#5029 - Rehder - Conflict of Laws BCL

Rehder (2009)

Facts

A dispute between Mr Rehder and Air Baltic Corporation ('Air Baltic') following the cancellation of a flight which he had booked with that company to take him from Munich (Germany) to Vilnius (Lithuania).

Substantive law provision:

Regulation (EC) No261/2004of the European Parliament and of the Council of 11 February 2004: In case of cancellation of a flight, the passengers concerned shall: (c) have the right to compensation by the operating air carrier in accordance with Article 7, unless... they are informed of the cancellation...'

Mr Rehder, who resides in Munich, booked a flight from Munich to Vilnius with Air Baltic, the registered office of which is in Riga (Latvia). The distance between Munich and Villnius is slightly less that 1500 kilometres. Approximately 30 minutes before the scheduled time of departure from Munich, passengers were informed that their flight had been cancelled. After his booking had been changed by Air Baltic, the applicant took a flight via Copenhagen to Vilnius, where he arrived more than six hours after the flight which he had initially booked should have landed.

By an application to the Amtsgericht Erding, the court having territorial jurisdiction over Munich airport, Mr Rehder requested that Air Baltic be ordered to pay him compensation in the amount of EUR 250 in accordance with Articles 5(1)(c) and 7(1)(a) of Regulation No 261/2004.

In an appeal by Air Baltic against that decision, the Oberlandesgericht München, taking the view that air transport services are provided at the place where the company operating the flight has its head office, overturned the decision of the first-instance court.

Question

Is the second indent of Article 5(1)(b) of Regulation [No 44/2001] to be interpreted as meaning that in the case also of journeys by air from one Member State to another Member State, the single place of performance for all contractual obligations must be taken to be the place of the main provision of services, determined according to economic criteria?

Where a single place of performance is to be determined: what criteria are relevant for its determination; is the single place of performance determined, in particular, by the place of departure or the place of arrival of the aircraft?'

Holding

Nature of the substantive right

In that regard, the right which the applicant in the main proceedings relies on in the present case, which is based on Article 7 of Regulation No 261/2004, is a passenger's right to a standardised and lump-sum payment following the cancellation of a flight, a right which is independent of compensation for damage in the context of Article 19 of the Montreal Convention (see Case C-344/04 IATA and ELFAA [2006] ECR I403, paragraphs 43 to 46). The rights based respectively on those provisions of Regulation No 261/2004 and of the Montreal Convention accordingly fall within different regulatory frameworks.

Rule in Color Drack applies to inter-state disputes as well

The factors on which the Court based itself in order to arrive at the interpretation set out in Color Drack are also valid with regard to contracts for the provision of services, including the cases where such provision is not effected in one single Member State. The rules of special jurisdiction provided for by Regulation No 44/2001 for contracts for the sale of goods and the provision of services have the same origin, pursue the same objectives and occupy the same place in the scheme established by that regulation.

Where the services in question are provided at several places in different Member States, a differentiated approach cannot be applied to the objectives of proximity and predictability, which are pursued by the centralisation of jurisdiction in the place of the provision of services under the contract at issue and by the determination of sole jurisdiction for all claims arising out of that contract. Apart from the fact that there is no basis for it in the provisions of Regulation No 44/2001, such a differentiated approach would contradict the objectives for which it was adopted, which, through the unification of the rules governing conflict of jurisdiction in civil and commercial matters, contributes to the development of an area of freedom, security and justice, as well as to the proper functioning of the internal market within the Community (see recitals 1 and 2 in the preamble to Regulation No 44/2001).

Consequently, where there are several places at which services are provided in different Member States, it is also necessary to identify the place with the closest linking factor between the contract in question and the court having jurisdiction, in particular the place where, pursuant to that contract, the main provision of services is to be carried out.

Which is the most proximate place for an air-transport contract?

Not the place of the registered office: In that regard, it must be noted at the outset that, as has been pointed out by the national court, the place of the registered office or the principal place of establishment of the airline concerned does not have the necessary close link to the contract. The operations and activities undertaken from that place, such as, in particular, the provision of an adequate aircraft and crew, are logistical and preparatory measures for the purpose of carrying out a contract relating to air transport and are not services the provision of which is linked to the actual content of the contract. The same is true with regard to the place where the contract for air transport is concluded and the place where the ticket is issued.

Place of arrival or departure: The services the provision of which corresponds to the performance of obligations arising from a contract to transport passengers by air are the checking-in and boarding of passengers, the on-board reception of those passengers at the place of take-off agreed in the transport contract in question, the departure of the aircraft at the scheduled time, the transport of the passengers and their luggage from the place of departure to...