JUDGMENT OF THE COURT (Fourth Chamber)
of 15 June 2023(* Oh, my God *)
References for a preliminary ruling — Unfair terms in consumer contracts — Directive 93/13/EEC – Articles 6(1) and 7(1) – abroad currency-indexed mortgage — Conversion clauses — Determination of the exchange rate between that abroad currency and the national currency — Effects of establishing the unfair nature of the condition – Effects of considering the contract as invalid in its entirety – chance to prosecute claims going beyond the amounts agreed in the contract and beyond the payment of interest for late payment – failure on the consumer side – Failure to dispose of the amount of monthly instalments transferred to the bank – failure on the bank – Failure to dispose of the amount of capital provided to the consumer – Repellent effect of ban on unfair contractual terms – Effective consumer protection – Judicial explanation of national legislation
In Case C-520/21
having applied for a preliminary ruling under Article 267 TFEU by the territory Court for Warsaw-Śródmieście in Warsaw (Poland) by decision of 12 August 2021, received at the Court on 24 August 2021, in the proceedings:
Arkadius Szczeniak
v
Bank M. SA,
with:
the Ombudsman,
the Financial Ombudsman,
Prosecutor of the Warsaw-Śródmieście territory Attorney's Office in Warsaw,
the president of the Financial Supervision Commission,
THE COURT (Fourth Chamber),
composed of C. Lycourgos, president of the Chamber, L.S. Rossi, J.-C. Bonichot, S. Rodin (rapporteur) and O. Spineanu-Matei, Judges,
Advocate General: A.M. Collins,
Secretary: M. Siekierzynska, Administrator,
Having respect to the written phase of the proceedings and following the proceeding on 12 October 2022,
Having considered the comments they made:
– on behalf of Arkadiusz Szcześniak – R. Górski and P. Pląska, legal advisers,
– on behalf of Bank M. SA – A. Cuda-Wagner, G. March, legal advisers, B. Miąskiewicz and M. Minkiewicz, lawyers,
– on behalf of the Ombudsman – M. Taborowski, Deputy Ombudsman, B. Wojciechowska, legal advisor and G. Heleniak, attorney,
– on behalf of the Financial Ombudsman – B. Pretkiel, the Financial Ombudsman, which was supported by Mr Tronowska and Mr. Obrozak, legal advisers,
– on behalf of the Prosecutor of the territory Prosecutor's Office Warsaw-Śródmieście in Warsaw – M. Dejak, the prosecutor delegated to the Regional Prosecutor's Office in Warsaw and M. Dubowski, the territory lawyer in Warsaw,
– on behalf of the president of the Financial Supervision Commission – J. Jastrzębski, president of the Financial Supervision Commission, K. Liberadzki and A. Tupai-Cholewa, Legal Advisor,
– for the Polish Government – B. Majczyn and S. Żyrek, as Agents,
– for the Portuguese Government – P. Barros da Costa, C. Chamber Alves, A. Cunha and S. Fernandes, as Agents,
– the European Commission, N. Ruiz García and A. Szmytkowska, as Agents,
Having heard the Opinion of the Advocate General at the sitting on 16 February 2023,
issue the following
Judgment
1 The mention for a preliminary ruling concerns the explanation of Articles 6(1) and 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29) and the principles of effectiveness, legal certainty and proportionality.
2 This application was lodged in the context of a dispute between Arkadius Szcześniak (hereinafter referred to as ‘A.S.’) and Bank M. SA on an action for the satisfaction of a claim resulting from the usage of money under a mortgage credit agreement, which should be declared invalid due to the fact that that agreement cannot proceed to apply after unfair terms have been removed from it.
Legal framework
Union law
3 Recitals 10 and 24 of Directive 93/13 are worded as follows:
"more effective consumer protection can be achieved by adopting uniform legal standards on unfair conditions; ...
[...]
the courts and administrative authorities of the associate States must have appropriate and effective measures at their disposal to prevent the continued application of unfair terms in consumer contracts."
4 Article 6(1) of that Directive is worded as follows:
‘Member States shall supply that under national law unfair terms in contracts concluded by sellers or suppliers [traders] with consumers will not be binding on the consumer and that the contract will proceed to apply to the parties in the remainder if this is possible after unfair terms are excluded from it.’
5 Article 7(1) of that Directive provides:
"In the interests of consumers and competitors, associate States will guarantee appropriate and effective measures to prevent the continued application of unfair terms in contracts concluded by sellers or suppliers with consumers".
Polish recipes.
6 Article 5 of the Act of 23 April 1964. – The civilian Code (OJ 1964, No 16) in the version applicable to the dispute in the main proceedings (hereinafter ‘the civilian Code’) provides:
"It is not possible to make of its right of usage which would be contrary to the social and economical intent of that right or to the principles of social coexistence. specified action or omission of the rightholder shall not be regarded as exercise of the right and shall not enjoy protection.’
