Judgment — ECLI:EU:C:2024:1026
Date: 2024-12-12
Language of the case: Spanish
Court formation: Ninth Chamber
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary C-300/23 - 1 
Case C-300/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
10 May 2023 
Referring court: 
Juzgado de Primera Instancia n.º 8 de Donostia – San Sebastián 
(Spain) 
Date of the decision to refer: 
27 April 2023 
Applicant: 
NB 
Defendant: 
Kutxabank, S. A. 
  
Subject matter of the main proceedings 
Application for a declaration of nullity of a term in a mortgage loan agreement 
under which variable interest is calculated by reference to the Índice de Referencia 
de Préstamos Hipotecarios (mortgage loan reference index, ‘IRPH’), on the 
grounds that it was included in a non-transparent manner and is unfair. 
Subject matter and legal basis of the request 
Consumer protection – Interpretation of Council Directive 93/13/EEC of 5 April 
2005 on unfair terms in consumer contracts – Interpretation of Directive 
2005/29/EC of the European Parliament and of the Council of 11 May 2005 
concerning unfair business-to-consumer commercial practices in the internal 
market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 
98/27/EC and 2002/65/EC of the European Parliament and of the Council and 
Regulation (EC) No 2006/2004 of the European Parliament and of the Council – 
Unfair terms in consumer contracts – Loan agreement – Variable interest rate – 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – C-300/23 
 
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Mortgage loan reference index (IRPH) – Review of the transparency requirement 
by the national court – Review of the unfairness of the term by the national court – 
Consequences of a declaration that the term is unfair 
Questions referred for a preliminary ruling 
1. Whether, given that, in Notice 5/1994 of 22 June 1994 by which it 
incorporated the IRPH rates into the Spanish mortgage market, the Bank of 
Spain also warned that using the rates simply as they stood meant setting an 
AER for the transaction above the market AER and that to avoid that 
outcome it was necessary to include the appropriate negative differential, the 
fact that the warning is disregarded and that no negative differential is 
included may be regarded as a means of giving rise to the imbalance 
contrary to the requirement of good faith referred to in Article 3(1) of 
Directive 93/13/EEC. 
2. Whether the fact that financial institutions apply negative differentials, 
correction coefficients or IRPH percentages, as the Bank of Spain envisages, 
only where mortgage loan agreements are for the purchase of officially 
protected housing and are supervised by the public administration, but do 
not apply those negative differentials, correction coefficients or IRPH 
percentages where the mortgage loan taken out is for the purchase of 
residential property on the open market and is not supervised by the public 
administration, may amount to a means of giving rise to the imbalance 
contrary to the requirement of good faith referred to in Article 3(1) of 
Directive 93/13/EEC. 
3. Whether, since component elements of the AERs of the mortgage loan 
transactions used on a monthly basis to determine the IRPH for savings 
banks rate, such as the commitment fee and certain costs which should have 
been paid by the seller or supplier, have been found to be unfair, Article 6(1) 
of Directive 93/13/EEC is infringed by the continued validity of a term 
which includes in an agreement the IRPH for savings banks rate which has 
been determined, on a monthly basis, using data obtained from transactions 
applying terms which have been declared unfair. 
4. Whether national case-law, such as that established by the Tribunal Supremo 
(Supreme Court, Spain), according to which the national court must find that 
a term by which the IRPH mortgage rate is included in an agreement 
concluded by a consumer and a seller or supplier passes the transparency 
test, in all circumstances and with no requirement to carry out the checks 
and ascertain the information required by paragraphs 51, 52, 54 and 55 of 
the judgment of 3 March 2020 in Case C-125/18, on the grounds that the 
mortgage rate in question is defined in the Boletín Oficial del Estado 
(Spanish Official State Gazette, BOE), specifically in Bank of Spain Notice 
5/1994, published in BOE No 184 of 3 August 1994, from page 25106 to 
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page 25111, even though the consumer is unaware of that information, is 
contrary to those paragraphs. 
