BGH Declares Oil Price Linkage Clause in Gas Contracts Void

Today the Federal Court of Justice (Bundesgerichtshof – BGH) ruled in two landmark cases against the gas suppliers Rheinenergie and Stadtwerke Dreieich that clauses pegging the gas price exclusively to the oil price were void.

The BGH held that terms and conditions containing the above clause unduly discriminated the consumer. The costs for the consumer had to be transparent. In case of the above clause, however, undue margins could be achieved if cost reductions for instance for grid fees and and sales were not taken into consideration. The court denied the suppliers a legitimate interest in keeping up the clause, argueing that the clause could only be justified if  “it was specific and suitable to ensure that the amount owed by the consumer corresponded with the market price”. For gas, however, there was no market price as there was still no competition in the relevant consumer market.

Source: Press release 61/10 Federal Court of Justice (BGH), decisions 24 March 2010, ref. nos. VIII ZR 178/08 and VIII ZR 304/08 Spiegel Online

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