ECJ Clarifies Rules On Jurisdiction In Relation To Consumer Contracts

On 6 September 2012, the Court of Justice of the European Union ("ECJ") gave judgment on a preliminary reference from the Austrian Supreme Court concerning the interpretation of Article 15(1)(c) of Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the "Brussels I Regulation") (ECJ, case C-190/11, Daniela Mühlleitner v. Ahmad Yusufi and Wadat Yusufi).

As a general rule, the Brussels I Regulation requires actions against a person domiciled in an EU Member State to be brought in the courts of that State. Further, in contractual matters, the Brussels I Regulation allows the courts of the place of performance of the contractual obligation to decide on the dispute.

With a view to protecting consumers, section 4 of the Brussels I Regulation derogates from the above general rules for contractual disputes between a consumer and a trader. In such disputes, the consumer is entitled to bring proceedings before the courts of the EU Member State where he is domiciled when specific conditions are satisfied. In this regard, Article 15(1)(c) of the Brussels I Regulation provides that a consumer may sue in his national courts a trader with whom he has concluded a contract, even if the trader is domiciled in another EU Member State on the double condition that (i) the trader pursues commercial or professional activities in the EU Member State of the consumer's domicile or, by any means (e.g., via the Internet), directs such activities to that State or to several States including that State; and (ii) the contract at issue falls within the scope of such activities.

The Austrian Supreme Court asked the ECJ whether Article 15(1)(c) of the Brussels I Regulation must be interpreted as requiring the contract between the consumer and the trader to be concluded at a distance. This question arose in proceedings between Ms. Mühlleitner, who resides in Austria, and the Germany-based company Autohaus Yusufi GbR ("Autohaus Yusufi") which sells cars.

After coming across an offer of Autohaus Yusufi on the Internet, Ms. Mühlleitnerwent to Germany to sign the contract of sale and to take delivery of the vehicle. However, on her return to Austria, Ms. Mühlleitnerdiscovered that the vehicle was defective. Since Autohaus Yusufi refused to repair the vehicle, Ms. Mühlleitnerbrought proceedings in the Austrian courts for rescission of the sale contract. Autohaus Yusufi contested the...