5. Whether, with a view to complying with the transparency requirement of a 
term in a mortgage loan agreement with a variable interest rate, where the 
remunerative interest is referenced to an official index such as the IRPH 
which, as a result of how it is calculated, does not reflect remunerative 
interest alone; requires the application of a differential which is complex to 
calculate in order to be comparable with other indices; and entails a risk that 
the consumer will have to pay partly duplicated bank fees, Article 5 of 
Directive 93/13/EEC must be interpreted as precluding legislation or case-
law according to which it is permissible for the seller or supplier not to 
include the following information in the agreement or expressly provide it to 
the consumer sufficiently in advance of conclusion of the agreement: 
a. the fact that the reference rate reflects not only remunerative interest 
but also fees; 
b. the actual increase this represents; 
c. whether it applies a negative differential to the reference rate margin to 
offset that increase, 
so that consumers can easily make a genuine comparison between the 
different possible reference rates and ascertain whether, under the agreement 
to be concluded, they will be liable to pay partly duplicated fees and the 
amount of any such fees, and so that they can challenge any such fees. 
6. Whether national case-law, such as that established by the Spanish Supreme 
Court, according to which the seller or supplier party to an agreement is 
relieved of any responsibility for informing consumers about the functioning 
of the method of calculating the IRPH mortgage rate and the resulting 
economic consequences and that responsibility is transferred to the 
consumers who, although lacking any financial knowledge, must look for 
that information themselves by finding and understanding a definition 
published in the BOE, which contains no explicit information to the effect 
that the index in question includes differentials and costs, and must infer that 
circumstance themselves from the fact that the mortgage rate is determined 
on a monthly basis using an average of the AERs of the reference 
transactions, is contrary to paragraph 57 of the Observations of the European 
Commission of 31 May 2018, points 2 and 125 of the Advocate General’s 
Opinion of 10 September 2019 and paragraphs 51, 52, 54 and 55 of the 
judgment of 3 March 2020 in Case C-125/18. 
7. Whether an interpretation of paragraphs 53 and 56 of the judgment in Case 
C-125/18 according to which mere publication of the definition of the IRPH 
rate in the BOE places consumers in a position to know that the rate includes 
the differentials and costs applied by the institutions is compatible with 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – C-300/23 
 
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settled case-law of the Court of Justice according to which consumers are in 
a weaker position in respect of information than the seller or supplier with 
which they contract, and with point 2 of the Advocate General’s Opinion of 
10 September 2019 in Case C-125/18 which states that the average 
consumer is not in a position to understand certain concepts, such as 
‘interest rate’, ‘reference index’ or ‘annual percentage rate of charge’ 
(APRC), and, in particular, the differences between those concepts, and that 
the same applies to the functioning of the actual calculation not only of the 
variable interest rates but also of the official reference indices of mortgage 
loans and of the APRCs on the basis of which those interest rates are 
calculated. 
8. Whether an interpretation of paragraphs 53 and 56 of the judgment in Case 
C-125/18 according to which a consumer is in a position to know, from the 
definition published in the BOE, that the IRPH mortgage rate includes 
differentials and costs even though, in order to do so, the consumer must 
know what an AER is and what it represents in order to be in a position to 
infer that, since the IRPH for savings banks rate is calculated using a simple 
average of AERs, it will necessarily include the fees, differentials and costs 
applied by the institutions, is contrary to the settled case-law of the Court 
according to which consumers are in a weaker position in respect of 
information than the seller or supplier with which they contract, and contrary 
to point 2 of the Advocate General’s Opinion of 10 September 2019 in Case 
C-125/18. 
9. Whether, where the seller or supplier is permitted, in accordance with the 
order of the Court of 17 November 2021 in Case C-655/20, not to include in 
a contract the full definition of the reference index used to calculate a 
variable interest rate and not to provide an information booklet setting out 
past fluctuations in that index, that permission is absolute and unconditional 
or is, in contrast, subject to the consumer being in a position, merely from 
the official information provided by the seller or supplier, to understand the 
functioning of the method for calculating the index in question and thus 
evaluate, on the basis of clear, intelligible criteria, the potentially significant 
economic consequences on his or her financial situation. 
10. Whether that permission also covers situations in which, under the national 
legislation in force at the time the contract is concluded, the contract must 
include the full definition of the reference index used to calculate the 
variable interest rate and the information booklet setting out past fluctuations 
in that index must be provided. 
