Riigikohus; 2019-12-10; J.T. vs J.V.; 2-19-4463/10
Decision by national courts in the field of European Union law — ECLI:EE:RK:2019:2.19.4463.22745
Date: 2019-12-10
Subject matter: Judicial cooperation in civil matters
Origin: Estonia

82019EE1210(51)_ENG_SUMJURE
JURE summary
JURE summary
This case regards a question of international jurisdiction of the Estonian courts in a dispute between the guarantor of credit and the principal debtor, which was assessed by the Riigikohus (hereinafter ‘the Supreme Court’).
A natural person domiciled in the United Kingdom (hereinafter ‘the defendant’) entered into a consumer credit agreement with a bank domiciled in Estonia (hereinafter ‘the creditor’). The credit agreement was secured by a surety agreement between a natural person domiciled in Estonia (hereinafter ‘the plaintiff’) and the creditor. The defendant failed to fulfil its obligations, so the creditor raised the claims against both the principal debtor (the defendant) and its guarantor (the plaintiff).
The plaintiff paid its obligations to the creditor and subsequently applied before the Harju Maakohus (hereinafter ‘the Court of First Instance’) for the repayment of the amount paid to the creditor instead of the defendant.
The Court of First instance invoked the TsMS (1) and Article 4(1) of the Brussels I Regulation (recast) (2), according to which the case must be brought in the courts of defendant’s domicile, declared a lack of its jurisdiction and dismissed the action.
The plaintiff appealed before the Tallinna Ringkonnakohtu (hereinafter ‘the Court of Appeal’), which altered the grounds on which the Court of First Instance decided but upheld the conclusion of a lack of jurisdiction. The Court of Appeal held that the current claim originated in a consumer contract. The plaintiff, which took over the claim of the former creditor against the plaintiff, became a new creditor against the plaintiff. Such transfer of the claim does not affect the character of the claim, i.e., the current claim still must be regarded as originating in a consumer contract. Then, according to the Brussels I Regulation (recast), the Estonian courts lack the jurisdiction to hear this case.
The plaintiff filed a cassation appeal to the Supreme Court and sought the annulment of the lower courts’ conclusions, alleging that both lower courts misapplied both national and European legislation.
The Supreme Court held that special jurisdiction over consumer contracts is part of European law to protect a weaker party to a dispute (e.g., in a dispute between a bank and a natural person who is not a professional). The fact that the main credit agreement between the former creditor and the defendant was a consumer contract does not automatically mean that the current dispute, where a former guarantor became a new creditor, has the same character. Conversely, in the current dispute, both parties have an equal position as none of them could be regarded as the weaker party.
The Supreme Court considered that second indent of Article 7(1)(b) of the new Brussels I Regulation (recast) applies to the current dispute instead. This provision suggests that jurisdiction lies with the courts for the place where the services were provided or should have been provided. In the current dispute, the financial services were provided in Estonia, therefore the Estonian courts shall have jurisdiction, which means that both lower courts erred in their conclusions.
The Supreme Court granted the cassation appeal, annulled the lower courts’ decisions, and referred the case back to the Court of First Instance, which must also ascertain the possible prorogation of jurisdiction according to Article 25 of the Brussels I Regulation (recast).
(1) Tsiviilkohtumenetluse seadustik (Code of Civil Procedure).
(2) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.