Case number and/or case name
C-302/13 flyLAL-Lithuanian Airlines AS v Starptautiskā lidosta Rīga VAS and Air Baltic Corporation AS (Third Chamber)
Referring court and Member State
Latvia, Third Instance, Augstākās Tiesas Senāts
Summary
The case was referred to the CJEU in Latvian proceedings between flyLAL, a Lithuanian airline in liquidation, and two Latvian companies, concerning a request for recognition and enforcement of a Lithuanian court order for provisional/protective measures in Latvia. The provisional/protective measures for sequestration of the movable/immovable assets and property rights of the co-defendants was granted in 2008 in a pending action before the Lithuanian Court of Appeal in which flyLAL sought compensation for damage resulting from alleged infringements by the co-defendants of EU competition law. The District Court of Vidzeme in Riga, Latvia recognised and enforced the Lithuanian judgment ordering provisional/protective measures in Latvia. This decision, confirmed by the Riga Court of Appeal, was appealed against by the co-defendants before the referring court. They argued that the recognition and enforcement of the judgment was contrary to both the rules of public international law on immunity from jurisdiction and Brussels I, and that the dispute relating to airport charges set by State rules did not concern a civil or commercial matter falling within the scope of Brussels I. FlyLAL counter-argued that its action was a civil matter because it sought compensation for damage resulting from the infringement of Arts 81 and 82 EC. The referring court asked four questions to the CJEU. By its first question, it asked whether the action seeking legal redress for damage resulting from alleged infringements of EU competition law is a civil and commercial matter covered by Brussels I. The CJEU referred to its settled case-law on Brussels I and the Brussels Convention on the interpretation of “civil and commercial matters”, Recital 7 to Brussels I, and Art 5(3) and (4) and it found that the action relates to tort, delict or quasi-delict, is civil and commercial in nature and covered by Brussels I. The CJEU noted that the exercise of public powers by one of the parties to the case excludes it from civil and commercial matters. However, it found no exercise of public powers in the present case because the fact that the first defendant is subject to generally applicable statutory provisions of Latvia regarding the determination of the rates of airport charges and reductions in those charges does not affect the legal relationships between itself and the airlines which benefit from its services, and also the Latvian State is not a party to the main proceedings. By its second and third questions, the court asked whether the action falls within the scope of Art 22(2) and, if so, whether this precludes the judgment’s recognition under Art 35. Referring to its judgment in C 372/07, para 26, the CJEU found that the action is not covered by Art 22(2) because the subject-matter of the substance of the dispute concerns a compensation claim, not the validity of the decisions of the organs of companies. By its last question, the court asked whether the failure to give reasons regarding the determination of the amount of the sums concerned by the provisional/protective measures granted by the judgment or the invocation of serious economic consequences constitute a ground to refuse the judgment’s recognition on the basis of public policy under Art 34(1). After referring to its judgment in C 619/10, the CJEU observed that there was no lack of reasoning, the parties had the opportunity to bring an action against the decision in Lithuania and they exercised that option, and thus the basic principles of a fair trial were respected. Regarding the consequences, by agreeing with the AG that public policy seeks to protect interests expressed through a rule of law, and not purely economic interests, the CJEU found that the mere invocation of serious economic consequences does not constitute an infringement of the public policy of the MS in which recognition is sought. This was a strict interpretation of the public policy ground consistent with its nature.