BGH Ruling on Gas Price Clauses

In its decision of 31 July 2013, the Federal Court of Justice (BGH) ruled that a standard gas price adjustment clause used by RWE in its general terms and conditions with special consumers (Sondervertragskunden) is invalid. BGH rejected the appeal of RWE, Germany’s second-largest energy supplier. The decision of the BGH follows a preliminary ruling from the European Court of Justice in March.

The Consumer Association for North Rhine-Westphalia (Verbraucherzentrale NRW) pursued the case on behalf of 25 consumers who had a standard price adjustment clause in contracts with special consumers (Sondervertragskunden). The clause in dispute gave the right to unilaterally adjust the price under certain conditions. The Consumer Association claimed that the price adjustment clause was unfair, and that price increases during January 2003 and  October 2005 based on the clause were invalid. Consequently, it requested reimbursement from RWE.

The price adjustment clause that RWE used only referred to Sec. 4 para 1 and 2 AVBGas (Ordinance on General Terms regarding Gas Supply of Tarif customers). In general AVBGas applies to standard tariff contracts, and not to special consumers. AVBGas allowed the supplier to adjust gas prices unilaterally, without stating the grounds, conditions or scope of the adjustment. However, customers were to be informed of the adjustment, and were free to terminate the contract.

BGH considered clause in general terms not to be sufficiently clear for the consumer. The decision of the BGH implements a preliminary ruling of the European Court of Justice (EJC). The EJC had ruled that the use of this clause in standard terms and conditions in consumer contracts remained subject to review regarding unfairness, and stated that it was for the national courts to decide whether the clauses complied with the requirements of good faith and transparency.

Based on this decision of EJC the BGH decided that price clauses which only refers tp the adjustments right of Sec. 4 para 1 and 2 GasAVB are not sufficient to overcome the potential lack of transparency and unfairness of the clause, and are therefore to be invalid.

The Consumer Association welcomed the judgement as strengthening the position of consumers. Many consumers with same contracts could now reclaim the money paid due to unjustified price increases.

The Federal Association of Energy and Water Industries (BDEW) was critical of the decision, arguing that the Court had changed its settled case-law by ruling against RWE, and that energy suppliers were punished for complying with established law. BDEW criticised that the decision only dealt with formal legal requirements, rather than the question whether the price revisions were appropriate in fact.

So far, BGH has not yet released the full text of its decision, but only a press release.

Sources: Press Release 131/2013 Bundesgerichtshof, Consumer Association for North Rhine Westphalia (Verbraucherzentrale NRW), BDEW

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