On 11 April 2024, the Court of Justice of the European Union (hereinafter the “CJEU”) delivered an important judgment in Case C-183/23, Crédit Agricole Bank Polska v AB. The ruling provides much-needed clarity on how the Brussels I Recast Regulation (Regulation (EU) No 1215/2012 – hereinafter “Brussels I Recast”) applies where a consumer defendant, a national of a third State, has an unknown current domicile but was last known to reside in a Member State.

The decision has practical significance for financial institutions and national courts confronted with cross-border debt recovery disputes where the consumer debtor cannot easily be located.

The case originated before the District Court in Warsaw, Poland, following a claim brought by Crédit Agricole Bank Polska against AB under a consumer credit agreement concluded in July 2020.  AB, a national of a third state, had failed to comply with repayment obligations, prompting the bank to seek an order for payment.

The Polish courts issued such an order, but attempts at service were unsuccessful given that AB’s current address could not be established. A court-appointed representative in absentia opposed the order, but without contesting jurisdiction. The only certainty available to the court was that AB’s last known domicile was in Poland.

Faced with this uncertainty, the Polish court referred the preliminary reference questions to the CJEU whereby it questioned whether jurisdictional rules should be determined by Polish law, or whether the Brussels I Recast Regulation itself could provide a basis for jurisdiction despite the unknown domicile.

The bank argued in favour of an interpretation that kept the matter within the remit of the Brussels I Recast Regulation. In its view, reverting to national rules would undermine uniformity and certainty. On the other side, arguments were advanced that the Regulation does not cover situations involving third-state nationals with no ascertainable domicile, making domestic law (in this case Polish law) the only fallback regulating jurisdiction.

Several governments and the European Commission also intervened. The Commission emphasised that the Regulation should be construed broadly to ensure predictability and to protect weaker parties such as consumers.

The CJEU ruled that Article 6(1) of Brussels I Recast (regulating jurisdiction of defendants not domiciled in a Member State) must be read alongside Article 18(2) of the same Regulation regulating jurisdictional rules related to consumers. Where the (i) defendant is a third-country national (ii) their current domicile cannot be identified and (iii) the court has no concrete evidence that they reside in another Member State or outside the EU, jurisdiction should lie with the court of the Member States of the defendant’s last known domicile. That competence is derived not from national law but from the Regulation itself, specifically Article 18(2) on jurisdictional rules in consumer claims. In other words, the Warsaw court retained jurisdiction to hear the bank’s claim, because AB’s last known domicile was in Poland and no evidence suggested otherwise.

The Court stressed that Brussels I Recast must be interpreted to achieve its aims of harmonising the rules regarding conflicting jurisdictions in civil and commercial matters creating rules that are highly predictable. National rules cannot displace the uniform jurisdictional framework in situations where the Regulation is designed to apply.

Referring to earlier rulings such as Hypoteční banka (C-327/10) where the defendant was a national of another Member State, the Court confirmed that the concept of domicile can extend to the defendant’s last known domicile, particularly when no current residence can be established. Article 18(2) was relied upon as a residual jurisdictional rule. Importantly, the Court imposed limits on this approach. Jurisdiction by last known domicile is only available if there is “no firm evidence to support the conclusion that the defendant is in fact domiciled in another Member State or outside the European Union”. Where credible evidence of relocation exists, the rule cannot be applied.

The judgment reinforces the principle of “jurisdiction by last known domicile” and extends it expressly to third-state consumers. This clarification prevents claimants from being left without a forum when defendants cannot be located, preserving the Regulation’s objectives of uniformity and mutual trust and providing more predictable rules on jurisdiction, despite uncertainty on the consumer’s last known domicile.

For banks and other creditors, the ruling provides reassurance that they may rely on the courts of the consumer’s last known domicile, rather than having to resort to potentially inconsistent national rules. For national courts, the decision makes clear that they must apply the Regulation directly when faced with elusive defendants, rather than resorting to domestic law.

The judgment also underscores the importance of evidence. Practitioners must carefully document both the last known domicile and the absence of proof of relocation, as any firm evidence to the contrary will deprive the court of jurisdiction under this approach.

The explicit use of Article 18(2), Brussels I Recast Regulation to ground jurisdiction where the consumer defendant is a third-state national with an unknown domicile is a new, extended application of earlier case law which had recognised the “last known domicile” principle in respect of EU nationals, extending the principle’s reach to third-state nationals.

By doing so, the Court ensures that Brussels I Recast remains effective even in cases involving non-EU defendants, aligning with its objective of legal certainty.