Delfly sp. z o.o. v Smartwings Poland sp. z o. o., formerly Travel Service Polska sp. z o.o (C-356/19)

Contents

Judgment of the Court (Eighth Chamber)3 September 2020^note(Reference for a preliminary ruling — Air transport — Regulation (EC) No 261/2004 — Article 7 — Right to compensation in the event of delay or cancellation of a flight — Compensation procedure — Claim expressed in national currency — National provision prohibiting the creditor from choosing the currency)In Case C‑356/19,REQUEST for a preliminary ruling under Article 267 TFEU from the Sąd Rejonowy dla m. st. Warszawy XV Wydział Gospodarczy (District Court for the Capital City of Warsaw, 15th Commercial Division, Poland), made by decision of 16 April 2019, received at the Court on 3 May 2019, in the proceedingsDelfly sp. z o.o.vSmartwings Poland sp. z o.o., formerly Travel Service Polska sp. z o.o.,THE COURT (Eighth Chamber),composed of L.S. Rossi, President of the Chamber, J. Malenovský (Rapporteur) and F. Biltgen, Judges,Advocate General: P. Pikamäe,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– Delfly sp. z o.o., by J. Pruszyński, adwokat,– Smartwings Poland sp. z o.o., formerly Travel Service Polska sp. z o.o., by M. Skrzypek, adwokat,– the Polish Government, by B. Majczyna, acting as Agent,– the European Commission, by B. Sasinowska and N. Yerrell, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 7(1) of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 (OJ 2004 L 46, p. 1).

2The request has been made in proceedings between Delfly sp. z o.o. and Smartwings Poland sp. z o.o., formerly Travel Service sp. z o.o., an air transport company, concerning a claim for compensation on the basis of Regulation No 261/2004.

Legal context

European Union law

3Recital 1 of Regulation No 261/2004 reads as follows:‘Action by the [European Union] in the field of air transport should aim, among other things, at ensuring a high level of protection for passengers. Moreover, full account should be taken of the requirements of consumer protection in general.’

4Article 3(1) of that regulation provides:‘This Regulation shall apply:(a) to passengers departing from an airport located in the territory of a Member State to which the Treaty applies;(b) to passengers departing from an airport located in a third country to an airport situated in the territory of a Member State to which the Treaty applies, unless they received benefits or compensation and were given assistance in that third country, if the operating air carrier of the flight concerned is a Community carrier.’

5Article 7 of Regulation No 261/2004, headed ‘Right to compensation’, provides:1.Where reference is made to this Article, passengers shall receive compensation amounting to:(a) EUR 250 for all flights of 1500 kilometres or less;(b) EUR 400 for all intra-Community flights of more than 1500 kilometres, and for all other flights between 1500 and 3500 kilometres;(c) EUR 600 for all flights not falling under (a) or (b).In determining the distance, the basis shall be the last destination at which the denial of boarding or cancellation will delay the passenger’s arrival after the scheduled time.…3. The compensation referred to in paragraph 1 shall be paid in cash, by electronic bank transfer, bank orders or bank cheques or, with the signed agreement of the passenger, in travel vouchers and/or other services.…’

Polish law

The Code of Civil Procedure

6Article 321 of the ustawa Kodeks postępowania cywilnego (Law on the Code of Civil Procedure) of 17 November 1964, in the version applicable to the case in the main proceedings (‘the Code of Civil Procedure’), provides, in paragraph 1 thereof, that a court may not decide on a claim that has not been put forward or award more than has been claimed.

7Article 505¹(1) of that code, which governs the simplified procedure, provides that that procedure applies to claims under contracts, where the value of the subject matter of the dispute does not exceed 20000 Polish zlotys (PLN) (approximately EUR 4487) and, for claims under warranties, quality guarantees or claims resulting from the contractual non-conformity of goods sold to consumers, where the value of the subject matter of the contract does not exceed that amount.

8The first sentence of Article 505⁴(1) of the Code of Civil Procedure reads as follows:‘Any modification of the claim is not permitted.’

The Law on the Civil Code

9Article 358 of the ustawa Kodeks cywilny (Law on the Civil Code) of 23 April 1964, in its version applicable to the case in the main proceedings (Journal of Laws [Dz. U.] of 2018, item 1025), provides:1. Where the subject matter of an obligation being performed in the territory of the Republic of Poland is a sum denominated in a foreign currency, the debtor may render performance in Polish currency, unless legislation, a court ruling constituting the basis of the obligation or a juridical act reserves the performance of the obligation exclusively in a foreign currency.2. The value of the foreign currency is to be calculated in accordance with the average exchange rate announced by the National Bank of Poland on the day of the obligation’s maturity, unless legislation, a court ruling or a juridical act provides otherwise.3. Where the debtor delays in the performance, the creditor may demand performance in Polish currency in accordance with the average exchange rate announced by the National Bank of Poland on the day on which the payment is made.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

10Ms X had a confirmed reservation with the air transport company, Smartwings Poland, formerly Travel Service, established in Warsaw (Poland), for a flight allowing her to travel from city A in a third country to city B in Poland. On 23 July 2017, she arrived on time at the check-in for that flight. The flight was delayed by more than three hours. It has not been established whether Ms X received any benefits or compensation or was given assistance in the third country of departure within the meaning of Article 3(1)(b) of Regulation No 261/2004.

