Consumer Protection and Consumer Disputes Under EU Law - Part III - B2C Arbitration: Consumer Protection in Arbitration
Alexander Bělohlávek is Founder and Senior Partner of The Bělohlávek Law Offices, Prague. He is a Member of the International Court of Arbitration at the International Chamber of Commerce (ICC) in Paris as well as Member of the ICC Commission on International Arbitration and a Member of the National Committee of the ICC in the Czech Republic. He has acted as arbitrator or counsel in more than 170 international arbitrations and is listed as arbitrator with the international arbitral centers of several economic chambers in Central Europe. He has published numerous books and articles on arbitration and business law.
Originally from B2C Arbitration: Consumer Protection in Arbitration
III. Consumer Protection and Consumer Disputes under EU Law
III.1. Restrictive model under EU law
94. Based on the above-defined fundamental questions relating to consumer relations and consumer arbitration, we distinguish two basic approaches. The first model is common in most European countries and is based on consumer protection laws – special rules regulating consumer contracts limit the freedom of contract. On the other hand, the second, American model is based on a complete freedom of contract, and the protection of consumers is left to the courts and to the application of standard legal instruments and institutions of substantive and procedural law; in other words, the American model attempts to avoid any special consumer protection rules.
95. When examining the European model, it is necessary to concentrate primarily on the special EU approach and the concepts adopted by the EU Member States. The reasons are twofold: first, the extension of European legislation to cover the EEA means that most European countries fall within the scope of the legislation, and second, European law is now the only example of international (harmonizing) consumer protection laws. Whereas the domestic (national) nature of consumer contracts significantly limits the efforts of consumer legislation down to the protection of the individual countries, the EU’s objective was to create favorable conditions in its Member States.
96. Secondary EU law is broad and has a fairly significant impact on consumer arbitration, despite the fact that arbitration itself is beyond the scope of EU law. The impact on arbitration is therefore mediated through consumer protection laws. Consequently, EU law does not regulate arbitration as a procedural instrument, but as a special instrument, and intervenes subjectively by way of a strong protectionist policy favorable to consumers.
III. Consumer Protection and Consumer Disputes under EU Law
III.1. Restrictive model under EU law
III.2. Fundamental consumer rights
III.3. Directive 93/13/EEC on unfair terms in consumer contracts (the "Directive")
III.3.1. Identification of unfair terms in court rulings
III.3.2. Annex to the Directive
III.3.3. Application of the Annex to the Directive to consumer arbitration
III.3.4. Obligation of the [arbitral] tribunal to decide according to the applicable laws and regulations
III.4. EC Recommendation No. 98/257/EC of 30 March 1998, regarding the resolution of consumer disputes
III.5. Other sources of EU law
III.5.1. Directive 98/27/EC of the European Parliament and of the Council of 19 May 1998
III.5.2. Liability for defective products
III.5.3. EU laws with no impact on consumer arbitration
III.6. Concept of single European Contract Law (contractual framework)
III.6.1. Genesis and development
III.6.2. The Green Paper
III.6.3. EP Resolution of 8 June 2011 (the "Resolution")
(a) Contents of the EP Resolution
(b) Legal nature of the instrument of European Contract Law
(c) Scope of application of the instrument
(d) Application of the instrument in practice
(e) Importance of the Resolution
III.6.4. Influence of the EP's Resolution on arbitration
III.7. Proposals of the European Commission regarding the alternative resolution of consumer disputes and regarding online consumer disputes of 29 November 2011
III.7.1. Legal context of the Commission's legislative Proposals
III.7.2. Proposed legislative procedure
III.7.3. Commission Communication on alternative dispute resolution for consumer disputes in the Single Market
III.7.4. Proposal for a Directive on alternative dispute resolution for consumer disputes ("ADR Directive")
III.7.5. Legal elements of the Proposal
III.8. Proposal for a Regulation on online dispute resolution for consumer disputes ("ODR Regulation")
III.8.1. Premises of the proposed Regulation
III.8.2. Legal elements of the Proposal
III.8.3. Implications of the proposed EU legislation for arbitration
III.8.4. Assessment of the proposals presented by the EU Commission
III.9. Case law of the ECJ concerning arbitration and interpretation of the Directive and other consumer protection instruments
III.9.1. Case law of the ECJ in mutual comparison
III.9.2. ECJ Judgment, Case C-168/05 of 26 October 2006 (Elisa María Mostaza Claro v. Centro Móvil Milenium SL)
(a) Conclusions of the ECJ
(b) Facts of the case
(c) The ECJ's reasoning and conclusions
(d) Notes on the judgment
III.9.3. ECJ Judgment, Cases C-240/98 through C-244/98 of 27 June 2000 (Oceáno Grupo Editorial SA)
(a) Conclusions of the ECJ
(b) Facts of the case
(c) The ECJ's reasoning and conclusions
III.9.4. ECJ Judgment, Case C-473/00 of 21 November 2002 (Cofidis SA v. Jean-Louis Fredout [Cofidis])
(a) Conclusions of the ECJ
(b) Facts of the case
(c) The ECJ's reasoning and conclusions
(d) Assessment of the merits
III.9.5. ECJ Judgment, Case C-40/08 of 6 October 2009 (Telecomunicaciones SL v. Cristina Rodríguez Nogueira [Asturcom])
(a) Conclusions of the ECJ
(b) Facts of the case
(c) The ECJ's reasoning and conclusions
III.9.6. ECJ Judgment, Case C-243/08 of 4 June 2009 (Pannon GSM Zrt v. Sustikné Győrfi Erzsébet [Pannon GSM])
(a) Conclusions of the ECJ
(b) Facts of the case
(c) Arguments of the ECJ
(aa) The first question: Examination of unfairness ex officio (of the court's own motion)
(bb) The second question: Examination of unfairness where the court has sufficient factual and legal information
(cc) The third question: Circumstances decisive or the assessment of (un)fairness and (im)balance
(d) Obligation of the arbitrators to instruct the parties about the unfairness of a contractual term
III.9.7. ECJ Order, Case C-76/10 of 16 November 2010 (Pohotovosťs.r.o. v. Iveta Korčkovská [Pohotovosť])
(a) Summary
(b) Factual and legal findings
(c) Form of the ECJ's ruling
(d) Permissibility of the preliminary reference Procedure
(e) Arguments of the ECJ
(aa) The first question: Information in the agreement about total annual costs of the credit
(bb) The second question: Sub-par. (a)
(cc) The second question: Sub-pars. (b) and (c)
(dd) The third question: Assessment of the unfairness of the contract in proceedings on enforcement of a foreign arbitral award
III.9.8. ECJ Judgment, Case C-137/08 of 9 November 2010 (VB Pénzügyi Lízing Zrt. v. Ferenc Schneider): Unfairness of a choice-of-court clause
(a) Conclusions of the ECJ
(b) Factual and legal findings
(c) Preliminary reference procedure
(d) The ECJ's reasoning and conclusions
(aa) Conclusions regarding the third question originally referred: Informing the Minister of Justice
(bb) The first and the second additional questions: The jurisdiction of the ECJ to interpret the concept of “unfair term” and the obligation of the national court to apply the interpretation to the facts of a particular case
(cc) The third additional question: The obligation of the court to undertake an ex officio review
III.10. Requirements imposed on EU Member States