Opinion of the Advocate General — ECLI:EU:C:2023:654
Date: 2023-09-07
Language of the case: Polish
Subject matter: Energy;Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Poland

Summary C-371/22-1 
Case C-371/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
8 June 2022 
Referring court: 
Sąd Okręgowy w Warszawie (Regional Court, Warsaw) (Poland) 
Date of the decision to refer: 
12 May 2022 
Appellant: 
G sp. z o.o. 
Respondent: 
W S.A. 
  
Subject matter of the main proceedings 
Case brought by W S.A. in G. seeking payment by G sp. z o.o. in W. of a 
contractual penalty for early termination by the latter company of a fixed-term 
energy supply contract. 
Subject matter and legal basis of the request 
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, in conjunction 
with Article 267 of the Treaty on the Functioning of the European Union (TFEU). 
Questions referred for a preliminary ruling 
1. Must 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, which 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-371/22 
 
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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 Ustawa z dnia 23 kwietnia 1964 r. 
kodeks cywilny (Law of 23 April 1964 establishing the Civil Code)) and 
without any criteria being laid down in the Law on Energy (Article 4j(3a) of 
the Ustawa z dnia 10 kwietnia 1997 r. prawo energetyczne (Law on Energy 
of 10 April 1997)) for the charging of such fees or the establishment 
thereof? 
2. Must 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, 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 end of the contract in accordance with 
the take-or-pay rule? 
Provisions of European Union law relied on 
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: Article 3(5) and (7); 
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: Article 12(3); 
Treaty on the Functioning of the European Union (TFEU): Article 267. 
Provisions of national law and case-law relied on 
Ustawa z dnia 10 kwietnia 1997 r. – Prawo energetyczne (Law on Energy of 
10 April 1997): Articles 4j(3), 4j(3a) and 4j(6); 
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Ustawa z dnia 23 kwietnia 1964 r. – Kodeks cywilny (Law of 23 April 1964 
establishing the Civil Code): Articles 3531, 483(1) and 484(1) and (2); 
Resolution of the Sąd Najwyższy (Supreme Court) of 6 November 2003, III 
CZP 61/03; 
Judgment of the of the Sąd Najwyższy of 17 January 2020, IV CSK 579/17; 
Judgment of the Sąd Okręgowy w Warszawie (Regional Court, Warsaw) of 
10 September 2021, file ref. XVII AmA 69/20. 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 1 January 2010, W S.A. in G., as an electricity seller, and G sp. z o.o. in W., as 
an energy customer and small undertaking employing fewer than 50 employees, 
concluded a contract for the sale of electricity to an agro-tourism farm in 
K. Subsequently, on 23 February 2015, the parties concluded an agreement under 
which G sp. z o.o. undertook to continue the concluded contract for a period of up 
to at least 31 December 2016. In the agreement, the customer undertook to 
purchase a fixed amount of electricity from the seller at a fixed price. That 
agreement guaranteed the parties the right to terminate it by giving notice of 
termination and the notice period was to be six months from the date on which 
notice of termination was given. The parties also agreed that if the contract was 
terminated by G sp. z o.o. before the period for which the agreement had been 
concluded, W S.A. could charge the counterparty the amount resulting from the 
difference in the value of electricity declared by G sp. z o.o. at the price specified 
in that agreement and the value of electricity consumed by G sp. z o.o. until the 
time of termination of the contract at the price specified in that agreement 
(Article 4(4) of the agreement). 
2 On 30 January 2015, G sp. z o.o. concluded with Z S.A. (the new energy seller) a 
contract for the sale of electricity relating to the same premises in K. The new 
energy seller was given the authority inter alia to give notice of termination of 
existing contracts for the sale of electricity on behalf of G sp. z o.o. On 
25 February 2015, Z S.A. informed W S.A. of the conclusion of a contract for the 
sale of electricity with G sp. z o.o. and, in the event that W S.A. failed to consent, 
gave notice of termination of the contract on 1 January 2010. 
3 On 9 March 2016, W S.A. issued G sp. z o.o. with a debit note for an amount of 
PLN 63 959.70 by way of contractual penalty for early change of seller. G sp. z 
o.o. was required to purchase electricity for precisely that amount. W S.A. 
calculated the contractual penalty on the basis of Article 4(4) of the agreement. On 
account of the failure to pay the above amount on time, W S.A. brought an action, 
on 21 November 2016, before the Sąd Rejonowy dla m. st. Warszawy w 
Warszawie (District Court for the Capital City of Warsaw in Warsaw) seeking 
payment by G sp. z o.o. of PLN 63 959.70, plus statutory interest, by way of a 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-371/22 
 
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contractual penalty for early termination by that company of a fixed-term energy 
supply contract. 
