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Case Details

Case Details
National ID 28 Cdo 864/2008
Member State Czech Republic
Common Name link
Decision type Other
Decision date 05/08/2008
Court Nejvyšší soud (Supreme court)
Subject
Plaintiff
Defendant
Keywords

Unfair Contract Terms Directive, Article 5

Insurance contract – consumer – interpretation of an unclear term in a contract – Article 5 of Council Directive No. 93/13/EEC on unfair terms in consumer contracts
The plaintiff, an insurance company, sued the defendant and sought payment of a specific amount of money as unjust enrichment created in relation to performance upon an insurance contract. The dispute concerned in particular interpretation of insurance terms and conditions, which were part of the insurance contract and according to which the insurance should, in the event of discontinuance of self-employment, terminate. Since the defendant had suspended the performance of his business activities for a specific period of time, the plaintiff believed that the insurance relationship had terminated and sought return of the performance. The defendant had paid the premium properly during the entire period of suspension of his business activities.
According to the district court, discontinuance of the performance of business activities cannot be regarded as satisfaction of the condition for insurance termination, and it dismissed the case. On the contrary, the regional court acknowledged the claim, stating that discontinuance of business activities results in termination of insurance.
According to the Supreme Court, it was necessary to interpret the ambiguous article of the terms and conditions with regard to actions of the parties to the contract. Subsequently, the court provided an interpretation stating that discontinuance of the performance of business activities does not cause termination of an insurance relationship.
The Supreme Court also referred to the provision of Section 55 (3) of the Civil Code, which stipulates that in the event of any doubts concerning the meaning of consumer contracts, such contracts shall be interpreted in the manner which is more favorable to the consumer. Since the respective provisions of the Civil Code are a transposition to Council Directive No. 93/13/EEC on unfair terms in consumer contracts, the Supreme Court examined the wording of said Directive as well. Article 5, second sentence, of the Directive even uses a superlative: “… most favorable to the consumer” – in several language versions. The court regarded it fair so that the interpretation of unclear provisions of the insurance terms and conditions prejudiced the insurance company, which formulated them. Therefore, the Supreme Court vacated the judgment of the appellate court and returned the case to the appellate court for further proceedings.
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