7 Article 222(1) of that Code provides:
‘The owner may require the individual who actually controls his or her thing to be issued to him, unless that individual has the power to regulation the thing effectively with respect to the owner.’
8 In accordance with Article 3581 1-4 of that code:
Ԥ 1. Where the subject of the work since its formation is simply a monetary sum, the performance of the benefit shall be effected by the payment of the nominal sum, unless otherwise specified in the peculiar provisions.
§ 2. The Parties may supply in the agreement that the amount of the cash benefit shall be determined according to a value measurement another than money.
§ 3. In the event of a crucial change in the purchasing power of money following the formation of an obligation, the court may, after considering the interests of the parties, in accordance with the principles of social coexistence, alter the amount or manner of the cash benefit, even if they are laid down in the judgement or contract.
§ 4. A organization operating an undertaking may not request a change in the amount or manner of the cash benefit if the benefit remains due to the operation of the undertaking.’
9 Article 361(1) and (2) of that Code provides:
Ԥ 1. The liability to compensation shall be liable only for the average consequences of the action or omission from which the harm occurred.
§ 2. Within the above limits, in the absence of a different provision of the law or contract, the compensation of the harm shall include the losses suffered by the injured individual and the benefits which he could have achieved if the harm had not been caused.’
10 Article 3851 The following wording shall be added to the code for 1 and 2:
Ԥ 1. The provisions of a contract concluded with a consumer not individually agreed do not bind him if they form his rights and obligations in a manner contrary to good manner, grossly affecting his interests (unauthorised contractual provisions). This does not apply to provisions specifying the main benefits of the parties, including the price or remuneration, erstwhile expressed in a unambiguous manner.
§ 2. If a provision of the contract pursuant to paragraph 1 does not bind the consumer, the parties shall be bound by the contract to the another extent.’
11 Article 405 of that Code reads:
‘Who, without a legal basis, has obtained a property benefit at the expense of another person, is obliged to grant an advantage in kind and, if that were not possible, to return its value.’
12 Article 410(1) and (2) of that Code provides:
Ԥ 1. The provisions of the preceding Articles shall apply in peculiar to undue benefits.
§ 2. The benefit shall be undue if the individual who has fulfilled it has not been obliged or has not been obliged at all to the individual to whom it has provided the benefit, or if the basis for the benefit has failed or the intended intent of the benefit has not been achieved, or if the legal act requiring the benefit is invalid and has not become valid after the performance of the benefit.’
Main proceedings and the question referred for a preliminary ruling
13 On 25 July 2008 A.S. and his spouse E.S. concluded a mortgage debt agreement with Bank M. for a period of 336 months, amounting to PLN 329 707.24 (PLN) (approximately EUR 73 000), together with interest at a variable interest rate (hereinafter referred to as the ‘mortgage debt agreement’). The terms of this agreement were not negotiated individually. The debt was indexed to the Swiss Franc (CHF), and the contract provided that monthly instalments of the debt should be paid in Polish zlotys after the Swiss Franc's exchange rate at the abroad exchange rate table applied by Bank M. on the date of payment of each instalment. Following the conclusion of an annex to that agreement, on 6 September 2011. A.S. and E.S. were given the chance to pay monthly debt instalments straight in Swiss francs.
14 In a suit lodged on 31 May 2021. A.S. requested Bank M. to pay PLN 3660,76 (about EUR 800), plus statutory interest on late payment from 8 June 2021 until the date of payment. In support of its action, A.S. claimed that the mortgage debt agreement contained unfair conditions causing it to be nullified and so Bank M. collected monthly instalments of the debt without a legal basis.
15 According to A.S., utilizing between 1 October 2011 and 31 December 2020 of the amount of PLN 7769,06 (approximately EUR 1700) corresponding to the monthly instalments paid between June 2011 and September 2011, Bank M. received an advantage of PLN 7321,51 (approximately EUR 1600). As a consequence, A.S. requested Bank M. to pay half of this amount, i.e. PLN 3660,76 (about EUR 800), as the another half falls to his spouse E.S., who is not a organization to the main proceedings.
16 In consequence to a suit lodged on 1 July 2021, Bank M. requested that A.S.’s action be dismissed, claiming that the mortgage credit agreement should not be considered invalid due to the fact that it did not contain unfair terms, and in any event, if it was to be declared invalid, it was only Bank M. and not A.S. that it would have been able to pay the capital claim without a legal basis.
17 The territory Court for Warsaw-Śródmieście in Warsaw (Poland), which is the referring court, pointed out that A.S. contests the provisions of § 2(2) and § 7(1) of the mortgage credit agreement, according to which the credit capital and monthly instalments of the debt are converted from Swiss francs to Polish and Polish zlotys into Swiss francs utilizing the exchange rate established by Bank M. (the alleged "recalculation clauses").
