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The Obligations of the Travel Organizer for Fulfilling the Contract Terminated due to Virus SARS-CoV-2

The Obligations of the Travel Organizer for Fulfilling the Contract Terminated due to Virus SARS-CoV-2

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The First Primary Court in Belgrade recently rendered the first ruling obliging the tour operator to refund the client the travel costs to traveling abroad canceled due to the SARS-CoV-2 virus epidemic.

A few days ago, news broke that the First Basic Court in Belgrade issued the first ruling in a dispute in which it obliged the travel agency – the tour operator,  to pay the client – the passenger, who had paid the price of a tourist trip abroad in advance, that was canceled due to the SARS-CoV-2 outbreak, to refund the money paid with the appropriate interest, according to the provisions of the Law on Consumer Protection.

In the proceedings that preceded the ruling, the travel agency referred to the fact that the airplane flight was canceled due to reasons for which they cannot be held accountable, which was a well-known situation related to the virus SARS-CoV-2. Further, the travel agency stated that they offered the client – the passenger, another travel date and accommodation with the issuance of a certificate of travel replacement according to the Decree of the Government of the Republic of Serbia on the offering of replacement travel which was canceled or not realized due to the Covid-19 disease caused by the SARS-CoV-2 (“Official Gazette of the Republic of Serbia” no. 63/2020) as well as that, in this case, there was no acquisition without grounds due to the fact that the money that was paid by the passengers was transferred to the agency’s foreign partner travel agency, but the client did not accept the conditions of the new arrangement and instead terminated the contract.

The Court took the stance that the passenger, i.e. the consumer, as a contracting party from the travel contract, according to the relevant provisions of the Law on consumer protection (“Official Gazette of the Republic of Serbia” no. 64/2014, 6/2016 and 44/2018), in situations where the travel organizer who is forced to change certain relevant provisions of the contract (i.e. the price, destination, means of transport, characteristics or category of the transport, date, type, location, category or level of comfort of the accommodation) before the contracted date of departure and who is obligated to inform the passenger, has the right to choose whether he wants to accept the offered changes to the travel contract or to terminate the contract, of which he is obligated to inform the travel organizer who, in the situation where the passenger chooses to terminate the contract, is obligated to return the received travel costs in the full amount without reductions.

At the same time, the Court assessed that the reference of the travel agency to the aforementioned Decree was without effect due to the fact that it, as a general act of lower legal standing than the Law, cannot derogate the Law, not even if its provisions were imperative, which they are not in the case of the Decree. The provisions of the Decree were exclusively indicative, therefore in such cases, the provisions of the Law on consumer protection as a “lex specialis” shall be applied, as well as general provisions of the Law on Torts and Contracts concerning the rights and obligations of contractual parties that are binding from the moment they concluded the contract.

Lastly, the Court also concluded that according to the relevant provisions of the Law on Consumer Protection, the passenger has the right to choose to terminate the travel contract even if it was canceled due to reasons for which the travel agency, as the travel organizer, is not responsible, i.e. natural disasters, which include pandemics, in which case the passenger has the right to a full refund of the funds paid in advance.

As this is only the first ruling passed in such a case, which has not yet become final, as there are still no published other or different decisions of other courts that would be made in similar cases, as the second instance courts have not yet had the opportunity to take a stand on this issue, neither an individual, thus nor a generally accepted legal stand, which would be accepted as unified court practice for same or similar cases, although such a court decision is fully grounded in the legal provisions on which it is based, it remains to be seen for some more time to be able to draw a conclusion on the common position of the court practice taken on this issue.

By Jelena Milinovic, Partner, JPM Jankovic Popovic Mitic

Serbia Knowledge Partner

The oldest full service commercial law firm in Serbia, founded in 1991, JPM with three decades of experience in assisting local and international businesses presence and growth not only in Serbia but throughout the SEE region.

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