G sp. z o.o. v W S.A (C-371/22)

Contents

Judgment of the Court (Fifth Chamber)11 January 2024^note(Reference for a preliminary ruling — Internal market in electricity — Directive 2009/72/EC — Article 3(5) and (7) — Consumer protection — Right to switch supplier — Non-household customer — Fixed-term, fixed-price electricity supply contract concluded with a small undertaking — Contractual penalty for early termination — National legislation limiting the amount of that penalty to the costs and damages resulting from the contract)In Case C‑371/22,REQUEST for a preliminary ruling under Article 267 TFEU from the Sąd Okręgowy w Warszawie (Regional Court, Warsaw, Poland), made by decision of 12 May 2022, received at the Court on 8 June 2022, in the proceedingsG sp. z o.o.vW S.A.,THE COURT (Fifth Chamber),composed of E. Regan, President of the Chamber, Z. Csehi, M. Ilešič, I. Jarukaitis (Rapporteur) and D. Gratsias, Judges,Advocate General: A. Rantos,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– the Polish Government, by B. Majczyna, acting as Agent,– the Greek Government, by K. Boskovits and C. Kokkosi, acting as Agents,– the European Commission, by M. Owsiany-Hornung and T. Scharf, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 7 September 2023,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 3(5) and (7) of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (OJ 2009 L 211, p. 55).

2The request has been made in proceedings between G sp. z o.o. (‘G’) and W S.A., an energy supplier (‘W’), concerning the payment of a contractual penalty for the early termination by G of a fixed-term, fixed-price electricity supply contract concluded by those parties.

Legal context

European Union law

Directive 2009/72

3Recitals 1, 3, 7, 8, 42, 51, 52, 54 and 57 of Directive 2009/72 stated:(1) The internal market in electricity, which has been progressively implemented throughout the Community since 1999, aims to deliver real choice for all consumers of the European Union, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices, and higher standards of service ……(3) The freedoms which the Treaty guarantees the citizens of the Union … are achievable only in a fully open market, which enables all consumers freely to choose their suppliers and all suppliers freely to deliver to their customers.…(7) The Communication of the [European] Commission of 10 January 2007 entitled “An Energy Policy for Europe” highlighted the importance of completing the internal market in electricity and of creating a level playing field for all electricity undertakings established in the Community. …(8) In order to secure competition and the supply of electricity at the most competitive price, Member States and national regulatory authorities should facilitate cross-border access for new suppliers of electricity from different energy sources as well as for new providers of power generation.…(42) All Community industry and commerce, including small and medium-sized enterprises, and all citizens of the Union that enjoy the economic benefits of the internal market should also be able to enjoy high levels of consumer protection, …. Those customers should also have access to choice, fairness, representation and dispute settlement mechanisms.…(51) Consumer interests should be at the heart of this Directive and quality of service should be a central responsibility of electricity undertakings. Existing rights of consumers need to be strengthened and guaranteed, and should include greater transparency. Consumer protection should ensure that all consumers in the wider remit of the Community benefit from a competitive market. Consumer rights should be enforced by Member States or, where a Member State has so provided, the regulatory authorities.(52) Clear and comprehensible information should be made available to consumers concerning their rights in relation to the energy sector. ……(54) Greater consumer protection is guaranteed by the availability of effective means of dispute settlement for all consumers. ……(57) Promoting fair competition and easy access for different suppliers and fostering capacity for new electricity generation should be of the utmost importance for Member States in order to allow consumers to take full advantage of the opportunities of a liberalised internal market in electricity.’

