(Reference for a preliminary ruling– Judicial cooperation in civil matters– Law applicable to contractual obligations– Regulation (EC) No593/2008

5Between January 2012 and June 2014, UE, a consumer resident in Austria, entered into a framework agreement with ShareWood, a company established in Switzerland, and a further four purchase contracts for the acquisition of teak and balsa trees in Brazil.

6The four contracts were for the purchase of 705 teak trees costing EUR67328.85, 2690 teak trees costing EUR101716.53, 2600 teak trees costing EUR111583.34 and 1860 balsa trees costing EUR32340. The framework agreement also included a lease agreement and a service agreement. The ground rent for that lease agreement, which granted the right to grow the trees in question, was included in the purchase price of those trees. The service agreement provided that ShareWood would manage, administer, harvest and sell the trees and would remit the net return on the timber to UE. The difference compared to the gross return, expressed as a percentage of the return, was retained by ShareWood as its fee for the provision of those services.

7The following terms formed part of that framework agreement:

‘3.1.[ShareWood] shall sell the trees in the [ShareWood] and [Sharewood do Brasil Reflorestadora Ltda] plantations in its own name and on its own account to [UE]. [ShareWood] undertakes to transfer ownership of the trees to [UE] on payment of the purchase price.

3.2.[UE] shall purchase individually identified trees already planted. Trees are individually identified through to harvest and sale by tree number, plot number, parcel number and plantation number, recorded in an inventory of trees.

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4.2.Once payment has been received, a tree title deed recording the individual identification markers of the trees purchased shall be served on [UE] in confirmation of completion of the sale.

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7.Ground lease

7.1.On purchasing the trees, [UE] shall simultaneously lease the ground (see individual contract) for as long as the trees purchased from [ShareWood] are standing on them or, at least, for a term not exceeding that stipulated in the individual contract. The lease shall only confer the right to grow the trees.

7.2.The ground rent is included in the purchase price.

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7.3.The lease can only be transferred if the trees are resold. Sub-leasing is prohibited.

8.Resale of the trees by [UE]

8.1.[UE] may sell and transfer ownership of his trees to a third party at any time with or without a service agreement. [UE] promises to transfer the ground lease to the third party and to ensure that the third party makes the same undertaking.

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9.Value retention in purchased trees

9.1.[ShareWood] recommends that the trees be tended to regularly to ensure they retain and increase their value. [ShareWood] offers that service under the service agreement.

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11.With service agreement

11.1.In entering into a service agreement with [ShareWood], [UE] entrusts [ShareWood] with the management, administration, care, harvesting and sale of the trees purchased in accordance with plantation management policy and with international standards on sustainable plantation management and to remit to [UE] the net return achieved from the timber sales to the account designated by him. [ShareWood] shall also discharge all obligations pursuant to the ground lease.

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11.9.[ShareWood] shall decide, on [UE]’s behalf and in accordance with its plantation management policy, which trees are to be harvested in which years and shall advise [UE] accordingly prior to the harvest. Unless [UE] rejects the harvesting proposal within 10days of receipt of the advice by post or email, the proposal shall be construed as accepted.

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15.1.[ShareWood] shall insure the land and the teak trees (but not the other trees) against fire, lightning strike, gales, precipitation and frost damage for [UE] and for itself for the first 4years after planting. [UE] acknowledges that insurance shall not cover losses of less than 10% of the teak trees.

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24.1.The framework agreement and each individual agreement shall be governed by Swiss substantive law, to the exclusion of (i) international conventions, including the United Nations Convention on Contracts for the Sale of International Goods of 11April 1980 (CISC) and (ii) conflict of law rules.…’

8The contract for the purchase of 2600 teaks, referred to in paragraph6 above, was terminated by mutual consent of the parties.

9UE brought an action before the Handelsgericht Wien (Commercial Court, Vienna, Austria) seeking a declaration that ShareWood had failed to fulfil its obligation to take ownership of the trees in question and that ShareWood and VF, director and member of the board of directors of that company, should be jointly and severally liable to pay him the sum of EUR201385.38 plus interest and costs. Furthermore, in that action, UE argued that, as a consumer, he had, under Austrian law, the right to terminate the three other purchase contracts referred to in paragraph6 above and to obtain damages.

10By judgment of 9September 2019, the Handelsgericht Wien (Commercial Court, Vienna) dismissed that action. By decision of 25February 2020, the Oberlandesgericht Wien (Higher Regional Court, Vienna, Austria) upheld that judgment.

11Hearing an appeal on a point of law brought by UE against that decision, the referring court, the Oberster Gerichtshof (Supreme Court, Austria), finds that the contractual relationship between UE and ShareWood falls under Article6(1)(b) of the Rome I Regulation. It is apparent from the framework agreement referred to in paragraph5 above that the parties agreed that Swiss law would apply. However, in accordance with Article6(2) of that regulation, that choice of law may not have the result of depriving the consumer of the protection afforded to him or her by provisions that cannot be derogated from by agreement by virtue of the law which, in the absence of choice, would have been applicable on the basis of Article6(1), namely, in the present case, Austrian law.

12However, that court notes that, in the context of the dispute before it, mandatory national provisions of that kind, which are designed to protect the consumer, could be relied on only if the framework agreement at issue does not fall within the category of contracts referred to in Article6(4)(c) of the Rome I Regulation, namely contracts relating to a right in rem in immovable property or to a tenancy of immovable property.

13In those circumstances the Oberster Gerichtshof (Supreme Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Is Article6(4)(c) of [the Rome I Regulation] to be interpreted as meaning that a contract for the purchase of teak and balsa trees between an undertaking and a consumer, which is intended to confer ownership of the trees, which are then managed, harvested and sold for profit, and which includes for that purpose a lease agreement and a service agreement, is to be regarded as “a contract relating to a right in rem in immovable property or a tenancy of immovable property” within the meaning of that provision?’