Dieselgate Settlements – BGH Declares Shareholders' Resolution Void

November 2025 – The German Supreme Court ("BGH") has annulled the resolution of the general meeting of Volkswagen AG ("VW AG") in the so-called "Dieselgate" scandal, where settlements concluded with former members of the management board (liability settlements) as well as with the involved D&O insurers (coverage settlements) were approved. The court found that the general meeting had been convened improperly and that the accompanying documents provided insufficient information. With this judgment, the BGH strengthens shareholders' rights to information and disclosure. Given the substantially identical provisions under Austrian stock corporation law, this judgment is also relevant for Austrian stock corporations (Aktiengesellschaften).

1. Facts of the case

Based on investigative reports and additional reviews, VW AG concluded that certain members of its management board had negligently breached their duties of care in connection with the diesel emissions scandal by failing to promptly follow up on indications of unlawful software related to diesel engines. Accordingly, in June 2021 VW AG entered into liability settlements with former members of the management board as well as corresponding coverage settlements with D&O insurers in order to resolve potential claims for damages against the executives and related coverage claims against the insurers.

VW AG also agreed to indemnify the former management board members against certain third-party claims and undertook not to pursue claims against specific individuals, including all other current and former members of the management board and supervisory board.

The agreements were approved by the general meeting of VW AG on 22 July 2021 with a majority of over 99%. Investor protection associations challenged these resolutions in court and have now been partially successful before the BGH.

The BGH's judgment also has a signal effect for Austria, since the relevant statutory provisions in Austria and Germany are substantially identical—see Sect 195 para 4 of the Austrian Stock Corporation Act (öAktG) and Sec 243 para 4 of the German Stock Corporation Act (dAktG).

2. Information and disclosure rights of shareholders

Under both German and Austrian law, shareholders are entitled to comprehensive rights to information that are essential for the adoption of resolutions on individual agenda items at a general meeting. The convening notice of the general meeting must include, among others, the proposed agenda listing all matters to be addressed at the general meeting. The specific wording of each agenda item delineates the scope of the resolutions to be adopted.

If the information provided is incomplete, and a reasonably informed shareholder would have regarded such information as material for the proper exercise of their participation and membership rights, the resolution of the general meeting is subject to challenge. The decisive factor is that the duty to provide information ensures both the careful preparation for the general meeting and an informed decision-making process at the general meeting. Nevertheless, a certain threshold of materiality must be exceeded. Minor or merely formal errors are therefore irrelevant and do not render the resolution subject to challenge.

3. Reasoning of the BGH

According to the recent decision of the BGH, shareholders are not sufficiently informed if a general waiver of claims against all current and former board members is not expressly included in the agenda of the general meeting but only in the management board's report. A reasonable shareholder cannot be expected to assume that such material information, forming the basis of a shareholder resolution, would be contained solely in the explanatory documents accompanying the agenda items. This means that information essential to the decision-making process cannot be communicated exclusively through attached documents, even if these are provided or made available to shareholders. Information regarding a resolution that entails a waiver of claims against a large number of board members must be expressly stated in the agenda itself.

Moreover, sufficient preparation and disclosure are required beyond the mere content of the agenda. In the specific case, the justification for the settlement was based on the alleged insufficient financial capacity of the board member concerned to cover the amount exceeding the insurance limit. However, the necessary information regarding their actual financial circumstances was inadequately provided, as this argument could not be verified on the basis of the documents presented. Consequently, the shareholders were not in a position to make an informed decision. Due to insufficient factual findings, the case was remitted to the competent Higher Regional Court for further proceedings on this point.

4. Key takeaways

• The Austrian legal framework regarding shareholders' rights to information and disclosure is largely comparable to that of Germany. In particular, the provision governing the challenge of resolutions of a general meeting due to insufficient information disclosure is almost identical. The recent judgment of the BGH in connection with VW AG's Dieselgate case is therefore also relevant for Austria.
• In essence, the BGH's decision strengthens shareholder rights to information and disclosure. A comprehensive and transparent presentation of all relevant information is required in order to establish a sound basis for decision making and to enable shareholders to assess the management board's reasoning. Furthermore, the wording of the agenda must ensure an adequate degree of transparency; all aspects material to the resolution must be expressly stated in the agenda.
• From a corporate perspective, thorough preparation of general meetings in order to ensure full compliance with shareholders' information and disclosure rights is essential to minimise the risk of claims for the annulment of resolutions.

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