4Article 1 of that directive, entitled ‘Subject matter and scope’, provided:‘This Directive establishes common rules for the generation, transmission, distribution and supply of electricity, together with consumer protection provisions, with a view to improving and integrating competitive electricity markets in the Community. …’

5Under Article 2 of that directive:‘For the purposes of this Directive, the following definitions apply:…7. “customer” means a wholesale or final customer of electricity;…9. “final customer” means a customer purchasing electricity for his own use;10. “household customer” means a customer purchasing electricity for his own household consumption, excluding commercial or professional activities;11. “non-household customer” means a natural or legal [person] purchasing electricity which is not for [his] own household use and includes producers and wholesale customers;12. “eligible customer” means a customer who is free to purchase electricity from the supplier of his choice within the meaning of Article 33;…’

6Article 3 of that directive, entitled ‘Public service obligations and customer protection’, provided, in paragraphs 3 to 5 and 7 thereof:3.Member States shall ensure that all household customers, and, where Member States deem it appropriate, small enterprises (namely enterprises with fewer than 50 occupied persons and an annual turnover or balance sheet not exceeding EUR 10 million), enjoy universal service ……4. Member States shall ensure that all customers are entitled to have their electricity provided by a supplier, subject to the supplier’s agreement, regardless of the Member State in which the supplier is registered …5.Member States shall ensure that:(a) where a customer, while respecting contractual conditions, wishes to change supplier, the change is effected by the operator(s) concerned within three weeks; ……Member States shall ensure that the rights referred to in points (a) and (b) are granted to customers in a non-discriminatory manner as regards cost, effort or time.…7. Member States shall take appropriate measures to protect final customers …. They shall ensure high levels of consumer protection, particularly with respect to transparency regarding contractual terms and conditions, general information and dispute settlement mechanisms. Member States shall ensure that the eligible customer is in fact able easily to switch to a new supplier. As regards at least household customers, those measures shall include those set out in Annex I.’

7Article 33 of Directive 2009/72, entitled ‘Market opening and reciprocity’, stated in paragraph 1 thereof:‘Member States shall ensure that the eligible customers comprise:…(c) from 1 July 2007, all customers.’

8Annex I to that directive, entitled ‘Measures on consumer protection’, provided, in paragraph 1 thereof:‘Without prejudice to Community rules on consumer protection …, the measures referred to in Article 3 are to ensure that customers:(a) have a right to a contract with their electricity service provider that specifies:…– the duration of the contract, the conditions for renewal and termination of services and of the contract and whether withdrawal from the contract without charge is permitted,…Conditions shall be fair and well-known in advance. In any case, this information should be provided prior to the conclusion or confirmation of the contract; ……(e) are not charged for changing supplier;…’

9Directive 2009/72 was repealed and replaced, with effect from 1 January 2021, by Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (OJ 2019 L 158, p. 125), in accordance with the first paragraph of Article 72 of Directive 2019/944.

Directive 2019/944

10Article 4 of Directive 2019/944, entitled ‘Free choice of supplier’, provides:‘Member States shall ensure that all customers are free to purchase electricity from the supplier of their choice and shall ensure that all customers are free to have more than one electricity supply contract at the same time, provided that the required connection and metering points are established.’

11Article 12 of that directive, entitled ‘Right to switch and rules on switching-related fees’, provides, in paragraph 3 thereof:‘… Member States may permit suppliers … to charge customers contract termination fees where those customers voluntarily terminate fixed-term, fixed-price electricity supply contracts before their maturity, provided that such fees are part of a contract that the customer has voluntarily entered into and that such fees are clearly communicated to the customer before the contract is entered into. Such fees shall be proportionate and shall not exceed the direct economic loss to the supplier … resulting from the customer’s termination of the contract, including the costs of any bundled investments or services that have already been provided to the customer as part of the contract. The burden of proving the direct economic loss shall be on the supplier … and the permissibility of contract termination fees shall be monitored by the regulatory authority, or by [any] other competent national authority.’

Polish law

12The ustawa – Prawo energetyczne (Law on Energy) of 10 April 1997 (Dz. U. No 54, position 348), in the version applicable to the dispute in the main proceedings (‘the Law on Energy’), provides, in Article 4j(3a) thereof:‘An end customer may terminate a fixed-term contract pursuant to which the energy undertaking supplies gaseous fuel or energy to that customer, without bearing costs and damages other than those resulting from the contract, by submitting a written statement to the energy undertaking.’

