CJEU Case C-19/20/ Judgment

I.W. and R.W. v Bank BPH S.A.
Policy area
Consumers
Deciding body type
Court of Justice of the European Union
Deciding body
Court (Seventh Chamber)
Type
Decision
Decision date
29/04/2021
ECLI (European case law identifier)
ECLI:EU:C:2021:341

Carta dei diritti fondamentali dell’Unione europea

Title VI: Justice

Article 47 - Right to an effective remedy and to a fair trial

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  • CJEU Case C-19/20/ Judgment

    Key facts of the case:

    Reference for a preliminary ruling – Consumer protection – Directive 93/13/EEC – Unfair terms in consumer contracts – Effects of a finding that a term is unfair – Mortgage loan agreement denominated in a foreign currency – Determination of the exchange rate between currencies – Novation agreement – Deterrent effect – Obligations of the national court – Article 6(1), and Article 7(1).

     

    Outcome of the case:

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

    1. Article 6(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that it is for the national court to find that a term in a contract concluded between a seller or supplier and a consumer is unfair, even if it has been contractually amended by those parties. Such a finding leads to the restoration of the situation that the consumer would have been in in the absence of the term found to be unfair, except where the consumer, by means of amendment of the unfair term, has waived such restoration by free and informed consent, which it is for the national court to ascertain. However, it does not follow from that provision that a finding that the original term is unfair would, in principle, lead to annulment of the contract, since the amendment of that term made it possible to restore the balance between the obligations and rights of those parties arising under the contract and to remove the defect which vitiated it.
    2. Article 6(1) and Article 7(1) of Directive 93/13 must be interpreted as meaning that, first, they do not preclude the national court from removing only the unfair element of a term in a contract concluded between a seller or supplier and a consumer where the deterrent objective pursued by that directive is ensured by national legislative provisions governing the use of that term, provided that that element consists of a separate contractual obligation, capable of being subject to an individual examination of its unfair nature. Second, those provisions preclude the referring court from removing only the unfair element of a term in a contract concluded between a seller or supplier and a consumer where such removal would amount to revising the content of that term by altering its substance, which it is for that court to determine.
    3. Article 6(1) of Directive 93/13 must be interpreted as meaning that the consequences of a judicial finding that a term if a contract concluded between a seller or supplier and a consumer is unfair are covered by national law and the question of continuity of the contract should be assessed by the national court of its own motion in accordance with an objective approach on the basis of those provisions.
    4. Article 6(1) of Directive 93/13, read in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that it is for the national court, finding that a term in a contract concluded between a seller or supplier and a consumer, to inform the consumer, in the context of the national procedural rules after both parties have been heard, of the legal consequences entailed by annulment of the contract, irrespective of whether the consumer is represented by a professional representative.
  • Paragraphs referring to EU Charter

    33) In those circumstances, the Sąd Okręgowy w Gdańsku XV Wydział Cywilny (Regional Court, Gdańsk, XV Civil Division, Poland) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

    1. 'Must Article 3(1) and (2) in conjunction with Article 4(1) and Articles 6(1) and 7(1) of Council Directive 93/13 … be interpreted as meaning that the national court is obliged to declare that a term in a contract concluded with a consumer is unfair (within the meaning of Article 3(1) of the directive) including where, on the date of delivery of the judgment, as a result of an amendment to the contract made by the parties by way of an annex, that term has been amended such that it is no longer unfair and a finding that the term in its original wording was unfair may result in the annulment (invalidation) of the entire contract?
    2. Must Article 6(1), in conjunction with Article 3(1), the second sentence of Article 3(2) and Article 2 of Council Directive 93/13 … be interpreted as permitting a national court to find that only certain elements of a contract term relating to the exchange rate fixed by the bank for the currency to which the loan extended to the consumer is indexed (such as in the main proceedings) are unfair, namely, by eliminating the provision allowing the bank’s margin, which is a component of the exchange rate, to be determined unilaterally and in an unclear manner, where leaving an unambiguous provision referring to the average exchange rate announced by the central bank (the Narodowy Bank Polski – National Bank of Poland), which does not require the eliminated term to be replaced with any legal provision, … will result in real balance between the consumer and the trader being restored, although it will change the essence of the provision concerning the performance by the consumer of his obligation in a manner that is advantageous to him?
    3. Must Article 6(1) in conjunction with Article 7(1) of Council Directive 93/13 … be interpreted as meaning that, even if the national legislature has introduced measures to prevent the continued use of unfair contract terms, such as that at issue in the main proceedings, by introducing provisions which require banks to stipulate in detail the methods and time limits for determining the exchange rate on the basis of which the amount of credit and principal and interest payments are calculated, and the rules for converting amounts into the currency in which the loan was disbursed or is to be repaid, the public interest militates against the finding that only certain elements of the term in question are unfair in the manner described in Question 2?
    4. Should the annulment of the contract referred to in Article 6(1) of Council Directive 93/13/EEC, as a result of the exclusion of unfair terms as defined in Article 2(a) in conjunction with Article 3 of [that] directive, be understood as a sanction resulting from a constitutive court decision made at the express request of the consumer with consequences from the date of conclusion of the contract, that is to say, ex tunc, and do restitution claims by the consumer and the trader become due and payable upon the judgment becoming final?
    5. Must Article 6(1) of Council Directive 93/13 in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union of 30 March 2010 (OJ 2010 C 83, p. 389) be interpreted as imposing an obligation on the national court to inform a consumer who has requested that a contract be annulled in connection with the elimination of unfair terms of the legal consequences of such a judgment, including possible restitution claims by the trader (bank), even if such claims have not been raised in the proceedings in question, and also claims whose validity has not been clearly established, even if the consumer is represented by a professional legal representative?’

    ...

    91) By its fifth question, the referring court asks, in essence, whether Article 6(1) of Directive 93/13, read in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), must be interpreted as meaning that it is for the national court, on finding that a term of a contract concluded by a seller or supplier with a consumer is unfair, to inform the consumer of the legal consequences that the annulment of such a contract may entail, irrespective of whether the consumer is represented by a professional representative.

    92) In that regard, it follows from settled case-law that it is for the national court, which has found a term to be unfair and must draw the legal conclusions therefrom, to comply with the requirements of effective judicial protection of an individual’s rights under EU law, as guaranteed by Article 47 of the Charter. Among those requirements is the principle of audi alteram partem, as part of the rights of defence and which is binding on that court, in particular when it decides a dispute on a ground that it has identified of its own motion (judgment of 21 February 2013, Banif Plus Bank, C‑472/11, EU:C:2013:88, paragraph 29 and the case-law cited).

    ...

    99) In the light of all the foregoing considerations, the answer to the fifth question is that Article 6(1) of Directive 93/13, read in conjunction with Article 47 of the Charter of must be interpreted as meaning that it is for the national court, finding that a term in a contract concluded between a seller or supplier and a consumer is unfair, to inform the consumer, in the context of the national procedural rules, after both parties have been heard, of the legal consequences which annulment of the contract may entail, irrespective of whether the consumer is represented by a professional representative.