ECJ overturns three-year solution for energy supply contracts with consumers

 

If courts deem a price adjustment clause to be invalid years after the contract was concluded, price adjustments made, for example, due to cost increases in the meantime, are generally invalid. The Federal Court of Justice (BGH) considered this legal consequence to be unfair in long-term energy supply contracts and therefore treated price changes as valid if the customer did not object to the new price within three years of the first invoice (VIII ZR 113/11) (the so-called ‘three-year solution’). Furthermore, the BGH granted energy suppliers the right to unilaterally replace invalid clauses with valid price adjustment clauses (VIII ZR 175/19). Whilst it was clear to the Federal Court of Justice that the ‘three-year solution’ was compatible with Directive 93/13/EEC (the Unfair Terms Directive) (VIII ZR 165/21), the Kammergericht harboured doubts and referred the Federal Court of Justice’s case law for review by way of a preliminary ruling (Ref. 9 U 1087/20).

I. Decision of the Court of Justice of the European Union

The Kammergericht’s doubts were well-founded. In its judgment of 24 September 2026, the Court of Justice of the European Union (CJEU) ruled in Case C-900/24 (SVB) that the Federal Court of Justice’s case law contravenes Articles 6 and 7 of the Unfair Terms Directive.

• No binding effect of invalid price adjustment clauses and price adjustments: In this regard, the CJEU makes it clear that invalid price adjustment clauses may not be binding on the consumer. However, the ‘three-year solution’ had precisely this effect, as price adjustments became binding after three years had elapsed if the consumer had not objected. In this context, the CJEU also fundamentally rejects the courts’ practice of supplementary interpretation of contracts (Sections 133 and 157 of the German Civil Code (BGB)).
• No unilateral right of substitution for the energy supplier: The ECJ also rejects, as a matter of principle, the energy supplier’s right to unilaterally replace an invalid price adjustment clause with a valid one. An exception applies where the right to substitute a clause is provided for in a ‘binding legal provision’. In the view of the ECJ, based on the questions referred and the description of the facts provided by the Kammergericht, Section 24(4) of the AVBFernwärmeV does not constitute such a provision. However, the ECJ also emphasises that it is for the referring court to carry out the necessary assessments of the energy supply contract in question within its factual and legal context.

II. Assessment of the ECJ judgement

The ECJ judgement marks a turning point in the existing case law on the legal consequences of invalid price adjustment clauses in long-term energy supply contracts with consumers. As the Unfair Terms Directive does not apply in the B2B sector, energy suppliers may continue to rely on the three-year solution in their business-to-business transactions.

The ECJ judgement does not address the question of whether the contracts in question are void in their entirety or whether consumers are entitled to claims for restitution. These issues must be clarified by the German courts, taking into account the nuanced and not always consistent case law of the ECJ regarding the Unfair Terms Directive. However, doubts are warranted in this regard, as energy suppliers are in any case entitled to claims for unjust enrichment and any excessive claims by consumers may be time-barred.

III. How Noerr Can Help

Noerr offers contract drafting and defence against claims from a single source. Noerr has many years’ experience in assisting with contract amendments resulting from changes in legislation or case law, as well as providing the associated strategic advice on dealing with customer enquiries, claims for restitution and collective actions.