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Fuengirola 1st Instance Court Rules according to High Court Judgement

A recent ruling by the Court of First Instance No 5 of Fuengirola has dismissed a move to have a case rejected by the court as they claim the contract does not come under the jurisdiction of Spanish law or courts.

Sentence in Spanish & English

This case concerns our UK clients who purchased a Club la Costa Fractional along with the accompanying fractional points. This was purchased from Continental Resort Services SL in Malaga back in 2014.

Their contract with the terms & conditions states the contract is subject to UK law and the Jurisdiction of UK courts, which many timeshare companies use in an attempt to bypass the strict laws on timeshare in Spain.

When our lawyers submitted the case to the court on behalf of our clients, Continental Resort Services and Club la Costa petitioned the court to reject the case as it was not within their jurisdiction. They maintained that it is English law according to clause “S” of the contract, “S. Law: this contract will be interpreted in accordance with English law and shall be subject to the exclusive jurisdiction of the English Courts”.

The counter-argument by our lawyers was “regarding the application of English law, this Chamber has also ruled in the recent judgment dated June 28, 2019 issued in Appeal Roll 626/2018 (Rapporteur Ilmo. Mr. Sánchéz Gálvez), where we said:” The remaining text can be found at the bottom of page 3 of the PDF translation.

Consequently, the judge, in this case, ruled that Spanish Law and Courts did indeed have jurisdiction, as the contract was signed in Spain, the payment was made in Spain and the clients had the full protection of Spanish law.

In another very interesting ruling on this case concerns the taking of payments within the statutory cooling-off period. It now seems that this also includes any loan agreement, signed on the day or within the 14 day period.

The sentence stated:

“that the subscription of a loan by the consumer within the terms of art. 11 constitutes a prohibited advance is ratified by the current Law 4/2012, of July 6, of contracts for the use in turn of goods for tourist use, the acquisition of long-term vacation products, resale and exchange and tax regulations, in whose article 13 is considered within the prohibition of advances the express recognition of debt or the assumption of any consideration by the consumer, before the end of the withdrawal period, that is, there is no need for any financial outlay by the consumer within the withdrawal period”.

So it looks like this court considers that a loan agreement is by definition an advanced payment, regardless of when the timeshare company receives the money.

The rest of the case revolved around the fractional points system which has already been declared illegal, this contract was duly declared null and void with the return of 30,692.6€ plus legal fees and legal interest.

Once again it is congratulations to our client and a very big thank you to the legal team for all their hard work and effort in this case.

June 23, 2020

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