July 31, 2013 / 1:16 PM / in 4 years

Court says some of RWE's gas price increases were void

FRANKFURT, July 31 (Reuters) - Price revision clauses in some of RWE’s old gas contracts were not transparent enough, a German court has ruled, rendering them legally void and potentially enabling thousands of gas clients to claim back money.

Customers of RWE, Germany’s No.2 utility, had sued the group to receive reimbursement for gas prices increases between 2003 and 2005, claiming back more than 16,000 euros ($21,200) each.

Germany’s Federal Court of Justice on Wednesday said price revision clauses in so-called special gas contracts were intransparent, adding it had rejected an appeal by RWE.

The court said it thereby implemented a preliminary ruling made by the European Court of Justice, which said in March it was insufficient to inform clients about price increases ahead of time and give them a right of cancellation.

Instead, customers need to be aware of the criteria based on which price revisions can take place when they sign a contract, it said at the time.

According to North Rhine-Westphalia’s consumer association, which had lodged the suit against RWE on behalf of 25 customers, the ruling could have wide-ranging consequences.

“Clients whose contracts contain similar clauses can claim back money,” it said, adding more than 70 percent of Germany’s 13.5 million gas clients had special contracts.

RWE, which said it would reimburse clients for the claimed amount, said it was unclear whether further complaints would follow, adding the price revision clauses were no longer in use.

RWE supplies gas to about 400,000 customers, about 60 percent of which have special contracts.

Peer EnBW, Germany’s third-largest utility, said it had never used the price revision clauses and was therefore unaffected by the ruling.

Top player E.ON declined to comment on any impact on its business, adding the court’s detailed written opinion on the ruling was still outstanding.

RWE shares were down 1.7 percent by 1306 GMT while the DAX index of blue-chip stocks was down 0.4 percent. ($1 = 0.7547 euros) (Reporting by Christoph Steitz, Tom Kaeckenhoff and Ilona Wissenbach; Editing by David Holmes)

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