Posts Tagged Regulation 261/2004

ZX v Ryanair: Branch jurisdiction and voluntary appearance under Brussels Ia.

In C-464/18 ZX v Ryanair, the CJEU last week succinctly held on branch jurisdiction (Article 7(5)) and on voluntary appearance under Article 26.

The Court first reminds readers of the exclusion of simple contracts of transport (as opposed to combined tickets /package travel) from the consumer title of the Regulation: aee Article 17(3): the consumer title ‘shall not apply to a contract of transport other than a contract which, for an inclusive price, provides for a combination of travel and accommodation’.

Surprisingly perhaps (and /or due to lobbying), this did not come up for amendment in the recent Recast, despite the massive increase on travel tickets bought online in particular since transport was first carved out from the consumer title in the Brussels Convention. At 160 the Jenard Report explains the carve-out by reference to international agreements – yet these too could probably do with a refit – but I am straying.

The Court also reminds us that the flight compensation Regulation 261/2004 does not contain conflict of laws rules – these remain subject to the general instruments.

To the case at hand then: ZX purchased a ticket online for a flight operated by Ryanair between Porto (Portugal) and Barcelona (Spain). Applicant  is neither domiciled nor resident in Spain, defendant has its registered office in Ireland, and has a branch in Girona (Spain). ZX, the passenger, did not justify jurisdiction pro Girona on the basis of forum contractus. Per C‑204/08 Rehder, this would have been place of arrival or departure.

Branch jurisdiction per Article 7(5) featured most recently in C-27/17 flyLAL, and is quite clearly not engaged here: the ticket was purchased online. There is no element in the order for reference indicating that the transport contract was concluded through that branch. Furthermore, the services provided by the branch of Ryanair in Girona appear to be related to tax matters.

That leaves Article 26: how and when may it justify the international jurisdiction of the court seised by virtue of a tacit acceptance of jurisdiction, on the ground that the defendant in the main proceedings does not oppose that court having jurisdiction? The case-file reveals that following the invitation from the registry of that court to submit observations on the possible international jurisdiction of that court, Ryanair failed to submit written observations. The Court finds this does not amount to tacit acceptance.

Article 26 requires that the defendant enter an appearance. However what exactly this requires hitherto I believe to quite a degree has been subject to lex fori – particularly the local procedural law. One might have expected a more extensive CJEU consideration e.g. revisiting 119/84 Capelloni v Pelkmans.

A missed opportunity.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.7.

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Happy Flights v Ryanair. Belgian Supreme Court (only) confirms proper lex causae for validity of choice of court under Article 25 Brussels Ia.

Thank you alumna and appreciated co-author Jutta Gangsted for flagging Charles Price’s (former learned colleague of mine at Dibb Lupton Alsop) and Sébastien Popijn’s alert on the Belgian Supreme Court’s ruling of 8 February last in C.18.0354.N Happy Flights v Ryanair. Happy Flights are a Belgium-based online claim agency to which disgruntled passengers may assign claims for compensation under Regulation 261/2004.

At issue is the validity of Ryanair’s choice of court in its general terms and conditions, referring consumers to Irish courts. The Brussels Commercial court on 30 May 2018 seemingly first of all did not assess whether the agency may be considered a ‘consumer’ within the terms of Irish consumer protection law (itself an implementation of Directive 93/13), having been assigned the consumers’ claims. The May 2018 decision itself is unreported <enters his usual rant about the lack of proper reporting of Belgian case-law>.

The Supreme Court (at 2, line 47) notes this lack of assessment by the lower court. It does not however complete the analysis sticking religiously to its role to interpret the law only, not the facts. Per CJEU Schrems mutatis mutandis I would suggest an affirmative answer (the agency having been assigned the consumers’ rights).

Do note that the use of the word ‘consumer’ in this context must not confuse: the consumer title of Brussels Ia itself does not apply unless the contract is one of combined travel and accommodation (or other services); the Regulation excludes contracts for travel only, from the scope of application of the consumer title.

The Brussels Commercial court subsequently and again from what one can infer from the Supreme Court’s ruling, discussed the validity of choice of court under Article 25 Brussels Ia, reviewing its formal conditions (formation of consent) yet judging the material validity under the lex fori, Belgian law, not the lex fori prorogati, Irish law. This is a clear violation of A25 juncto recital 20 Brussels Ia. The Supreme Court suggests that the relevant Irish implementation of the unfair consumer terms Directive 93/13 does imply invalidity of the clause (again: if the claim is held to fall under the consumer title, this analysis will become superfluous).

Note that the SC omits recital 20’s renvoi instruction, keeping entirely schtum about it: clearly misapplying the Regulation.

The Court’s judgment unlike the understandably enthusiastic briefing by Happy Flight’s counsel does not quite yet mean that Ryanair’s terms and conditions on this issue have been invalidated. However it is likely they will be upon further assessment on the merits – with hopefully the Court of Appeal not omitting Brussels Ia’s renvoi instruction. As I note above first up there will be the issue of assignment rather than the issue of A25.

For your interest, I gave a Twitter tutorial on a related issue (consumer law, lex causae, compulsory referral to arbitration) recently.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9, Heading 2.2.9.4.

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