11Ms X, who was entitled to compensation amounting to EUR 400 under Article 7(1) of that regulation, assigned her claim to Delfly, a company established in Warsaw. Delfly then brought an action before the referring court requesting that Smartwings Poland, formerly Travel Service, be ordered to pay it the sum of PLN 1 698.64, which, applying the exchange rate set by the National Bank of Poland on the date on which the claim for compensation was brought, was the equivalent of EUR 400. It is clear from the explanations provided by that court that, in accordance with Article 505¹ of the Code of Civil Procedure, disputes relating to contractual obligations are to be heard under the ‘simplified’ procedure where the amount in question does not exceed PLN 20000 (approximately EUR 4487).

12Smartwings Poland, formerly Travel Service, contended that the claim for compensation should be rejected on the ground, inter alia, that that claim had been expressed, contrary to the requirements of national law, in an incorrect currency, namely in Polish zlotys (PLN) and not in euros. The referring court states that, in the context of the ‘simplified’ procedure, the first sentence of Article 505⁴(1) of the Code of Civil Procedure does not provide for any possibility of modifying the claim. In the view of that court, the change in the currency in which the claim is expressed is to be regarded as a modification of the claim.

13The referring court points out that Article 358 of the Law on the Civil Code of 23 April 1964, in its version applicable to the case in the main proceedings, was interpreted by the Sąd Najwyższy (Supreme Court, Poland) in its judgment of 16 May 2012, delivered in Case III CSK 273/11. The referring court states that the obligation in question in that case had been denominated in foreign currency and that the parties had not agreed on the acceptability of its conversion to Polish zlotys (PLN). As the debtor had not chosen to pay the sum due in Polish currency and there had been no agreement between the parties in this regard, the Sąd Najwyższy (Supreme Court) took the view that the creditor could demand payment only in foreign currency. According to the Supreme Court, only the debtor has the right to choose the currency in which that debtor’s obligation will be performed, whether the debtor performs it on time or is delayed or in default. In the event of the debtor’s default in respect of an obligation concerning a pecuniary sum expressed in foreign currency, the creditor only has the right to choose the exchange rate to be applied. Moreover, the creditor has the right to choose the exchange rate only if the debtor has chosen Polish currency.

14The referring court also points out that that judgment has resulted in case-law by which the national courts have rejected claims for compensation, for the consequences of a delayed flight, in which the claim had been expressed in national currency, whereas the obligation had been denominated in foreign currency. The referring court explains that it is impossible for the court to give a ruling in such a case because it may not, under Article 321(1) of the Code of Civil Procedure, decide on a claim that has not been put forward.

15As is apparent from the order for reference, the referring court’s questions result from the fact that the provisions of Regulation No 261/2004 have not been interpreted uniformly by the Polish courts as regards the solutions to be applied to disputes in which the applicant brings a claim for compensation, expressed in national currency, for the damage caused to that applicant by a delayed flight.

16In those circumstances, the Sąd Rejonowy dla m. st. Warszawy XV Wydział Gospodarczy (District Court for the Capital City of Warsaw, 15th Commercial Division, Poland) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Should Article 7(1) of [Regulation No 261/2004] be interpreted as governing not only the scope of the obligation to pay compensation but also the manner in which that obligation is to be discharged?(2) If the answer to the first question is in the affirmative, can a passenger or his legal successor effectively demand the payment of the equivalent of EUR 400 in another currency, including, in particular, the national currency of the place of residence of the passenger whose flight was cancelled or delayed?(3) If the answer to the second question is in the affirmative, what criteria should be used to determine the currency in which the passenger or his legal successor may demand payment, and what exchange rate should be applied?(4) Do Article 7(1) or other provisions of [Regulation No 261/2004] preclude the application of provisions of national law which result in the dismissal of an action brought by a passenger or his legal successor on the sole ground that the claim incorrectly indicated the national currency of the passenger’s place of residence rather than the euro in accordance with Article 7(1) of the Regulation?’

Consideration of the questions referred

17By its questions, which should be examined together, the referring court asks, in essence, whether Regulation No 261/2004, and in particular Article 7(1) thereof, must be interpreted as meaning that passengers whose flights have been cancelled or subject to a long delay or their legal successors may demand payment of the amount of the compensation referred to in that provision in the national currency of their place of residence, so that that provision precludes a Member State’s legislation or case-law which results in the dismissal of an action brought for that purpose by such passengers or their legal successors on the sole ground that the claim was expressed in that national currency.

18Article 7(1) of Regulation No 261/2004 provides that, where reference is made to that article, passengers are to receive compensation varying from EUR 250 to EUR 600 depending on the distance covered by the flights concerned.