4 By judgment of 7 February 2020, the Sąd Rejonowy dla m. st. Warszawy w 
Warszawie upheld that action. That court held that the mere conclusion by the 
defendant on 30 January 2015 of an contract for the sale of electricity with the 
new seller and notification of the applicant thereof resulted in a change of 
electricity seller ipso jure and that there is no doubt that, as a result of the change 
of energy seller at the will of the defendant, the contract between W S.A. and G 
sp. z o.o., which was to remain in force until at least 31 December 2016, was 
terminated before that date, thus entitling the applicant to request payment of that 
penalty. The court of first instance added that in the light of Article 483(1) of the 
Civil Code, under which a contract may stipulate that compensation for damage 
arising from non-performance or improper performance of a non-pecuniary 
obligation is be effected by payment of a fixed sum (contractual penalty), the 
applicant does not have to demonstrate damage in order to seek the contractual 
penalty concerned. 
5 The defendant lodged an appeal against that judgment of the Sąd Okręgowy w 
Warszawie. 
The essential arguments of the parties in the main proceedings 
6 G sp. z o.o. claims that in its judgment the court of first instance infringed 
substantive law, that is to say Article 4j(6) of the Law on Energy of 10 April 1997 
by misinterpreting it in finding that the mere conclusion by that company on 
30 January 2015 of a contract for the sale of electricity with a new electricity 
seller and the notification of W S.A. thereof resulted in a change of electricity 
seller ipso jure. G sp. z o.o. also disputes, in essence, the imposition on it of the 
contractual penalty, pointing out that under Article 3(5) Directive 2009/72 it 
should not be charged. It also argues that W S.A. suffered no actual damage and 
merely a loss of profit which it could have made. 
7 W S.A. argues that under national law the contractual penalty is independent of 
the amount damage suffered because under Article 484(1) of the Civil Code in the 
event of non-performance or improper performance of an obligation a contractual 
penalty is due to the creditor in the amount stipulated for such an event, 
irrespective of the amount of the damage suffered. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
8 With regard to the first question, the national court notes that the original rules on 
the Community electricity market were given concrete expression in Directive 
2009/72, which is to apply to the assessment of the contractual relationship 
established by the parties’ agreement of 23 February 2015. The arrangements set 
out in that directive were transposed in Poland by the Ustawa z dnia 8 stycznia 
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2010 r. o zmianie ustawy – Prawo energetyczne oraz o zmianie niektórych innych 
ustaw (Law on Energy of 8 January 2010 also amending certain other laws). The 
above amendment incorporated Article 4j(2), under which an energy undertaking 
engaged in the transmission and distribution of gaseous fuels or energy is, 
applying objective and transparent rules ensuring equal treatment between system 
users, to enable the customers of gaseous fuel or energy connected to its network 
to change seller of gaseous fuel or energy. Furthermore, Article 4j(3a) 
incorporated a right under which a final 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. 
9 Subsequent Directive 2019/944 specified the arrangements incorporated in 
Directive 2009/72, which is relevant to the interpretation of Directive 2009/72 in 
the present case. The overriding principle expressed in both directives is the 
possibility of freely changing the energy supplier. Under Article 3(5) of Directive 
2009/72, Member States are to ensure that the right to change energy supplier is 
granted to customers in a non-discriminatory manner as regards cost, effort or 
time. Furthermore, Article 3(7) of that directive expressly refers to the need to 
ensure that the eligible customer is in fact able easily to switch to a new supplier. 
