Immovable property — Tenancy — Brussels Convention — Contracting state — Jurisdiction in proceedings regarding tenancies of immoveable property — Preliminary ruling given
The claimants, who were German residents, brought an action against the defendant company, which was established in the Isle of Man. They claimed repayment of sums paid under a contract by which they had acquired the right to use a holiday apartment in Greece. Located in a hotel complex, the apartment was available on a time-share basis for one week per year until 2031. In order to use the property, the claimants had to purchase a club membership, which constituted the major part of the purchase price.
The German court applied to the European Court of Justice (ECJ) for a preliminary ruling on the question of jurisdiction. The court was asked to consider whether Article 16(1)(a) of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (the Brussels Convention), which provides for the exclusive jurisdiction of the courts of a contracting state where a property is situated, in proceedings that have tenancies of immovable property as their object, applied in the instant case.
Held: A preliminary ruling was given.
On its proper construction, article 16(1)(a) did not apply in the instant case.
The rule of exclusive jurisdiction in respect of tenancies of immovable property was intended to cover, inter alia, disputes concerning compensation for damage caused by tenants. The courts of the state in which the property was situated were best placed to ascertain the facts by carrying out checks, inquiries and expert assessments and by applying the rules and practices of that state.
However, in the present case, the claim was essentially in relation to the club- membership contract. In the construction of the contract, the value of the right to use the property was of secondary economic importance compared with the right to member to be used by the member was not sufficiently close to warrant classifying it as a tenancy within article 16(1)(a).
As an exception to the general rule of jurisdiction in the Convention, article 16 should not be interpreted more widely than was required to pursue its objective since the article deprived the parties to proceedings of the choice of forum and might result in them coming before a court that was not of the domicile of any of them.
M Brinkmann (Rechtsanwalt) appeared for the claimants; R Wagner (acting as agent) appeared for the Federal Republic of Germany, an interested party; C Jackson and R Caudwell (acting as agents) and Thomas de la Mare (barrister) appeared for the United Kingdom, an interested party; A-M Rouchand-Joët and S Grünheid (acting as agents) appeared for the Commission, as an interested party; the defendants did not appear and were not represented.
Eileen O’Grady, barrister