18 This court first explains that conversion clauses specified as those in dispute in the main proceedings are uniformly regarded by the Polish courts as unlawful contractual provisions and that they have been entered in the registry of prohibited clauses conducted by the president of the Office for Competition and Consumer Protection (Poland).
19 Secondly, the referring court points out that national jurisprudence is not yet unanimous on the effects of specified unfair conversion clauses in the mortgage credit agreement. However, erstwhile the Court has delivered its judgement in Dziubak (C-260/18, EU:C:2019:819), that is to say, as of 3 October 2019, the national jurisprudence powerfully predominates the position that the conclusion of specified provisions in the credit agreement renders that contract invalid.
20 With respect to the effects of the uncovering that the contract is invalid under national law, the referring court has explained that an agreement which has been declared invalid is considered never to have been concluded (ex tunc nullity). Since the parties have performed certain benefits on the basis of this contract, they may request reimbursement due to the fact that they are undue benefits.
21 More specifically, the referring court explains that the bank may, on the 1 hand, require the borrower to reimburse the amount of the chief debt that has been granted to it and, on the another hand, the borrower may recover from the bank the equivalent of the monthly instalments paid and the claims received by the bank. The Court of First Instance indicated that each organization may besides request payment of the statutory interest due from the date on which the announcement was sent.
22 However, the referring court points out that national jurisprudence is not uniform with respect to whether parties to an invalid credit agreement may request, in addition to the payment of the amounts mentioned in paragraph 21 of this judgment, the payment of another amounts for the usage of cash for a certain period without a legal basis. The legal basis most frequently invoked by the parties in support of specified claims is the unwarranted enrichment and reimbursement of the undue benefit.
23 According to that court, the Court has not yet expressed its views on the possibility, in the light of Directive 93/13, of the parties to a credit agreement deemed invalid to reimburse amounts exceeding those paid by them in the performance of that contract.
24 The referring court considers that no request from the bank which would go beyond the return on capital paid to the consumer (and, in addition to payment, in the case in question, of interest on late payment at the statutory rate from the date of the call for payment) cannot be accepted, since otherwise there would be a breach of the objectives pursued by Directive 93/13. According to that court, since the nullity of the credit agreement is due to the conduct of a bank which has applied unfair conditions, it must be excluded that the bank benefits from its conduct, which is contrary not only to Directive 93/13 but besides to the requirements of good religion and good manners. It would besides be contrary to the request to keep the dissuasive effect of the prohibition of specified conditions provided for in Directive 93/13.
25 Consequently, in the view of the referring court, the adoption of specified a solution would lead to a consumer who had learned of the existence of a unfair condition preferring to proceed the performance of the contract alternatively than to exercise his rights, since the nullity of the contract could exposure him to negative financial consequences, specified as the payment of remuneration for the usage of capital.
26 In contrast, in relation to the consumer, the referring court notes that the anticipation for the consumer to claim payment of amounts exceeding the monthly instalments which he has paid to the bank and, if any, interest on late payment at the statutory rate from the time of the call for payment, costs, commissions and insurance premiums does not appear to be contrary to the rule of effectiveness.
27 However, according to that court, allowing consumers to pay specified amounts without a legal basis for the amount of monthly instalments would mean imposing disproportionate sanctions on traders.
28 In addition, the referring court considers that the legal basis for specified requests from consumers is very similar, and it would so not be reasonable to supply for the anticipation to prosecute so many claims simultaneously without violating the rule of proportionality. According to that court, the granting of specified an option would besides be contrary to the rule of legal certainty, which should be understood to mean that, if the debt agreement is declared invalid in its entirety, both parties are obliged to reimburse all the cash benefits fulfilled in the performance of the contract, excluding any another claims.
29 In these circumstances, the Warsaw-Śródmieście territory Court decided to suspend proceedings and to mention the following question to the Court for a preliminary ruling:
‘Is Articles 6(1) and 7(1) of [Directive 93/13], as well as the principles of effectiveness, legal certainty and proportionality, to be interpreted as precluding the judicial explanation of national rules that, where a credit agreement concluded by a bank and a consumer is deemed to be invalid from the outset due to unfair contractual terms, the organization must, in addition to the reimbursement of the money paid in the performance of the contract (bank — credit capital, consumer — instalments, fees, commissions and insurance premiums) and the statutory interest for late payment from the time of the call for payment, besides be entitled to any another benefits, including charges (in peculiar compensation, compensation, reimbursement of costs or valorisation of the benefit) on the grounds that:
1. fulfilling a cash benefit has been temporarily deprived of its ability to usage its money, thus losing its ability to invest and get its benefits,
2. the cash benefit supplier incurred the costs of operating the credit agreement and transferring the money to the another party,
3. the recipient of the cash benefit was that he could temporarily usage another people's money, including his investments, and thus get benefits,
4. the recipient of a temporary cash benefit had the anticipation to usage another people's money free of charge, which would be impossible under marketplace conditions,
5. the acquisition value of the money has fallen due to the passage of time, which means a real failure to the individual who performs the cash benefit,
6. temporary release of the money for usage may be treated as a service for which a cash-providing service has not been paid."