10 The concept of being able ‘in fact’ to switch to a new energy supplier should be 
interpreted as the existence of an actual – and not just a hypothetical – ability to 
make such a switch. In addition, that directive also provides guarantees of ‘easily’ 
switching to a new supplier, which means that the law must not create barriers 
which could nullify such freedom. Those rules seek, on the one hand, to protect 
energy customers, in particular consumers, and to safeguard their rights, and, on 
the other, to guarantee energy undertakings equal access to customers. In this 
context, it is the settled case-law of the Court of Justice that although State 
intervention in the fixing of the price of electricity constitutes an obstacle to the 
achievement of a competitive electricity market, that intervention may nonetheless 
be accepted within the framework of Directive 2009/72 if three conditions are 
satisfied. First, the intervention must pursue an objective of general economic 
interest, second, it must comply with the principle of proportionality and, third, 
the public service obligations that it lay downs must be clearly defined, 
transparent, non-discriminatory and verifiable, and guarantee EU electricity 
undertakings equal access to consumers [see, by analogy, judgments: of 
7 September 2016, A., C-121/15, EU:C:2016:637, paragraph 36; and also of 
30 April 2020, (…) and (…), C-5/19, EU:C:2020:343, paragraph 56, and 
judgment of 14 November 2021 (…), formerly (…), C-683/19]. 
11 The essential problem associated with the guaranteed freedom to switch to a new 
energy supplier therefore is the possibility of charging the energy customer a fee if 
he terminates a fixed-term contract for the supply of energy and the effect of such 
a charge on the actual ability to switch to a new energy supplier. At national level, 
it is possible for the customer to choose the seller of gaseous fuel and energy, but 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-371/22 
 
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Article 4j(3a) of the Law on Energy allows a fixed-term contract to specify that 
customers will be charged ‘costs and damages’ if it they terminate it. 
12 The Law on Energy Law does not specify any criteria for determining those costs 
and damages and refers to the contract. In the context of the freedom of contract, 
the parties may deal with matters relating to the costs of early termination of the 
contract, including charging a contractual penalty. Under the Civil Code, a 
contractual penalty is included in the rules governing liability to provide damages 
and constitutes flat-rate damages for non-performance or improper performance of 
an obligation and is subject to Articles 483 and 484 of the Civil Code. As a rule, 
national law allows provision to be made for a contractual penalty irrespective of 
the amount of damage suffered (Article 484 of the Civil Code; see resolution of 
the Sąd Najwyższy of 6 November 2003, III CZP 61/03). The amount of the 
contractual penalty in proceedings cannot be established on an entity’s own 
initiative. National law also provides for a category of damages which may 
include both expenses incurred and profit lost. 
13 National case-law indicates that a clause allowing a customer to be charged a fee 
for early termination of a fixed-term contract which he has concluded is 
permissible, and, where that fee is fixed in advance (pre-established contractual 
damages in the form of a lump sum calculated in proportion to the period 
remaining until the end of the fixed-term contract), it constitutes a contractual 
penalty, which is subject to assessment in the light of the relevant provisions of 
the Civil Code. It is also holds that establishing the amount of a flat-rate one-off 
fee in advance does not constitute abuse by a company of is contractual position 
and protection of its own interests, but is intended to facilitate the exercise of 
claims without having to demonstrate the circumstances of the damage sustained 
or the amount thereof. Since this right is laid down in law, it cannot, a priori, be 
regarded as an abuse of contractual position. Only the manner in which those 
damages are incorporated into a contract, such as setting the contractual penalty in 
an excessive amount, can be assessed. Furthermore, flat-rate damages (a 
contractual penalty) are also favourable to the debtor since he knows the 
maximum amount of his potential liability and, when signing the contract, can 
consider in advance whether or not to consent to such risk (judgment of the Sąd 
Okręgowy w Warszawie of 10 September 2021, file ref. XVII AmA 69/20; 
judgment of the Sąd Najwyższy of 17 January 2020, IV CSK 579/17). 
14 However, in the case of consumers national legal writers allow an excessively 
high penalty for termination of a contract to be regarded as invalid in trade with 
consumers. This means that the assessment whether clauses of the contract 
concluded grossly prejudice the consumer’s interests must be made in concreto, 
having regard to all the circumstances of the case. If such contractual penalties 
have the effect in practice of blocking termination of fixed-term contracts, they 
should be deemed to be invalid as infringing the principle of freedom of contract 
under Article 3531 of the Civil Code and being contrary to Article 4j(3a) of the 
Law on Energy. 
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15 The referring court notes that it is apparent from the reference in Article 3(7) of 
Directive 2009/72 to Annex I that, in the case of a customer who is a consumer, 
no charge is to be made for changing supplier [point 1(e) of that annex]. However, 
the Law on energy does not provide for such an exclusion. 
