CJEU Joined Cases C-776/19 to C-782/19 / Judgment

VB and Others v BNP Paribas Personal Finance SA and AV and Others v BNP Paribas Personal Finance SA and Procureur de la République
Policy area
Consumers
Deciding body type
Court of Justice of the European Union
Deciding body
Court (First Chamber)
Typ
Decision
Decision date
10/06/2021
ECLI (European case law identifier)
ECLI:EU:C:2021:470
  • CJEU Joined Cases C-776/19 to C-782/19 / Judgment

    Key facts of the case:

    Requests for a preliminary ruling from the Tribunal de grande instance de Paris.

    Reference for a preliminary ruling – Consumer protection – Directive 93/13/EEC – Unfair terms in consumer contracts – Mortgage loan agreements denominated in a foreign currency (Swiss francs) – Limitation – Article 4(2) – Main subject matter of the contract – Terms exposing the borrower to a foreign exchange risk – Requirements of intelligibility and transparency – Burden of proof – Article 3(1) – Significant imbalance – Article 5 – Contractual term that is in plain, intelligible language – Principle of effectiveness.

     

    Outcome of the case: 

    On those grounds, the Court (First Chamber) hereby rules:

    1) Article 6(1) and Article 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, read in the light of the principle of effectiveness, must be interpreted as precluding national legislation which makes the submission of a claim by a consumer:

    • for a declaration that a term in a contract concluded between a seller or supplier and that consumer is unfair subject to a limitation period;
    • for repayment of sums paid but not due, on the basis of such unfair terms, subject to a five-year limitation period, where that period begins to run from the date of acceptance of the loan offer such that, at that time, the consumer may have been unaware of all of the rights that he or she has under that directive.

    2) Article 4(2) of Directive 93/13 must be interpreted as meaning that terms of a loan agreement which provide that the foreign currency is the account currency and the euro the settlement currency and which have the effect that the foreign exchange risk is borne by the borrower come within that provision where those terms lay down an essential element characterising the agreement.

    3) Article 4(2) of Directive 93/13 must be interpreted as meaning that, in the context of a loan agreement denominated in a foreign currency, the requirement of transparency of terms of that agreement, which provide that the foreign currency is the account currency and the euro the settlement currency and which have the effect that the foreign exchange risk is borne by the borrower, is satisfied where the seller or supplier has provided the consumer with sufficient and accurate information to enable the average consumer, who is reasonably well informed and reasonably observant and circumspect, to understand the specific functioning of the financial mechanism in question and thus to evaluate the risk of potentially significant adverse economic consequences of such terms on his or her financial obligations throughout the term of the agreement.

    4) Directive 93/13 must be interpreted as precluding the burden of proving that a contractual term is plain and intelligible, for the purposes of Article 4(2) of that directive, from being borne by the consumer.

    5) Article 3(1) of Directive 93/13 must be interpreted as meaning that terms of a loan agreement which provide that the foreign currency is the account currency and the euro the settlement currency and which have the effect that the foreign exchange risk, without being subject to an upper limit, is borne by the borrower, are liable to cause a significant imbalance in the parties’ rights and obligations arising under that agreement, to the detriment of the consumer, where the seller or supplier could not reasonably expect, in compliance with the requirement of transparency in relation to the consumer, that the consumer would have agreed, in individual contract negotiations, to a disproportionate foreign exchange risk as a result of those terms.

  • Paragraphs referring to EU Charter

    29) In addition, the Court has stated that the obligation on the Member States to ensure the effectiveness of the rights that individuals derive from EU law, particularly the rights deriving from Directive 93/13, implies a requirement for effective judicial protection, also guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union, which applies, inter alia, to the definition of detailed procedural rules relating to actions based on such rights (see, to that effect, judgment of 31 May 2018, Sziber, C‑483/16EU:C:2018:367, paragraph 49 and the case-law cited).