11. Whether, where Directive 2005/29/EC concerning unfair business-to-
consumer commercial practices in the internal market applies, failure by the 
seller or supplier to provide relevant information such as the specific 
functioning of the method used to calculate the IRPH rates; the fact that 
those rates are calculated using AERs from the reference transactions, 
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having the effect that the average differentials, fees and costs of those 
transactions are included in their nominal rates; the fact that they have been 
constantly above Euribor throughout the years since its creation; and the 
existence of a warning by the Bank of Spain to the financial institutions 
about the need to include a negative differential in order to prevent the AER 
for the transaction being higher than the market AER, can be regarded as a 
misleading practice in the light of Article 7 of that directive. 
12. Whether, where the national court finds that the practice carried on by the 
seller or supplier was misleading in the light of Directive 2005/29/EC, it is 
to be understood, without further ado, that the behaviour of the seller or 
supplier gives rise to the significant imbalance contrary to the requirement 
of good faith referred to in Article 3(1) of Directive 93/13/EEC, or, on the 
contrary, it is compatible for the seller or supplier to act in a misleading 
manner in the light of Directive 2005/29/EC and in good faith in the light of 
Directive 93/13/EEC. 
13. Whether the principle of effectiveness is infringed by national case-law, 
such as that established by the Spanish Supreme Court, according to which, 
where the term by which the IRPH for savings banks rate is included in an 
agreement concluded between a consumer and a seller or supplier has been 
found to lack transparency, the provisions of Article 83 of the Texto 
Refundido de la Ley General para la Defensa de los Consumidores y 
Usuarios (Consolidated text of the general law for the protection of 
consumers and users, ‘TRLGDCU’) and of Article 5(5) of Ley 7/98 de 
Condiciones Generales de la Contratación (Law 7/98 on general contractual 
conditions) of 13 April 1998 cannot be applied retroactively, thereby giving 
rise to two levels of protection against the same unfair term, one for 
consumers who concluded agreements before that amendment and a 
different one for consumers who concluded agreements subsequently. 
14. Whether the principle of effectiveness is infringed by national case-law, 
such as that established by the Supreme Court, according to which the lack 
of transparency of a price clause in an agreement, such as a ‘floor clause’, 
renders the term unfair, because it involves misleading information, whereas 
the lack of transparency of the term by which the IRPH for savings banks 
rate is included in the agreement, a term which likewise affects the price of 
the contract, does not render it unfair. 
15. Whether national case-law, such as that established by the Supreme Court, 
which finds it illogical to argue that the seller or supplier did not act in good 
faith when it used an official mortgage rate regulated by the Bank of Spain 
and habitually used by the public administration in its officially protected 
housing programmes and infers in consequence, in all cases, that the seller 
or supplier acted in good faith, finding there to be no requirement to enquire 
whether the seller or supplier could have believed that the consumer, dealt 
with fairly and equitably, would have agreed to the term at issue in 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – C-300/23 
 
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individual negotiations, is contrary to paragraph 69 of the judgment of 
14 March 2013 in Case C-415/11 and to the concept of an imbalance 
‘contrary to the requirement of good faith’. 
16. Whether, in the context of a dispute relating to the inclusion of an IRPH for 
savings banks rate in an agreement in order to determine the contractual 
remuneration, paragraph 69 of the judgment of 14 March 2013 in Case 
C-415/11 must be interpreted as meaning that the national court is required 
to examine whether the seller or supplier could have believed that a 
consumer, who understood the functioning of the method of calculating the 
IRPH for savings banks rate, knew the fluctuations in the IRPH for savings 
banks rate in at least the two years preceding conclusion of the agreement 
and had been informed that, in Notice 5/1994, the Bank of Spain warned that 
it was necessary, where applicable, to include a negative differential – a 
warning which the seller or supplier did not intend to heed – would have 
agreed to that term in individual negotiations. 
17. Whether, applied to a term by which the IRPH for savings banks rate is 
included in an agreement concluded between a consumer and a seller, 
paragraph 67 of the judgment of 26 January 2017 in Case C-421/14 must be 
interpreted as meaning that, in order to determine whether there is an 
imbalance contrary to the requirement of good faith, the national court must 
compare on the one hand the method of calculating that rate with the method 
used to determine the Euribor rate, the most widely used rate, and on the 
other the resulting actual rate in each case for loans of equivalent amounts 
and durations. 
