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Case Details

Case Details
National ID C-191/15
Member State European Union
Common Name link
Decision type Court of Justice decision
Decision date 28/07/2016
Court European Court of Justice
Subject
Plaintiff Verein für Konsumenteninformation
Defendant Amazon EU Sàrl
Keywords general discussion, jurisdiction, unfair terms

Unfair Contract Terms Directive, Article 3, 1. Injunctions Directive, link

Article 3(1) of Directive 93/13 must be interpreted as meaning that a term in the general terms and conditions of a seller or supplier which has not been individually negotiated, under which the contract concluded with a consumer in the course of electronic commerce is to be governed by the law of the Member State in which the seller or supplier is established, is unfair in so far as it leads the consumer into error by giving him the impression that only the law of that Member State applies to the contract, without informing him that under Article 6(2) of Regulation No 593/2008 he also enjoys the protection of the mandatory provisions of the law that would be applicable in the absence of that term.
Amazon EU is a company established in Luxembourg belonging to an international mail order group which, among other activities, via a website with a domain name with the extension .de, addresses consumers residing in Austria, with whom it concludes electronic sales contracts. The company has no registered office or establishment in Austria.

Until mid-2012 the general terms and conditions in the contracts concluded with those consumers were worded as follows:
‘12. Luxembourg law shall apply, excluding [the United Nations Convention on the International Sale of Goods].’

The VKI, which is an entity qualified to bring actions for injunctions within the meaning of Directive 2009/22, brought an action before the Austrian courts for an injunction to prohibit the use of all the terms in those general terms and conditions and for publication of the judgment to be delivered, as it considered that those terms were all contrary to legal prohibitions or accepted principles of morality.

The court at first instance held that clause 12 on the choice of applicable law was invalid, on the ground that the choice of law should not have the result of depriving consumers of the protection afforded to them by the law of their State of habitual residence.

The appellate court, to which both parties to the main proceedings appealed, set aside the judgment of the first-instance court and referred the case back to it for rehearing. It only made a substantive examination of clause 12 on the choice of applicable law. It held that Article 6(2) of the regulation did not allow the conclusion that that term was unlawful, and that in accordance with Article 10(1) of the regulation that term should instead have been assessed in the light of Luxembourg law.
The Oberster Gerichtshof (Supreme Court, Austria), to which the VKI appealed then referred various questions to the Court for a preliminary ruling.
Is a term in the general terms and conditions of a contract concluded in the course of electronic commerce between a seller or supplier and a consumer, under which the contract is to be governed by the law of the Member State in which the seller or supplier is established, unfair within the meaning of Article 3(1) of Directive 93/13?
In accordance with Article 3(1) of Directive 93/13, a contractual term which has not been individually negotiated must be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer.
The Court held that in the case of a term such as clause 12 of the general terms and conditions at issue in the main proceedings, concerning the applicable law, it must first be observed that EU legislation in principle allows choice-of-law terms. Article 6(2) of the Rome I Regulation provides that the parties may choose the law applicable to a consumer contract, provided that the protection is ensured which the consumer is afforded by provisions of the law of his country that cannot be derogated from by agreement.
In the view of the Court, a pre-formulated term on the choice of the applicable law designating the law of the Member State in which the seller or supplier is established is unfair only in so far as it displays certain specific characteristics inherent in its wording or context which cause a significant imbalance in the rights and obligations of the parties. The unfairness of such a term may result from a formulation that does not comply with the requirement of being drafted in plain and intelligible. Furthermore the Court found that where the effects of a term are specified by mandatory statutory provisions, it is essential that the seller or supplier informs the consumer of those provisions .
The Court thus concluded that Article 3(1) of Directive 93/13 must be interpreted as meaning that a term in the general terms and conditions of a seller or supplier which has not been individually negotiated, under which the contract concluded with a consumer in the course of electronic commerce is to be governed by the law of the Member State in which the seller or supplier is established, is unfair in so far as it leads the consumer into error by giving him the impression that only the law of that Member State applies to the contract, without informing him that under Article 6(2) of the Rome I Regulation he also enjoys the protection of the mandatory provisions of the law that would be applicable in the absence of that term, this being for the national court to ascertain in the light of all the relevant circumstances.
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The court referred the case back to the national court.