• The case of Case C-40/08 Asturcom Telecomunicaciones [2009] ECR I-9579 concerned unfair terms in consumer contracts. The principle of effectiveness does not automatically preclude, nor become infringed, where an award has obtained the res judicata rule and is not compatible with the EU law.

Facts of Case C-40/08 Asturcom Telecomunicaciones [2009] ECR I-9579

  • Mobile company Asturcom brought an action against the D consumer for the enforcement of an arbitral award made in her absence
  • The award was made to be final as the D did not bring an action of annulment within the statutory limitation of 2 months, in accordance with the res judicata rule
  • The national court found this arbitral clause to be unfair, contrary to Article 6 of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts
  • Reference was made the European Court of Justice as to whether the rule of res judicata is precluded by EU law, or not

Issues in Case C-40/08 Asturcom Telecomunicaciones [2009] ECR I-9579

  • Is the res judicata rule precluded by EU law, thereby finding the arbitral award to be void?
  • Or was the consumer contract valid and the rule not precluded by EU law?

Held by the European Court of Justice

The res judicata rule is not precluded by EU law; the principle of effectiveness will not stop it applying here.

Findings of the Court

Here, the statutory limitation within national law caused the award to become final

  • “every case in which the question arises as to whether a national procedural provision makes the application of Community law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national bodies. For those purposes, account must be taken, where appropriate, of the basic principles of the domestic judicial system, such as protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure” [39]

Having considered the facts presented as to the time limitation, the European court found:

  • “the time-limit starts to run from the date of notification of the arbitration award. Therefore, in the action in the main proceedings, it was not possible for the consumer to have found herself in a situation in which the limitation period had started to run, or had expired, without even being aware of the effects of the unfair arbitration clause upon her.” [45]
  • “In such circumstances, such a time-limit is consistent with the principle of effectiveness, since it is not in itself likely to make it virtually impossible or excessively difficult to exercise any rights which the consumer derives from Directive 93/13” [46]

As to the principle of effectiveness and Directive 93/13

  • “the need to comply with the principle of effectiveness cannot be stretched so far as to mean that … a national court is required not only to compensate for a procedural omission on the part of a consumer who is unaware of his rights, as in the case which gave rise to the judgment in Mostaza Claro, but also to make up fully for the total inertia on the part of the consumer concerned who, like the defendant in the main proceedings, neither participated in the arbitration proceedings nor brought an action for annulment of the arbitration award, which therefore became final.” [47]
  • “the procedural rules laid down by the Spanish system for the protection of consumers against unfair terms in contracts does not make it impossible or excessively difficult to exercise the rights conferred on consumers by Directive 93/13” [48]

It is for the national courts to “assess of its own motion whether an arbitration clause in a contract concluded between a seller or supplier and a consumer is unfair, in so far as, under national rules of procedure, it can carry out such an assessment in similar actions of a domestic nature.” [59]