"In the 2006 Mostaza Claro case, the European Court of Justice  (“ECJ”) held that Directive 93/13 on unfair terms in consumer contracts  provides a defence against arbitral awards in an action for annulment, even  when the consumer failed to plead the invalidity of the arbitration agreement containing an unfair term during the previous arbitration proceeding. While emphasizing the essential and mandatory character of Directive 93/13, the ECJ did not clearly indicate in Mostaza Claro whether the Directive rises to the level of public policy for purposes of setting aside or refusing to enforce an arbitral award. In the recent Asturcom case, the ECJ clarified the public policy effects of Directive 93/13."

Continue reading (ASA, Volume 28, No. 2, June 2010, 413-416), with permission from Kluwer Law International.