16 With regard to small undertakings, legal writers consider that the absence of any 
reference in Article 4j(3a) of the Law on Energy to consumer protection even 
makes it impossible to examine the unfairness of those clauses. This rule allows 
energy undertakings to provide, in essence, for any, and even excessively high, 
penalties for early termination of a contract. Furthermore, it does not permit that 
penalty to be established at an entity's own initiative in relation to a customer 
which is an undertaking. Nor does it lay down any criteria on the charging 
penalties and for example contains no references to proportionality to the costs 
incurred or the risk. In practice, the penalties are equal to the cost of a potential 
bill for the supply of energy, which may in fact block the possibility of 
terminating that type of contract. 
17 Uncertain as to the interpretation of Article 3(5) of Directive 2009/72, the national 
court notes that Article 3(5) and (7) make clear above all the need to ensure that 
eligible customers are able easily to switch to a new supplier and to exercise the 
right to switch energy supplier in a non-discriminatory manner as regards cost, 
effort or time. Those provisions make no mention of penalties or damages, but do 
highlight the need to maintain a proportion in the exercise of those rights in a 
manner appropriate to the costs. If the customer is in fact subject to financial 
burdens, the extent thereof cannot constitute a discriminatory measure in relation 
to other energy suppliers because an energy customer will not in fact be able to 
switch to a new energy supplier. 
18 The referring court adds that it follows from Articles 4 and 12(3) of Directive 
2019/944, which specify those rules, that, where small undertakings are charged 
fees in connection with a switch to a new energy supplier, such fees are to be 
proportionate and not to exceed the direct economic loss to the supplier or the 
market participant engaged in aggregation 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. 
Therefore, this interpretation may affect how exercise of consumers’ right to 
change energy suppliers under Directive 2009/72, which makes no reference to 
fees, is understood [judgment of the Court of Justice of 16 October 2014 (…) sp. z 
o.o., C-605/12, in which it allowed a reference to a regulation which was not 
applicable at the date of the facts]. 
19 The referring court sums up it considerations relating to the first question, 
recalling that Directive 2009/72 expressly refers to the need to ensure that eligible 
customers are in fact able easily to switch to a new supplier (Article 3(7)). The 
introduction of such fees makes it difficult to switch energy supplier. The Law on 
Energy uses the category of costs and damages in general terms. However, it lays 
down no precise criteria relating to damage and refers to the contract. It is 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-371/22 
 
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permissible to lay down in a contract both a contractual penalty (flat-rate 
damages) and damages. If it is concluded that the fees constitute damages, the 
question arises whether they can also be calculated as lost profits and correspond 
de facto to the fees for energy since the Law on Energy does not lay down any 
criteria for those costs. If it is concluded that it constitutes a contractual penalty – 
flat-rate compensation –, then under national law it can be claimed irrespective of 
the amount of the damage suffered and, furthermore, the customer must show that 
it is manifestly excessive, irrespective of the amount of damage suffered. The 
potential for establishing the penalty depends on the court’s assessment and the 
energy consumer’s litigation, whilst according to Article 12(3) of Directive 
2019/944 the burden of proving the direct economic loss is to be on the supplier or 
market participant engaged in aggregation, and the permissibility of contract 
termination fees is to be monitored by the regulatory authority, or by another 
competent national authority. The permissibility of such contractual penalties in 
national law could therefore thwart the protective functions sought by the 
European Union legislature in creating Article 3(5) and (7) of Directive 2009/72 
and Article 12(3) of Directive 2019/944. The permissibility of charging 
contractual penalties irrespective of the amount of damage – without clear and 
precise damage criteria – could result in a de facto restriction of the freedom of 
customers to terminate contracts, thus distorting the guarantees of equal access to 
customers for European Union energy undertakings. 
20 With regard to the second question, the national court emphasises that it is related 
to the first question and concerns the permissibility of laying down in contracts 
charges on energy consumers for terminating an energy supply contract early, 
corresponding de facto to the cost of the non-consumed energy The national court 
is uncertain whether the abovementioned rules, including the rule relating to the 
ability easily to switch to a new supplier and change supplier in a non-
discriminatory manner, preclude such a calculation of fees. Directive 2009/72 
emphasises the importance of proportionality in the charges imposed on 
consumers, while at the same time – as already mentioned – stipulates the ability 
in fact to switch to a new supplier in order to protect equal access of energy 
companies to consumers. 
