Judgment;Summary — ECLI:EU:C:2024:919
Date: 2024-10-24
Language of the case: Polish
Court formation: Tenth Chamber
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Poland

SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING OF 8. 5. 2023 – CASE C-347/23 
 
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makes the following order: 
1. the following question is referred to the Court of Justice of the European 
Union, pursuant to Article 267 of the Treaty on the Functioning of the European 
Union: 
Must Article 2(b) and (c) of Council Directive 93/13/EEC of 5 April 1993 on 
unfair terms in consumer contracts be interpreted as meaning that a natural 
person who concludes a mortgage loan agreement in order to raise funds to 
purchase a single property to be rented for remuneration (buy-to-let) is to be 
regarded as a ‘consumer’ within the meaning of that directive? 
2. Proceedings are stayed pursuant to Article 177(1)(31) of the Code of Civil 
Procedure pending an answer to the question set out above. 
… 
GROUNDS … 
… 
1 [Details of the referring court] 
2 … 
3 [Details of parties to the main proceedings and their representatives]. 
4 … 
5 … 
6 Subject matter of the dispute in the main proceedings and the relevant facts 
of the case 
7 By an application lodged on 27 December 2019 … the applicants requested that 
the defendant be ordered to pay them the amount of PLN 764 938.17. The 
applicants claimed that they had concluded with the defendant bank a CHF-
indexed mortgage loan agreement which contains unlawful terms, rendering the 
agreement invalid. Consequently, the applicants claim that the defendant bank 
should reimburse the equivalent of all loan instalments paid in the performance of 
that agreement. 
8 In its defence, the defendant contended that the action should be dismissed, stating 
that the loan agreement concluded by the parties is not invalid and does not 
contain unlawful terms. 
9 … [T]he referring court established that the applicants, who … reside in London, 
decided in 2008 to buy a residential property in Poland. The applicants did not 
intend to reside in that property. In order to carry out that plan, they used the 
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services of JP, a Polish property manager … [, who] became the applicants’ agent 
and represented them in the conclusion of the loan agreement, the purchase of the 
property, the rental of the property, and serving the tenants. 
10 On 3 April 2008, the applicants submitted to Noble Bank S.A. in Warsaw (the 
bank of which the defendant is the legal successor) an application for a loan … in 
CHF for a period of 360 months in order to acquire … a property in Warsaw … 
The application stated that the applicants are purchasing the property in order to 
rent it out for remuneration (‘buy-to-let’). In addition, the applicants stated that 
they are married in a community of property and reside in London, and that the 
male applicant has completed secondary education and is a police officer and the 
female applicant has completed higher education and is a school principal. 
11 Together with the loan application, the applicants signed a declaration in which 
they confirmed that they had familiarised themselves with the concept of currency 
risk (meaning that loan repayment instalments can change both downwards and 
upwards depending on fluctuations in the exchange rate of the currency in which 
the loan was taken out) and also with the model simulations of loan 
instalments …. and a historical chart of the CHF/PLN exchange rate for the period 
from 9 November 2004 to 2 July 2006. 
12 On 20 June 2008, the applicants … concluded a mortgage loan agreement … 
indexed to CHF. … [T]he bank granted the borrower a loan in the amount of 
PLN 710 407.07 indexed to the CHF exchange rate under the conditions set out in 
the loan agreement and the general conditions (Paragraph 2(1)). The loan was to 
be used to purchase of immovable property on the primary market … 
(Paragraph 2(2)). The term of the loan was 360 months (Paragraph 2(3)). The loan 
was disbursed in PLN with simultaneous conversion on the day of disbursement 
into the currency stated in the loan agreement at the foreign exchange purchase 
rate in force at the bank on the day of disbursement (Paragraph 3(8)). Repayment 
of all obligations under the agreement was effected in zlotys to the loan account 
(Paragraph 4(2)). The method and date for fixing the exchange rate (on the basis 
of which repayment instalments and the current debt balance are calculated) and 
the conditions for updating the repayment schedule were set out in the general 
conditions (Paragraph 4(4)). The interest rate on the loan was variable and, as at 
the date the agreement was drawn up, amounted to 6.66% per annum, consisting 
of the sum of the applicable 3M LIBOR reference rate for CHF …. and the bank’s 
fixed margin, which amounted to 3.95% (Paragraph 5(1)). The general conditions 
for loan agreements of Noble Bank S.A. in Warsaw … formed an integral part of 
the loan agreement (Paragraph 13). 
