Facts
The Polish dispute between the bank and consumers resulted from a debt agreement concluded in 2007 denominated in Swiss francs. In 2020, these consumers brought an action before the territory Court in Warsaw (the referring court), demanding reimbursement of all the amounts that they had paid to the bank under this credit agreement, citing the unfair nature of its terms concerning the conversion into gold amounts in CHF and vice versa, as well as the nullity of that agreement, which would consequence in the removal of those conditions. The Bank demanded that the action be dismissed due to the fact that those contractual terms were not unfair in its assessment, since they were not essential for the performance of the contract, i.e. the debt could be paid and repaid in CHF. The mention for a preliminary ruling concerns the possible unfair nature of the condition of this agreement, which takes into account the exchange rate difference in favour of the bank and transfers exchange rate risks to consumers.
TS Position
Transparency requirement
The referring court considered that the condition concerning the determination of the amount of the debt by which the bank reserved for itself an advantage linked to the exchange rate difference refers to the determination of the the main subject substance of the contract. However, the TS has acknowledged that this presumption seems justified insofar as the condition concerns the determination of the final amount of credit denominated in abroad currency, which determines the amount in fine, the scope of the consumer's work to pay ( TS judgement of 26.2.2015, Matei, C-143/13, Legalis, paragraph 67). However, the TS stated as regards the exchange rate difference as specified that the anticipation for the bank to usage the asymmetry existing between the different exchange rates that can be applied for performance purposes, cannot be automatically regarded as determining the main benefits under the credit agreement, which so characterises it, besides considering the request to carry out narrow interpretation Article 4(2) of Council Directive 93/13/EEC of 5.4.1993 on unfair terms in consumer contracts (OJ L 95, 29). The Court pointed out that it is for the referring court to carry out the essential verifications in this respect, even if it could not be considered that the condition on the basis of which the Bank reserved for itself an advantage relating to the exchange rate difference determines the main object of the contract within the meaning of Article 4(2) of Directive 93/13/EEC, that court should guarantee that that that condition satisfies the request laid down in Article 5 of Directive 93/13/EEC to express it in a simple and understandable language.
The Court held that Article 4(2) of Directive 93/13/EEC must be interpreted as meaning that if, in the context of a contract concluded with a consumer of credit denominated in a abroad currency covered by that contract, the condition results, first, in the transfer to that consumer of the exchange hazard associated with the appreciation of that currency to the national currency and, second, the granting to the bank, at the expense of the consumer, of the benefit of the difference between the exchange rate chosen by the bank for the intent of determining the final amount of credit denominated in that currency and the another rates that the bank may have applied on that occasion, it is adequate to state that the bank did not supply the consumer with any information relating to the consideration of that difference, regardless of the degree of the information provided to the consumer relating to the exchange rate risk.
Significant imbalance
The Court added that in this context, the referring court besides refers to the verification ‘Proportionality of the sanctions applicable to the trader‘, which may consequence from the uncovering of the unfair nature of the condition concerning the determination of the amount of the debt to the degree that it provides for an advantage to the Bank relating to the exchange rate difference. The referring court does not regulation out that, as in the case of the anticipation referred to in paragraph 44 of the judgement of 3.10.2019, Gubak, C-260/18, Legalis, the removal of specified a condition may lead to the annulment of the full contract and thus free consumers from the financial consequences of the transfer of exchange rate risks, although this condition, to the degree that the transfer was carried out, is not unfair. The referring court so besides appears to wonder whether specified a declaration of invalidity would be proportionate in the light of the limited economical effects of the exchange rate advantage.
The Court held that Article 3(1) of Directive 93/13/EEC must be interpreted as meaning that if, in the context of a contract concluded with a consumer for a credit denominated in a abroad currency covered by that contract, the condition results, first, in the transfer to that consumer of the exchange rate hazard associated with the appreciation of that currency vis-à-vis the national currency and, second, in the granting of an advantage to the bank related to the exchange rate difference, that condition, in so far as it relates to the exchange rate difference, may in itself consequence in a crucial imbalance resulting from the contract of rights and obligations to the detriment of the consumer, regardless of the examination of the possible unfair nature, within the meaning of that provision, of that condition, in so far as it relates to the exchange rate hazard transfer.
Cancellation
In the present case, the referring court is of the view that a condition for establishing the final amount of credit in CHF which that court considers to be the chief object of the contract within the meaning of Article 4(2) of Directive 93/13/EEC and to which the financial consequences of the transfer of exchange rate risks must besides be linked. In those circumstances, subject to any further verifications to be carried out, if necessary, by the referring court, the TS considers that it is not legally possible to keep the credit agreement in question after the removal of that condition, regardless of the unfair nature of another conditions specified as those determining the currency conversion for repayment.
The Court held that Article 6(1) of Directive 93/13/EEC should be interpreted as meaning that it does not preclude a contract of credit denominated in abroad currency concluded with the consumer and that the consumer is thus relieved of the financial consequences of the condition for the transfer of abroad exchange hazard covered by that contract. Where a national court finds that the condition covered by that contract concerning the determination of the final amount of credit, in so far as it results in the granting of an exchange rate advantage to the bank, is unfair. Even if the terms of that agreement determining how the currency is to be converted for the intent of repayment of the debt are not unfair or their removal would not entail the annulment of that contract if that court considers, in accordance with the provisions of its national law and by an nonsubjective approach, that the credit agreement cannot proceed to apply without a unfair condition, in peculiar due to the fact that that condition defines the main object of the contract.
Comment
In the present case concerning the rule of abusiness (see Article 3581 § 1 KC) the alleged franc credit was accepted by the Polish referring court to be different from the TS, since the provision of the CHF debt agreement at the same time took into account, in favour of the bank, the exchange rate difference which was not expressly provided for in that credit agreement, resulting from the application of the amount of credit to its own acquisition rate, and transferred the related exchange rate risks to consumers. The TS rightly accepted that in this case, too, its explanation of the provisions of Directive 93/13/EEC should be applied and based solely on the views already expressed in earlier case law, including in Polish cases. The Court so referred to an earlier position as to whether the disputed contractual condition was individually negotiated, to the conditions for compliance with the request of transparency, to the rules for examining the existence of crucial imbalances, and to the penalties applicable to the trader resulting from the conditions concerning exchange rate differences and exchange rate risks. This provision does not bring fresh content to the Court's earlier positions in this respect, but alternatively has an orderable value.
In view of the ongoing legal discourse, it is worth noting that, besides in this provision, the Court consistently maintains that it is not apparent from Directive 93/13/EEC that it is besides appropriate to establish the unfair nature of the condition relating to the transfer of exchange rate risks, regardless of the manner in which those conditions were actually formulated or interlinked in the context of the contractual structure. Especially due to the fact that these 2 conditions, given their different objectives and effects, must be clearly distinguished from each other.