13The ustawa – Kodeks cywilny (Law establishing the Civil Code) of 23 April 1964 (Dz. U. No 16, position 93), in the version applicable to the dispute in the main proceedings (‘the Civil Code’), provides, in Article 483(1):‘The contract may stipulate that compensation for damage arising from non-performance or improper performance of a non-pecuniary obligation is to be effected by payment of a fixed sum (contractual penalty).’

14Under Article 484 of the Civil Code:‘§1. In the event of non-performance or improper performance of an obligation a contractual penalty is payable to the creditor in the amount stipulated for such an event, irrespective of the amount of the damage suffered. A claim for damages exceeding the amount of the penalty provided for is not admissible, unless the parties have agreed otherwise.§2. If a substantial part of the obligation has been performed, the debtor may request a reduction of the contractual penalty; the same applies if the contractual penalty is manifestly excessive.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

15On 1 January 2010, G, a small undertaking with fewer than 50 occupied persons, and W entered into a general contract (‘the general contract’), under which W undertook to sell electricity intended for an agro-tourism farm in K. (Poland).

16On 23 February 2015, those parties entered into an agreement whereby G undertook to maintain that general contract at least until 31 December 2016. In that agreement, they also agreed that they could terminate the contract subject to notice and that, if G terminated the contract before the expiry of the period for which it had been concluded, W would request payment from G of a sum corresponding to the price of the electricity which G had undertaken to purchase from W but which G had not yet paid for or consumed, that price being stipulated in the agreement.

17Moreover, on 30 January 2015, G entered into an electricity supply contract with Z S.A., another electricity supplier, for the same agro-tourism farm. On 25 February 2015, Z, acting on the authority given to it in that context, informed W that that contract had been entered into and, in the event that W failed to consent to the change, gave notice of termination of the general contract.

18On 9 March 2016, W sent G a debit note for the amount of 63 959.70 Polish zlotys (PLN) (around EUR 14161), by way of a contractual penalty for early termination of the general contract, arising from the early change of electricity supplier. Since G did not make the requested payment within the prescribed period, on 21 November 2016 W brought an action before the Sąd Rejonowy dla m. st. Warszawy w Warszawie (District Court, Warsaw, Poland) requesting that G be ordered to pay W that sum, together with interest.

19By judgment of 7 February 2020, that court upheld the action. It considered inter alia that W was entitled to demand payment of the contractual penalty, since its contract with G had been terminated before the agreed term on account of the change of supplier effected by the conclusion of a new contract with Z. In that regard, that court noted that, on the one hand, under Article 484(1) of the Civil Code, a claim for a contractual penalty is not subject to proof of the existence of damage and, on the other hand, the amount claimed corresponded to that stipulated in the agreement referred to in paragraph 16 of this judgment.

20G brought an appeal against that judgment before the Sąd Okręgowy w Warszawie (Regional Court, Warsaw, Poland), the referring court, claiming, inter alia, that, in accordance with Article 3(5) of Directive 2009/72, the contractual penalty could not be imposed on it. In that regard, it stated that W had not suffered any damage, but had suffered only a loss of profit. In its defence, W argued that, in accordance with Article 484(1) of the Civil Code, the amount of a contractual penalty is independent of the amount of damage suffered.

21The referring court observes, as a preliminary point, that, although Directive 2009/72 is applicable ratione temporis to the dispute before it, Article 4 and Article 12(3) of Directive 2019/944 have provided clarifications concerning that first directive, which may, in its view, have an impact on the exercise of customers’ rights as provided for by Directive 2009/72.

22As regards the dispute in the main proceedings, that court notes, in the first place, that Article 4j(3a) of the Law on Energy allows a customer to terminate a fixed-term contract without bearing costs and damages other than those resulting from the contract, but that that law lays down no criterion, not even one of proportionality, regarding the calculation of such costs and damages and does not rule out the possibility of claiming flat-rate compensation. It also states that a contractual penalty, within the meaning of the Civil Code, can be reduced by a court only at the request of the party concerned and that that party bears the burden of proving that the penalty is excessive.

23Moreover, the referring court notes that, while it is possible, according to the legal literature, to annul manifestly excessive termination fees so far as concerns contractual relationships with consumers, it is, by contrast, not possible to examine whether clauses imposing such contractual penalties are unfair where the contractual relationship concerns a small undertaking.