18. Whether, for the purpose of determining, in accordance with paragraph 67 of 
the judgment of 26 January 2017 in Case C-421/14, whether a term by 
which the IRPH for savings banks rate is included in an agreement 
concluded between a consumer and a seller gives rise to an imbalance 
contrary to the requirement of good faith, it is relevant that the actual rate 
resulting from calculation of the Euribor rate represents the price at which 
institutions purchase the money which they subsequently lend to their 
customers, whereas the actual rate resulting from calculation of the IRPH for 
savings banks rate, which is always higher, represents the total cost borne by 
the customers to whom the savings banks have lent that money. 
19. Whether Article 7(1) of Directive 93/13/EEC is infringed where, once a term 
by which the IRPH for savings banks rate is included in an agreement 
concluded between a consumer and a seller has been found to be unfair and 
it has transpired that the agreement cannot continue to exist after removal of 
that term, the term is replaced in accordance with the 15th additional 
provision of Ley 14/2013 de apoyo a los emprendedores y su 
internacionalización (Law 14/2013 to support entrepreneurs and their 
internationalisation) of 27 September 2013, since that replacement would 
have the effect that the imbalance to the benefit of the seller or supplier, 
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which the national court declared unlawful, remains in place, because that 
supplementary provision was intended to replace the index automatically 
and sought to ensure that doing so did not affect the situation existing before 
the index was abolished. 
20. Whether, having regard to the fact that, according to the Bank of Spain, all 
the criticisms which can be levelled against the IRPH for savings banks 
mortgage rate would have been neutralised if the corresponding negative 
differential had been included, Article 6(1) of Directive 93/13/EEC must be 
interpreted as meaning that, where the term by which the IRPH for savings 
banks rate is included in an agreement concluded between a consumer and a 
seller or supplier has been found to be unfair, the national court is not 
precluded from retroactively replacing the differential included in the 
agreement with the negative differential which should have been included at 
the time it was concluded, reimbursing the consumer the amount unfairly 
charged, plus interest, with the aim of preventing the agreement from being 
void and of transforming it into the agreement which should have been 
entered into in accordance with the warning by the Bank of Spain. 
21. Whether Article 7(1) of Directive 93/13/EEC is infringed where, once the 
term by which the IRPH for savings banks rate is included in an agreement 
concluded between a consumer and a seller has been found to be unfair and 
the agreement has been declared void because it cannot continue to exist 
once that term has been removed, Article 1303 of the Código Civil (Civil 
Code) is applied, with the effect that the infringing party benefits because it 
recovers the entire amount lent, plus statutory interest higher than the 
interest under the agreement and applicable to the entire amount of the loan 
from the first day. 
22. Whether, bearing in mind that we are dealing with a pre-formulated standard 
contract comprising non-negotiated general contract terms which have been 
imposed by the seller or supplier, which is solely responsible for including 
unfair terms relating to essential aspects of the price, Article 7(1) of 
Directive 93/13/EEC must be interpreted as meaning that the seller or 
supplier is liable for the illegality or immorality which rendered the 
agreement void in its entirety and, in consequence, that Article 1306(2) of 
the Civil Code should apply. 
Provisions of European Union law relied on 
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer 
contracts: twelfth, thirteenth, nineteenth, twentieth and twenty-fourth recitals and 
Articles 3, 5, 6, and 7 
Directive 2005/29/EC of the European Parliament and of the Council of 11 May 
2005 concerning unfair business-to-consumer commercial practices in the internal 
market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – C-300/23 
 
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98/27/EC and 2002/65/EC of the European Parliament and of the Council and 
Regulation (EC) No 2006/2004 of the European Parliament and of the Council: 
Article 7 
Provisions of national law relied on 
(a) Royal Legislative Decree 1/2007 of 16 November 2007 approved the 
Consolidated Text of the general law for the protection of consumers and 
users) and other supplementary laws. The following provisions of that law are 
cited: 
‘Article 8. Basic rights of consumers and users The following are basic rights of 
consumers and users: 
… 
(b) the protection of their legitimate economic and social interests, in particular 
against unfair commercial practices and the inclusion of unfair terms in 
contracts. 
… 
(d) Accurate information on the various goods or services, … as well as 
instruction and familiarisation to facilitate knowledge of the proper use, 
consumption or enjoyment of those goods or services.’ 
‘Article 60. Information prior to the conclusion of the contract 
1. Before a consumer or user is bound by a contract or relevant offer, the 
supplier must, unless it is clear from the context, provide him in a clear and 
intelligible form with relevant, correct and sufficient information about the main 
features of the contract, in particular, its legal and financial terms.’ 
