On 11 April 2019, the Court of Justice of the European Union (CJEU) issued a preliminary ruling (C-464/18) providing guidance on the interpretation of the choice of jurisdiction rules, in the context of a claim brought under Regulation 261. The referring court wanted to know whether it was competent to hear an application for compensation in respect of a delayed flight. In their response, the CJEU provided an autonomous interpretation of Articles 7(5) and Article 26(1) of Regulation (EU) No 1215/2012 ("Brussels Recast").
The applicant in the underlying case had purchased a ticket online to travel from Portugal to Spain on a flight operated by Ryanair. The flight was delayed, and the applicant brought a claim to Spain, under Regulation 261, for compensation of EUR 250. The applicant is neither domiciled nor resident in Spain. The defendant has its registered office in Ireland, and a branch in Spain.
The Spanish court referred two questions to which the CJEU replied. Firstly, the Spanish court asked whether they could have jurisdiction on the grounds that the defendant had not opposed it, pursuant to Article 26 of Brussels Recast. Secondly, they asked whether the existence of an airline branch within a Member State was enough to give that Member State's courts jurisdiction, under Article 7(5) of Brussels Recast.
The CJEU's reasoning and answers
The CJEU confirmed that as there are no rules on international jurisdiction within Regulation 261 itself, Brussels Recast was the appropriate text to be referred to for these matters.
Turning to Article 26(1) of Brussels Recast, the CJEU found that the article only applies where the court seeking to establish jurisdiction does not already have jurisdiction under another provision of Brussels Recast. In this case, the Spanish courts did not have jurisdiction by virtue of the general principle, namely, the defendant's place of domicile. The CJEU then considered the special rules of jurisdiction of Brussels Recast, namely Article 7(1)(b) and all articles under Section 4, to see if they may have given jurisdiction to the Spanish courts. The special rules of Section 4 of the regulation (Jurisdiction over consumer contracts) do not apply where an airline passenger has only purchased a flight ticket, pursuant to Article 17(3). Article 7(1)(b) grants jurisdiction on the basis of place of performance of an obligation, which seems relevant to the facts here. However, the CJEU found that the applicant did not bring her claim under this article, and without stating any further reason, did not consider it further. The next step in determining whether Brussels Recast already granted jurisdiction to the Spanish courts would have been an analysis of its Article 7(5). Therefore, the CJEU considered the referring court's last question first.
The CJEU advised that the context of the underlying case, involving an airline and a ticket connecting different Member States, does not have any impact on the interpretation of Article 7(5) on international jurisdiction. For this article to apply, the CJEU still had to establish whether the operations of the defendant's Spanish branch were sufficiently connected to the underlying dispute, that is to say whether the dispute concerned acts relating to the operations of the branch, or commitments entered into by such branch on behalf of the parent body (if those commitments are to be performed in the State in which the branch is situated). The question of the referring court mentions the arrival and departure of the relevant flight from the court's Member State as a potential connecting factor between the branch and the dispute. This was not considered by the CJEU. The ticket had been purchased online; and the branch only handled matters unrelated to passengers. It was held there was no evidence of any connection between the branch and the dispute, so the referring court was not competent to hear the dispute under Article 7(5) of Brussels Recast. A Member State cannot have jurisdiction under Article 7(5) of the CJEU on the sole basis that the airline has a branch in that Member State.
The CJEU advised that Article 26 of Brussels Recast provides a rule of jurisdiction, based on the appearance of the defendant, where another provision of Brussels Recast does not already grant jurisdiction to the court seized (or where the court is seized in breach of another provision). Its effect is to infer tacit acceptance of the court seized from a defendant's appearance.
The CJEU therefore looked for any sign of appearance from the defendant in the underlying dispute. They found that the defendant failed to submit written observations when invited to do so by the referring court. Nothing the defendant had done could amount to an appearance for these purposes. The defendant does not have to actively contest jurisdiction – Article 26(1) only applies where they actively recognise it.
This does suggest that the CJEU does not always expect a physical appearance of the defendant at the seized court to apply Article 26(1). Had the airline responded and sent written observations to the Spanish court when requested, it appears the CJEU would have been willing to consider it and assess whether that constitutes an appearance for the purposes of Article 26(1).
In its questions, the referring court asks whether the application of Article 26(1) can be impacted by "limitations laid down in Member States' rules on domestic jurisdiction" and "the procedural law of that Member State". The CJEU's straightforward response, providing a single rule of interpretation of Article 26(1), rejects this.