Nejvyšší soud; 2012-11-20; CC Invest Limited; J.F.; 32 Cdo 50/2011
Decision by national courts in the field of European Union law — ECLI:CZ:NS:2012:32.CDO.50.2011.1
Date: 2012-11-20
Subject matter: Judicial cooperation in civil matters
Origin: Czechia

82012CZ1120(51)_ENG_SUMJURE
JURE summary
JURE summary
This case concerned the question of international jurisdiction, based on the place of habitual residence of the defendant (i.e. the domicile in common law). The defendant is a citizen of Poland and does not have a habitual residence in the Czech Republic. The court applied Article 15(1)(c) and 16(2) of the Brussels I Regulation (1) as the case concerns an obligation from a consumer contract, specifically a loan agreement for 56,000 CZK. The aforementioned provisions designate that a consumer can be sued only in the Member State of his domicile.  Article 59(1) of the Brussels I Regulation states that the national court in question shall apply national law in order to determine the question of domicile. The Občanský zákoník (Czech Civil Code) perceives the domicile as the place of factual residence of a person with intent to be there permanently. The court of first instance dismissed the case as the plaintiff did not prove that the defendant had his habitual residence in the Czech Republic, and therefore the Czech courts did not have international jurisdiction.  The defendant’s mother provided the court with information that he resideds at an unknown location in Great Britain and the courts of first and second instances were not able to obtain any further information. The court of appeal confirmed the decision. The plaintiff did not indicate another address of residence of the defendant and the court was not able to ascertain it. The plaintiff also failed to prove that the defendant had a domicile in the Czech Republic at the time of filing the lawsuit. On the contrary, everything led to the conclusion that the defendant did not stay in the Czech Republic as all the mail sent by the court was undelivered.  The court of appeal argued that it is not possible to apply Article 24 and Article 26, and concluded that the burden of proof for the place of habitual residence is on the plaintiff, but plaintiff failed to prove this point.
The plaintiff filed a cassation to the Supreme Court arguing that Article 15 could not be applied, as it is not applicable to loan agreements without stating the purpose of that loan. If the purpose is not set, it is impossible to prove whether the loan was used for professional or business reasons. The Plaintiff also considered the arguments of the lower courts as unconstitutional as the rights of court protection were breached, since it cannot be fairly demanded of the plaintiff to search for the defendant in all of the states of the European Union. The defendant had changed his place of residence without notifying the creditor, contrary to his contractual duty.
According to the Supreme Court, as for Article 15(1)(a) and (b) of the Brussels I Regulation, it is clear that these provisions are applicable exclusively to consumer contracts dealing with the sale of goods on instalment credit terms or for contracts for loans repayable in instalments, or for any other form of credit, made available to finance the sale of goods. Under Article 15(1)(b) can be subsumed only loan agreements that are purpose-bound and not on loans without a contractually negotiated purpose. The conclusion of the lower courts concerning the application of Article 15(1)(b) was therefore wrong. The Supreme Court argued that in case C-327/10 (2) the Court of Justice of the European Union stated that if a consumer leaves their domicile before an action is filed, the courts of their last known domicile have jurisdiction based on Article 16(2), if the actual place of residence cannot be ascertained. In this case, the defendant was not found at the address in the Central evidence of residents and the Foreign Police notified the court that the right to residence had been cancelled in 2009. The Foreign Police did not have any information about his location. Also, no indication that he was staying outside of European Union was found. Therefore, the Supreme Court concluded that Czech courts had the international jurisdiction based on Article 16(2), as courts of the Member State where the defendant had his last known domicile.
The decisions of the lower courts were annulled and the proceedings will continue at the court of first instance.
(1) Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
(2) Judgment of 17 November 2011, Hypoteční banka a.s. v Udo Mike Lindner, C-327/10, EU:C:2011:745.