24In that regard, the referring court notes that the Law on Energy contains no reference to consumer protection and does not provide for the possibility of automatic reduction of penalties as regards non-household customers or contain any criterion for calculating such penalties. On the one hand, Article 3(5) of Directive 2009/72 requires Member States to ensure that the right to change supplier be granted to customers in a non-discriminatory manner as regards cost, effort or time. On the other hand, Article 3(7) of that directive refers to the need for it to be in fact possible easily to exercise that right, which requires, in the enforcement of that right, adequate proportionality between the amount of the contractual penalty and the costs incurred by the other party to the contract. Moreover, according to the referring court, although Article 3(7) of Directive 2009/72, read in conjunction with Annex I thereto, provides that, for a residential customer, a change of supplier is not to give rise to any charge, the Law on Energy contains no such clarification.

25The referring court considers that the fact that national law allows contractual penalties to be imposed without also laying down criteria for determining the amounts of those penalties could nullify the aim of consumer protection, referred to by the EU legislature when it established Article 3(5) and (7) of Directive 2009/72 and Article 12(3) of Directive 2019/944, as well as the freedom of customers to terminate contracts, and distort the guarantees of equal access to customers for electricity undertakings in the European Union.

26In the light of those considerations, the referring court asks whether Article 3(5) and (7) of Directive 2009/72 precludes the possibility of imposing a contractual penalty on a customer for terminating a fixed-term energy supply contract where that customer wishes to change energy supplier, irrespective of the amount of loss suffered and without any criterion being laid down in the applicable law for calculating and reducing those fees.

27In the second place, the referring court raises the issue of the possibility of contractually imposing fees on energy customers for terminating an energy supply contract before maturity, in the context of a change of supplier, when those fees correspond de facto to the costs of the electricity not consumed, having regard to the objective of ensuring that it is in fact possible easily to switch to a new energy supplier and that the change of supplier be made in a non-discriminatory manner, and to the need to respect the principle of proportionality. That court considers that Article 12(3) of Directive 2019/944 provides, in that regard, useful guidance for the interpretation of Article 3(5) and (7) of Directive 2009/72, in particular by its reference to proportionality and to the ‘direct economic loss’ to the supplier.

28In that context, it states that a contractual take-or-pay penalty places the entire financial risk of the contract on the customer. Such a penalty is therefore manifestly excessive and could require a customer to continue with the performance of the contract even if he or she does not wish to do so. However, in the case of such contracts, the ‘direct economic loss’ could correspond to the costs associated with supplying energy to the customer concerned and with the need to maintain the entire infrastructure, to the costs associated with the transmission or distribution contracts already concluded and to wages. It therefore raises the issue of the interpretation of the concept of ‘appropriate proportion of the costs related to the direct economic loss’ to an energy supplier and asks whether Directive 2009/72 requires national legislation expressly to provide for how those costs are to be calculated.

29In those circumstances, the Sąd Okręgowy w Warszawie (Regional Court, Warsaw) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Must Article 3(5) and (7) of [Directive 2009/72], which requires that the rights of an energy customer (small undertaking), in the event of a change of energy supplier, be exercised in accordance with the rule ensuring that the eligible customer is in fact able easily to switch to a new supplier, and that that change be made in a non-discriminatory manner as regards cost, effort or time, be interpreted as precluding the possibility of imposing a contractual penalty on an energy customer for terminating a fixed-term energy supply contract where the energy customer wishes to change energy supplier, irrespective of the amount of loss suffered (Articles 483(1) and 484(1) and (2) [of the Civil Code]) and without any criteria being laid down in the Law on Energy (Article 4j(3a)) … for the charging of such fees or the establishment thereof?(2) Must Article 3(5) and (7) of [Directive 2009/72], which requires that the rights of an energy customer (small undertaking), in the event of a change of energy supplier, be exercised in a non-discriminatory manner as regards cost, effort or time and in accordance with the rule ensuring that the eligible customer is in fact able easily to switch to a new supplier, be interpreted as precluding an interpretation of contractual clauses which, in the event of early termination of an energy supply contract concluded with a supplier for a fixed term, makes it possible to charge consumers (small undertakings) fees corresponding de facto to the cost of the energy not consumed before the [initial] end of the contract in accordance with the take-or-pay rule?’

