A Hungarian consumer entered into a mobile phone contract with Pannon. The terms of that contract provided that the court in Pannon's locality - some 275 km away from where the consumer lived - would have exclusive jurisdiction over any disputes. Pannon started legal action against the consumer in its local court. The Hungarian court asked the European Court of Justice whether it could consider the term as being unfair under the Unfair Terms Directive, even thought the consumer had not raised the issue. The Unfair Terms Directive has been implemented into national laws across the EU; for example, in English law it has been brought into force as the Unfair Terms in Consumer Contracts Regulations 1999. As the name implies, the aim of the law is to protect consumers against unfair terms introduced by businesses in consumer contracts. The Directive contains a non-exhaustive list of terms which may be regarded as unfair; one is hindering a consumer's right to take legal action or exercise any other legal remedy.
The ECJ said that the court not only had a right, but actually a positive obligation, to consider the Directive, whether or not it has been argued by the consumer in the case. The whole rationale of the law was to protect consumers from being in a weak position, so it would be absurd to say that consumers would not be protected unless they fully argue the legal position. As to whether an exclusive jurisdiction clause which was some distance away from the consumer was unfair, this was a matter for the national court (in this case, the Hungarian court) to rule.
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