The Court of First Instance and Instruction number 2 of Granadilla de Abona has managed to get the Supreme Court to resolve “very important” issues - in the words of the Network of Specialists in European Union Law of the CGPJ - on international jurisdiction and the applicable law in disputes over timeshare contracts signed in Spain by British consumers and the Spanish branch of an English company domiciled in the United Kingdom. The applicable law in these cases is English and not Spanish.
To understand how this momentous clarification of the international legal panorama has been reached, we must refer to the judgment handed down on October 29 by the Court of First Instance and Instruction number 2 of Granadilla de Abona (Santa Cruz de Tenerife). It states that, in order to resolve a lawsuit in which, alleging confusion in the contract, two British citizens claimed 43.277 pounds (about 52.086 euros) from the time-sharing company Diamond Resorts - a subsidiary of the Hilton chain -, the judge suspended the case when the oral hearing was about to end, in order to raise a preliminary question to the Court of Justice of the European Union, based in Luxembourg.
The judge effectively froze his decision as he was not clear about the applicable rule and asked Luxembourg whether it should be guided by the Spanish law on timeshare use of real estate (Law 42/98 of 15 December) or apply the European Parliament regulation Rome 1, which provides for freedom of agreement between the parties for the law applicable to contractual relations, the prevalence of the law of the domicile of the service provider and the “habitual residence of the owner in the case of temporary leases of up to six months if the tenant resides in the same country”.
The preliminary ruling was referred to Luxembourg on 13 October 2021. The CJEU took almost two years to respond. On 14 September last year, it ruled that, although the different dates of the contracts caused the applicable rule to fluctuate between the Rome Convention of 1980 and the Rome 1 Regulation of 2008, “the applicable law is English law”.
Based on this ruling, the Granadilla de Abona court issued a ruling on October 29, dismissing the clients' claim and absolving Diamond Resorts of all financial claims.
The decision of the Canarian court and the ruling of the CJEU had such doctrinal significance that the following day, October 30, the plenary session of the Civil Chamber of the Supreme Court issued judgment 1.427/2024 which, citing the Granadilla case and the decision on the matter by the CJEU, dismissed other claims that had been brought against Diamond Resorts (in this case, for stays in hotels in the Canary Islands, but raised in Malaga), applying the doctrine that the current rule is the English one and not the Spanish one.