The questions referred

30As a preliminary point, it should be noted, first, that, although the referring court refers, in the grounds of its request for a preliminary ruling, to several provisions of Directive 2019/944, that directive did not repeal and replace Directive 2009/72 until 1 January 2021. Accordingly, in view of the date of the facts giving rise to the dispute in the main proceedings, that dispute remains governed by Directive 2009/72. There is therefore no need, in the present case, to interpret Directive 2019/944, which, moreover, is not formally referred to in the questions raised by the referring court. Secondly, although the referring court refers generally to the supply of energy, only the supply of electricity is at issue in the dispute in the main proceedings. Furthermore, in accordance with Article 1 thereof, Directive 2009/72 relates solely to the internal market in electricity.

31In those circumstances, by its two questions, which should be examined together, the referring court must be understood as asking, in essence, whether Article 3(5) and (7) of Directive 2009/72 must be interpreted as precluding national legislation under which, in the event of early termination by a small undertaking of a fixed-term, fixed-price electricity supply contract, with a view to switching supplier, that undertaking is required to pay the contractual penalty stipulated in that contract, which may amount to the full price of the electricity which it had undertaken to purchase, even if that electricity has not been and will not be consumed, although that legislation does not lay down any criterion for the calculation of such a penalty or for its possible reduction.

32When interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part.

33As regards, in the first place, the wording of the provisions whose interpretation is sought, point (a) of the first subparagraph of Article 3(5) of Directive 2009/72 provides that Member States are to ensure that, where a customer, while respecting contractual conditions, wishes to change supplier, the change is effected by the operator(s) concerned within three weeks. The second subparagraph of Article 3(5) of that directive adds that Member States are to ensure that the rights referred to in the first subparagraph of Article 3(5) are granted to customers in a non-discriminatory manner as regards cost, effort or time. Article 3(7) thereof requires Member States to take appropriate measures to protect final customers, ensure high levels of consumer protection, particularly with respect to transparency regarding contractual terms and conditions, and ensure that the eligible customer is in fact able easily to switch to a new supplier. That provision further states that, as regards at least household customers, those measures are to include those set out in Annex I to that directive.

34Moreover, under Article 2(9) of that directive, the concept of ‘final customer’ refers to ‘a customer purchasing electricity for his own use’, whereas, under Article 2(12) thereof, the concept of ‘eligible customer’ refers to ‘a customer who is free to purchase electricity from the supplier of his choice within the meaning of Article 33 [of Directive 2009/72]’. Since 1 July 2007, the latter concept therefore includes ‘all customers’, in accordance with Article 33(1)(c) of that directive.

35It is also important to point out, as the Advocate General does in footnote 17 of his Opinion, that Directive 2009/72 does not contain a definition of the concept of ‘consumer’, which appears in that directive, but that it is possible to infer from recital 1 of that directive, which states that the internal market in electricity aims to deliver real choice ‘for all consumers of the European Union, be they citizens or businesses’, and from recital 42 of that directive, that, in the absence of any indication to the contrary in a provision of that directive, that term is, in that directive, construed broadly and therefore includes, as a rule, any ‘final customer’, that is to say both ‘household customers’ and ‘non-household final customers’, including small undertakings.

36It follows from the foregoing that the wording of Article 3(5) and (7) of Directive 2009/72, read in the light of the relevant definitions referred to in paragraphs 34 and 35 above, is limited essentially to requiring that national legislation such as that described in paragraph 31 above, first, ensures that a final customer may in fact, if he or she so wishes, easily change electricity supplier, in accordance with the terms and conditions of his or her electricity supply contract, secondly, ensures that contractual stipulations such as those described in paragraph 31 of this judgment are transparent and, thirdly, provides for a mechanism for settling any disputes which may arise between consumers and their electricity supplier.