13 The general conditions for loan agreements of Noble Bank S.A. in Warsaw … 
provided that the disbursement of a loan (or tranche thereof) denominated vis-à-
vis a foreign currency was to be effected in PLN with simultaneous conversion of 
the disbursed amount on the date of disbursement into the currency stated in the 
loan agreement at the purchase [rate] of the currency concerned, as established by 
the bank in the current table of exchange rates (Paragraph 11(7)) and in the case of 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING OF 8. 5. 2023 – CASE C-347/23 
 
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a loan denominated in a foreign currency the loan repayment schedule is 
expressed in the currency of the loan, and the amount of a repayment instalment is 
calculated according to the foreign exchange selling rate in force at the bank, 
based on current exchange rate table in force at the bank as of the repayment date 
(Paragraph 12(7)) … 
14 The contents of neither the loan agreement nor the general conditions were 
negotiated. Following the conclusion of the loan agreement, the bank disbursed 
the loan … The property was rented out for remuneration and the rental income 
was mainly used to repay the loan instalments. The entire time the applicants 
resided in London, where … they carried on no commercial activity. The 
applicants did not reside in the property in Warsaw … and the servicing of the 
property, the tenants and the loan was handled by JP on their behalf. On 
21 December 2009, the parties concluded an annex to the loan agreement, 
allowing the applicants to repay the loan instalments directly in CHF, but despite 
this, all the amounts due under the agreement were paid in PLN (a total of 
PLN 764 938.17 in the period from 7 July 2008 to 10 May 2019). The applicants 
repaid all the amounts due under loan agreement on 18 October 2019, after which 
they sold the property at B. street in Warsaw. 
15 Relevant provisions of law 
16 Provisions of Polish law 
17 Ustawa z dnia 23 kwietnia 1964 r. Kodeks cywilny (Law of 23 April 1964 
establishing the Civil Code (Dz.U. No 16, item 93, as amended); ‘Civil Code’ 
18 A ‘consumer’ is any natural person who concludes, with a seller or supplier, a 
legal transaction which has no direct link to that person’s business or professional 
activity (Article 221). 
19 A ‘seller or supplier’ is a natural person, a legal person and an organisational unit 
as referred to in Article 331(1) carrying on in its own name a commercial or 
professional activity (Article 431). 
20 The terms of a contract concluded with a consumer which have not been 
individually negotiated shall not be binding on the consumer if his or her rights 
and obligations are set forth in a way that is contrary to good practice and grossly 
infringes his interests (unlawful terms). This shall not apply to terms setting out 
the principal obligations to be performed by the parties, including price or 
remuneration, so long as they are worded clearly (Article 3851(1)). 
21 If a contractual term is not binding on the consumer pursuant to paragraph 1, the 
contract shall otherwise continue to be binding on the parties (Article 3851(2)). 
22 The compliance of contractual terms with good practice shall be assessed 
according to the state of affairs at the time of conclusion of the contract, taking 
into account its content, the circumstances in which it was concluded and also 
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other contracts connected with the contract which contains the provisions being 
assessed (Article 3852). 
23 Provisions of European Union law 
24 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer 
contracts (OJ 1993 L 95, p. 29 – Special edition in Polish, Chapter 15, 
Volume 2, p. 288); ‘Directive 93/13’ 
25 For the purposes of this Directive: (a) ‘unfair terms’ means the contractual terms 
defined in Article 3; (b) ‘consumer’ means any natural person who, in contracts 
covered by this Directive, is acting for purposes which are outside his trade, 
business or profession; (c) ‘seller or supplier’ means any natural or legal person 
who, in contracts covered by this Directive, is acting for purposes relating to his 
trade, business or profession, whether publicly owned or privately owned 
(Article 2). 
