Escalation clauses in Energy Supply Agreements

Current decisions from the Federal Court of Justice (BGH)

BGH, judgment dated 14 May 2014, file no. VIII ZR 114/13 and VIII ZR 116/13;
BGH, judgment dated 17 September 2014, file no. VIII ZR 258/13

Price adjustment clauses in gas supply agreements and other energy supply agreements have long been an issue for customers, suppliers and the courts. With court rulings already having initially focused on clauses in supply contracts with household customers, the Federal Court of Justice has now examined the admissibility of ‘escalation clauses’ and clauses on levies agreed in B2B relations and ruled that these clauses are admissible in principle.

In its deliberations, the Federal Court of Justice considered the following legal aspects:

• Differentiation between main price agreements and collateral price agreements;
• Differentiation between ‘escalation clauses’, cost element clauses and clauses on levies;
• Review of the reasonableness of the content of the aforementioned clauses in B2B relations;
• Classification of companies on the basis of their legal form as “entrepreneurs” in the meaning of consumer protection laws, such as housing cooperatives, even where these are not in pursuit of profit.

Martin Geipel’s comments on these three judgments have been published in jM 2015, 238 et seq. (in German) and we will gladly provide you with a copy in PDF format on request.