37The fact that such national legislation allows a fixed-term, fixed-price electricity supply contract to stipulate that a contractual penalty will be payable in the event of early termination of the contract by the customer with a view to switching supplier, even where that penalty has the characteristics described in paragraph 31 above and in so far as that legislation, on the one hand, requires that such a contractual stipulation be drafted in clear terms, allowing the customer to understand its scope before the contract is signed, and be freely consented to, thereby satisfying the condition of transparency which that wording requires, and, on the other hand, provides for the possibility of administrative or judicial redress in the event of a dispute, does not necessarily prevent that customer from being in fact able easily to switch to a new supplier.

38By contrast, it may be noted that Article 3(5) of Directive 2009/72 states that changes of supplier must be effected while respecting contractual conditions.

39Moreover, indeed, as already stated in paragraph 33 above, the last sentence of Article 3(7) of that directive provides that, as regards at least household customers, Member States must, in order to ensure high levels of consumer protection, adopt the measures set out in Annex I to that directive. As is apparent from Annex I thereto, these include measures to ensure that customers, in accordance with paragraph 1(a) of Annex I, have a right to a contract with their electricity service provider that specifies whether withdrawal from the contract without charge is permitted and, in accordance with paragraph 1(e) of Annex I, are not charged for changing supplier. It is apparent from Article 2(10) of that same directive that the concept of ‘household customer’ means ‘a customer purchasing electricity for his own household consumption, excluding commercial or professional activities’, whereas the term ‘non-household customer’ is defined in Article 2(11) as ‘a natural or legal [person] purchasing electricity which is not for [his] own household use and includes producers and wholesale customers’.

40Since Article 3(7) of Directive 2009/72 expressly provides that Member States may, for the purposes of applying the measures referred to in Annex I to that directive, distinguish between customers purchasing electricity for their own household consumption and customers purchasing electricity for a commercial or professional activity, Article 3(7) thereof, far from precluding national legislation such as that described in paragraph 31 above, tends, on the contrary, to show that the Member States are free to provide that, in the event of early termination by a small undertaking of a fixed-term, fixed-price electricity supply contract, with a view to switching supplier, that undertaking is required to pay the contractual penalty stipulated in that contract.

41As regards, in the second place, the context of Article 3(5) and (7) of Directive 2009/72, it should be noted, first of all, that no provision of Directive 2009/72 requires Member States to provide for the possibility of changing supplier without charge, or similar measures, for the benefit of non-household final customers, even if they are small undertakings.

42Next, Article 3(4) of that directive provides, in essence, that Member States are to ensure that all customers are entitled to have their electricity provided by a supplier, subject to the supplier’s agreement.

43Finally, recital 51 of Directive 2009/72 states that the interests of consumers are at the heart of that directive and that their rights must be enforced by the competent national authorities; recital 52 thereof states that ‘clear and comprehensible information’ should be made available to consumers ‘concerning their rights in relation to the energy sector’, and recital 54 of that directive states that the means of dispute settlement which must be provided for under Article 3(7) of that same directive are to be for the benefit of ‘all consumers’.

44It must therefore be noted that it is not apparent from that context that, where the Member State concerned has not chosen to extend the benefit of the measures set out in Annex I to Directive 2009/72 to customers other than household customers, the provisions whose interpretation is sought preclude, as a matter of principle, national legislation such as that described in paragraph 31 above. By contrast, it follows, in essence, from that context that such national legislation must ensure that customers have the right to choose their supplier and that consumers are informed in a clear and comprehensible manner of their rights and are able to enforce them in the context of a dispute settlement mechanism.

