Joined Cases C‑70/17 and C‑179/17
Abanca Corporación Bancaria SA
v
Alberto García Salamanca Santos
and
Bankia SA
v
Alfonso Antonio Lau Mendoza
and
Verónica Yuliana Rodríguez Ramírez
(Requests for a preliminary ruling from the Tribunal Supremo and the Juzgado de Primera Instancia no 1 de Barcelona)
Judgment of the Court (Grand Chamber), 26March 2019
(Reference for a preliminary ruling— Consumer protection— Directive 93/13/EEC— Articles6 and 7— Unfair terms in consumer contracts— Accelerated repayment clause of a mortgage loan contract— Declaration that the clause is unfair in part— Powers of the national court when dealing with a term regarded as ‘unfair’— Replacement of the unfair term with a provision of national law)
Consumer protection— Unfair terms in consumer contracts— Directive93/13— Declaration that a clause is unfair in part— Scope— Maintaining the part of the term that is not unfair, entailing an amendment of its content— Not permissible— Replacement of an unfair term with a provision of national law by the national court— Lawfulness— Conditions
(Council Directive 93/13, Arts 6 and 7)
(see paragraphs48, 53, 54, 56-58, 60, 64, operative part)
Résumé
By its judgment of 26 March 2019 in Joined Cases Abanca Corporación Bancaria (C-70/17) and Bankia (C-179/17), the Court, sitting as the Grand Chamber, has given a ruling on the interpretation of Articles 6 and 7 of Directive 93/13 (1) on unfair terms in consumer contracts.
The disputes in the main proceedings concerned applicants who had concluded mortgage loan contracts in Spain which contained a clause making it possible to require the early termination of the contract, in particular in the event of failure to pay a single monthly instalment.
The referring courts sought a ruling from the Court as to whether, in essence, Articles6 and 7 of Directive 93/13 are to be interpreted as meaning that, where an early repayment clause of a mortgage loan contract is found to be unfair, it may nonetheless be maintained in part, with the elements which make it unfair removed, and, if not, whether mortgage enforcement proceedings initiated on the basis of that clause may nonetheless continue by means of the supplementary application of a rule of national law because the impossibility of availing of those proceedings could be contrary to consumers’ interests.
In that regard, the Court held that Articles6 and 7 of Directive 93/13 must be interpreted, first of all, as precluding an accelerated repayment clause of a mortgage loan contract that has been found to be unfair from being maintained in part, with the elements which make it unfair removed, where the removal of those elements would be tantamount to revising the content of that clause by altering its substance. Next, the Court held that those same articles do not preclude the national court from compensating for the invalidity of such an unfair term by replacing that term with the new wording of the legislative provision on which it was based, which is applicable where the parties to the contract so agree, provided that the mortgage loan contract in question cannot continue in existence if that unfair term is removed, and that it is established that the annulment of the contract in its entirety would expose the consumer to particularly unfavourable consequences.
In that context, it is true that the Court recalled that, where a national court finds that an unfair term in a contract concluded between a seller or supplier and a consumer is void, Article6(1) of Directive 93/13 must be interpreted as precluding a rule of national law which allows the national court to modify that contract by revising the content of that term. Thus, if it were open to the national court to revise the content of unfair terms included in such a contract, such a power would be liable to compromise attainment of the long-term objective of Article7 of Directive 93/13. That power would contribute to eliminating the dissuasive effect on sellers or suppliers of the straightforward non-application with regard to the consumer of those unfair terms, in so far as those sellers or suppliers would still be tempted to use those terms in the knowledge that, even if they were declared invalid, the contract could nevertheless be modified, to the extent necessary, by the national court in such a way as to safeguard the interest of those sellers or suppliers.
However, in a situation where a contract concluded between a seller or supplier and a consumer is not capable of continuing in existence following the removal of an unfair term, Article6(1) of Directive 93/13 does not preclude the national court from removing, in accordance with the principles of contract law, an unfair term and replacing it with a supplementary provision of national law in cases where the invalidity of the unfair term would require the court to annul the contract in its entirety, thereby exposing the consumer to particularly unfavourable consequences, so that the consumer would thus be penalised.
Such a substitution is fully justified in the light of the purpose of Directive 93/13. It is consistent with the objective of Article6(1) of Directive 93/13, since that provision is intended to substitute for the formal balance established by the contract between the rights and obligations of the parties real balance re-establishing equality between them, not to annul all contracts containing unfair terms.
If it was not permissible to replace an unfair term with a supplementary provision of national law, requiring the court to annul the contract in its entirety, the consumer might be exposed to particularly unfavourable consequences, so that the dissuasive effect resulting from the annulment of the contract could well be jeopardised. In general, the consequence of such an annulment with regard to a loan contract would be that the outstanding balance of the loan would become due forthwith, which would be likely to be in excess of the consumer’s financial capacities and, as a result, would tend to penalise the consumer rather than the lender who, as a consequence, might not be dissuaded from inserting such terms in its contracts.
For similar reasons, the Court holds that, in a situation where a mortgage loan contract concluded between a seller or supplier and a consumer is not capable of continuing in existence following the removal of an unfair term whose wording is based on a provision of legislation which is applicable where the parties to the contract so agree, Article6(1) of Directive 93/13 also does not preclude a national court from replacing that term, with a view to preventing that contract from becoming invalid, with the new wording of that reference provision, introduced after the conclusion of the contract, in so far as the annulment of the contract would expose the consumer to particularly unfavourable consequences.
It is for the referring courts to verify, in accordance with the rules of national law and adopting an objective approach, whether the removal of those terms would mean that the continued existence of the mortgage loan contracts is no longer possible.
In such a case, it will be for the referring courts to examine whether the annulment of the mortgage loan contracts at issue in the main proceedings would expose the consumers concerned to particularly unfavourable consequences. In that regard, the Court observes that it is apparent from the orders for reference that such an annulment could have effects, in particular, on the procedural requirements of national law pursuant to which the banks may obtain repayment from the consumers, in court, of the entirety of the outstanding amount of the loan.
1Council Directive 93/13/EEC of 5April 1993 on unfair terms in consumer contracts (OJ 1993 L95, p.29).