📋Contents
JUDGMENT OF THE COURT (Fourth Chamber)
of June 15, 2023 (*)
Reference for a preliminary ruling - Unfair terms in consumer contracts - Directive 93/13/EEC - Article 6(1) 1 and art. 7 section 1 – Mortgage loan indexed to a foreign currency – Conversion clauses – Determination of the exchange rate between this foreign currency and the domestic currency – Effects of finding the unfair nature of a term – Effects of recognizing the contract as invalid in its entirety – Possibility of pursuing claims beyond the refund of the amounts agreed in the contract and beyond payment default interest – Damage to the consumer – Inability to dispose of the amount of monthly installments transferred to the bank – Damage to the bank – Inability to dispose of the amount of capital transferred to the consumer – Deterrent effect of the prohibition on the use of unfair contract terms – Effective consumer protection – Judicial interpretation of national provisions
In case C‑520/21
relating to an application for issuance, pursuant to Art. 267 TFEU, preliminary ruling, submitted by the District Court for Warsaw-Śródmieście in Warsaw (Poland) by order of 12 August 2021, received by the Court on 24 August 2021, in the proceedings:
Arkadiusz Szcześniak
against
Bank M. SA,
with the participation of:
Commissioner for Human Rights,
Financial Ombudsman,
Prosecutor of the Warsaw-Śródmieście District Prosecutor's Office in Warsaw,
Chairman of the Polish Financial Supervision Authority,
COURT (Fourth Chamber),
composed of: C. Lycourgos, president of the chamber, LS Rossi, J.-C. Bonichot, S. Rodin (Rapporteur) and O. Spineanu-Matei, Judges,
Advocate General: AM Collins,
secretary: M. Siekierzyńska, administrator,
having regard to the written procedure and following the hearing on 12 October 2022
having considered the comments they have submitted:
– on behalf of Arkadiusz Szcześniak – R. Górski and P. Pląsk, legal advisors,
– on behalf of Bank M. SA – A. Cudna-Wagner, G. Marzec, legal advisors, B. Miąskiewicz and M. Minkiewicz, attorneys-at-law,
– on behalf of the Commissioner for Human Rights – M. Taborowski, Deputy Commissioner for Human Rights, B. Wojciechowska, legal advisor and G. Heleniak, attorney,
– on behalf of the Financial Ombudsman – B. Pretkel, Financial Ombudsman, supported by P. Tronowska and M. Obroślak, legal advisors,
– on behalf of the Prosecutor of the Warsaw-Śródmieście District Prosecutor's Office in Warsaw – M. Dejak, prosecutor delegated to the Regional Prosecutor's Office in Warsaw and M. Dubowski, District Prosecutor in Warsaw,
– on behalf of the Chairman of the Polish Financial Supervision Authority – J. Jastrzębski, Chairman of the Polish Financial Supervision Authority, K. Liberadzki and A. Tupaj-Cholewa, legal advisor,
– on behalf of the Polish Government – B. Majczyna and S. Żyrek, as attorneys-in-fact,
– the Portuguese Government – P. Barros da Costa, C. Chambel Alves, A. Cunha and S. Fernandes, as Agents,
– on behalf of the European Commission – N. Ruiz García and A. Szmytkowska, as Agents,
Having heard the opinion of the Advocate General at the meeting of 16 February 2023,
seems as follows
Judgment
The request for a preliminary ruling concerns the interpretation of Article 6(1) and Article 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 filed within the dispute between Arkadiusz Szcześniak (hereinafter "A.S.") and Bank M. S.A. concerning a claim for satisfaction of a claim arising from the use of money under a mortgage loan agreement, which should be considered invalid on the grounds that this agreement can no longer remain in force after the removal of its unfair terms.
Legal framework
Union law
3. Motives tenth and twenty-fourth of Directive 93/13 read as follows:
'more effective consumer protection can be achieved by adopting uniform legal standards on unfair terms; […]
[…]
"The courts and administrative authorities of the Member States must have at their disposal appropriate and effective measures to prevent the continued use of unfair terms in consumer contracts."
Article 6(1) of that directive shall read as follows:
"Member States shall provide that, under national law, unfair terms in contracts concluded by sellers or suppliers [traders] with consumers shall not be binding on the consumer and the remainder of the contract shall continue to bind the parties, where that is possible after the unfair terms have been excluded from the contract." ".
