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Inclusion of an arbitral clause in a standard consumer contract


Оn September 17, 2013 the Presidium of the Supreme Commercial Court of the Russian Federation (hereinafter – the Presidium) released the Ruling No. 3364/13 (hereinafter – the Ruling of the Presidium), wherein the Supreme Commercial Court of the Russian Federation (hereinafter – the SCC) has spoken out about the illegality of inclusion of an arbitral clause in a standard consumer contract because such a clause violates the consumer’s right to fair trial.

The Ruling of the Presidium was adopted  in relation to the dispute between the Department ofthe Federal Service for Supervision of Consumer Rights and Human Welfare in the Republic of Tatarstan (hereinafter – the Department) and "Tatenergosbyt" JSC (hereinafter - the "Company").

The Company’s business activity was auditied by the Department due to the citizen’s application on the observance of the legislation on consumer protection. During the audit it was found that the standard consumer contract between the citizen and the Company contains a provision that all disputes and differences are to be considered in the Energy Arbitration Court in accordance with its rules, the award is final upon both parties of the dispute.

The Company was hold administratively liable for the inclusion in the standard consumer contract of the provisions violating the statutory consumer’s rights in accordance with Part 2 of Article 14.8 of the Russian Administrative Code. Having considered the actions of the Department as illegal, the Company seized the court for protection of its rights. The first instance court and the appellate court satisfied the Company’s claims. However, the Presidium canceled judicial acts of mentioned instances and formulated the following legal view in order to establish the uniformity of the court practice.

Inclusion in a standard consumer contract of an arbitral clause «deprives a consumer of a free choice of judicial remedies and violates statutory rights». The establishment of this fact by the court is the ground for holding a seller administratively liable in accordance with Part 2 of Article 14.8 of the Russian Administrative Code.

This Ruling is not prejudicial since it does not directly stipulate the possibility of judicial review under the new circumstances.

At the same time, the legal view formulated in the Ruling of the Presidium dated September 17, 2013 summarizesd current court practice, previously  formulated, for example, in the Ruling of the Presidium No. 7171/09 dated March 02,2010 and in the Informative Letter of the Presidium No. 146 dated September 13, 2011.

The Supreme Court of the Russian Federation (hereinafter – «the SC») has also expressed the legal view in defense of the consumer rights. The SC in the Judicial Review for the fourth quarter of 2011 pointed out that  the inclusion of an arbitral clause in the standard consumer contract is illegal. However, it declaresd such a clause admissible in case of a direct consent by the consumer once the grounds for a case arose.

It is supposed that after the merger of the SC and the SCC the court practice on the matter will be brought to a final uniformity both for arbitrazh courts and for the courts of general jurisdiction.



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