Vienna Court: Unlawful Price Adjustment in Verbund GTC

Mar 24, 2023 Benn-Ibler Rechtsanwälte

The Vienna Commercial Court (Handelsgericht Wien) has overturned a price adjustment clause in the general terms and conditions of Verbund AG, Austria’s largest electricity provider. The decision is not yet in force.

Specifically, Verbund AG used a clause in its consumer contracts according to which the energy price is ‘value-guarded’ by the Austrian Electricity Price Index (Österreichischer Strompreisindex, hereinafter ÖSPI). This clause granted Verbund AG the right to increase the price of electricity twice per year and required Verbund AG to reduce their electricity price as soon as a change of 4% in the initial index was exceeded. This specific clause was contained in contract section 8 titled ‘Value Protection of Basic price and Energy Price’. The basic price was value-secured by linking it to the consumer price index.

The Austrian Association for Consumer Information (Verein für Konsumenteninformation, VKI) objected to ‘value-securing’ of the energy price.

The Vienna Commercial Court ruled in favour of VKI:

Unfair Clauses Check under Section 864a Austrian Civil Code, ABGB

The clause is objectively unusual because it is located in a section titled `Wertsicherung’ (value protection). However, the ÖSPI does not compensate for general inflation, but rather represents a forecast of (future) wholesale prices. Customers would not expect to find this kind of information in that part of the contract. Furthermore, the clause violates Section 80a (2a) of the Elektrizitätswirtschafts- und –organisationsgesetz (Electricity Industry and Organisation Act 2010; hereinafter EIWOG) and is therefore detrimental to clients.

Violation of Section 80 (2a) ElWOG

Under Section 80 (2a) ElWOG, price changes must always be in reasonable proportion to the circumstances causing this change. Preserving the subjective equivalence of a contract is crucial.

The clause violates precisely these provisions, because although Verbund AG obtains electricity from one of its subsidiaries, Verbund AG acts as an electricity producer vis-à-vis its customer. Currently, most of the electricity is generated from hydropower, which is more cost-effective. However, if electricity is not purchased on the stock exchange but instead produced locally at low cost, the ÖSPI is not an adequate index and there are no relevant circumstances within the meaning of Section 80(2a) ElWOG.

Furthermore, according to Section 80 (2a) ElWOG, the price must be lowered if specific circumstances should change or cease to exist. However, this clause makes the requirement subject to the condition that the difference between the initial index and the calculation index exceeds 4%. However, no such condition is stated in Section 80 (2a) ElWOG.

The clause is therefore unlawful.

HG Vienna, 58 Cg 17/22s (07.02.2023)