5. Article 7(1) of that directive states:
"In the interests of both consumers and competitors, Member States shall ensure that appropriate and effective measures are taken to prevent the continued use of unfair terms in contracts concluded by sellers or suppliers [traders] with consumers."
Polish recipes.
6. Article 5 of the Civil Code Act of 23 April 1964 (Journal of Laws of 1964, No. 16), in the version applicable to the dispute in the main proceedings (hereinafter referred to as the "Civil Code"), provides:
“You cannot use your right in a way that would be contrary to the socio-economic purpose of this right or to the principles of social coexistence. Such action or omission by the entitled person is not considered to be the exercise of the right and is not protected.
7. Article 222(1) of that code states:
"The owner may demand from the person who actually has possession of his thing that the thing be handed over to him, unless that person has an effective right to possess the thing in relation to the owner."
8. In accordance with Article 3581 §§ 1–4 of this code:
'§ 1. If the subject of the obligation is a sum of money from the moment it is created, the benefit is satisfied by payment of the nominal sum, unless specific provisions provide otherwise.
§ 2. The parties may stipulate in the contract that the amount of the monetary benefit will be determined according to a measure of value other than money.
§ 3. In the event of a significant change in the purchasing power of money after the obligation has arisen, the court may, after considering the interests of the parties, in accordance with the principles of social coexistence, change the amount or method of fulfilling the monetary benefit, even if it was established in a judgment or contract.
§ 4. A party running an enterprise may not request a change in the amount or method of fulfilling a monetary benefit if the benefit is related to running the enterprise.
Article 361 §§ 1 and 2 of this Code provides:
'§ 1. The person liable for compensation shall be liable only for the normal consequences of the act or omission from which the damage resulted.
§ 2. Within the above limits, in the absence of a different provision of the Act or contract provision, compensation for damage covers the losses that the injured party has suffered and the benefits that he could have achieved if the damage had not been caused to him.
Article 3851 §§ 1 and 2 of the said code reads as follows:
"§ 1. Provisions of a contract concluded with a consumer that have not been individually agreed are not binding on him if they shape his rights and obligations in a manner contrary to good practices and grossly violate his interests (prohibited contractual provisions). This does not apply to provisions specifying the main services of the parties, including price or remuneration, if they were formulated unambiguously.
§ 2. If the provision of the contract in accordance with § 1 is not binding on the consumer, the parties are bound by the contract in the remaining scope.
Article 405 of this code reads:
"Whoever obtains a material benefit at the expense of another person without a legal basis is obliged to deliver the benefit in kind, and if this is not possible, to refund its value."
Article 410, sections 1 and 2 of this code states:
"§ 1. The provisions of the preceding articles apply in particular to undue performance.
§ 2. A benefit is undue if the person who provided it was not obliged at all or was not obliged to the person to whom he provided it, or if the basis for the benefit was eliminated or the intended purpose of the benefit was not achieved, or if the legal act requiring the benefit was invalid and did not become valid after performance.
Main proceedings and question for a preliminary ruling
13. On 25 July 2008, A.S. and his spouse E.S. entered into a mortgage loan agreement (hereinafter referred to as the "mortgage loan agreement") with Bank M. for a period of 336 months, amounting to PLN 329,707.24 (approximately EUR 73,000), including interest at a variable interest rate. The terms of this agreement were not individually negotiated. The loan was indexed to the Swiss franc (CHF), and the agreement stipulated that the monthly loan instalments should be paid in Polish zlotys after conversion according to the selling rate of the Swiss franc from the foreign exchange rate table used by Bank M. on the day of payment of each instalment. Following the conclusion of an addendum to this agreement on 6 September 2011, A.S. and E.S. obtained the option to pay the monthly loan instalments directly in Swiss francs.
14. In the lawsuit filed on 31 May 2021, A.S. sought payment from Bank M. of the sum of PLN 3,660.76 (approximately EUR 800), plus statutory default interest from 8 June 2021 until the date of payment. In support of his claim, A.S. argued that the mortgage agreement contained unfair terms rendering it invalid, and consequently, Bank M. collected the monthly loan instalments without legal basis.
