In a preliminary ruling delivered by the Court of Justice of the European Union (the “CJEU” or the “Court”) on the 3 February 2022 in the case of JW, HD and XS (the “Passengers”) vs LOT Polish Airlines (the “Defendant”), the Court had to consider the concept of ‘place of performance of the obligation in question’ in terms of Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Brussels Recast Regulation”) within the context of a claim for compensation by passengers in the event of a long delay of flights.

In the case in question, the Passengers made a single booking with Lufthansa AG for a flight, scheduled for 27 April 2019, from Warsaw (Poland) to Malé (Maldives) with a connection in Frankfurt (Germany). The first leg of the flight, from Warsaw to Frankfurt, was operated by the Defendant. Due to delayed departure, the Passengers landed late in Frankfurt and consequently missed their connecting flight to Malé, operated by Lufthansa. They only arrived in Malé, after a delay of more than four hours.

The Passengers instituted proceedings against the Defendant before the local court in Frankfurt for compensation in terms of article 7 of Regulation (EC) No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights (the “Air Passenger Rights Regulation”). The local court rejected the claim brought forward by the Passengers on the basis that it did not have jurisdiction to hear the dispute, since neither the place of departure nor the place of arrival of the flight provided for in the contract of carriage concerned was located within its jurisdiction as required under the Brussels Recast Regulation.

The Passengers appealed the decision before the regional court in Frankfurt on the basis that the local court may base its jurisdiction on Article 7(1)(b) of the Brussels Recast Regulation. According to the Passengers, the fact that Warsaw and Malé both constitute places of performance of the obligation arising from that contract of carriage does not necessarily preclude the existence of other places which may also be classified as places of performance of that obligation within the meaning of that article.

The regional court in Frankfurt (the “Referring Court”), decided to stay the proceedings and to refer the matter to the Court for a preliminary ruling. Essentially the regional court asked the Court whether Article 7(1)(b) of the Brussels Recast Regulation can be interpreted as meaning that the place of performance of the obligation arising from one contract of carriage consisting of two legs operated by two separate air carriers can be considered to be the place of arrival of the first leg of the journey concerned, in this case being Frankfurt.

Before delving into the merits of the case, the Court re-affirmed that the purpose of the Brussels Recast Regulation is to ensure that the rules on jurisdiction should be highly predictable and founded on the domicile of the defendant save for special circumstances in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor in order to facilitate the sound administration of justice.

Departing from the general rule of jurisdiction based on the defendant’s domicile, Article 7 of the Brussels Recast Regulation provides that a person domiciled in a Member State may, in matters relating to a contract, be sued in the courts of another Member State being the place of performance of the obligation in question. The Brussels Recast Regulation further clarifies that the place of performance of the obligation in question shall be:

(i)               in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered, and

(ii)             in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided.

Delving into to the merits of the case, the Court explained that that the action by the Passengers in the main proceedings falls within the concept of ‘matters relating to a contract’ within the meaning of Article 7(1)(a) of the Brussels Recast Regulation. The concept of ‘matters relating to a contract’ covers a claim brought by air passengers for compensation for the long delay of a connecting flight, made under the Air Passenger Rights Regulation, against an operating air carrier with which the passenger concerned does not have contractual relations which is the situation in the present case to LOT Polish Airlines. In the case at hand the contract was for the provision of a service therefore the place of performance of the obligation in question is the Member State where, under the contract, the services were provided or should have been provided as per paragraph (ii) above.

Reiterating previous judgments delivered by the CJEU in the flightright cases, the Court explained that in case of multiple Member States in which services are provided, the place of performance must, in principle, be the place with the closest connecting factor between the contract and the court having jurisdiction. As a general rule this will be the place of the main provision of services which is to be deduced from the provisions of the contract governing the service.

In the case of a flight consisting of one single booking for the entire journey yet including separate connecting flights operated by two different air carriers, the Court has also held that the ‘place of performance’, within the meaning of Article 7(1)(b), can be both the place of departure of the first leg of the journey and the place of arrival of the last leg of the journey. This is regardless of whether the claim for compensation brought on the basis of the Air Passenger Rights Regulation is brought against the air carrier operating the leg in question (in this case being LOT Polish Airlines) or against the air carrier with which the passenger concerned has a contractual relationship, but which is not the air carrier operating that leg (in this case being Lufthansa AG).

In the present case, the claim for compensation was brought solely on account of the delayed departure from the place of departure for the first leg of the journey concerned (being Warsaw). That place corresponds to one of the main places of provision of the services which are the subject of that contract and therefore ensures the close connecting factor required by the rules of special jurisdiction set out in Article 7(1) of the Brussels Recast Regulation between that contract and the court which has territorial jurisdiction over that place. Yet the question posed by the Referring Court is whether the place of landing of that first leg of the journey (being Frankfurt) could justify its jurisdiction under paragraph (ii) of Article 7(1)(b).

As already observed by the Court, where there are several places at which services are provided in different Member States, the place with the closest connecting factor between the contract concerned and the court having jurisdiction is, in particular, the place where, pursuant to that contract, the main provision of services is to be carried out. Accordingly, the use of the term ‘in particular’, implies that the places of the main provision of services, identified as being both the initial place of departure (being Warsaw) and the place of the final destination of a journey (being Malé), are a non-exhaustive illustration of the places where such a connecting factor could materialise. It cannot be ruled out that, in the light of the specific terms of a contract of carriage by air, services other than those provided at the initial place of departure and the place of the final destination of a journey may, where appropriate, justify the jurisdiction of courts other than the courts which have territorial jurisdiction over those places, that is to say, the courts at the transit location (being Frankfurt), to deal with a claim for compensation brought on the basis of the Air Passenger Rights Regulation.

In the case in question, the Court noted that the Referring Court failed to indicate those elements of the contract of carriage in question which could justify, with a view to the efficacious conduct of proceedings, the existence of a sufficiently close link between the facts of the dispute and its jurisdiction. In the absence of such justification, the ‘place of performance’ within the meaning of paragraph (ii) of Article 7(1)(b) can therefore be the place of departure of the first leg of the journey as one of the places of the main provision of services that are the subject of the contract of carriage by air at issue in the main proceedings.

Based on the foregoing considerations and keeping in mind the objectives of proximity and sound administration of justice behind the Brussels Recast Regulation the Court held that paragraph (ii) of Article 7(1)(b)  must be interpreted as meaning that, in the case of a flight consisting of one single booking for the entire journey yet including separate connecting flights operated by different air carriers, where a claim for compensation, brought on the basis of the Air Passenger Rights Regulation, arises exclusively from a delay of the first leg of the journey caused by a late departure and is brought against the air carrier operating that first leg, the place of arrival for that first leg may not be classified as a ‘place of performance’ within the meaning of that provision. 

Saman Bugeja is an Associate at Ganado Advocates.