The request to reopen the oral phase of the procedure
30 Bank M., after the Advocate General’s Opinion, by letters lodged at the Registry of the Court of Justice on 10 March 2023 and 26 April 2023, requested the beginning of the oral part of the proceedings again under Article 83 of the Rules of Procedure of the Court of Justice.
31 In support of its request, Bank M. first argues that the Opinion of the Advocate General, and in peculiar its observations in points 17, 19, 28, 29, 61, 62 and 66, does not let the scope of the claims of the trader and the consumer to be understood, thus preventing the correct application of the principles of proportionality and effectiveness.
32 In the second place, Bank M. wonders whether consumers who have taken out a mortgage in Poland will find themselves in a more favourable situation than consumers who have taken out specified a debt in another associate State if they have obtained the right to seek, in addition to reimbursement of monthly instalments and costs, another claims against the bank.
33 Third, Bank M. criticises any of the comments made in the Advocate General’s Opinion.
34 In the 4th and final order, Bank M submits that the oral phase of the procedure should be reopened in order to enable the Court to clarify the impact of the judgement of 21 March 2023, Mercedes-Benz Group (Responsibility of manufacturers of vehicles equipped with performance limitation devices) (C-100/21, EU:C:2023:229), to the main proceedings.
35 In that regard, it should be recalled, firstly, that the Statute of the Court of Justice of the European Union and the Rules of Procedure do not give the curious parties referred to in Article 23 of that Statute the chance to submit observations in consequence to the Opinion of the Advocate General [judgment of 21 March 2023], Mercedes-Benz Group (Responsibility of manufacturers of vehicles equipped with performance limitation devices), C-100/21, EU:C:2023:229, paragraph 43 and the caselaw cited there).
36 Secondly, pursuant to the second paragraph of Article 252 TFEU, the Advocate General shall publically supply a reasoned opinion on matters which, in accordance with the Statute of the Court of Justice of the European Union, require his involvement. The Court is neither bound by that opinion nor by the grounds on which the Advocate General comes to the conclusions of the Opinion. Consequently, the fact that 1 curious organization disagrees with the Opinion of the Advocate General, irrespective of the points raised in that Opinion, cannot in itself justify the beginning of the oral phase of the proceedings again [judgment of 21 March 2023], Mercedes-Benz Group (Responsibility of manufacturers of vehicles equipped with performance limitation devices), C-100/21, EU:C:2023:229, paragraph 44 and the caselaw cited there).
37 It is actual that in accordance with Article 83 of the Rules of Procedure The Court may, at any time after proceeding the Advocate General’s position, decide to reopen the oral part of the proceedings, in peculiar if it considers that the circumstances before it are not sufficiently clarified, or if, after the oral part of the proceedings has been closed, the organization has submitted a fresh fact which may be decisive for the decision of the Court, or if the case is to be settled on the basis of an argument which has not been discussed between the parties afraid referred to in Article 23 of the Statute of the Court of Justice of the European Union.
38 However, in the present case, the Court finds that it has all the information essential for its judgement and that the grounds for the ruling in the present case do not constitute arguments which have not been discussed between the parties concerned. Finally, in both applications for the reopening of the oral phase of the procedure referred to in paragraph 30 of this judgment, no fresh facts which may have a decisive effect on the decision to be taken by the Court in that case were identified.
39 In these circumstances, the Court finds, after proceeding the Advocate General’s position, that there is no request to order the beginning of the oral part of the procedure to be resumed.
The question referred for a preliminary ruling
The admissibility of the question put and the jurisdiction of the Court to answer it
40 In its application for a preliminary ruling, the referring court raised the question of the admissibility of the question which it referred to the Court, since the question concerns both the claims of the consumer and the claims of the bank in the event that the mortgage credit agreement was declared invalid, whereas the court was asked only by the consumer.
41 In that regard, it should be recalled that, within the framework of the cooperation between the Court and the national courts laid down in Article 267 TFEU, only to the national court before which the dispute has been brought and which should presume work for the court ruling to be brought, it is essential to assess, in the light of the peculiar circumstances of the case, both the request for a preliminary ruling in order for the national court to be able to issue its judgement and the relevance to the substance of questions raised to the Court. Therefore, where the questions raised concern the explanation of Union law, The Court is in rule obliged to give a judgement (judgment of 13 October 2022, EU: C:2022:785, paragraph 32 and the caselaw cited therein.
42 This means that questions concerning Union law benefit from the presumption of relevance to the case. The Court’s refusal to give a ruling on a question referred by a national court is only possible if it is clear that the explanation of Union law requested has no bearing on the facts or on the subject of the main proceedings where the Court does not have the information as to the factual or legal facts essential to supply a useful answer to the questions raised to it or where the problem is hypothetical (judgment of 13 October 2022, The amount of assigned gross in accordance with Article 21(3) of the Financial Regulation is estimated at EUR 500000.
