The full text of the historical judgment of the Court of Justice of the European Union (CJEU) of 15 June 2023 in case C-520/21 (Arkadiusz Szcześniak v Bank M. SA), which ultimately blocked banks' claims for remuneration for the unauthorised use of capital in franc-denominated loan cases.
Summary of the judgment
- Preliminary ruling on unfair terms in consumer contracts (Directive 93/13/EEC).
- The case concerns a mortgage indexed to the Swiss franc and conversion clauses.
- The Tribunal rules on the effects of declaring an agreement invalid and the possibility for banks to pursue claims beyond the return of the capital transferred.
Official document from the CJEU (C-520/21) in response to questions asked by the District Court for Warsaw-Śródmieście in Warsaw.
JUDGMENT OF THE COURT (Fourth Chamber) of 15 June 2023
In Case C-520/21, concerning a request for a preliminary ruling made by the District Court for Warsaw-Śródmieście in Warsaw, pursuant to Article 267 TFEU, in proceedings between: Arkadiusz Szcześniak against Bank M. SA, with the participation of, among others, the Commissioner for Human Rights, the Financial Ombudsman, the Polish Financial Supervision Authority.
Legal framework
Union law
In accordance with Directive 93/13/EEC, Member States provide that, under national law, unfair terms in contracts concluded between traders and consumers shall not be binding on the consumer, and the contract shall continue to bind the parties if it is capable of continuing in existence after exclusion of the unfair terms (Art. 6(1)).
Polish recipes
In accordance with Article 385[1], Section 1 of the Civil Code, clauses in a contract concluded with a consumer, which have not been individually agreed upon, shall not be binding on him if they shape his rights and obligations in a manner contrary to good morals, significantly infringing his interests (abusive contractual clauses). If the contract fails, the provisions on unjust enrichment (Articles 405 and 410 of the Civil Code) shall apply, among others.
Main proceedings and preliminary question
On 25 July 2008, A.S. and his spouse entered into a mortgage loan agreement with Bank M. which was indexed to CHF. The terms of this agreement were not individually negotiated (conversion clauses). The borrower sought the return of benefits resulting from the bank's use of his capital. The District Court indicated that Polish case law (following the Dziubak C-260/18 judgment) has established the view that such clauses lead to the nullity of the agreement from the outset.from the beginningThis gave rise to the problem of whether, in the event of such invalidity, the parties could demand any amounts from each other exceeding the pure restitution of payments (interest, remuneration, indexation).
Application for reopening of oral proceedings
Bank M., following the publication of the Advocate General's opinion, requested the reopening of the oral procedure (pursuant to Article 83 of the Rules of Procedure of the Court). It claimed a misunderstanding of the scope of its claims and challenged the Advocate General's opinion. The Court dismissed this request, recalling that the Court is not bound by the Advocate General's opinion, and that parties do not have the statutory right to debate with the Advocate General after the closure of the oral proceedings, unless entirely new facts emerge (which was not the case here).
Admissibility of the question and the Court's jurisdiction
The referring court wondered about the admissibility of its own question (as it also asked about the bank's potential claims for the use of capital, even though the bank had not yet formally filed a claim in the same matter against the consumer). The Court found the question admissible in its entirety, as the counterclaims were relevant for the overall settlement of the contract, and the bank had, in the meantime, already initiated separate court proceedings, which demonstrated the real and pressing nature of the issue.