C-249/16 Saale Kareda v Stefan Benk concerns a dispute between Mr Benk and his former partner Ms Kareda. In 2007, to finance the purchase of a family home, the parties entered into a number of loans under which they were joint borrowers with joint and several liability. Towards the end of 2011, Ms Kareda ended her cohabitation with Mr Benk and went to live in Estonia; Mr Benk then met the monthly repayment obligations by himself. Subsequently, Mr Benk commenced legal proceedings seeking reimbursement of the portion of the repayments which he made on Ms Kareda’s behalf. Ms Kareda contested the jurisdiction of the Austrian Courts.
Ultimately, the Austrian Supreme Court referred the following questions on jurisdiction to the CJEU for a preliminary ruling:
- Must Article 7(1) of Regulation No 1215/2012 (the recast Brussels I Regulation) be interpreted as meaning that, where a debtor under a (joint) credit agreement with a bank has, on his own, made the repayments due under that credit agreement, a reimbursement claim (compensation/recourse claim) brought by that debtor against the other debtor under that credit agreement constitutes a derived (secondary) contractual claim arising from that credit agreement?
- If Question 1 is answered in the affirmative; is the place of performance of a debtor’s reimbursement claim (compensation/recourse claim) against the other debtor arising out of the underlying credit agreement to be determined;
(a) in accordance with the second indent of Article 7(1)(b) of Regulation No 1215/2012 (“provision of services”) or
(b) in accordance with Article 7(1)(c), in conjunction with Article 7(1)(a), of Regulation No 1215/2012 on the basis of the lex causae?
- If Question 2(a) is answered in the affirmative; is the service characterising the credit agreement the granting of the loans by the bank, and is, therefore, the place of performance of that service determined in accordance with the second indent of Article 7(1)(b) of Regulation No 1215/2012 by the registered office of the bank, if the loans were provided exclusively at that place?
- If Question 2(b) is answered in the affirmative; for the purpose of determining the place of performance for the non-performed contractual obligation in accordance with Article 7(1)(a) of Regulation No 1215/2012, is the decisive date:
(a) the date on which the two debtors took out the loans (March 2007) or
(b) the dates on which the loan debtor entitled to recourse made to the bank the payments from which he derives the recourse claim (June 2012 to June 2014)?’
The CJEU held:
- A recourse claim between jointly and severally liable debtors is a “matter relating to a contract” as referred to in Article 7(1) of the recast Brussels I Regulation. Consequently, Article 7(1) rather than Article 7(2) (which governs tortuous claims) applies to determine the question of jurisdictions;
- A credit agreement such as the one between the joint debtors in these proceedings is a “contract for the provision of services” as referred to in Article 7(1)(b) of the recast Brussels I Regulation;
- Where a credit institution has granted a loan to two jointly and severally liable debtors, the “place in a Member State where, under the contract, the services were provided or should have been provided” is, unless otherwise agreed, the place where that institution has its registered office, and this also applies with a view to determining the territorial jurisdiction of the court called upon to hear and determine an action for recourse between those joint debtors; and
- Given the forgoing answers, the Court does not need to address the fourth question.
The full judgment can be read here: Saale Kareda v Stefan Benk