JURE summary

JURE summary

This case regards a question of international jurisdiction over a recovery of debt resolved by the Tallinna Ringkonnakohus (hereinafter ‘the Court of Appeal’).

A financial company domiciled in Estonia (hereinafter ‘the plaintiff’) brought a case before the Harju Maakohtu (hereinafter ‘the Court of First Instance’). The action was directed against a natural person (hereinafter ‘the defendant’) who entered into a loan contract with the bank, but the loan remained unpaid. The claim arising from the loan was further transmitted to the plaintiff for its recovery.

The Court of First Instance relied on data in the population register and declared that the defendant is no longer domiciled in Estonia. The defendant was a consumer who entered into a credit agreement. Article 18(2) of the Brussels I Regulation (recast) (¹), then provides that ‘proceedings may be brought against a consumer by the other party to the contract only in the courts of the Member State in which the consumer is domiciled’. The Court of First Instance declared a lack of its jurisdiction.

The plaintiff appealed to the Court of Appeal alleging that the determination of the defendant’s domicile cannot be carried out only formally following the data in the population register. The Court of First Instance ignored the data disclosed by the defendant in the contract (place of residence in Tallinn, Estonia) and failed to ascertain if the defendant lives abroad by asking the authorities of the foreign Member State for its confirmation.

The Court of Appeal assessed the documents of the case and cited Article 61(1) of the Brussels I Regulation, according to which ‘in order to determine whether a party is domiciled in the Member State whose courts are seised of a matter, the court shall apply its internal law’. The Court of First Instance should have applied Article 14(1) of the TsÜS (²) which provides that the domicile of a person is the place where he habitually or mainly resides. A place where a person voluntarily stays for a long period of time, but for a particular reason of purpose, without the intention or the possibility to settle there permanently, cannot be considered as the place of residence. The Court of First Instance based its conclusion solely on the population register, but this data has only informative and statistical significance and as such must be regarded only as one piece of evidence regarding the determination of habitual residence. A habitual residence of a person must be established on the basis of factual circumstances, but the Court of First Instance did not carry out a complete assessment. The court must also consider Article 14(2) of the TsÜS which provides that a person may be domiciled in several places at the same time. Furthermore, even if it turns out that the defendant is not domiciled in Estonia, the jurisdiction of the Estonian courts may be based on other provisions of the Brussels I Regulation (recast), such as Article 7(1)(a) (place of performance of the obligation in question), but the Court of First Instance failed to consider this option too.

Since the Court of First Instance did not thoroughly determine the facts on the basis of which the jurisdiction may be based and thus prematurely dismissed the action, the first instance decision must be annulled. The Court of Appeal granted the appeal and referred the case back to the Court of First Instance.

(¹) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

(²) Tsiviilseadustiku üldosa seadus (General Part of the Civil Code).