Irish Ferries is liable to pay compensation to potentially thousands of passengers whose sailings between Ireland and France were cancelled in the summer of 2018 due to the late delivery of a new vessel.

This is according to a finding by Europe's highest court.

In 2018 Irish Ferries cancelled all sailings between Dublin and Cherbourg because the delivery of its new vessel, the WB Yeats, was delayed until December.

It had been scheduled for delivery between May and June.

The company, which is owned by ICG, was unable to charter a replacement vessel and was forced to offer alternative sailings on its other ship, the Oscar Wilde, between Ireland and France or re-routing via Britain.

The National Transport Authority (NTA) ordered Irish Ferries to pay compensation to up to 20,000 passengers who had had to change their travel plans.

However, the company claimed the demand was invalid and breached its constitutional rights.

It told the Irish High Court that the passengers had been rebooked or given refunds.

The case was referred by the High Court to the European Court of Justice (ECJ) to clarify the extent to which a 2010 EU regulation covering the rights of maritime passengers applied.

The ECJ found that re-routing and compensation obligations in the event of cancellation of a ferry service "are proportionate to the objective pursued by the regulation."

The court has also rejected Irish Ferries' claim that compensation obligations for maritime passengers whose sailings were cancelled imposed a considerable financial burden which was entirely disproportionate to the regulation's objective.

"The Court observes that the measures are intended to give passengers the choice between reaching the final destination or waiving their transport by requesting reimbursement of the ticket price," the court said in a statement.

"With regard to the compensation provided for, it varies depending on the length of the delay in arrival at the final destination as established in the transport contract and is a proportionate approach aimed at compensating for the harmful consequences caused by the delay or cancellation which that regulation seeks to remedy," it added.

A spokesperson for Irish Ferries said the company was disappointed with the finding.

However, the company welcomed the court's view that diverting passengers through the UK landbridge was regarded as a comparable re-routing from Ireland to France.

They also said the company was disappointed that the ruling affirmed the notion that airlines were entitled to cancel a flight with a minimum of two weeks notice without incurring the need for compensation, whereas for ferries, if a cancellation was notified with two months notice or more there was still the burden of compensation.

"Irish Ferries also wish to point out that the case is still pending before the Irish High Court and has yet to go to a full hearing and be decided by the Irish court on the basis of Irish and EU law," a spokesperson said.