43 Since, in the present case, part of the question referred for a preliminary ruling concerns the trader’s claims against the consumer, whereas in the present case, on the date on which the application for a preliminary ruling was lodged, no request has been made by Bank M. The referring court takes the view that the admissibility of that part of the question is justified in the first instance by the fact that the designation of the contract as invalid ex tunc means the reimbursement of the undue benefits performed by each of the 2 contractors, and so the answer to the full question referred is essential for him to give a ruling on any objections made by the trader in order to argue the consumer’s request.
44 Second, that court informs the Court that, according to a dominant explanation in national jurisprudence, if both parties to the contract have fulfilled an undue benefit of the same kind and their benefits have resulted from the same legal relationship, only the organization who has obtained a greater benefit may be regarded as unduly enriched. Consequently, in the main proceedings, that court is in any event obliged to examine the merits of both counterparties’ claims.
45 In the 3rd and final order, that court considers that the failure to answer the question for a preliminary ruling would in its entirety have a negative effect on the dissuasive effect of Directive 93/13, as banks operating in Poland are publically threatening consumers with serious consequences if they decide to keep their claim to consider mortgage credit agreements as invalid, given that these traders will claim against consumers for uncontractual usage of capital.
46 Moreover, at a proceeding held before the Court on 12 October 2022, Bank M. informed the Court that it had initiated a separate procedure to get compensation from A.S. for the uncontractual usage of the capital borrowed. However, the proceedings were suspended until the conclusion of the present proceedings before the Court.
47 As the Advocate General pointed out in paragraphs 31 to 33 of his Opinion, the present case is not covered by any of the situations mentioned in paragraph 42 of this judgement in which the presumption of relevance for a question referred for a preliminary ruling may be overturned. It follows from the explanations provided to the Court, as summarised in paragraphs 43 to 46 of this judgment, that the explanation of Union law requested, in so far as it concerns claims by the bank for compensation beyond the reimbursement of the chief amount in the event of the annulment of the mortgage credit agreement, is related to the subject of the dispute in the main proceedings, since the referring court may be required, in the case in question of its own motion, to examine specified claims. Moreover, the Court has the information on the legal and factual situation essential to supply a useful answer to the question. Consequently, the question raised is acceptable.
48 Furthermore, it should be recalled that the national court must indicate to the parties, within the framework of national procedural standards and in the light of the rule of fairness in civilian proceedings, in an nonsubjective and exhaustive manner, the legal effects which the removal of the unfair condition may entail, whether the parties are represented by a professional typical or not (judgment of 29 April 2021, Bank BPH, C-19/20, EU:C:20201:341, paragraph 97).
49 specified information is peculiarly applicable erstwhile the failure to apply a unfair condition may lead to the annulment of the full contract, possibly exposing the consumer to restitution claims (see, to that effect, judgement of 29 April 2021, Bank BPH, C-19/20, EU:C:20201:341, paragraph 98).
50 In the present case, it follows from the file of the case at the Court’s disposal that the dispute before the referring court concerns precisely the legal effects which may entail the designation of a mortgage credit agreement as invalid in its entirety due to the fact that that agreement cannot proceed to apply after the unfair terms have been removed, and so the answer to part of the question referred for a preliminary ruling, which concerns the trader’s claims against the consumer, is essential to enable the referring court to fulfil its work to inform A.S. of specified consequences.
51 Furthermore, Bank M stated that the Court is not competent to answer that question due to the fact that it relates to the effects of the uncovering that the contract is invalid, which are not governed by Directive 93/13, but by different national provisions, the explanation of which fall within the exclusive jurisdiction of the national courts.
52 In that regard, although it is not disputed that it is within the jurisdiction of the Court of Justice to make a mention in the context of the procedure for mention for a preliminary ruling on the explanation of national provisions or to regulation on the correctness of their explanation as interpreted by the referring court, since specified explanation falls within the exclusive jurisdiction of the national courts (see, to that effect, UniCredit Leasing, C-242/18, EU:C:2019:558, paragraph 47 and the caselaw cited therein), the question referred does not concern the explanation of Polish law but the explanation of Articles 6(1) and 7(1) of Directive 93/13, as well as the principles of effectiveness, legal certainty and proportionality, as stated by the Advocate General in paragraph 35 of the Opinion.
53 Consequently, the Court has jurisdiction to answer the question put forward and is admissible.
About the essence
Preliminary remarks
54 According to settled case law, the protection strategy established by Directive 93/13 is based on the presumption that the consumer is in a worse position than the trader, both in terms of negotiating capacity and in terms of the degree of information, and so agrees to the contractual terms previously drawn up by the entrepreneur on which the content cannot be affected (judgment of 26 March 2019, Abanca Corporación Bancaria and Bankia, C-70/17 and C-179/17, EU:C:2019:250, paragraph 49 and the caselaw cited).