26 Reasoning in the request for a preliminary ruling 
27 The need to refer the present question has arisen in connection with the 
requirement to interpret European Union law in order to classify correctly (as a 
consumer or a seller or supplier) a borrower who buys a property with a view to 
renting it out. That issue is of key importance to the resolution of this case since it 
determines whether or not the provisions of Directive 93/13 will apply in this 
case. If the applicants are found to be consumers, it may be concluded that the 
terms of the mortgage loan agreement providing for indexation to the CHF 
exchange rate (Paragraph 2(1) of the agreement) and the fixing of the CHF/PLN 
exchange rate on the basis of a unilateral decision of the bank (Paragraph 3(8) of 
the agreement and Paragraphs 11(7) and 12(7) of the general conditions) are 
unfair. Those terms were not individually negotiated and at the same time define 
the main subject matter of the contract, were not drafted in plain, intelligible 
language, and are contrary to the requirement of good faith, causing a significant 
imbalance in the parties’ rights and obligations arising under the contract, to the 
detriment of the applicants. That assessment arises from the fact that, as a result 
the conclusion of the loan agreement, the applicants were exposed to an unlimited 
exchange rate risk, without simultaneously being informed of the potential effects 
of an unfavourable change in the CHF/PLN exchange rate. Although the 
applicants were presented with a historical chart of the CHF/PLN rate and a 
simulation of the change in instalments in the event of an increase in that rate, in 
both cases the presented exchange rate fluctuations were insignificant. Moreover, 
both CHF and PLN were foreign currencies for the applicants as they earned in 
GBP, and none of the simulations and charts presented by the bank contained any 
reference to that currency. In addition, the terms of the loan agreement and the 
general conditions allowed the bank to set the level of the CHF/PLN exchange 
rate and it was therefore able to affect directly the amount of the payments made 
by the applicants. Declaring those terms of the loan agreement unfair and thus not 
binding on the applicants means that the loan agreement could not be in force and 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING OF 8. 5. 2023 – CASE C-347/23 
 
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was therefore invalid, and consequently all the loan instalments paid by the 
applicants constituted an undue performance which should be reimbursed to the 
applicants, as requested in the in the application. Thus, declaring the applicants to 
be consumers constitutes grounds for granting the action, whereas finding that 
they were not consumers when concluding the agreement will mean that the 
provisions of Directive 93/13, and consequently also the provisions of Polish law 
on unlawful terms, will not apply in this case, and therefore the action should be 
dismissed. 
28 It is by reference to the capacity of the contracting parties, according to whether or 
not they are acting for purposes relating to their trade, business or profession, that 
Directive 93/13 defines the contracts to which it applies. 1 As regards the concept 
of ‘consumer’, within the meaning of Article 2(b) of Directive 93/13, it is 
objective in nature and is distinct from the concrete knowledge the person in 
question may have, or from the information that person actually has. 2 The 
concept of ‘consumer’ must be assessed by reference to a functional criterion, 
consisting in an assessment of whether the contractual relation at issue has arisen 
in the course of activities outside a trade, business or profession. 3 The situation in 
which a natural person uses the apartment constituting his or her personal home 
for professional purposes also, such as in the context of salaried teleworking or in 
the exercise of a liberal profession, cannot be excluded from the scope of the 
concept of ‘consumer’. 4 The concept of ‘seller or supplier’, within the meaning of 
 
1 See: 
 - judgment of the Court of Justice of 27 October 2022, S.V. (Immeuble en copropriété), 
[C-485/21], paragraph 24, 
 - judgment of the Court of Justice of 21 March 2019, Pouvin and Dijoux, C-590/17, 
paragraph 23, 
 - judgment of the Court of Justice of 17 May 2018, Karel de Grote – Hogeschool Katholieke 
Hogeschool Antwerpen, C-147/16, paragraph 53. 
