Case law Developments in PIL

A Further Twist to Emissions Scandal Litigation: Jurisdiction in Case of Self-Imported Cars

This post was drafted by Paul Eichmüller and Matthias Lehmann.


Almost six years after the Volkswagen Dieselgate scandal became public, the issue of international jurisdiction for damage claims arising from the fraud is still creating headaches. In a recent decision from 24 March 2021, the Austrian Supreme Court decided a case that was in many respects similar to the one giving rise to the much discussed ECJ judgment of C-343/19, VKI/VW – yet, there was one important difference: the car was transported to another country after its purchase.

Facts

Like in previous cases, the Austrian Supreme Court had to decide on a damage claim resulting from the sale of a car produced by a member of the VW group. The claimant was resident in Austria but had acquired the car directly from the manufacturer in Germany, where the vehicle was also handed over to the buyer. He then paid the price from his Austrian bank account and imported the car to Austria, where he continued to use it. The manufacturer’s representative had been aware of this intention at the time when the contract was concluded. After the discovery of the emission fraud scandal, the buyer brought a claim for damages against the manufacturer in Austrian courts, claiming compensation for the decreased value of the car due to the fraud.

The courts of first and second instance both declined international jurisdiction since the car had been bought and handed over in Germany. They argued that for the sale of movable goods, the place where the damage occurs in the sense of Article 7(2) Brussels I bis Regulation should always be located where a good is handed over, and not in the country of (intended) habitual use.

The Decision by the Austrian Supreme Court

The Austrian Supreme Court agreed with the legal opinion of the lower courts. It cited the CJEU ruling in C-343/19, VKI/VW, according to which the damage occurs at the place of purchase (see para 37). As in its view the damage had already occurred in the moment of the purchase in Germany, the Austrian Supreme Court concluded that the subsequent transport to Austria – be it with the previous knowledge or even the consent of the seller – could not change the competent court.

Neither did the fact that the payment was effected from an Austrian bank account establish jurisdiction of Austrian courts change the analysis in the eyes of the Austrian Supreme Court. It distinguished the CJEU judgment in C-304/17, Löber, on the ground that the damage materialised in a tangible object and not in a bank account.

The buyer’s final argument was based on the fact that the seller had allegedly directed his activity to Austria and thus, the applicable law to the contract would be Austrian law pursuant to Art 6(1)(b) Rome I Regulation. However, this argument was rejected on purely procedural grounds.

Austrian courts thus lacked jurisdiction and the claim was rejected. The Supreme Court did not deem a request for a preliminary ruling necessary, as it considered it a case of the acte éclairé doctrine.

Assessment

The judgment by the Austrian Supreme Court is a logical next step from the CJEU ruling in VKI/VW. The latter gave precedence to the place of purchase, citing the interest of legal certainty, the need for the court to determine the market conditions at this place and the competitive relations or collective consumer interests that may be affected there as the main reasons. These considerations force the conclusion that the damage occurs at the place of purchase irrespective of where the car is subsequently used. This new ruling results from the CJEU using a single connecting factor in VKI/VW instead of weighing a number of different factors. Assigning jurisdiction to the courts of Germany may pose a disadvantage for some customers, but they must be aware that a purchase in a foreign country may also have legal side-effects.

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