55 In view of this disadvantage, Directive 93/13 requires associate States to establish a mechanics to guarantee that any contractual conditions which have not been negotiated individually can be reviewed for the intent of assessing their possible unfair nature. In this regard, it is for the national court to determine, taking into account the criteria set out in Articles 3(1) and 5 of Directive 93/13, whether, in the light of the circumstances of a peculiar case, the condition in question meets the requirements of good faith, balance and transparency laid down in that Directive (judgment of 26 March 2019, Abanca Corporate Bancaria and Bankia, C-70/17 and C-179/17, EU:C:2019:250, paragraph 50 and the caselaw cited therein).
56 In view of the nature and importance of the public interest of consumer protection, Directive 93/13 requires associate States, as is apparent from Article 7(1) in conjunction with recital 24 thereof, to guarantee appropriate and effective measures to prevent the continued application of unfair terms in contracts concluded by traders with consumers. To this end, the referring courts are obliged to waive the application of unfair terms of the contract, so that they do not, in the absence of any objection by the consumer, have the binding effects [judgment of 10 June 2021, BNP Paribas individual Finance, C-776/19 to C-782/19, EU:C:20201:470, paragraph 36 and the caselaw cited therein; and similarly, judgement of 8 September 2022, D.B.P. and Others (A mortgage credit denominated in abroad currency), C-80/21 to C-82/21, EU:2022:646, paragraph 58 and the caselaw cited therein].
57 The contractual condition found to be unfair should in rule be regarded as non-existent so as not to have effects on the consumer. Therefore, the judicial determination of the unfair nature of specified a condition should in rule have the effect of restoring the legal and factual situation of the consumer in which it would be in the absence of that condition (judgment of 21 December 2016, Gutiérrez Naranjo and Others, C-154/15, C-307/15 and C-308/15, EU:C:2016:980, paragraph 61).
58 In that regard, the Court explained that the work of the national court to retreat from the application of a unfair contractual condition requiring the payment of amounts which prove to be undue would, in principle, entail an appropriate restitution effect in respect of those amounts, since the absence of specified an effect could be detrimental to the deterrent effect that Article 6(1) of Directive 93/134/15, in conjunction with Article 7(1) of that Directive, intends to attribute the unfair nature of the conditions contained in contracts concluded by the trader with consumers (see, to that effect, Case C-154/15, C-307/15 and C-308/15, EU:C:2016:980, paragraphs 62, 63).
59 It should besides be recalled that Article 6(1) of Directive 93/13 requires associate States to supply that unfair conditions do not bind consumers ‘under national law’ (judgment of 21 December 2016, Gutiérrez Naranjo and Others, C-154/15, C-307/15 and C-308/15, EU:C:2016:980, paragraph 64 and the caselaw cited there).
60 However, the establishment by national law of a legal framework for protection guaranteed by Directive 93/13 cannot alter the scope and, therefore, the substance of that protection, thereby undermining the effectiveness of that protection by adopting uniform rules on unfair conditions, which were intended by the Union legislature, as indicated in recital 10 of Directive 93/13 (judgment of 21 December 2016, Gutiérrez Naranjo and Others, C-154/15, C-307/15 and C-308/15, EU:C:2016:980, paragraph 65).
61 Consequently, while it is for the associate States to determine, by national law, the conditions under which a uncovering of the unfair nature of the condition contained in the contract is made and where the circumstantial effects of that uncovering arise, specified a message should enable the restoration of the legal and factual situation in which the consumer would be in the absence of specified an unfair condition, justifying in peculiar the right to refund the advantage unduly acquired by the trader, to the detriment of the consumer, on the basis of that unfair condition (judgment of 21 December 2016, Gutiérrez Naranjo and Others, C-154/15, C-307/15 and C-308/15, EU:C:2016:980, paragraph 66).
62 The question referred for a preliminary ruling should be examined in the light of these considerations.
The question referred for a preliminary ruling
63 By means of the question referred for a preliminary ruling, the referring court seeks, in fact, to find whether, in the context of the designation of a mortgage credit agreement as invalid in its entirety, it cannot proceed to apply after it has been removed from unfair terms, Articles 6(1) and 7(1) of Directive 93/13 must be interpreted as meaning that:
– they preclude the judicial explanation of national law according to which the consumer is entitled to claim compensation from the credit institution beyond the reimbursement of monthly instalments and costs paid for the performance of that contract and beyond the payment of statutory interest for late payment from the date of the call for payment, and
– they preclude the judicial explanation of national law that a credit institution is entitled to claim compensation from the consumer beyond the repayment of the capital paid for the performance of that contract and beyond the payment of statutory interest for late payment from the date of the call for payment.
