Case law

  • Case Details
    • National ID: Case II. ÚS 812/2014-15
    • Member State: Slovakia
    • Common Name:link
    • Decision type: Court decision in appeal
    • Decision date: 25/11/2014
    • Court: Constitutional Court of the Slovak Republic
    • Subject:
    • Plaintiff: Rapid life životná poisťovňa, a.s.
    • Defendant: N/A
    • Keywords: consumer, consumer rights, terms and conditions, unfair terms
  • Directive Articles
    Unfair Contract Terms Directive, Article 3, 2. Unfair Contract Terms Directive, Article 6, 1. Unfair Contract Terms Directive, Article 7, 1.
  • Headnote
    (1) An arbitration clause which was not individually negotiated and was included in general terms & conditions constitutes an unfair term in consumer contract as it is not deemed to be individually negotiated and therefore the consumer was unable to influence the wording of such clause.

    (2) When national court ex offo identifies an unfair term in the consumer contract, it does not have to wait for the consumer to propose invalidity of such term and the court may draw consequences of such term itself.
  • 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, Declaration of Fundamental Rights and Freedoms as well as the Charter 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 18,29 together with interest.

    As the Insured did not pay the outstanding amount, 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. Subsequently, the Supreme Court of the Slovak Republic has dismissed the appeal in this matter. Finally, the plaintiff brought the case before the court, claiming the infringement of its fundamental rights, namely to have its case decided by the independent judge, procedural errors and in the proceeding before the District Court, 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 court to issue a decision stating that its fundamental rights were infringed by the District, Regional and Supreme Court and to dismiss these decisions and oblige the Supreme Court to initiate further proceeding in this matter.
  • Legal issue
    Regarding the breach of the fundamental rights of the plaintiff by the District Court, the court has ruled that its competence is only subsidiary and is based only in the case if the general courts cannot decide on its rights and obligations. As the plaintiff has exercised its right to appeal against the decision of the District Court, the court has dismissed this claim.

    The court further stated that the District Court did not breach the fundamental rights of the plaintiff when it issued a decision in this matter and without opening the proceeding.

    The court further refers to Article 6 (1) and Article 7 (1) of the Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts ("Directive 93/13/EEC") (implemented into Slovak law by Sections 41, 53 (5), 53a, 23 (1) and 24(1) of the Act No. 40/1964 Coll. Civil Code ("Civil Code")), which states that when national court ex offo identifies an unfair term in the consumer contract, it does not have to wait for the consumer to propose invalidity of such term and the court may draw consequences of such term itself. In this regard, the court has stated that the plaintiff did have the right to express its opinion when the plaintiff appealed against the decision of the District Court to the Regional Court and therefore the court has dismissed the claim of the plaintiff.

    The court further examined the decision of the Regional Court with respect to the arbitration clause included in the insurance contract. The court agreed with the opinion of the Regional Court that the arbitration clause did not fulfil the conditions of an individually negotiated contractual clause. The arbitration clause was also included in the general terms and conditions of the plaintiff. The Regional Court stated such clause should have been individually negotiated as it has particular importance for the consumer. The way that the plaintiff has presented the insurance contract including the arbitration clause was improperly presented to the consumer with an intention to exclude the competence of the courts to examine unfair contractual terms. Such conduct represents unfair commercial practice within the meaning of Section 8 (4) of Act No. 250/2007 on consumer protection, as amended. Furthermore, the plaintiff did not prove the individual negotiation of the arbitration clause. Finally, the Regional Court stated the concept of the individually negotiated contractual clause has to be assessed in accordance with the aim of the Directive 1993/93/EEC and that the contractual clause is not deemed to be individually negotiated if such clause was proposed in advance and the consumer was unable to influence the merit of such clause in connection with the pre-formulated standard contract (Article 3 (2) of the Directive 1993/93/EEC (implemented into Slovak law by Section 53 (2) of the Civil Code)).
  • Decision

    (1) Does an arbitration clause which was not individually negotiated and is included in general terms & conditions constitute an unfair term in consumer contract?

    (2) When national courts ex offo identifies an unfair term in the consumer contract, does it have to wait for the consumer to propose invalidity of such term?

    URL: https://www.ustavnysud.sk/ussr-intranet-portlet/docDownload/582afc8b-7e00-4b53-952f-9209d8e1eb7c/Rozhodnutie%20-%20Koncept%20uznesenia%20II.%20%C3%9AS%20812_2014.pdf

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  • Result
    The court dismissed the plaintiff's claim.