Casenote: Irish Ferries Limited v National Transport Authority. (Case C-570/19)

26th March 2021 by Sarah Prager

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On 4th March 2021 Advocate General Szpunar gave his Opinion in Irish Ferries Limited v National Transport Authority, Case C-570/19, and it makes for interesting reading.

The matter had been referred to the Court of Justice of the European Union by the Irish High Court with a request for a preliminary ruling on the rights of passengers intending to travel by sea and inland waterway where their journey is cancelled.

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The claim arose out of a delay of 200 days in the delivery of Irish Ferries’ new vessel, the W.B. Yeats, which was due to be delivered from a German shipyard in time for the 2018 summer season. In the event, the vessel was not ready in time, and at least two months prior to departure over 20,000 Irish passengers who had purchased tickets for Irish Ferries’ Dublin-Cherboug route were informed that they would have to be re-routed (some via the UK ‘land bridge’), or their trips would have to be cancelled. The Irish NTA stepped in, and required Irish Ferries to compensate the passengers for the cancellation and rerouting, and for any costs they incurred in re-routing; Irish Ferries contended before the High Court that this decision was irrational and disproportionate. They claimed, in the first place, that Regulation (EU) No.1177/2010 on the Rights of Passengers When Travelling by Sea and Inland Waterway did not apply where a cancellation had occurred several weeks before the date of the scheduled sailings. In the second place, they argued that the delay in the delivery of the vessel constituted an ‘extraordinary circumstance’ which exempted them from the payment of the compensation provided for in Article 19 of that Regulation. In the third place, Irish Ferries criticised NTA for having infringed Article 25 by purporting to exercise its jurisdiction over transport services departing from France and heading to Ireland, whereas those services fell within the exclusive jurisdiction of the French authority. In the fourth place, they complained that the NTA had infringed Article 24 by having failed to limit the effect of its decision to passengers who had made a complaint in the form and within the deadlines specified in Article 24. In the fifth and final place, Irish Ferries contested the validity of the Regulation in the light of the principles of proportionality, legal certainty and equal treatment, and of Articles 16, 17 and 20 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

The High Court referred ten questions relating to the interpretation of Regulation (EU) No.1177/2010 to the ECJ for preliminary ruling.

The Advocate General prefaced his Opinion with the comment that the ECJ has had 15 years to build up a body of caselaw regarding the interpretation of Regulation (EU) No.261/2004 in relation to travel by air, whereas the Irish Ferries case is the first to be referred on the interpretation of Regulation (EU) No.1177/2010. The two Regulations provide for similar regimes in respect of delay and cancellation; one of the questions for the Advocate General was whether the body of caselaw relevant to the interpretation of one could be imported to aid interpretation of the other.

Irish Ferries’ first argument was that the Regulation did not apply at all in circumstances where passengers had been informed of the cancellation at least seven weeks in advance of their booking. This was founded partly on the language of the Regulation itself, which refers to ‘interrupted travel’, and partly on the fact that air passengers do not receive compensation when their flights are cancelled more than two weeks in advance of their booking (cf Article 5(1)(c) of the Denied Boarding Regulation).

The Advocate General gave this argument short shrift, rather primly refusing to read into the Regulation a limitation which is not there on the face of it (notably something which did not trouble the ECJ at all when reading into the Denied Boarding Regulation an obligation to compensate for delay of over three hours which is not there on the face of it). He observed that the EU legislature did not intend to provide parity of obligation between providers of different modes of transport, and declined to limit the obligations of providers of transport by sea in the same way they are limited in respect of airlines. Prima facie, therefore, the Regulation applied where a ferry company was forced to cancel bookings well in advance of planned departure due to late delivery of a vessel.

The Advocate General went on to opine that re-routing by means of an alternative sailing or sailings taking a different route from that of the initial sailing or via a (road or rail) land bridge may constitute ‘re-routing to the final destination’ under ‘comparable conditions’ within the meaning of Article 18 of the Regulation if other conditions of that sailing are comparable to those laid down for the initial sailing in the transport contract. However, under Article 18(1)(a) the passenger must be reimbursed for the cost of this re-routing. Furthermore, pursuant to Article 19 the passenger must also be offered compensation for the lengthy delay or cancellation of the original booking (unless he or she has opted to be reimbursed in full rather than re-routed). And to add insult to injury, when considering the ‘ticket price’ for the purposes of Articles 18 and 19 any additional optional services selected by the passenger, such as access to lounges or kennels, must be taken into consideration.

As for Irish Ferries’ defence to the claim for compensation on the grounds that the delay in delivery of the vessel amounted to an ‘extraordinary circumstance’, the Advocate General relied on the caselaw determined under the Denied Boarding Regulation in limiting the application of that defence very substantially. He pointed out that the management and operation of a fleet of vessels is inherent in the normal exercise of the activity of a maritime carrier, and that the ordering of a new vessel is within its control; therefore, using the existing authorities under the Denied Boarding Regulation, the failure of the shipyard to deliver the vessel on time did not amount to an extraordinary circumstance so as to provide a defence to a claim for compensation.

Pursuant to Article 24 of the Regulation a passenger must submit any complaint to a carrier within two months of the date of anticipated performance. Irish Ferries tried to import this provision into the Article 19 right to compensation, so that a passenger could only obtain compensation for delay or cancellation if he or she had asked to be compensated within two months of anticipated performance of the obligation in question. The Advocate General did not agree that a request for compensation could be equated with a complaint, with the effect that passengers need not bring such claims within two months of the carrier’s failure to perform the carriage.

