In a judgment of November 17, 2011, the first chamber of the European Court of Justice ruled in Hypotecní banka a.s. v Lindner (case C-327/10) that defendants with unknown domicile are domiciled at their last known domicile for the purpose of the Brussels I Regulation.
The case was concerned with a consumer (Lindner) who had borrowed money from a Czech bank (Hypotecní banka a.s.). The consumer was a German national living in the Czech Republic. The loan contract contained a jurisdiction clause in favour of “the local court of the bank”, ie Prague courts. Lindner lived 150 km away from Prague. Yet, it seems that when the bank initiated proceedings against Lindner, it brought them before the court of its former domicile. Lindner, however, had changed addresses, and the court was unable to assess where he had moved to.
This of course raised great difficulties. The applicability of the Brussels I Regulation is conditional upon the defendant being domiciled in the European Union (art. 2). Consumers must be sued at the place of their domicile (art. 16).
Last Known Domicile
The Court held that the last known domicile had to be used for the purpose of each provision of the Regulation. It explained that it struck a fair balance between the rights of the plaintiff, who must be able to identify easily the competent court, and of the consumer.
44 It is, above all, in accordance with the objective, pursued by Regulation No 44/2001, of strengthening the legal protection of persons established in the European Union, by enabling the applicant to identify easily the court in which he may sue and the defendant reasonably to foresee before which court he may be sued (see, inter alia, Joined Cases C-509/09 and C-161/10 eDate Advertising and Others [2011] ECR I-0000, paragraph 50).
45 (…)
46 Lastly, for the purpose of applying Article 16(2) of Regulation No 44/2001, the criterion of the consumer’s last known domicile ensures a fair balance between the rights of the applicant and those of the defendant precisely in a case such as that in the main proceedings, in which the defendant was under an obligation to inform the other party to the contract of any change of address occurring after the long-term mortgage loan contract had been signed.
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