissible under its legislation.
(6) The Contracting Parties shall, in accordance with the legislation in force on the two sides, impose no import or export duties on goods to be used for the construction, operation, maintenance or replacement of the dam. The Contracting Parties shall ensure that any necessary import or export licences are issued. The customs authorities of the two sides shall take the necessary control measures in consultation with each other.
(7) The Contracting Parties shall assist each other in the determination and assessment of taxes and shall allow the other side to carry out tax audits in their territory.
ARTICLE 18. (1) The Contracting Parties shall endeavour to make available as soon as possible the exchange-control permits necessary for giving effect to this agreement.
(2) With a view to the fulfilment by the Company of its purposes and the transfer of any profits, exchange-control restrictions shall be relaxed by the German and the Austrian side wherever possible. This shall also apply to the exchange-control treatment of persons frequently crossing the frontier.
(3) If shares or interim certificates are issued by the Company, steps shall be taken to make possible the transfer to Austria of the relevant documents belonging to the Austrian group.
ARTICLE 19. Wherever possible, the necessary residence, employment, entry and exit and other similar permits shall be granted, on the German and the Austrian side, to all persons needed for work in connexion with the construction and operation of the Jochenstein dam.
ARTICLE 20. So far as the interests of the Company and the provision of financing permit, the German and the Austrian side shall be given equal consideration in the letting of contracts and similar matters. As a matter of general principle, the German and the Austrian side shall share equally in the hiring of employees by the Company. The Company shall transmit the necessary information to the labour authorities of the two sides.
ARTICLE 21. Hunting and fishing rights shall be governed by the legislation applicable in each of the States concerned.
ARTICLE 22. This Agreement shall be without prejudice to the agreements reached concerning the course of the State frontier.
ARTICLE 23. (1) The Contracting Parties shall take steps for the immediate establishment of the new Company and, to the extent of their jurisdiction, shall further the activities of the Company in every possible and permissible way.
(2) Where the Agreement entails rights and obligations which the Contracting Parties cannot directly exercise or fulfil, they shall take steps to ensure that the rights are exercised and the obligations fulfilled by the other parties concerned to the extent of their powers with respect to such parties.
ARTICLE 24. If, for compelling reasons, and in particular as a result of legislative action by either of the States concerned, it should become necessary to modify or supplement the arrangements provided for in this Agreement in order to protect the interests of the States concerned as established in those arrangements, such modifications or additions shall be agreed on immediately in a spirit of trust and co-operation.
ARTICLE 25. (1) If a difference of opinion arises between the German and the Austrian side concerning the interpretation or application of this Agreement, the matter shall, at the request of either side, be settled through arbitration by an arbitral tribunal.
(2) The arbitral tribunal shall also, at the request of either side, make arrangements for the continued operation of the undertaking as a whole which take into account the interests of the Contracting Parties and the shareholders , if an agreement on the matter as provided in article 10, paragraph (3), is not reached within a period of six months from the time the Company is dissolved.
(3) The arbitral tribunal shall for each dispute be constituted through the appointment by each side of two qualified persons from among its nationals as arbitrators and the selection by both sides of a national of a friendly third State as umpire. Both sides reserve the right to agree in advance and for a specified period of time on the person to be appointed umpire in a given case.
(4) If the umpire is not selected or the arbitrators appointed within three months after the difference of opinion has been made known, the President of the International Court of justice at The Hague shall, in the absence of other agreed arrangements, be requested to make the necessary appointments.
(5) The umpire shall be the chairman of the arbitrat tribunal. The arbitral tribunal shall reach a decision by majority vote. The decision shall be binding.
(6) In the first dispute, the arbitral tribunal shall meet in the territory of the respondent side, in the second dispute in the territory of the other side, and so on in rotation in the territory of one or the other side, and at a place fixed by the Contracting Party concerned. This Party shall provide the premises and the secretarial and other staff required by the arbitral tribunal for its work.
(7) The German and Austrian sides shall agree in individual cases or on a permanent basis on the form of proceedings to be adopted by the arbitral tribunal. In the absence of such agreement, the arbitral tribunal itself shall determine the form of its proceedings. The proceedings may be in written form if neither of the Contracting Parties objects; in such a case the provisions of the foregoing paragraph need not be applied.
(8) With respect to the summoning and hearing of witnesses and experts, the authorities of each of the Contracting Parties shall, in response to request by the arbitral tribunal to the Government concerned grant the same legal assistance as it would at the request of a domestic civil court.
ARTICLE 26. This Agreement shall not affect the laws in force in the territory of the Contracting Parties.