Could an Austrian resident wanting a refund on a sea voyage sue the German ship owner in the Austrian courts after buying the ticket online from a German travel agent? Come again? Martin Pachl of Osborne Clarke Cologne embarks on a cruise to the highest EU court to find a key ecommerce verdict.
Topic: Ecommerce
Who: Peter Pammer v Reederei Karl Schluter
When: December 2010
Where: Court of Justice of the European Union (formerly the European Court of Justice)
Law stated as at: December 2010
What happened:
Peter Pammer, who lives in Austria, wanted to take a cargo ship voyage from Trieste (Italy) to the Far East. He booked the trip at Reederei Karl Schlueter, a company established in Germany. Mr. Pammer booked the trip through a German travel agency (Frachtschiffreisen Pfeiffer GmbH) is specialised for sales of cargo ship travels on the web. The voyage contract was concluded between Mr. Pammer and Reederei Karl Schlueter.
Mr. Pammer refused to depart with that cargo ship, since in his view the conditions on board did not meet the indications by the travel agency. Therefore he demanded a refund of the already paid price for the trip. Since Reederei Karl Schlueter only reimbursed a part of that price, Mr Pammer filed a complaint before an Austrian court. Reederei Karl Schlueter appealed against the jurisdiction of the Austrian court. Reederei Karl Schlueter contended that it did not pursue any professional or commercial activity in Austria and raised the plea that the court lacked jurisdiction.
The law
According to the EU regulation on jurisdiction in civil and commercial matters (Regulation [EC] No 44/2001) claims against persons resident in the territory of a Member State must be filed with the courts of that State. Disputes arising from a contractual action can be taken to the court of the place where the obligation has been or must be fulfilled under the contract.
If a consumer contract has special rules to protect the consumer, the Regulation provides special rules for the jurisdiction: If the trader has directed its activities to the Member State where the consumer lives, the consumer may bring any action before the court of the Member State in which he lives. Vice versa the costumer only can be sued in that State.
The Austrian Supreme Court which dealt with the dispute asked the European Court of Justice for a preliminary ruling on the question whether offering services and goods over the Internet means automatically to “direct” these services and goods to other Member States. Also the Austrian court asked which criteria to use when determining whether a website is directed to a foreign state.
In his ruling, the court finds that the mere use of a website by sellers to effect transactions as such, does not mean that the company directs its activities to other Member States. Rather, the application of these rules shall require that the trader has expressed its intention to establish business relationships with consumers from other Member States.
This shall be determined by an overview of all circumstances. Evidence of this intention is that the offer is explicitly aimed at several Member States. Expenditure of the trader for special web-search-optimizers to help Member States residents to access its website also indicates such intention.
Such clues are the international nature of the activity in question, such as certain tourist activities and the disclosure of phone numbers including international code. Other clues might be the use of a top-level domain name other than that of the Member State where the trader is established and mentioning an international clientele composed of customers domiciled in various Member States. Moreover, if a website for consumers provides a language or currency of another Member State this may be an indication of cross-border activity by the trader.
On the other hand, the electronic or geographical address of the trader on the website or their phone number without country code are not an indication for directing services to another Member State because such data does not reveal whether the trader’s activities are oriented to one or more Member States.
Thus, the court came to the conclusion that the Austrian court has to decide on the basis of these principles, whether the site and the overall activities show that the trader directed his offer to Austria and had the intention to establish business with Austrian costumers.
Why this matters:
The decision of the court of Justice of the European Union matters since design and the content of a website define whether an offer is directed to another Member State. It is very important to customize the website according to the intention of the trader to avoid that all EU-residents can take legal action in the Member States where they live. Especially the contact data, namely the phone number, and possibilities to get information in different languages should be checked critically if they may cause an intention to direct services to other Member States.