64 As the Advocate General pointed out in paragraph 44 of his Opinion, Directive 93/13 does not explicitly regulate the effect of the annulment of an agreement concluded between an entrepreneur and a consumer after it has removed unfair conditions. It is so for the associate States to find the effects of specified a statement, with the provisions laid down by them in this respect having to comply with Union law and in peculiar with the objectives of that Directive.
65 Moreover, as indicated in paragraph 57 of this judgment, a contractual condition considered to be ‘unfair’ must in rule be considered as never existing in order to prevent it from having effects on the consumer. Therefore, the judicial uncovering of the unfair nature of specified a condition should in rule consequence in the restoration of the legal and factual situation in which the consumer would be in the absence of specified a condition, justifying in peculiar the right to refund the advantage unduly acquired by the trader, to the detriment of the consumer, on the basis of that unfair condition (see, to that effect, the judgement of 31 March 2022, Lombard Lízing, C-472/20, EU:C:2022:242, paragraphs 50, 55 and the caselaw cited).
66 To the degree that, as is apparent from the caselaw cited in paragraph 58 of this judgment, the absence of specified an effect could affect the dissuasive effect that Article 6(1) of Directive 93/13, in conjunction with Article 7(1) of that Directive, intends to attribute to the uncovering that the conditions contained in the contracts concluded by the trader with consumers are unfair, a akin restitution effect should be recognised where the unfair nature of the terms of the contract concluded between the trader and the consumer causes not only the nullity of those conditions but besides the nullity of that agreement in its entirety.
67 Furthermore, Article 7(1) of Directive 93/13, in conjunction with recital 24, shows that the directive besides aims to discourage traders from utilizing unfair terms in consumer contracts.
68 It follows that the compliance with Union law with national rules governing the applicable consequences of the cancellation of a mortgage credit agreement due to unfair conditions depends on whether those provisions, firstly, let the legal and factual situation of the consumer in which it would be in the absence of that agreement, and secondly, do not jeopardise the implementation of the dissuasive effect envisaged in Directive 93/13.
69 In the present case, as regards first of all the anticipation for the consumer to seek, where a mortgage credit agreement is declared invalid, claims exceeding the reimbursement of the monthly instalments and costs paid for the performance of that contract, and, where appropriate, the payment of statutory interest on late payment from the date of the call for payment, shall not appear, subject to verification by the referring court, to undermine the objectives set out in paragraph 68 of this judgment.
70 In that regard, it is for the referring court to examine, in the light of all the circumstances before it, whether the applicable national government allows for the legal and factual restoration of the consumer situation in which he would be in the absence of that contract.
71 As regards the dissuasive effect pursued by Article 7(1) of Directive 93/13, it should be pointed out that the anticipation referred to in paragraph 69 of this judgement may lead to the discouragement of traders to include unfair conditions in contracts concluded with consumers, since the inclusion of specified conditions entailing the nullity of the contract in its entirety could entail financial consequences beyond the reimbursement of the amounts paid by the consumer and, where appropriate, interest on late payment.
72 It should be added that the adoption by the competent court of measures specified as those referred to in paragraph 69 of this judgement cannot be considered contrary to the rule of legal certainty since it constitutes a concrete implementation of the prohibition on the application of the unfair conditions provided for in Directive 93/13.
73 In addition, the rule of proportionality, which constitutes the general rule of Union law, requires that the national provisions implementing that law do not go beyond what is essential to accomplish the objectives pursued (see, to that effect, Case C-415/11 Aziz, EU:C:2013:164, paragraph 74; Case C-769/21 BTA Baltic Insurance Company, EU:C:2022:973, paragraph 34). Consequently, it is for the referring court to measure in the light of all the circumstances of the main proceedings whether and to what degree the consideration of consumer claims specified as those referred to in paragraph 69 of this judgement goes beyond what is essential in order to accomplish the objectives set out in paragraph 68 of this judgment.
74 It follows that, in the context of the designation of a mortgage credit agreement as invalid in its entirety due to the fact that that agreement cannot proceed to apply after the unfair terms contained therein have been removed, Directive 93/13 does not preclude the explanation of national law that the consumer is entitled to require compensation from the credit institution beyond the reimbursement of monthly instalments and costs paid for the performance of that contract and beyond the payment of statutory interest for late payment from the date of the call for payment, provided that the objectives of Directive 93/13 and the rule of proportionality are respected.
75 Secondly, as regards the trader’s claims on the consumer, it should be pointed out that, as in the case of the anticipation for the consumer to prosecute claims resulting from the annulment of the mortgage credit agreement, specified claims may only be admissible if they do not jeopardise the objectives set out in paragraph 68 of this judgment.
76 In the meantime, granting a credit institution the right to claim compensation from the consumer beyond the reimbursement of the capital paid in respect of the performance of that contract and beyond the payment, in the case in question, of interest on delay, could undermine the dissuasive effect pursued by Directive 93/13, as the Advocate General pointed out in paragraph 60 of the Opinion.
