• The CJEU answered five preliminary questions posed by the District Court in Gdańsk.
• The Court's ruling validates the current case law adopted with regard to consumer cases.
• The Court held that national courts are responsible for proper establishment of the factual state and the application of national law.

The CJEU’s ruling of 29.04.2021 relates to five preliminary questions posed by the District Court of Gdańsk, which submitted a request for the issue of a ruling in one of the pending cases, C-19/20 Bank BPH, to the Court of Justice in December 2019.

The questions included:

1. Is a national court obliged to declare a contract illicit and consequently consider it null and void after the illicit provision has been modified by way of amendment accepted by the parties?

The CJEU allows for the modification of an illicit provision by way of an amendment to the consumer's contract, but notes that the consumer should be fully aware of a non-binding character of the illicit provision in question and the voluntariness of concluding the amendment, and the new provision must not be abusive. If, for example, the consumer signed the document unknowingly, the borrower would have the right to dispute it. According to the CJEU ruling, the customer should be clearly informed of what they are resigning from by amending their long-standing contract.

2. Is it possible for a domestic court to declare illicitness of only selected elements of a given contractual provision, which relates to the establishment of the exchange rate by the bank (i.e. the manner in which the bank determines margin), and declare the remaining part of the provision valid without eliminating the entire clause from the contract or replacing it with a discretionary rule?
3. Can the validity of the so-called Anti-spreading Act of 2011 affect the ruling on whether the contractual provisions are abusive in a way indicated in the second question?

The Court answered the second and the third question jointly. It held that part of a contractual provision can be found invalid only if its individual parts constitute separate contractual obligations. According to the President of UOKiK, when taking into account guidelines provided by the CJEU in this respect, it is not possible to divide the contractual provision into separate elements in the case under consideration, which indicates that the entire provision relating to the indexation clause should be deemed abusive.

4. If a contract is not in force as a result of a court ruling, will the related claims of the consumer and the trader become due when that ruling becomes valid?

According to the CJEU, the consequences of a court finding that a certain provision of a contract between a trader and a consumer is illicit are subject to national law, and the question of whether such a contract should remain in force must be assessed by a national court, in accordance with an objective approach based on national legislation. Therefore, the CJEU validated the position presented in the case law to date. In the CJEU's justification regarding the statute of limitation of a consumer's claim against a trader, the Court referred to its previous case law.

It is worth mentioning the recent ruling in case C-485/19 Profi Credit Slovakia. According to this ruling, a consumer's claim against a trader cannot be barred by limitation if the consumer is unaware of the abusive character of the clause and its consequence in the form of a claim for restitution.

5. If a consumer makes claims for the rescission of a contract arising from the illicit nature of contractual clauses, is the court obliged to inform the consumer of the consequences of ruling such rescission also with regard to possible claims of the trader, even if they have not been raised during the proceedings or their validity has not been clearly established?

The CJEU has reaffirmed its previous case law on the court's obligation to inform the consumer of the consequences of the contract invalidity. Moreover, the consumer may decide whether he or she wishes to be covered by protection arising from the consequences of applying abusive clauses in the contract. The Court also pointed out that the protection resulting from Directive 93/13/EC is objective.

It is worth noting that the CJEU did not directly address the issue of remuneration for the use of the principal, as this was not the question posed by the District Court in Gdańsk. The Court – in accordance with the scope of the question –  referred only to the issues the consumer should be informed of. However, based on the CJEU case law up to date, it is not possible to find that banks have a right to claim remuneration for the use of the principal in the event of a contract cancellation resulting from the bank's fault, i.e. in connection with the application of illicit provisions.

The CJEU’s ruling of 29.04.2021 will influence the jurisprudence of Polish courts, especially in cases concerning the Swiss franc debtors. The borrowers, banks and judges are also expecting the decision of seven judges of the Civil Chamber of the Supreme Court (III CZP 6/21, the sessions are scheduled to take place on 7 May this year) and the resolution of the full composition of the Civil Chamber of the Supreme Court (file no. III CZP 11/21, the session is scheduled to take place on 11 May this year – more on this).

"The verdict does not come as a surprise to us – on the contrary, it is in line with the Court's previous case law, our predictions and current position. This ruling requires adopting broader perspective, this is referring to the CJEU case law to date which, as I would like to point out, favours consumers" says Tomasz Chróstny, President of UOKiK.

What does C-19/20 Bank BPH case involve?

Case C-19/20 Bank BPH involves consumers who entered into mortgage loan agreements indexed in Swiss francs in order to build and finish their houses. The loan was to be disbursed in Polish zlotys, according to the exchange rate established by the bank on the day of disbursement, and repaid in 360 instalments, which were also converted into Polish zlotys according to the exchange rate indicated by the bank. However, the agreements did not include any explanation as to how the bank's margin was determined. What is more, the bank did not allow to repay the loan in francs.

The plaintiffs demand, among other things, that the entire agreement be declared invalid due to the illicit nature of contractual clauses concerning indexation. They want the bank to return all principal and interest instalments, as well as fees that they have paid to the bank up to the date of filing the lawsuit. In turn, the bank argues that the indexation clauses are not illicit in nature, refers to the statute of limitations concerning claims for restitution and requests the dismissal of the action.

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