OTP Bank Nyrt. and OTP Faktoring Követeléskezelő Zrt v Teréz Ilyés and Emil Kiss.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Prechal
• ECLI: ECLI:EU:C:2018:750
• Docket Number: C-51/17
• Date: 20 September 2018
• Procedure Type: Reference for a preliminary ruling

Provisional text

JUDGMENT OF THE COURT (Second Chamber)

20 September 2018 (*)

(Reference for a preliminary ruling — Consumer protection — Unfair terms — Directive 93/13/EEC — Scope — Article 1(2) — Mandatory statutory or regulatory provisions — Article 3(1) — Concept of ‘contractual term which has not been individually negotiated’ — Term incorporated in the contract after its conclusion following the intervention of the national legislature — Article 4(2) — Plain and intelligible drafting of a term — Article 6(1) — Examination by the national court of its own motion as to whether a term is unfair — Loan contract denominated in a foreign currency concluded between a seller or supplier and a consumer)

In Case C‑51/17,

REQUEST for a preliminary ruling under Article 267 TFEU from the Fővárosi Ítélőtábla (Regional Court of Appeal, Budapest, Hungary), made by decision of 17 January 2017, received at the Court on 1 February 2017, in the proceedings

OTP Bank Nyrt.,

OTP Faktoring Követeléskezelő Zrt.

v

Teréz Ilyés,

Emil Kiss,

THE COURT (Second Chamber),

composed of M. Ilešič, President of the Chamber, A. Rosas, C. Toader, A. Prechal (Rapporteur) and E. Jarašiūnas, Judges,

Advocate General: E. Tanchev,

Registrar: I. Illéssy, Administrator,

having regard to the written procedure and further to the hearing on 22 February 2018,

after considering the observations submitted on behalf of:

– OTP Bank Nyrt. and OTP Faktoring Követeléskezelő Zrt., by A. Lendvai, ügyvéd,

– Ms Ilyés and Mr Kiss, by P. Dantesz, ügyvéd,

– the Hungarian Government, by M. Z. Fehér, acting as Agent,

– the Polish Government, by B. Majczyna, acting as Agent,

– the European Commission, by A. Tokár and A. Cleenewerck de Crayencour, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 3 May 2018,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Article 1(2), Article 3(1) and Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29), as well as point 1(i) of the annex thereto.

2 The request has been made in proceedings between OTP Bank Nyrt. and OTP Faktoring Követeléskezelő Zrt. (together, ‘OTP Bank’) and Ms Teréz Ilyés and Mr Emil Kiss (together, ‘the borrowers’) concerning an application for a declaration that certain terms in a loan contract denominated in Swiss francs (CHF), disbursed and repaid in Hungarian forints (HUF), are unfair.

Legal context

EU law

3 According to the thirteenth recital of Directive 93/13:

‘… the statutory or regulatory provisions of the Member States which directly or indirectly determine the terms of consumer contracts are presumed not to contain unfair terms; … therefore, it does not appear to be necessary to subject the terms which reflect mandatory statutory or regulatory provisions and the principles or provisions of international conventions to which the Member States or the [European Union] are party; … in that respect the wording “mandatory statutory or regulatory provisions” in Article 1(2) also covers rules which, according to the law, shall apply between the contracting parties provided that no other arrangements have been established’.

4 Article 1(2) of that directive provides:

‘The contractual terms which reflect mandatory statutory or regulatory provisions and the provisions or principles of international conventions to which the Member States or the [European Union] are party, particularly in the transport area, shall not be subject to the provisions of this Directive.’

5 Article 3 of that directive is worded as follows:

‘1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.

2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.

…

3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.’

6 Article 4 of the directive provides:

‘1. Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.

2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.’

7 Article 6(1) of Directive 93/13 provides:

‘Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.’

8 Article 7(1) of that directive is worded as follows:

‘Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.’

9 The annex to Directive 93/13, entitled ‘Terms referred to in Article 3(3)’, contains point 1(i), which is worded as follows:

‘Terms which have the object or effect of:

…

(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract’.

Hungarian law

The Law on credit institutions

10 Pursuant to Paragraph 203 of the hitelintézetekről és a pénzügyi vállalkozásokról szóló 1996. évi CXII. törvény (Law CXII of 1996 on credit institutions and financial undertakings, ‘the Law on credit institutions’):

‘1. The financial institution must inform both its current and potential customers, in a plain intelligible manner, of the conditions for using the services they provide, and the amendments to those conditions …

…

6. In the case of contracts concluded with retail customers granting a foreign currency loan or containing an option to purchase real property, the financial institution must explain to the customer the risk he bears in the contractual operation and the customer shall append his signature to confirm that he is aware thereof.’

Law DH 1

11 Paragraph 1(1) of the Kúriának a pénzügyi intézmények fogyasztói kölcsönszerződéseire vonatkozó jogegységi határozatával kapcsolatos egyes kérdések rendezéséről szóló 2014. évi XXXVIII. törvény (Law XXXVIII of 2014 regulating specific matters relating to the decision of the Kúria (Supreme Court, Hungary) to safeguard the uniformity of the law concerning loan contracts concluded by financial institutions with consumers, ‘Law DH 1’) provides:

‘This Law shall apply to loan agreements concluded with consumers between 1 May 2004 and the date of entry into force of this Law. For the purposes of this Law, the concept of loan agreements concluded with consumers shall cover any foreign exchange based (linked to, or denominated in, a foreign currency and repaid in Hungarian forints) or Hungarian forint based credit or loan agreement, or any financial leasing agreement, concluded between a financial institution and a consumer, if it incorporates standard contract terms or any contract term which has not been individually negotiated for the purposes of Paragraph 3(1) or Paragraph 4(1).’

12 Paragraph 3(1), (2) and (5) of that law provides that:

‘1. In loan agreements concluded with consumers, terms — with the exception of contractual terms which have been individually negotiated — pursuant to which the financial institution stipulates that, for the purpose of paying out the amount of finance granted for purchase of the subject of the loan or financial leasing, the buying rate is to apply, and that, for the purpose of repayment of the debt, the selling rate, or a different exchange rate from that set when the loan was paid out, is to apply, shall be void.

2. Instead of the void term referred to in subparagraph 1 — without prejudice to subparagraph 3 — the official exchange rate set by the National Bank for the foreign currency concerned shall apply in relation to the disbursement and the repayment of the loan (including payment of the instalments and all the costs, fees and commissions expressed in foreign currencies).

...

5. The financial institution must clear accounts with the consumer in accordance with the provisions of a special law.’

13 Paragraph 4 of that law provides:

‘1. In the case of loan agreements concluded with consumers which include the right to amend the contract unilaterally, the terms of that contract — with the exception of those that have been negotiated individually — which permit the unilateral increase of the interest rate or the unilateral increase of costs and commissions shall be deemed to be unfair …

2. A contractual term as referred to in subparagraph 1 shall be void if the credit institution has not … commenced civil proceedings or if the court has dismissed the action or discontinued the examination of the case, unless it is possible to bring the proceedings …, in respect of the contractual term, but those proceedings have not been commenced or, if they have been commenced, the court has not found the contractual term to be void under subparagraph 2a.

2a. A contractual term as referred to in subparagraph 1 shall be void if a court has...