45As regards, in the third place, the objectives pursued by Directive 2009/72, it should be noted that, under Article 1 thereof, the purpose of that directive is to establish common rules for the generation, transmission, distribution and supply of electricity, together with consumer protection provisions, with a view to improving and integrating competitive electricity markets in the European Union. In that context, and as is apparent from recitals 3, 7 and 8 thereof, that directive seeks, in particular, to establish a fully open and competitive internal market in electricity, which enables all consumers freely to choose their suppliers and suppliers freely to deliver to their customers, to foster competitiveness within the internal market in order to secure the supply of electricity at the most competitive price, and to create a level playing field in that market in order to bring about completion of the internal market in electricity (see, to that effect, judgments of 17 October 2019, Elektrorazpredelenie Yug, C‑31/18, EU:C:2019:868, paragraph 39, and of 11 June 2020, Prezident Slovenskej republiky, C‑378/19, EU:C:2020:462, paragraph 22 and the case-law cited).

46To that effect also, recital 57 of that directive states that promoting fair competition and easy access for different suppliers and fostering capacity for new electricity generation should be of the utmost importance for Member States in order to allow consumers to take full advantage of the opportunities of a liberalised internal market in electricity.

47In that regard, it should be noted, as the Advocate General did in point 50 of his Opinion, that fixed-term, fixed-price electricity supply contracts can protect customers by guaranteeing them a low and stable electricity price, offering consumers the certainty that the costs which they will have to bear will not vary throughout the duration of the contract. However, in order to fulfil its obligations under such contracts, the electricity supplier concerned may have incurred specific costs, which could, for it, have given rise to additional costs as compared with a contract of indefinite duration with no fixed price, particularly for the purpose of hedging against the volatility of costs on the wholesale market. Accordingly, the possibility of permitting the imposition of a contractual penalty on a customer where that customer terminates that type of fixed-term, fixed-price contract early may allow the supplier to offset the particular costs which it incurs as a result of that type of contract, whilst avoiding having to pass on to all customers the financial risk associated with that type of contract, which could lead to higher electricity prices for them and would, in the final analysis, be contrary to the objective of ensuring the most competitive prices for consumers.

48However, it is necessary to take into account also the general objective pursued by Directive 2009/72 of bringing about the completion of the internal market in electricity, as well as the more specific objectives, set out in recitals 51 and 57 of that directive, of ensuring that consumers benefit from a competitive and liberalised market. The attainment of those objectives would be undermined if national legislation permitted the imposition of contractual penalties which were incommensurate with the costs arising from the contract but not fully amortised on account of its early termination. Such penalties are likely artificially to dissuade the customers concerned from terminating their fixed-term, fixed-price electricity supply contract early, with a view to switching supplier, thereby preventing them from fully benefiting from a competitive and liberalised internal market in electricity.

49In that regard, since the questions raised relate to national legislation which, on the one hand, provides that the costs and compensation which may be contractually stipulated in the event of the early termination, by a non-household final customer, of such an electricity supply contract are payable irrespective of any loss suffered by the initial supplier and, on the other hand, does not lay down any criterion governing the calculation of those costs or their possible reduction by the administrative or judicial authority before which a dispute is brought in that regard, it should be pointed out that Directive 2009/72 admittedly contains no guidance on those issues.

50However, according to the case-law of the Court, the Member States must exercise their powers in compliance with EU law and they cannot therefore, in so doing, undermine the effectiveness of Directive 2009/72 (see, by analogy, judgments of 30 June 2005, Candolin and Others, C‑537/03, EU:C:2005:417, paragraphs 25 to 27, and of 17 December 2015, Szemerey, C‑330/14, EU:C:2015:826, paragraph 42).

51In the light of what has been stated in paragraph 48 above, that would be the case if, within the framework of the dispute settlement mechanism which the Member States are required to provide under that directive for the benefit of electricity consumers, the administrative or judicial authority before which a matter is brought were unable to assess the amount of a contractual penalty such as that at issue in the main proceedings and, where appropriate, to require it to be reduced or even annulled, if, in the light of all the circumstances of the case, that penalty were found to be disproportionate to the costs arising from a contract such as that at issue in the main proceedings, but not fully amortised on account of the early termination of that contract, with the result that that penalty would, in practice, have the effect of frustrating the right of the final customer to be in fact able easily to switch to a new supplier and undermine the objectives of Directive 2009/72 recalled in paragraphs 45, 46 and 48 above.