77 The Court has already had the chance to clarify in another context that, if the national court were to be able to alter the content of the unfair terms contained in specified agreements, that right could jeopardise the long-term nonsubjective laid down in Article 7 of Directive 93/13. This right would aid to destruct the deterrent effect on traders by simply not applying specified unfair conditions to consumers, since they would inactive be encouraged to apply those conditions, knowing that even if they were to be considered invalid, the agreement could be supplemented to the degree essential by the national court in order to warrant the interests of the traders afraid (judgment of 14 June 2012, Banco Español de Crédito, C-618/10, EU:C:2012:349, paragraph 69).
78 Similarly, the explanation of national law that a credit institution is entitled to claim compensation from the consumer beyond the reimbursement of the capital paid for the performance of that contract and thus the receipt of remuneration for the usage of that capital by the consumer would contribute to the elimination of the dissuasive effect on traders by declaring that contract invalid.
79 Moreover, the effectiveness of the protection afforded to consumers by Directive 93/13 would be jeopardised if they were exposed to the hazard of specified compensation as a consequence of their rights under that Directive. As the Advocate General pointed out in paragraph 61 of the Opinion, specified an explanation would endanger to make situations where it would be more beneficial for the consumer to proceed the implementation of an unfair contract than to exercise the rights it derives from that directive.
80 This reasoning cannot be called into question by Bank M.’s argument that, in the absence of the anticipation for traders to request compensation beyond the repayment of the capital paid for the performance of that contract and beyond the payment of interest on late payment, consumers would have obtained a ‘free’ credit. Nor can it be undermined by the argument of Bank M. and the president of the Financial Supervision Commission (Poland) that the stableness of financial markets would be jeopardised if banks could not request specified compensation from consumers.
81 In this regard, first, according to the nemo audit rule propriam turpitudin allegans (referring to its own wrongdoing will not be heard) neither must the organization benefit from its unlawful conduct nor be allowed to receive compensation for the inconvenience caused by it.
82 In the present case, as the Advocate General pointed out in paragraph 58 of his Opinion, the possible annulment of the mortgage credit agreement is the consequence of Bank M applying unfair terms. Consequently, it cannot get compensation for failure of profit akin to what it intended to accomplish from the contract.
83 Secondly, as the Advocate General pointed out in paragraph 63 of the Opinion, the argument on the stableness of financial markets is irrelevant in the context of the explanation of Directive 93/13, which aims to defend consumers. Furthermore, it is not possible for traders to be able to circumvent the objectives pursued by Directive 93/13 due to the stableness of financial markets. It is up to the banking institutions to organise their activities in a manner consistent with that Directive.
84 Consequently, in the context of the designation of a mortgage credit agreement as invalid in its entirety due to the fact that it cannot proceed to apply after the unfair terms contained therein have been removed, Directive 93/13 precludes the explanation of national law that a credit institution is entitled to claim compensation from a consumer beyond the return on capital paid in respect of the performance of that contract and in addition to the payment of statutory interest for late payment from the date of the call for payment.
85 In the light of all the above considerations, the answer to the question raised must be that, in the context of the designation of a mortgage credit agreement as invalid in its entirety due to the fact that it cannot proceed to apply after it has been removed from unfair terms, Articles 6(1) and 7(1) of Directive 93/13, it must be interpreted as meaning that:
– they do not preclude the judicial explanation of national law that the consumer is entitled to require compensation from the credit institution, beyond the reimbursement of monthly instalments and costs paid for the performance of that contract and beyond the payment of statutory interest on late payment from the date of the call for payment, provided that the objectives of Directive 93/13 and the rule of proportionality are respected, and
– they preclude the judicial explanation of national law that a credit institution is entitled to claim compensation from the consumer beyond the repayment of the capital paid for the performance of that contract and beyond the payment of statutory interest for late payment from the date of the call for payment.
Costs
86 For the parties in the main proceedings, the present proceedings are of a incidental nature and concern the question raised before the referring court, and it is so for the parties to decide on the costs. Costs incurred in submitting observations to the Court, another than those of the parties in the main proceedings, are not recoverable.
On those grounds, the Court (Fourth Chamber) hereby rules:
In the context of the designation of a mortgage credit agreement as invalid in its entirety due to the fact that it cannot proceed to apply after unfair terms have been removed from it,
Articles 6(1) and 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts
it must be interpreted as follows:
– they do not preclude the judicial explanation of national law that the consumer is entitled to require compensation from the credit institution, which goes beyond the reimbursement of monthly instalments and costs paid for the performance of that contract and the payment of statutory interest on late payment from the date of the call for payment, provided that the objectives of Directive 93/13 and the rule of proportionality are respected, and
– they preclude the judicial explanation of national law that a credit institution is entitled to claim compensation from the consumer in excess of the reimbursement of the capital paid for the performance of that contract and the payment of statutory interest on late payment from the date of the call for payment.
\A public sitting in Luxembourg was announced on 15 June 2023.