21 Some guidance on the interpretation of Article 3(5) and (7) of Directive 2009/72 
may be derived from the provisions of the new directive. Under abovementioned 
Article 12(3) of Directive 2019/944, by way of derogation from paragraph 2, 
Member States may, in the circumstances provided for by that provision, permit 
suppliers or market participants engaged in aggregation to charge customers 
contract termination fees where those customers voluntarily terminate fixed-term, 
fixed-price electricity supply contracts before their maturity. Those provisions do 
not preclude the possibility of charging fees in connection with the early 
termination of a contract, but nevertheless indicate the need to maintain an 
appropriate proportion of those fees. That directive stipulates that the charges 
must be proportionate, in particular to the investments and services already 
provided for the supplier. 
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22 As regards undertakings engaged in the sale/supply of energy, the company 
concerned, when it acquires a new customer, must purchase electricity, which 
involves funds and the need to pay deposits for the electricity and gaseous fuel 
purchased. These costs also include, inter alia, the remuneration of the agent who 
acquired the customer, as well as remuneration of the employees responsible for 
maintaining the overall system, and such like. All those costs can be covered by 
flat-rate damages – a contractual penalty – even if in practice it is quite difficult to 
calculate them precisely. The loss may comprise not only direct economic losses, 
but also lost profit. The question therefore arises whether contractual clauses, 
under which the fee for termination of a fixed-term contract is to correspond to the 
amount due for non-consumed energy, which could potentially have been 
consumed during the contract, are permissible. Is calculation of fees in accordance 
with the take-or-pay rule permissible? Will such an arrangement not in fact 
constitute an obstacle to switching to a new energy supplier in breach of the rule 
that it be possible in fact to switch supplier? 
23 The uncertainty therefore concerns the way in which the appropriate charge is 
assessed. Account must be taken of the fact that if the fee corresponds to the 
calculated costs of non-consumed energy, termination of the contract and 
continuation of a situation of obligation with the supplier will have comparable 
financial consequences for the customer. In that situation, a customer who would 
like to terminate a contract can be expected to remain in a situation of obligation 
which is unfavourable to him. The supplier, on the other hand, can be certain that 
it will, in any event, make financial gain during the whole term of the contract. If 
the contract is terminated, the customer will still be obliged to pay the equivalent 
of the estimated electricity price stipulated in the contract for the period up to the 
end of the contract. A contractual penalty calculated in this way will shift all the 
financial risk for termination of the contract to the customer and the customer will 
be charged a penalty in an excessively high amount. Such a situation may force 
customers to continue to perform the contract even though they may not wish to 
do so, and thus lead to a restriction of their freedom to decide to terminate the 
contract after it has been concluded and exercise their right to switch to a new 
electricity supplier. A contractual penalty set solely on the basis of the remaining 
period laid down by the parties is de facto intended to make it uneconomic for the 
customer to terminate the contract and discourage him from doing so. 
24 On the other hand, however, in the case of a fixed-term contract, the direct 
economic loss may actually correspond to the costs associated with the supply of 
energy to the customer concerned and the need to maintain the overall 
infrastructure. The fees for energy generally consist of two parts, that is to say a 
fee for the fuel or energy consumed and for the provision of an energy 
transmission or distribution service. Distribution charges may be calculated 
according to the forecast purchase of energy. 
25 The question therefore arises as to how, in the case of energy suppliers, their 
economic losses should be calculated, that is to say whether these calculated 
charges for the distribution or transmission of energy should be taken into 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-371/22 
 
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account, or whether they include other expenses related to the purchase of energy. 
How, therefore, is the concept of an appropriate proportion of the charge in 
comparison with the direct economic loss of such an undertaking to be 
interpreted? 
26 There is also fundamental uncertainty as to whether this type of fee calculation – 
in order to avoid the claim of arbitrariness and bring about conciliation with the 
content of the interpreted directive – should not, however, be explicitly defined by 
the Law on Energy in order to avoid arbitrariness in that respect and at the same 
time correctly distribute the burden of proof in this type of case. The existence in 
contracts of this kind of freedom to define the rules on charging fees may lead to 
arbitrariness or, in extreme cases, to the incorporation into the contract of the take-
or-pay rule. However, as has been pointed out, according to the case-law of the 
Court of Justice the idea that it should be possible easily to switch to a new 
supplier is intended to ensure that European Union energy undertakings have 
equal access to customers. The answer to this question will therefore be extremely 
useful, if the Court of Justice shares the view that it is in principle permissible 
under Directive 2009/72 to charge fees for early termination of an energy contract 
as a result of a change of energy supplier, and will be relevant to this case, and 
also to cases which may arise against the same background in future.