19According to Article 7(3) of Regulation No 261/2004, the compensation due under Article 7(1) of that regulation is to be paid in cash, by electronic bank transfer, bank orders or bank cheques or, with the signed agreement of the passenger, in travel vouchers and/or other services.

20It is clear from a comparison of the respective wording of paragraphs 1 and 3 of Article 7 that, although that compensation may be paid, as appropriate, by one of the means referred to therein, by contrast, there is no express provision for any comparable latitude as regards a national currency, other than the euro, in which that compensation is to be paid.

21Nonetheless, it cannot be inferred from that comparison, conversely, that latitude concerning a national currency, other than the euro, is in principle excluded.

22In the first place, it must be borne in mind that the main objective pursued by Regulation No 261/2004 is, as is apparent from, inter alia, recital 1 thereof, to ensure a high level of protection for passengers (see, inter alia, judgment of 17 September 2015, van der Lans, C‑257/14, EU:C:2015:618, paragraph 26 and the case-law cited).

23The Court has thus held that, in accordance with that objective, provisions conferring rights on air passengers must be interpreted broadly (see, inter alia, judgments of 19 November 2009, Sturgeon and Others, C‑402/07 and C‑432/07, EU:C:2009:716, paragraph 45, and of 4 October 2012, Finnair, C‑22/11, EU:C:2012:604, paragraph 23).

24It follows that the right to compensation provided for in Article 7 of Regulation No 261/2004 must be interpreted broadly.

25In that regard, as the Court has noted, Regulation No 261/2004 is intended to make good, in a standardised and immediate manner, the various types of damage constituted by the serious inconvenience occasioned during the carriage of passengers by air (see, to that effect, judgment of 10 January 2006, IATA and ELFAA, C‑344/04, EU:C:2006:10, paragraphs 43 and 45) and, inter alia, to compensate passengers thus aggrieved.

26Making the right to compensation for such damage subject to the condition that the compensation due must be paid to the aggrieved passenger in euros, and not in any other national currency, would restrict the exercise of that right and would therefore disregard the requirement for a broad interpretation referred to in paragraph 24 of this judgment.

27In the second place, it should be noted that Regulation No 261/2004 applies to passengers without making a distinction between them based on nationality or place of residence, the relevant criterion being that referred to in Article 3(1)(a) and (b) of that regulation, namely the place where the airport of departure of those passengers is located.

28Consequently, the passengers entitled to compensation under Article 7 of Regulation No 261/2004 are to be regarded as all being in comparable situations, as they all receive standardised and immediate compensation for the damage for which compensation is available under that regulation.

29In that regard, all acts of EU law, such as Regulation No 261/2004, must be interpreted, according to the Court’s case-law, in accordance with primary law as a whole, including the principle of equal treatment, which requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see, inter alia, judgment of 19 November 2009, Sturgeon and Others, C‑402/07 and C‑432/07, EU:C:2009:716, paragraph 48).

30However, the imposition of a condition that the amount of the compensation provided for in Article 7(1) of Regulation No 261/2004, sought by aggrieved passengers or their legal successors, may be paid only in euros, and not, as in the case in the main proceedings, in the legal tender of a non-euro area Member State, is likely to lead to a difference in treatment of aggrieved passengers or their legal successors, without it being possible to put forward any objective justification for that difference in treatment.

31It follows from the foregoing that it would be incompatible with the requirement to interpret broadly the rights of air passengers referred to in Regulation No 261/2004 and with the principle of equal treatment of aggrieved passengers and their legal successors to refuse to allow passengers entitled to compensation on the basis of Article 7(1) of that regulation to demand payment of the amount of that compensation in the national currency of their place of residence.

32In the third place, it is important to note that, in view of the foregoing, the payment of the amount of the compensation due in the national currency of the place of residence of the passengers concerned necessarily presupposes a conversion from the euro to that currency.

33In that regard, as Regulation No 261/2004 does not contain any instructions, the manner in which the conversion is made, including the setting of the exchange rate applicable to that conversion, remains a matter of the national law of the Member States, in compliance with the principles of equivalence and effectiveness.

34In the light of those considerations, the answer to the questions referred is that Regulation No 261/2004, and in particular Article 7(1) thereof, must be interpreted as meaning that passengers whose flights have been cancelled or subject to a long delay or their legal successors may demand payment of the amount of the compensation referred to in that provision in the national currency of their place of residence, so that that provision precludes a Member State’s legislation or case-law which results in the dismissal of an action brought for that purpose by such passengers or their legal successors on the sole ground that the claim was expressed in that national currency.

Costs

35Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Eighth Chamber) hereby rules: Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, and in particular Article 7(1) thereof, is to be interpreted as meaning that passengers whose flights have been cancelled or subject to a long delay or their legal successors may demand payment of the amount of the compensation referred to in that provision in the national currency of their place of residence, so that that provision precludes a Member State’s legislation or case-law which results in the dismissal of an action brought for that purpose by such passengers or their legal successors on the sole ground that the claim was expressed in that national currency.