15. According to A.S., by using the amount of PLN 7,769.06 (approximately EUR 1,700) corresponding to monthly instalments paid between June 2011 and September 2011, during the period from 1 October 2011 to 31 December 2020, Bank M. obtained a benefit of PLN 7,321.51 (approximately EUR 1,600). Consequently, A.S. requested Bank M. to pay half of this amount, i.e. PLN 3,660.76 (approximately EUR 800), as the other half belongs to his spouse E.S., who is not a party to the main proceedings.
16. In response to the statement of claim, filed on 1 July 2021, Bank M. requested the dismissal of A.S.'s lawsuit, arguing that the mortgage agreement should not be declared invalid, as it did not contain unfair terms. In any event, should it be declared invalid, only Bank M., and not A.S., could claim payment for the use of capital without legal basis.
17. The District Court for Warsaw-Śródmieście in Warsaw (Poland), which is the referring court, indicated that A.S. is challenging the provisions contained in § 2(2) and § 7(1) of the mortgage loan agreement, according to which the loan capital and the monthly loan instalments are converted from Swiss francs to Polish zlotys and from Polish zlotys to Swiss francs using the exchange rate determined by Bank M. (so-called "conversion clauses").
18. This court clarifies, first, that currency clauses, such as those at issue in the main proceedings, are uniformly recognised by Polish courts as unfair terms and have been entered into the Register of Unfair Terms maintained by the President of the Office of Competition and Consumer Protection (Poland).
Secondly, the referring court points out that national case law is not yet unanimous on the effects of the presence of such unfair conversion clauses in a mortgage loan agreement. Nevertheless, since the Court delivered its judgment in Case Dziubak (C-260/18, EU:C:2019:819), that is to say, since 3 October 2019, the position that the inclusion of such clauses in a loan agreement renders the agreement void has been decidedly dominant in national case law.
20. With regard to the consequences of declaring a contract void under national law, the referring court explained that a contract declared void is considered to have never been entered into (void ab initio). Since the parties have performed certain obligations under that contract, they can claim them back as they are undue payments.
More precisely, the referring court explains that, on the one hand, the bank can claim from the borrower the repayment of the principal amount of the loan granted to them, and, on the other hand, the borrower can claim from the bank repayment of the value of the monthly loan instalments paid and the amounts charged by the bank. That court indicated that each party may also claim statutory default interest, due from the date the demand for payment was sent.
22. The referring court nevertheless points out that national case law is not consistent with regard to the question of whether the parties to a void loan agreement can claim, in addition to the amounts referred to in paragraph 21 of this judgment, payment of other sums for the use of money for a certain period without legal basis. The legal basis most frequently relied upon by parties in support of such claims is unjust enrichment and the recovery of undue performance.
23. In this court's opinion, the Court has not yet ruled on whether, in light of Directive 93/13, parties to a credit agreement deemed invalid can request reimbursement of amounts exceeding those paid by them under the agreement.
The referring court considers that no claim by the bank that goes beyond the repayment of capital paid to the consumer (and beyond the payment, where applicable, of statutory default interest from the date of the payment request) can be accepted, as this would undermine the objectives pursued by Directive 93/13. In the opinion of that court, since the nullity of the credit agreement results from the bank's conduct in having applied unfair terms, it is necessary to exclude that bank from benefiting from conduct that is contrary not only to Directive 93/13 but also to the requirements of good faith and fair dealing. Granting benefits to traders who have used unfair terms would also be contrary to the need to maintain the deterrent effect of the prohibition on the use of such terms provided for by Directive 93/13.
25. In this regard, the referring court's opinion is that adopting such a solution would lead to a consumer who has become aware of an unfair term preferring to continue performing the contract rather than enforcing their rights, because declaring the contract invalid could expose them to negative financial consequences, such as having to pay remuneration for the use of capital.
However, with regard to the consumer, the referring court notes that the possibility for them to claim payment of amounts exceeding the monthly instalments they have paid to the bank, and beyond any default interest at the statutory rate from the date of the demand for payment, costs, fees and insurance premiums, does not appear to be contrary to the principle of effectiveness.
However, in the opinion of this court, allowing consumers to demand payment from businesses for the use of monthly instalments without legal basis would impose a disproportionate penalty on businesses.
Furthermore, the referring court considers that the possible legal bases for such claims by consumers are very similar, and therefore it would not be justified to create the possibility of pursuing so many claims simultaneously without infringing the principle of proportionality. In the opinion of that court, granting such a possibility would also be contrary to the principle of legal certainty, which must be understood to mean that if a loan agreement is declared void in its entirety, both parties are obliged to return all monetary benefits paid in performance of that agreement, to the exclusion of all other claims.
