Insights

In September 2021, the European Court of Justice (“ECJ”) delivered a preliminary ruling in relation to the interpretation of the provisions of Regulation (EU) 1177/2010 concerning the rights of passengers when travelling by sea and inland waterway (the “Regulation”).

The request for a preliminary ruling was made during a litigious proceeding before the High Court in Ireland (the “Irish Court”) between Irish Ferries Ltd (“Irish Ferries”) and the National Transport Authority of Ireland (“NTA”). These proceedings concerned the cancellation of a season of voyages scheduled by Irish Ferries between Dublin, Ireland and Cherbourg, France.

Background to the proceedings before the Irish Court

Irish Ferries provides passenger services from ports in Ireland to the United Kingdom and France. To operate a new itinerary between Dublin and Cherbourg, Irish Ferries ordered a new vessel which was to be delivered between May and June 2018. Irish Ferries began marketing pre-sale tickets for the 2018 summer season from October 2017 onwards. Following a delay by the shipyard’s accommodation outfitters, Irish Ferries had to cancel, as a first step, the voyages for July and consequently, the entire season of voyages. The vessel in question was not delivered until December 2018 and Irish Ferries was unable to find any other replacement vessel capable of providing the same service. All the passengers were informed of the cancellation of their tickets at least seven weeks before the originally scheduled departure date.

Irish Ferries offered either to re-route the passengers to and/or from other ports, including by a sea-crossing from a port in Ireland (or France) to a port in the United Kingdom, followed by a transfer overland to another port in the United Kingdom from where the passengers continued their journey by a second sea-crossing to a port in France (or Ireland), or the option of a full reimbursement for their tickets.

Irish Ferries, however, did not (i) cover all additional costs of rerouting; and (ii) pay compensation for the delay in arrival to the destination to passengers in line with Article 19 of the Regulation. Irish Ferries claimed that Articles 18 and 19 of the Regulation, being the articles in the Regulation relating to re-imbursement and compensation, did not apply cumulatively.

However, the NTA was of the view that Articles 18 and 19 of Regulation applied to the cancellations, and claimed Irish Ferries infringed the mentioned Articles. Consequently, Irish Ferries were ordered by the NTA to reimburse any additional costs incurred by passengers who decided to reroute their journey, as well as to pay compensation for delay. The NTA had ordered Irish Ferries to pay compensation to up to 20,000 passengers who had to change their travel plans. Irish Ferries contested this, arguing that the Regulation did not apply if several weeks’ notice was given with regards to the cancellation. Irish Ferriesalso claimed that the delay in delivery of the ferry was an extraordinary circumstance as defined under Article 20 of the Regulation.

The rights of passengers travelling by sea in relation to cancelled and/or delayed voyages

Introduced in 2010, the objectives of the Regulation are namely twofold, the high level of protection and assistance to passengers of Member States, and to ensure that economic agents function under harmonized conditions in the internal market.

Similarly to air passengers, travellers by sea are also entitled to various rights for cancelled and/or delayed voyages. Two ways through which the Regulation seeks to offer passengers protection are Articles 18 and 19 of the Regulation. These deal with the obligations of carriers, and, consequently, the rights of passengers in case of delay or cancellation of departure or arrival and are the subject-matter of the preliminary reference in this case.

Article 18 of the Regulation regulates the rerouting and reimbursement in the event of cancelled or delayed departures. Where a passenger service is cancelled or delayed for more than 90 minutes, the carrier must offer to the passenger the choice –

• to reroute to the destination under comparable conditions, at the earliest opportunity at no additional cost; or
• to have the ticket price reimbursed and, where relevant, have a return service free of charge to the first point of departure.

It is further stipulated that the reimbursement should be made within 7 days. Such reimbursement shall be of the full cost of the ticket price, for the part of the journey not made and for the parts already made where the journey no longer serves any purpose in relation to the passenger’s travel plan.

On the other hand, Article 19 of the Regulation deals with compensation of the ticket price in the event of delay in arrival. The first sub-article notes that without losing the right to transport, passengers may request compensation from the carrier if they are facing a delay in arrival at the destination as set out in the transport contract. Compensation shall be at least 25% of the ticket price. The following thresholds must be met for a passenger to receive compensation:

• where a journey lasts up to 4 hours, the delay must be of at least 1 hour;
• where a journey lasts more than 4 hours, the delay must be of at least 2 hours;
• where the journey lasts more than 8 hours, the delay must be of at least 3 hours; or
• and where the journey lasts more than 24 hours, the delay must exceed 6 hours.