2 See: 
 - judgment of the Court of Justice of 21 March 2019, Pouvin and Dijoux, C-590/17, 
paragraph 24, 
 - judgment of the Court of Justice of 3 September 2015, Costea, C-110/14, paragraph 21, 
3 See: 
 - judgment of the Court of Justice of 27 October 2022, S.V. (Immeuble en copropriété), 
[C-485/21], paragraph 25, 
 - order of the Court of Justice of 14 September 2016, Dumitraș, C-534/15, paragraph 32, 
 - order of the Court of Justice of 19 November 2015, C-74/15, paragraph 27, 
4 See: 
 - judgment of the Court of Justice of 27 October 2022, S.V. (Immeuble en copropriété), 
[C-485/21], paragraph 32, 
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Article 2(c) of Directive 93/13, is a functional concept, requiring determination of 
whether the specific contractual relationship is amongst the activities that a person 
provides in the course of his trade. 5 As with the concept of ‘consumer’, within the 
meaning of Article 2(b) of Directive 93/13, that of ‘seller or supplier’, within the 
meaning of Article 2(c) of that directive is objective in nature and does not depend 
on whether the professional decides to act in the context of its main activity or a 
secondary and ancillary one. 6 
29 It is apparent from the findings of fact in the present case that the applicants took 
out a loan with a bank in order to raise funds to purchase a property which was [to 
be] rented out. The applicants resided in London throughout, …. they did not 
reside and did not intend to reside at that property as they had no connection at all 
with Warsaw. All the formalities relating to the loan and the purchase and the 
renting out and the subsequent sale of the property were handled on the 
applicants’ behalf by a property manager employed by them. Renting the property 
out was the applicants’ objective from the outset, as evidenced in particular by the 
loan application, in which the applicants stated that they intended to use the funds 
from the loan to purchase a rental property from a developer (‘buy-to-let’). Thus, 
the applicants’ objective was not to meet their own housing needs, but to [grow] 
their assets. Acquiring funds for the purchase of a rental property therefore 
constituted a kind of investment. At the same time, however, the applicants were 
not engaged professionally in commercial activity, but were employed under 
employment contracts, and the rental income was intended to be an additional 
source of income for them. The applicants did not rent out any properties other 
than the dwelling located in Warsaw … 
30 The referring court is uncertain whether, in the situation described, there are 
grounds for finding that the borrowers can be regarded as a ‘seller or supplier’ 
within the meaning of Article 2(c) of Directive 93/13. The issue here is the 
assessment whether seeking to derive income from the ‘private’ rental of property 
constitutes acting for purposes relating to someone’s business, trade or profession. 
It is clear that a natural person who takes out a loan in order to acquire several or 
multiple rental properties is acting for purposes relating to his or her business 
since an activity on such a large scale requires organisation characteristic of 
businesses. However, an appropriate organisation of activity is also required to 
acquire a single rental property (in the present case, the applicants employed a 
 
5 See: 
 - judgment of the Court of Justice of 21 March 2019, Pouvin and Dijoux, C-590/17, 
paragraph 36, 
 - judgment of the Court of Justice of 17 May 2018, Karel de Grote – Hogeschool Katholieke 
Hogeschool Antwerpen, C-147/16, paragraph 55, 
6  See: 
 - judgment of the Court of Justice of 21 March 2019, Pouvin and Dijoux, C-590/17, paragraph 
41. 
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professional property manager to deal with all the formalities related to the loan 
agreement and the purchase and rental of the property, and the servicing of the 
tenants). In addition, renting out immovable property for a consideration, both on 
a large and small scale, shares the feature of making profit, which is the main 
objective of engaging in business. 
31 On the other hand, there are, however, strong arguments in support of the position 
that the acquisition of a loan for the purpose of purchasing a single rental property 
constitutes acting for purposes which are outside someone’s trade, business or 
profession and that, consequently, such a borrower must be regarded as a 
consumer within the meaning of Article 2(b) of Directive 93/13. Although the 
purchase property of a property for rent requires a certain amount of organisation, 
given the small scale of such an activity it may be assumed that it is not 
characteristic of engaging in business since even micro-enterprises engage in 
large-scale activities. In addition, while renting out property implies, by its very 
nature, realising income, with a single property that income is not significant and 
remains considerably lower than that of the vast majority of businesses operating 
on the market. 
32 On the basis of the facts of this case, it also appears to be relevant that, at the time 
of the conclusion of the loan agreement, both applicants were employed under 
employment contracts, were not professionally engaged in property management, 
and had no training in that field. Consequently, renting out the property did not 
have an important professional purpose for them, nor was it intended to be their 
main source of income. For them, the rental income was intended to be a form of 
investment, that is to say a way of growing their savings as an alternative to 
buying shares, bonds or fund units, or setting up [deposits] or savings accounts in 
banks. There is no doubt that the latter means of investing savings are not related 
to business, which would appear to warrant a similar assessment to be made as 
regards small-scale property rental too. Lastly, declaring borrowers in a situation 
such as the present to be consumers would appear better to achieve the objective 
of Directive 93/13 of protecting consumers against unfair terms in contracts, 
particularly given that investment in rental property is a popular way for 
consumers to grow their savings which, in addition, has a social benefit in that it 
makes it possible to meet the housing needs of people who do not have property 
of their own and are unable to buy it themselves. 
33 Question referred for a preliminary ruling 
34 [repetition of the question referred] … 
35 In the light of the circumstances set out above, the referring court proposes that 
the above question be answered in the affirmative. 
36 Staying of main proceedings 
37 …