29. In these circumstances, the District Court for Warsaw-Śródmieście in Warsaw decided to suspend the proceedings and to refer the following preliminary question to the Court:
"Is Art. 6 section 1 and art. 7 section 1 [of Directive 93/13], as well as the principles of effectiveness, legal certainty and proportionality, must be interpreted as precluding a judicial interpretation of national provisions according to which, where it is held that a credit agreement concluded by a bank and a consumer is initially invalid due to the inclusion of unfair contract terms, the parties, in addition to the refund of the money paid in the performance of this contract (bank - loan capital, consumer - installments, fees, commissions and insurance premiums) and statutory interest for delay from the moment of request for payment, may demand any other benefits, including receivables (in particular remuneration, compensation, reimbursement of costs or indexation of benefits) due to the fact that:
1. the recipient of the cash benefit was temporarily deprived of the ability to use his money, which resulted in him losing the opportunity to invest it and derive benefits from it,
2. the party making the monetary payment incurred the costs of servicing the loan agreement and transferring the money to the other party,
3. the recipient of the cash benefit benefited from being able to temporarily use other people's money, including investing it and thus obtaining benefits,
4. the recipient of the cash benefit was temporarily able to use other people's money free of charge, which would be impossible under market conditions,
5. the purchasing value of the money has decreased due to the passage of time, which means a real loss for the person making the monetary payment,
6. temporarily making money available for use may be treated as providing a service for which the person providing the cash benefit did not receive any remuneration.
Regarding the request to reopen the oral part of the procedure
30. Bank M., after the Advocate General had presented his Opinion, applied by letters lodged with the Court Registry on 10 March 2023 and 26 April 2023, for the oral part of the proceedings to be reopened, pursuant to Article 83 of the Rules of Procedure of the Court.
31. In support of its application, Bank M. submits, first, that the Advocate General's opinion, and in particular his remarks in points 17, 19, 28, 29, 61, 62 and 66, do not allow the scope of the claims of the trader and the consumer to be understood, which prevents the correct application of the principles of proportionality and effectiveness.
32. Secondly, Bank M. considers whether consumers who have taken out a mortgage in Poland would be in a more advantageous position than consumers who have taken out such a mortgage in another Member State, should they obtain the right to claim, in addition to the refund of monthly instalments and costs, other claims against the bank.
33. In the third instance, Bank M. criticises some of the observations made in the Advocate General's Opinion.
34. In the fourth and final part, Bank M. submits that the oral part of the proceedings should be reopened to enable the Court to clarify the impact of the judgment of 21 March 2023, Mercedes-Benz Group (Liability of manufacturers of vehicles equipped with prohibited devices) (C‑100/21, EU:C:2023:229), on the case in the main proceedings.
In this respect, it should be recalled, first, that the Statute of the Court of Justice of the European Union and the Rules of Procedure do not allow the parties concerned, within the meaning of Article 23 of that statute
Secondly, pursuant to the second paragraph of Article 252 TFEU, the Advocate General shall, in full impartiality and independence, publicly deliver a reasoned opinion on cases which, in accordance with the Statute of the Court of Justice of the European Union, require his or her involvement. The Court is not bound either by that opinion or by the reasoning on which the Advocate General bases his or her conclusions. Consequently, the fact that one of the parties concerned disagrees with the Advocate General's opinion, irrespective of any points raised in that opinion, cannot in itself justify the reopening of the oral part of the procedure [judgment of 21 March 2023, Mercedes-Benz Group (Liability of manufacturers of vehicles equipped with devices to reduce the effectiveness of pollution control devices), C-100/21, EU:C:2023:229, para 44 and the case-law cited].
It is true that, in accordance with Article 83 of the Rules of Procedure, the Court may at any time, after hearing the Opinion of the Advocate General, decide to reopen the oral part of the procedure, in particular if it considers that the circumstances of the case before it are not sufficiently clear, or if, after the closure of the oral part of the procedure, a party submits a new fact which may be decisive for the Court's ruling, or if the case is to be decided on the basis of an argument which has not been discussed by the parties referred to in Article 23 of the Statute of the Court of Justice of the European Union.
