Past claims by the bank

Facts

In 2007, 2 consumers concluded with Bank a credit agreement denominated in Swiss francs. In 2017, these consumers filed a complaint and then filed against Bank the action, claiming that the contract is invalid due to unfair conditions contained therein. By judgement of June 2023, the Court of First Instance found that the credit agreement was invalid, and ruled from Bank reimbursement of the amount corresponding to the full instalments paid by those consumers, plus statutory late interest. In December 2021. Bank He brought before the territory Court in Warsaw (referring court), an action in which he demanded that these consumers return the capital paid to him, plus statutory interest for the delay. And these consumers have requested that this action be dismissed, claiming that the claim Bank has passed a statute of limitations.

The referring court asked the following question for a preliminary ruling: ‘Is Article 7(1) of Council Directive 93/13/EEC of 5.4.1993 on unfair terms in consumer contracts (OJ L 1993 L. No. 95, p. 29) and the principles of effectiveness, proportionality, legal certainty and the right to court must be interpreted as precluding national rules which let the national court to take into account a limitation of the trader's claim against the consumer for the reimbursement of undue benefits under a contract which has become invalid due to unfair contractual terms in it, if the grounds for fairness or the rule of social coexistence so require?’

TS Position

According to the Court of Justice’s common case law, a uncovering of unfairness of specified a condition should in rule consequence restoring 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, the judgement of the TS of 15.6.2023, Bank M. (Results of declaring the agreement invalid), C-520/21, paragraph 65, Legalis. The Court stressed that this nonsubjective of restoring the legal and factual situation of the consumer in the absence of a unfair condition should be respected proportionality a general rule of Union law which requires that the national government implementing that law does not go beyond what is essential to accomplish the nonsubjective pursued. In the meantime, this rule of proportionality would be infringed, if restitutio in integrum was excluded for the trader. Thus, the work to repay, resulting from the annulment of a credit agreement containing unfair terms, should be reciprocal, however, the bank cannot claim compensation from the consumer beyond the return on capital paid in respect of the performance of the contract and beyond the payment of statutory interest on late payment, calculated from the date of the call for payment. Furthermore, the restitution effect linked to the annulment of a credit agreement containing unfair terms which justifies the bank’s request, according to the TS, allows the protection of rights guaranteed by the Union legal order to be safeguarded did not lead to unjust enrichment of the consumer.

In the present case, the referring court notes that the long duration of proceedings initiated by consumers in order to establish the annulment of the credit agreement and the reimbursement in Polish jurisprudence with respect to the impact of the removal of the unfair condition concerning exchange rate hazard in the credit agreement indexed to the abroad currency on the validity of that agreement in its entirety may lead to the violation of the right of the trader to a court. Therefore, in accordance with the rule of fairness in Article 117¹ KC may constitute exceptional circumstances allowing the court to include Bank the claim for recovery without considering the expiry of the limitation period for the claim of the bank. According to the Court in this context and in the light of the erstwhile case law the rule of fairness in Article 117¹ KC, to the degree that it avoids unjust enrichment, may not be declared as incompatible with Union law as such. The Court acknowledged that a priori the application of this rule of fairness could negatively affect the predictability of the situation and legal relations, as the debtor remains in uncertainty as to whether the trader's claim may, despite the expiry of the limitation period, be exceptionally regarded as unlimited. However, the rule of legal certainty cannot be interpreted as precluding a provision of national law according to which It is for the national court to balance the interests of the parties proceedings to take a decision, in exceptional circumstances and where justified, not to take account of the expiry of the limitation period. However, provided that this balance is achieved on the basis of nonsubjective criteria provided for in the Act which the national court must take into account, specified as in the present case, the dimension of the limitation period, the dimension of the period which expired from the expiry of the limitation period until the time of the claim, and the nature of the circumstances which led to the failure of the rightholder to comply, including the effect of the conduct of the rightholder on the hold of the claim.

The Court states that the application by the competent national court of the rule of fairness in the area of unfair contractual terms should be respected principles of effectivenessto the exercise of the rights conferred on the consumer by Directive 93/13 has not become unduly hard or practically impossible. The Court has already ruled that the procedural provisions which origin too advanced costs for the consumer, could lead to the fact that this consumer would be discouraged from taking part in proceedings to enable him to effectively defend his rights before the court before which the trader brought proceedings against him ( TS judgement of 7.4.2022), Caixabank, C-385/20, paragraph 54, Legalis). This is in peculiar the case where, in the context of an investigation by an entrepreneur of claims which have already been subject to limitation, the consumer is required to bear costs, specified as judicial costs or lawyer's fees, in so far as it could prevent or unduly impede the effective exercise of the rights conferred on him by Directive 93/13.

In conclusion, the TS held that Article 7(1) of Directive 93/13 and the rule of effectiveness, taking into account the right to a court and the principles of proportionality and legal certainty, should be interpreted as meaning that they do not preclude a provision of national law which allows the national court, in exceptional circumstances and where it so requires, to take account of the trader's claim for reimbursement of benefits paid to him under a credit agreement which is invalid due to unfair conditions contained therein, even if the time limit has expired for that trader to claim reimbursement of those benefits, provided that the court takes all essential measures to guarantee that the exercise of the rights conferred on the consumer by that directive is not unduly impeded or virtually impossible.

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