Keywords: consumer protection; unfair trade practices; severability agreement.

Subject: Directive 93/13 / EEC of 5 April 1993 on unfair terms in consumer contracts.

Referring court: Juzgado de Primera Instancia nº 1 de Fuenlabrada (Spain)

Applicant: Bankia, S.A

Defendants: [..].

Date of request to resume the handling of the original request with the ECJ: February 21, 2017.

Date of original request: February 8, 2016.

Summary of the facts:

This matter had been suspended pending judgment in Case C-421/14 Banco Primus SA.  After the judgment (of 26-01-2017), the national court indicated to uphold its request for a preliminary ruling.

The applicant has made use of the special procedure it initiated in January 2000 for the foreclosure of its mortgage on defendants’ main residence. Like most foreclosures, it involved (unilateral) notice by the applicant, following defendants’s default. This case concerns the condition of advanced repayment.

The referring Spanish court (district court of Fuenlabrada) examines the possibility in Article 6.1 of Directive 93/13 to continue the agreement, without the unfair condition. He points to the doctrine of ‘essential components’, pursuant to which the unfair condition is not part of the main terms of the agreeement. He wonders whether the agreement can survive if, after deletion of the unfair condition, honouring the agreement would become unreasonably onerous for the seller. The ECJ held, inter alia in Case C-26/13 that “the provision (Article 6 of the Directive), according to established case-law, aims to replace the formal balance laid down in the agreement between the rights  and obligations of the parties with an real balance which restores the equality between them.” The court wonders whether Directive 93/13 is a lex perfecta (Ulpian), and what the consequences thereof are.  He doubts whether the agreement can continue. He cites a judgment of the Spanish Supreme Court which warns that overprotection of consumer protection may result in restricted consumer access to (mortgaged) loans.

The court then points to the possibility indicated by the ECJ (inter alia in Case C-26/13) for the national court to replace the unfair condition, if the continuation of the agreement is not possible. However, this is limited to cases in which the nullity of the unfair condition, would oblige the judge to annul the entire agreement  and thus would confront consumers with such consequences as to damage his interests. The court wonders whether continuation of the contract is possible after invalidation of the advanced repayment condtion. According to the court, this should depend on the reasonableness of the circumstances. Is the content of the agreement severable and what are the consequences for the balance between the respective obligations of the parties.

Finally, the national court wants to know whether the consumer can waive the protection regime of Directive 93/13. In Case C-243/08, the ECJ stated that the national court is not bound to disregard an unfair condition, if the consumer decides not to invoke the unfairness. In the case at hand, it concerns a right, so that in the opinion of the court the rule appplies that everyone is entitled to waive any provisions beneficial to him. The court points to Article 38 of the Charter (high level of consumer protection) and wonders whether the Spanish scheme is compatible with the Directive. In the notes to his request to resume the case, the court notes in particular the desirability of the Court to adhere to its case lawe, but to distinguish between the seller in good faith and the seller in bad faith in the enforcement of the Directive’s regime of non-binding terms.

Questions referred to the ECJ:

 1. Must Article 6, paragraph 1 of Directive 93/13 / EEC of 5 April 1993 on unfair terms in consumer contracts, be interpreted as meaning that a contract cannot survive without the unfair term, when the remaining content is unreasonably burdensome for the seller?
2. If a contract which is unreasonably onerous for the seller cannot survive, can the national court in order to protect the consumer, continue the contract by applying a provision of equity, or is he to supplement the agreement with a provision that is minimally acceptable for the seller?
3. Is it, in case of invalidity of a clause regarding advanced repayment, possible, because its unfairness, for the remainder of the contract to continue to exist within the meaning of Article 6, paragraph 1 of Directive 93/13?
4. Can the consumer forgo any protecton given under Directive 93/13 at the court hearing?

5. Is a national law on procedures which makes certain rights or benefits for the consumer dependent on the question of whether or not a speedy foreclosure takes place and which does not grant these rights and benefits in other procedures, compatible with the efficiency principle of Directive 93/13 and the Charter on the Fundamental Rights of the European Union?

Cited case law:

C-243/08 Pannon GSM; C-26/13 Kásler et Káslerné Rábai; C-8/14 BBVA; C-32/14 First Bank Hungary; C-110/14 Costea; C-169/14 Sánchez Morcillo en Abril García.


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