Irish Ferries had also attempted to limit the involvement of the Irish NTA in respect of any passengers travelling from France to Ireland. However, the Advocate General advised that Article 25(1) must be interpreted as meaning that the jurisdiction of a national body responsible for enforcing the Regulation covers transport services from ports situated in the territory of that Member State and, where the transport is for a return journey that has been cancelled in its entirety, return transport services from another Member State to ports situated on the territory of that first Member State. The Irish NTA therefore had jurisdiction over passengers on both legs of the ferry’s proposed journeys.

The wholesale challenge to the Regulation based on the Charter also failed. Irish Ferries had argued that the fact that maritime carriers were subject to a different, and arguably more onerous, regime than air and rail carriers infringed the principle of equal treatment under Article 20 of the Charter. But the Advocate General reminded the Court that the situations of undertakings operating in different transport sectors are not comparable. He did not consider the requirement for maritime carriers to compensate passengers to be disproportionate given the intention of the legislature to provide consumers with a high level of protection; nor was it invalid by way of legal uncertainty, given his interpretation of the language of the Regulation.

In summary, the Advocate General proposed that the ECJ should answer the questions raised by the Irish High Court as follows:

Regulation (EU) No 1177/2010 of the European Parliament and of the Council of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and amending Regulation (EC) No 2006/2004 must be interpreted as meaning that that regulation, in particular Articles 18 and 19 thereof, applies in the situation in which a maritime transport service is cancelled and notice is given, prior to the initially scheduled departure, on the ground that the delivery of the vessel intended to operate that transport service was delayed and an alternative vessel could not be found.

The concept of ‘final destination’, within the meaning of Articles 18 and 19 of Regulation No 1177/2010, corresponds, in principle, to the port of disembarkation specified in the transport contract for an original sailing.

Re-routing by means of an alternative sailing or sailings taking a different route from that of the initial sailing or via a (road or rail) land bridge may constitute ‘re-routing to the final destination’ under ‘comparable conditions’ within the meaning of Article 18 of Regulation No 1177/2010 if other conditions of that alternative sailing are comparable to those laid down for the initial sailing in the transport contract.

Article 18(1)(a) of the regulation must be interpreted as meaning that re-routing must occur at no additional cost, such that the carrier must reimburse the costs incurred by passengers in travelling to the alternative ports of embarkation and disembarkation as well as those borne in leaving those ports in so far as those costs are attributable to the re-routing and are greater than those which the passengers would have incurred in the case of an uninterrupted passenger service.

Article 19 of Regulation No 1177/2010 must be interpreted as meaning that, where notice has been given of the cancellation of the passenger service, prior to the scheduled departure, and a passenger opts to be re-routed or for a sailing at a later date, that passenger may claim compensation under Article 19 of that regulation, having regard to the delay in arrival at the final destination as set out in the transport contract for the original sailing. Where the passenger requests such compensation, the delay corresponds to the difference between the arrival time provided for in the contract and the time at which the passenger arrived at the final destination, as set out in the transport contract, assuming that the re-routing continued from the alternative port of disembarkation to that destination.

 

By contrast, a passenger who opted for and has received reimbursement in full cannot claim that compensation.

 

Article 19 of Regulation No 1177/2010 must be interpreted as meaning that the ticket price includes the costs related to the additional optional services chosen by the passenger, such as the booking of a cabin or a kennel or even access to premium lounges.

 

Article 20(4) of Regulation No 1177/2010 must be interpreted as meaning that a delay in the delivery of a vessel, which is the result of the conduct of one of the contracting parties or of that party’s subcontractors, is inherent in the normal exercise of the activity of the carrier concerned where that carrier has begun offering bookings and entered into transport contracts with passengers before the vessel has been provided to it and, therefore, does not come within the scope of the concept of ‘extraordinary circumstances’ within the meaning of that provision.

 

Article 24(2) of Regulation No 1177/2010 must be interpreted as meaning that the imposition of a penalty on the carrier for non-payment of the compensation owed to the passenger under Article 19 of that regulation is not subject to the condition that the passenger made the request for compensation to the carrier within two months from the date on which the service was performed or should have been performed.

Article 25(1) of Regulation No 1177/2010 must be interpreted as meaning that the jurisdiction of a national body responsible for enforcing that regulation, as designated by a Member State, covers transport services from ports situated in the territory of that Member State and, where the transport is for a return journey that has been cancelled in its entirety, return transport services from another Member State to ports situated on the territory of that first Member State.

 

Examination of the tenth question has not revealed anything capable of affecting the validity of Articles 18 and 19 of Regulation No 1177/2010.

 

Maritime carriers and National Transport Authorities alike will await with interest the decision of the ECJ; it would not be surprising if it were to follow the Opinion of the Advocate General, given the tenor of the decisions it has made in respect of the Denied Boarding Regulation, which are, by and large, unabashedly consumer-friendly and rooted in the desire to provide as much consumer protection as possible. Of course, the position in respect of cancellations related to the Covid-19 pandemic and the measures taken to contain it remains untested; there are interesting times ahead, both domestically and in the ECJ.

 

[Editorial Note: Although post-Brexit this case may seem irrelevant to the UK that is not so. Regulation 1177/2010 became part of UK law by virtue of The Merchant Shipping (Passengers’ Rights) Regulations 2013 and despite Brexit remains part of UK law for the time being.]

Sarah Prager is a Barrister with 1 Chancery Lane

She can be contacted at sprager@1chancerylane.com

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