Diamond Resorts Europe. CJEU confirms exhaustive nature of Rome I’s consumer title, rules out more favourable law shopping.

In C-632/21 JF and NS v Diamond Resorts Europe Limited (Sucursal en España) (‘Diamond Resorts Europe) the CJEU has held that Article 6(2) Rome I on consumer contracts is exhaustive, preventing a consumer to shop for more favourable laws different from those of their habitual residence.

Applicants are British consumers resident in the UK who concluded, on 14 April 2008 and 28 June 2010 respectively, two timeshare contracts with Diamond Resorts Europe, an English company operating as a branch in Spain of the Diamond Resorts group. The accommodation subject to the timeshare is spread across the EU with focus on Spain. Applicants request invalidity of the contracts on the basis of the Spanish timeshare laws, which implement the relevant EU law at issue. They seize a Spanish court, claiming the proceedings have as their object a right in rem in immovable property (the jurisdictional echo of C-73/04 Klein v Rhodos Management already should have made them think otherwise imho). Defendants argue the claim concerns a right in personam which in consequence of Rome Convention’s and /or the Rome I Regulation’s provisions on consumer contracts, are subject to the laws of the habitual residence of the consumers, i.e. English law.

The CJEU first of all holds (para 55) that as a consequence of Articles 66(a) and 126 of the UK-EU Withdrawal Agreement, the Rome Regulation applies to one of the contracts only, the other one being subject to the Rome Convention. It also confirms (para 52) that despite the contracts having been concluded between UK parties, the contract is clearly ‘international’ given the presence of foreign elements.

Next, it confirms without much ado (para 70 ff) the contracts as consumer contracts, notes lex voluntatis as being English law, and in consequence of the consumer title, that lex voluntatis being the same lex contractus as would have applied in the absence of choice.

Importantly, with reference mutatis mutandis to CJEU Schlecker, and a clear hint as to the future reply in VK v N1,

“An interpretation whereby it would be possible to derogate from the conflict-of-law rules laid down by the Rome I Regulation for determining the law applicable to consumer contracts, on the ground that another law would be more favourable to the consumer, would necessarily seriously undermine the general requirement of predictability of the applicable law and, therefore, the principle of legal certainty in contractual relationships involving consumers” (para 75)

A further question on Article 9 overriding mandatory provisions is declared inadmissible for lack of any detail on the nature of the national laws, given by the referring court.

Geert.