52While that assessment of the proportionality of the amount of such a contractual penalty is a matter solely for the national authority before which any dispute is brought, it is nevertheless appropriate, in order to provide a useful response to the referring court, to state that, for the purposes of that assessment, account may be taken, inter alia, of the initial duration of the contract in question, the remaining duration at the time of its termination, the quantity of electricity which was purchased with a view to the performance of that contract but which will not ultimately be consumed by the customer, and the means which a reasonably diligent supplier would have had at its disposal to limit any economic losses that it might incur as a result of that early termination.

53In the present case, it is not apparent from the documents before the Court that the Republic of Poland intended to extend to non-household final customers or small undertakings the benefit of the measures set out in Annex I to Directive 2009/72 which the Member States are, under Article 3(7) thereof, required to provide for household customers. Moreover, it is indeed clear from the order for reference that the applicable national legislation provides, in essence, that the parties to the contract are free to determine the amount of the contractual penalty applicable in the event of early termination, by the final customer who is party to the contract, of a fixed-term, fixed-price electricity supply contract, with a view to switching supplier, and that the agreed amount is payable irrespective of the amount of the damage suffered. However, it is also clear from that order that it is possible, under Article 484(2) of the Civil Code, to bring the matter before a judicial authority in the event of a dispute in that regard and to request a reduction of the amount of that penalty ‘if a substantial part of the obligation has been performed’ or if that penalty ‘is manifestly excessive’. Furthermore, nor is it apparent from the documents before the Court that Polish law fails to ensure compliance with the other requirements laid down by Directive 2009/72, which are recalled in paragraph 36 above. In those circumstances, and subject to the verifications and final assessments which it is for the referring court to carry out, Article 3(5) and (7) of that directive does not appear to preclude the application of national legislation such as that at issue in the main proceedings to a non-household final customer, within the meaning of that directive.

54In that regard, it should also be added that, even if, in the course of those verifications, the referring court were to find that G, which it describes as a ‘small undertaking’, does not satisfy the two cumulative conditions, set out in Article 3(3) of Directive 2009/72, for such classification under that directive, this would have no bearing on the relevance of the answer to be given for the purposes of resolving the dispute in the main proceedings, since, as follows from the considerations set out in paragraph 44 above, that answer applies, as a rule, to all non-household final customers within the meaning of that directive, and, subject to verification by the referring court, it is not apparent that G cannot be so classified.

55In the light of all the foregoing considerations, the answer to the two questions referred must be that Article 3(5) and (7) of Directive 2009/72 must be interpreted as not precluding national legislation under which, in the event of early termination by a small undertaking of a fixed-term, fixed-price electricity supply contract, with a view to switching supplier, that undertaking is required to pay the contractual penalty stipulated in that contract, which may amount to the full price of the electricity which it had undertaken to purchase, even if that electricity has not been and will not be consumed, although that legislation does not lay down any criterion for the calculation of such a penalty or for its possible reduction, in so far as that legislation, on the one hand, ensures that such a contractual stipulation must be clear, comprehensible and freely consented to and, on the other hand, provides for the possibility of administrative or judicial redress, in the context of which the authority before which the matter is brought may assess the proportionality of that penalty in the light of all the circumstances of the case and, where appropriate, require the reduction or annulment of the penalty.

Costs

56Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Fifth Chamber) hereby rules: Article 3(5) and (7) of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/ECmust be interpreted as not precluding national legislation under which, in the event of early termination by a small undertaking of a fixed-term, fixed-price electricity supply contract, with a view to switching supplier, that undertaking is required to pay the contractual penalty stipulated in that contract, which may amount to the full price of the electricity which it had undertaken to purchase, even if that electricity has not been and will not be consumed, although that legislation does not lay down any criterion for the calculation of such a penalty or for its possible reduction, in so far as that legislation, on the one hand, ensures that such a contractual stipulation must be clear, comprehensible and freely consented to and, on the other hand, provides for the possibility of administrative or judicial redress, in the context of which the authority before which the matter is brought may assess the proportionality of that penalty in the light of all the circumstances of the case and, where appropriate, require the reduction or annulment of the penalty.