38. In this case, however, the Court finds that it has all the necessary information to deliver judgment and the grounds for deciding this case do not involve arguments that did not give rise to an exchange of views between the parties. Finally, neither of the requests to reopen the oral part of the proceedings, mentioned in paragraph 30 of this judgment, pointed to any new factual circumstance that could have a decisive impact on the ruling that the Court is to give in this case.
39. In these circumstances, the Court, having taken note of the Advocate General’s Opinion, considers that there is no need to order that the oral part of the procedure be reopened.
The question referred for a preliminary ruling
The admissibility of the question asked and jurisdiction of the Court to answer them
40. In the request for a preliminary ruling, the referring court raised the issue of the admissibility of the question it had referred to the Court, given that this question concerned both the consumer's claims and the bank's claims in the event that the mortgage agreement was declared void, whereas the court had been approached solely with the consumer's claim.
41. In this regard, it should be recalled that, within the framework of the cooperation established by Article 267 TFEU between the Court and national courts, it is for the national court before which the dispute has been brought and which must take responsibility for the judicial decision to be given, to assess, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to give judgment and the relevance of the questions which it submits to the Court. Consequently, if the questions asked relate to the interpretation of Union law, the Court is, in principle, required to give a ruling (judgment of 13 October 2022, Baltijas Starptautiskā Akadēmija and Stockholm School of Economics in Riga, C‑164/21 and C‑318/21, EU:C:2022:785, paragraphs 32 and the case-law cited).
This means that questions concerning Union law are presumed to be relevant to the case. The Court may decline to give a ruling on a preliminary question referred by a national court only if it is obvious that the interpretation of Union law sought has no connection with the realities or the subject matter of the main proceedings, or if the Court does not have the factual or legal information necessary to give a useful answer to the questions put to it, or if the problem is hypothetical (judgment of 13 October 2022, Baltijas Starptautiskā Akadēmija and Stockholm School of Economics in Riga, C‑164/21 and C‑318/21, EU:C:2022:785, para. 33 and the case law cited there).
43. As part of the preliminary question concerns claims by a trader against a consumer, whereas in this case, no claim to that effect was formulated by Bank M. on the date on which the request for a preliminary ruling was lodged, the referring court considers that the admissibility of that part of the preliminary question is justified, first and foremost, by the fact that the declaration of nullity of the contract *ex tunc* implies the restitution of undue payments made by each of the two contracting parties, and that consequently the answer to the whole of the preliminary question is necessary for it to give judgment on any pleas of the trader in opposition to the consumer’s claim.
44. In the second instance, the court informs the Court of Justice that, in accordance with the predominant interpretation in national case law, where both parties to a contract have performed unentitled performances of the same kind, and their performances arose from the same legal relationship, then only the party who received the performance to a greater extent may be considered to have been unjustly enriched. Consequently, in the case before the national court, that court is in any case obliged to examine the merits of the claims of both contracting parties.
Furthermore, at the hearing held before the Court on 12 October 2022, Bank M. informed the Court that it had commenced separate proceedings to seek compensation from A.S. for the unauthorised use of borrowed capital. However, these proceedings have been suspended pending the outcome of the present proceedings before the Court.
As the Advocate General observed in points 31 to 33 of his Opinion, this case does not fall within any of the situations referred to in point 42 of the present judgment in which the presumption of relevance of a question referred for a preliminary ruling may be rebutted. The explanations provided to the Court, which are summarised in points 43 to 46 of the present judgment, show that the interpretation of EU law sought, in so far as it relates to claims for compensation by a bank beyond reimbursement of the principal amount in the event of the invalidity of a mortgage loan agreement, is connected with the subject matter of the dispute in the main proceedings, inasmuch as the referring court may be required, in the present case, to examine such claims of its own motion. Furthermore, the Court has all the legal and factual information relating to the applicable legislation and case law which is necessary to give a useful answer to the question asked. Consequently, the question is admissible.
Furthermore, it should be recalled that the national court must inform the parties, within the framework of national procedural rules and in light of the principle of fairness in civil proceedings, in an objective and exhaustive manner, of the legal consequences that the removal of an unfair term may entail, irrespective of whether the parties are represented by a professional lawyer or not (judgment of 29 April 2021, Bank BPH, C-19/20, EU:C:2021:341, para. 97).