Banco Santander SA v Mahamadou Demba and Mercedes Godoy Bonet and Rafael Ramón Escobedo Cortés v Banco de Sabadell SA.

• Jurisdiction: European Union
• Celex Number: 62016CJ0096
• ECLI: ECLI:EU:C:2018:643
• Docket Number: C-94/17,C-96/16
• Date: 07 August 2018
• Court: Court of Justice (European Union)
• Procedure Type: Cuestión prejudicial - sobreseimiento

JUDGMENT OF THE COURT (Fifth Chamber)

7 August 2018 ( *1 )

(Reference for a preliminary ruling — Directive 93/13/EEC — Unfair terms — Scope — Assignment of debts — Loan agreement concluded with a consumer — Criteria for assessing the unfairness of a contractual term setting the default interest rate — Consequences of that unfairness)

In Joined Cases C‑96/16 and C‑94/17,

REQUESTS for a preliminary ruling under Article 267 TFEU, from (i) the Juzgado de Primera Instancia No 38 de Barcelona (Court of First Instance No 38, Barcelona, Spain), made by decision of 2 February 2016, received at the Court on 17 February 2016; and (ii) the Tribunal Supremo (Supreme Court, Spain), made by decision of 22 February 2017, received at the Court on 23 February 2017, in the proceedings

Banco Santander SA

v

Mahamadou Demba,

Mercedes Godoy Bonet (C‑96/16),

and

Rafael Ramón Escobedo Cortés

v

Banco de Sabadell SA (C‑94/17),

THE COURT (Fifth Chamber),

composed of J.L. da Cruz Vilaça, President of the Chamber, A. Tizzano (Rapporteur), Vice-President of the Court, E. Levits, A. Borg Barthet and F. Biltgen, Judges,

Advocate General: N. Wahl,

Registrar: L. Carrasco Marco, Administrator,

having regard to the written procedure and further to the hearing on 10 January 2018,

after considering the observations submitted on behalf of:

– Banco Santander SA, by A.M. Rodríguez Conde and J.M. Rodríguez Cárcamo, abogados,

– Banco de Sabadell SA, by A.M. Rodríguez Conde and J.M. Rodríguez Cárcamo, abogados,

– the Spanish Government, by V. Ester Casas, acting as Agent,

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

– the European Commission, by J. Baquero Cruz, N. Ruiz García, M. van Beek and A. Cleenewerck de Crayencour, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 22 March 2018,

gives the following

Judgment

1 These requests for a preliminary ruling concern the interpretation of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).

2 The requests have been made in the course of proceedings between, in the first case, Banco Santander SA and Ms Mercedes Godoy Bonet and Mr Mahamadou Demba (C‑96/16); and, in the second case, Mr Rafael Ramón Escobedo Cortés and Banco de Sabadell SA (C‑94/17), concerning the enforcement of loan agreements concluded between those parties.

Legal context

European Union law

3 The 13th recital of Directive 93/13 states that: ‘Whereas 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; whereas, therefore, it does not appear to be necessary to subject [to this directive] the terms which reflect mandatory statutory or regulatory provisions …; whereas 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 of the directive provides: ‘1. The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer. 2. The contractual terms which reflect mandatory statutory or regulatory provisions … shall not be subject to the provisions of this Directive.’

5 Article 3(1) and (3) of the directive provides: ‘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. … 3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.’

6 Article 4(1) of the same directive is worded as follows: ‘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.’

7 Under Article 6(1) of Directive 93/13: ‘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 provides: ‘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 Article 8 of that directive provides: ‘Member States may adopt or retain the more stringent provisions compatible with the Treaty in the area covered by this Directive, to ensure a maximum degree of protection for the consumer.’

10 Point 1(e) of the Annex to Directive 93/13 includes in the list of contractual terms referred to in Article 3(3) thereof, those terms which have the object or effect of ‘requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation’.

Spanish law

Provisions relating to assignment of debts

11 Article 1535 du Código Civil (Civil Code), which governs the right of the debtor to buy back his debt in the event of the assignment of the claim, provides: ‘When a disputed debt is assigned, the debtor shall have the right to extinguish it by reimbursing to the assignee the price paid by the latter, any costs incurred by the assignee and interest on the price from the date on which it was paid. A debt shall be deemed to be disputed as soon as a claim for its payment, in legal proceedings, is contested. The debtor may exercise his right within nine days, running from the date on which the assignee claims payment from him.’

12 The substitution of the assignor by the assignee in court proceedings is governed by Articles 17 and 540 of Ley 1/2000 de Enjuiciamiento Civil (Law 1/2000 establishing the Civil Procedure Code) of 7 January 2000 (BOE No 7, of 8 January 2000, p. 575) (‘the Civil Procedure Code’), Article 17 being applicable to proceedings on the substance and Article 540 to enforcement proceedings.

Provisions relating to unfair terms

13 Article 82 of the texto refundido de la Ley General para la Defensa de los Consumidores y Usuarios y otras leyes complementarias (consolidated text of the General law for the protection of consumers and users and other supplementary laws), approved by Real Decreto Legislativo 1/2007 (Royal Legislative Decree 1/2007) of 16 November 2007 (BOE No 287 of 30 November 2007, p. 49181) (‘the LGDCU’), provides: ‘All terms not individually negotiated and all practices not expressly agreed to which, contrary to the requirement of good faith, cause a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer and user, shall be regarded as unfair terms.’

14 Under Article 85(6) of the LGDCU, ‘terms that require a consumer and user who fails to fulfil his obligations to pay a disproportionately high sum in compensation’ are considered unfair. That provision transposes the combined provisions of Article 3(1) and (3), together with point 1(e) of the Annex to Directive 93/13, whilst stating that, in Spanish law, the type of contractual term referred to in point 1(e) will always be considered unfair.

The case-law of the Tribunal Supremo (Supreme Court, Spain)

15 It is apparent from the order for reference in Case C‑94/17 that, in its judgments No 265/2015 of 22 April 2015, No 470/2015 of 7 September 2015 and No 469/2015 of 8 September 2015 (‘judgments of 22 April and 7 and 8 September 2015’), the Tribunal Supremo (Supreme Court) found that, in the absence of statutory requirements giving rise to clear rules for assessing the unfairness of non-negotiated terms defining the default interest rate in personal loan agreements concluded with consumers, the Spanish courts of first instance and of appeal were applying different criteria. This resulted in a great deal of legal uncertainty and an arbitrary difference in treatment between consumers depending on the court hearing the case. There was also a great degree of divergence in the determination of the consequences of the possible unfairness of those contractual terms.

16 Consequently, in order to bring an end to that situation of legal uncertainty and those disparities, the Tribunal Supremo (Supreme Court) deemed it necessary to define the criteria for assessing the unfairness of such contractual terms and determine those consequences.

17 To that end, the Tribunal Supremo (Supreme Court) noted, first, that in accordance with Article 85(6) of the LGDCU, terms which require a consumer who fails to fulfil his obligations to pay a disproportionately high sum in compensation are considered unfair. Secondly, it examined the national provisions applicable in the event of late payment on the part of the debtor in the absence of agreement between the parties in various...