CJEU case law: Termination of package holidays in the event of extraordinary circumstances

The Court of Justice of the European Union (the "CJEU") in its judgment dated September 14, 2023, under case number C-83/22, held that the national court has the authority, subject to specific conditions, to officially notify the traveler of his right to withdraw from the package travel agreement without incurring any expenses.

In the case in question, a request for a preliminary ruling was submitted to the CJEU by the Spanish court. This request pertained to the interpretation of Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangement (the "Directive"). The dispute arose before the Spanish court concerning a package holiday trip to Vietnam and Cambodia for two individuals which had been purchased by plaintiff from company Tuk Tuk Travel on October 10, 2019, (the "Agreement"). The departure was scheduled on March 8, 2020 from Madrid (Spain), with the arrival planned for March 24, 2020. The plaintiff made an initial prepayment of EUR 2,402 upon entering into the Agreement, whereas the total costs of the trip amounted to EUR 5,208. The general terms and conditions of the Agreement included information regarding the option to withdraw from the Agreement before the departure date for a cancellation fee, but they did not specify the possibility of withdrawing from the Agreement in the event of unavoidable and extraordinary circumstances at the travel destination or its immediate vicinity that would significantly affect the performance of the Agreement.

As a result of the escalating spread of the coronavirus in Asia, the plaintiff decided to withdraw from the Agreement on February 12, 2020, and subsequently sought a refund for the entitled amounts. Since the defendant was willing to reimburse the plaintiff only in the amount of EUR 302, the plaintiff filed a lawsuit before the Spanish court seeking reimbursement of an additional sum of 1,500 EUR. The remaining amount of EUR 601 was not

claimed by the plaintiff, as he believed that it correspond to the defendant's administrative costs.

In relation to the described factual circumstances, the Spanish court posed two preliminary questions. The first question pertained to the validity of Article 5 of the Directive, as it was suggested that this provision does not impose an obligation on the travel organizer to specifically inform the traveler about his right to withdraw from the package travel agreement as outlined in Article 12 of the Directive. The latter provision enables withdrawal in cases of unavoidable and extraordinary circumstances significantly affecting the execution of the agreement, without the imposition of any cancellation fees, and with a full refund of all made payments. In response to the raised question, the CJEU ruled that Article 5 of the Directive must be interpreted in a manner that mandates the travel organizer to inform a traveler of his right to withdraw, as specified in the second paragraph of Article 12 of the Directive.

The second question posed by the Spanish court related to the interpretation of Articles 114 and 169 of the Treaty on the Functioning of the European Union and the interpretation of Article 15 of the Directive in connection with the application of the principle of dispositiveness and principle of the correlation between the claims put forward in the action and the rulings contained in the operative part of the judgement, when these two principles hinder the effective protection of the consumer as an plaintiff. In response to the raised question, the CJEU determined that the effective protection of the right of withdrawal that traveler has based on Article 12 of the Directive requires that the national court must have the possibility to ex-officio examine the violation of stated provision.

However, certain conditions apply to the examination of the right that the national court conducts ex-officio, namely:

one of the parties to the package travel agreement must initiate legal proceedings before the national

1. court, and the agreement has to be the subject of these proceedings;

2. the right to withdraw as per the second paragraph of Article 12 of the Directive must be related to the subject matter of the dispute;

• the national court must have access to all the legal and factual elements necessary to assess whether the traveler in question could invoke the right to withdraw from agreement; and

1. the traveler must not expressly state before the national court that he objects to application of the second paragraph of Article 12 of the Directive.

Furthermore, the CJEU also concluded that in a situation where a traveler does not invoke the provisions of the second paragraph of Article 12 of the Directive (i.e., the right to withdraw from the package travel agreement and demand a refund of all payments related to the travel package), even though the conditions for its application appear to be met, it cannot be ruled out that the traveler was not aware of the existence of his right of withdrawal. Therefore, this alone provides sufficient grounds for the national court to refer to stated provision ex-officio.