A court case about two different authorisations concerning the same matter

An authorisation has not been deemed to be revoked in the prescribed manner because the principal has issued a new authorisation with limited authority for the representative. Despite this, the third party has not been able to rely on the previous authorisation, since the third party should have understood that the principal’s intend was that the new – and not the previous – authorisation would regulate the representative's competence. A payment made by a third party to the representative has therefore not been made with exonerating effect.

A company sued the State, after which the parties entered into a settlement that meant that the state would pay a certain amount to the company. The company had engaged a lawyer as counsel in the dispute and issued him with an authorisation. Before the settlement agreement was signed, the State requested the company to issue a new authorisation for the representative. The company complied with the request. Unlike the previous authorisation, the new authorisation did not entitle the lawyer to receive payment on behalf of the company. The new authorisation was handed over to the State through the lawyer. The State then paid the settlement amount to the lawyer, who did not, however, pay the amount on to the company. The company claims that the payment to the lawyer was not made with exonerating effect.

The Supreme Court notes that the fact that a new authorisation was issued with a more limited competence for the lawyer does not mean that the first authorisation must be considered to have been revoked in the prescribed manner. Several authorisations with different permissions can apply in parallel. However, through the new authorisation, the company expressed the view that the lawyer's competence under the previous authorisation would no longer apply. The State, which had requested the new authorisation, should have understood this. The State could therefore not rely on the previous authorisation. This means that the payment of the settlement amount to the lawyer was not made with exonerating effect.

Case No: T 5880-23  

Case name

"Two powers of attorney"

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Updated
2025-03-07