Case law

  • Case Details
    • National ID: Case I. ÚS 547/2012-35
    • Member State: Slovakia
    • Common Name:link
    • Decision type: Court decision in appeal
    • Decision date: 24/10/2013
    • Court: Constitutional Court of the Slovak Republic
    • Subject:
    • Plaintiff: R.I., a.s.
    • Defendant: N/A
    • Keywords: consumer rights, contract law
  • Directive Articles
    Unfair Commercial Practices Directive, Chapter 2, Article 5
  • Headnote
    (1) A contractual party cannot submit an arbitration clause to the consumer for signature within general contractual conditions.

    (2) Improper submission of contractual condition is considered an unfair commercial practice in respect to consumer protection.

    (3) A consumer has a right to refuse to sign an arbitration clause. Non-signature of the arbitration clause will have no effect on the validity of an insurance contract.
  • Facts
    The plaintiff was a legal entity performing business activities in the field of insurance.

    The plaintiff claimed infringement of its fundamental rights set forth by the Slovak Constitution - Article 46 (1) and Article 48 (2) and the Declaration of Fundamental Rights and Freedoms.

    The plaintiff has concluded an insurance contract with the obliged party. The obliged party ("Insured") did not fulfil its obligation to pay the insurance fee as agreed in the insurance contract and stopped making payments to the plaintiff.

    In accordance with the arbitration clause included in the contract, the plaintiff has brought the case before the Arbitration Court in Košice, which has issued an arbitral award stating that the Insured is obliged to pay the outstanding amount of EUR 17,22 together with interest.

    As the Insured did not pay the outstanding amount nor the interest, the plaintiff has initiated the enforcement of the arbitral award. The District Court has dismissed the motion and the plaintiff has appealed to the Regional Court which has confirmed the decision of the District Court.

    Finally, the plaintiff has brought the case before the court, claiming the infringement of its fundamental rights, as well as that it did not have the chance to express its opinion to the evidence presented to the court as the District Court issued a decision and did not open a proceeding in its matter.

    The plaintiff asked the courtto issue a decision stating that its fundamental rights were infringed by the District, Regional Court and to dismiss these decisions.
  • Legal issue
    The court decided that the fundamental rights of plaintiff were not breached.

    The District Court decided to refuse the authorization to the enforcement (execution proceedings) and the appelate court confirmed it. Their justification is that the execution proceeding is not legal, because of the non-existence of an execution title. The execution title does not exist due to unfair commercial practices used by the plaintiff as the plaintiff submitted an arbitration clause to the consumer for signature, which clause was written in the contract of insurance in the section described as "general contractual clauses". As the consumer had no possibility how to refuse arbitration, the District Court and the Regional Court considered it as improper submission of contractual conditions.

    Improper submission of contractual conditions falls under unfair commercial practices prohibited by Act No. 250/2007 on Consumer Protection, as amended and by the Directive 2005/29/EC.

    In accordance with the above mentioned the court stated that the right of the plaintiff to be a party to the proceeding was not breached. The court can decide on the authorization to execution proceedings based on documentary evidence without proceeding.
  • Decision

    (1) Can a contractual party submit an arbitration clause for signature to the consumer as a general contractual condition?

    (2) Is the improper submission of a contractual condition considered an unfair commercial practice?

    (3) Does a consumer have the right to refuse to sign an arbitration clause, and if so, does non-signature of the arbitration clause have no effect on the validity of the insurance contract?


    Full text: Full text

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  • Result
    The court decided that fundamental rights of the plaintiff were not breached.