If the delay exceeds double the time set out in these thresholds, the compensation shall be of 50% of the ticket price. The compensation must be paid within a month after the submission of the request for compensation is made.

The above-mentioned Articles are, however, subject to several qualifications and exemptions. Of particular importance in this case is that the right of compensation in case of delay, as stipulated in Article 19 of the Regulation, shall not apply where the carrier proves that cancellation or delay is caused by unsafe weather conditions or by extraordinary circumstances hindering the performance of the passenger service which could not have been avoided even if all reasonable measures had been taken.

Article 24 of the Regulation further provides that where a passenger wants to make a complaint to the carrier or terminal operator, such passenger shall submit it within 2 months from the date on which the service was performed or when a service should have been performed. Within 1 month of receiving the complaint, the carrier or terminal operator shall give notice to the passenger that the complaint has been substantiated, rejected or is still being considered. The time taken to provide the final reply shall not be longer than 2 months from the receipt of a complaint.

The Preliminary Ruling and the Findings of the ECJ

As a result of the preliminary ruling request, the ECJ confirmed that the Regulation does apply where a carrier cancels a passenger service giving several weeks’ notice prior to the originally scheduled departure due to delivery of vessel required for service being delayed.

Secondly, the ECJ noted that ‘rerouting’ implies that a passenger is transported to the destination contractually provided for, without it being necessary that the itinerary followed, and the means of transport, are the same to that originally agreed upon. The carrier must bear the additional costs of fuel or road tolls that the passengers may have incurred to travel to another port, or costs incurred when travelling by road or rail in connection with a land bridge. Moreover, it was also noted that, ‘comparable conditions’ entails comparing the conditions of rerouting with those original agreed in the transport contract. Furthermore, the ECJ clarified the concept of ‘ticket-price’ also includes costs relating to additional optional services used by the passenger.

The ECJ further stipulated that the simultaneous application of Article 18 and Article 19 is possible and this depending on whether the passenger has chosen to reimburse the ticket-price or reroute the journey according to Article 18 of the Regulation. The ECJ confirmed that,

“Where a carrier cancels a passenger service giving several weeks’ notice before the originally scheduled departure, a passenger has a right to compensation where he or she decides to be re-routed at the earliest opportunity or to postpone the journey to a later date and that passenger arrives at the originally scheduled destination with a delay that exceeds the thresholds laid down in Article 19 of that regulation. By contrast, where a passenger decides to be reimbursed for the ticket price, he or she does not have such a right to compensation under that article.”

It was also noted that the late delivery of a passenger transport vessel which led to the cancellation of all sailings to be operated by that vessel in the context of a new maritime route does not fall within the concept of ‘extraordinary circumstances’.

Reporting of complaints in Malta

Regulation 1177/2010 was transposed into Maltese law by means of Legal Notice 360 of 2013, entitled ‘Rights of Passengers when travelling by Sea and Inland Waterway Regulations’, as a supplement to the Consumer Affairs Act, Chapter 378 of the Laws of Malta.

The Director General (Consumer Affairs), Office for Consumer Affairs within the Malta Competition and Consumer Affairs Authority (the “MCCAA”) is responsible for the monitoring and investigations regarding compliance with the Regulation and is further responsible for receiving complaints from passengers regarding infringements under the Regulation. Passengers are to submit a complaint to the carrier and if such is not satisfied, the complaint can be brought forward to the MCCAA.

Concluding remarks

This is the first time that the ECJ has been requested to interpret the provisions of this Regulation. This is particularly interesting as Regulation (EC) 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights has been the subject of numerous preliminary ruling requests before the ECJ. Both laws allow, by means of different legal mechanisms, for the different forms of compensation in relation to the delayed or cancelled travel for passengers.

The ECJ has for the first time, amongst other matters, confirmed that that the legal mechanisms pertaining to compensation as stipulated in the Regulation can be utilised cumulatively. Furthermore, the ECJ has provided for the first limitation to the interpretation of ‘extraordinary circumstances’ relating to the delay and/or cancellation of voyages.

The author would like to thank Roberta Attard, an intern at Ganado Advocates, for her assistance during the drafting of this law report.

This article was first published in The Malta Independent.