EUPillar C-327/10 Hypoteční banka a.s. v Udo Mike Lindner (First Chamber) [2011] ECR I-11543

Summary

The case concerns Art 16(2) of Brussels I. It was referred to the CJEU in proceedings between Hypoteční banka (governed by Czech law and established in Prague, Czech Republic), and Mr Lindner (a German national whose address was unknown) seeking to secure payment of a sum regarding a mortgage loan which the bank had granted to him. The contract between the parties included a clause granting jurisdiction to ‘the local court of the bank’, determined according to its registered office. At the time of the conclusion of the contract, Lindner was domiciled in Mariánské Lázně, Czech Republic. The bank brought its action in Cheb, Czech Republic before the referring court, claiming that that court was the ‘court with general jurisdiction over the defendant’ and, at the date on which the proceedings were brought, it was unable, for reasons beyond its control, to submit the original contract to its local court. The court granted the application by way of a payment order. However, that payment order was not able to be served on the defendant personally, as required by the Czech civil procedure rules, so it was set aside by the court. The court then assigned a guardian ad litem to the defendant, who was considered to be a person whose domicile was unknown. In the first action carried out by the guardian in the proceedings before the court, the guardian raised factual objections to the part of the claim relating to interest. The court decided to refer some questions to the CJEU. The first question was whether Brussels I was applicable where one of the parties to the court proceedings is a national of a MS other than that in which those proceedings are taking place. The CJEU referred to C 281/02 Owusu where it held regarding the Brussels Convention that the international nature of a legal relationship may derive from the fact that the situation at issue in the proceedings is such as to raise questions relating to the determination of international jurisdiction. The CJEU stated that the foreign nationality of one of the parties to the proceedings is not taken into account by the jurisdiction rules of Brussels I, but agreed with AG Trstenjak that it may raise questions relating to the determination of the international jurisdiction. Considering legal certainty and the purpose of Brussels I to guarantee the protection of defendants who are domiciled in the EU, it held that Brussels I is applicable to the proceedings in which the defendant is a foreign national and has no known place of domicile in the State of the court seised. The second question was whether Brussels I precludes a national law provision which enables proceedings to be brought against persons whose domicile is unknown. Citing C 18/02 DFDS Torline, the CJEU noted that Brussels I does not unify the procedural rules and found that it does not preclude the application of a provision of national procedural law of a MS which, with a view to avoiding situations of denial of justice, enables proceedings to be brought against, and in the absence of, a person whose domicile is unknown, if the court seised of the matter is satisfied, before giving a ruling in those proceedings, that all investigations required by the principles of diligence and good faith have been undertaken with a view to tracing the defendant. It also interpreted Art 16(2), requiring an action against a consumer to be brought only in the courts of the MS in which the consumer is domiciled, in respect of consumers whose current domicile is unknown. It found that the courts of the MS in which the consumer had his last known domicile have jurisdiction under Art 16(2) to deal with proceedings in the case where they have been unable to determine, pursuant to Art 59, the defendant’s current domicile and also have no firm evidence allowing them to conclude that the defendant is in fact domiciled outside the EU.