‘Article 80. Requirements for terms not individually negotiated 
1. In contracts with consumers and users using terms which have not been 
individually negotiated, including contracts concluded by public authorities and 
their dependent entities and undertakings, those terms must satisfy the following 
requirements: 
(a) precise, clear and simple wording, enabling immediate understanding 
without reference to texts or documents not supplied before, or at the time 
of, the conclusion of the contract and which, in any event, must be expressly 
referred to in the contract document; 
(b) accessibility and legibility, so that the consumer or user may know of their 
existence and content before the contract is concluded. … 
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(c) good faith and fair balance between the rights and obligations of the parties, 
which, in any case, excludes the use of unfair terms. 
2. Where individual actions are brought, in the event of uncertainty as to the 
meaning of a term, the interpretation most favourable to the consumer shall 
prevail.’ 
‘Article 82. Definition of unfair terms. 
1. All contractual terms not individually negotiated and all practices for which 
express consent has not been given and 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 or user shall be 
regarded as unfair terms. 
2. The fact that certain aspects of a term, or one specific term, have been 
negotiated individually shall not exclude the application of the rules on unfair 
terms to the rest of the contract. 
A seller or supplier who claims that a particular term has been individually 
negotiated shall bear the burden of proof.’ 
‘Article 83. Nullity of unfair terms and continued existence of the contract 
Unfair terms shall automatically be void and deemed not to have formed part of 
the contract. To that end, the court, having heard the parties, shall declare the 
invalidity of unfair terms included in the contract, which shall nevertheless 
continue to bind the parties on the same terms if it is capable of continuing in 
existence without the unfair terms.’ 
(b) Law 7/1998 of 13 April 1998 on general contractual conditions: 
Articles 3, 5(5), 7, 8 and 10. The content of those provisions is not reproduced 
(c) Law 14/2013 to support entrepreneurs [and their internationalisation] 
of 27 September 2013: 15th additional provision 
(d) Civil Code: Articles 1303 and 1306(2) The content of those provisions is 
not reproduced. 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 11 September 2006, the applicant entered into a mortgage loan agreement with 
KUTXABANK savings bank. It was agreed that variable interest would be paid, 
calculated on the basis of the IRPH plus a positive differential. In order to define 
the IRPH for savings banks, Clause 3 bis of that agreement draws on the official 
definition of that index itself, contained in Bank of Spain Notice 5/1994 of 22 July 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – C-300/23 
 
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1994, and states that the IRPH applicable to the agreement is the simple average 
of the weighted average interest rates for the principal amounts of loans granted 
by savings banks and secured by a mortgage, with a term equal to or greater than 
three years for the purchase of a residential property on the private housing 
market, without any adjustment, using the most recent IRPH published by the 
Bank of Spain in the month preceding each interest rate review date or, if there is 
none, the most recent IRPH published by the Bank of Spain before that month. 
2 The referring court describes the functioning of the IRPH and how it is calculated, 
drawing attention to the following: 
– Since 1994, the Bank of Spain has been competent to determine which official 
reference indices may be applied to variable-rate mortgage loans. By Notice 
5/1994, the Bank of Spain inserted an Annex VIII to its earlier Notice 8/1990 to 
credit institutions of 7 September 1990, on the transparency of transactions and 
customer protection. That new Annex VIII referred to the IRPH (comprising 
three versions: for banks, for savings banks and for all institutions) as one of 
those indices. Law 14/2013 provided that the IRPH for banks and the IRPH for 
savings banks would no longer be published from 1 November 2013 and that in 
agreements which used them those indices would be replaced by the IRPH for 
institutions, which was calculated in a similar manner to the indices being 
abolished. The IRPH has therefore continued to be one of the official indices 
supervised by the Bank of Spain and published each month in the BOE. 
– Bank of Spain Notice 5/1994 states in relation to calculation of the IRPH that 
the average rates selected are annual equivalent rates (AERs), since they reflect 
the total cost which the loan represents to the borrower because, in addition to 
the nominal interest rate, they include other charges payable by the consumer 
(commitment and administration fees, the premium for mandatory insurance 
and sundry transaction costs such as management fees and the costs of 
registering the mortgage). Certain terms under which some of those charges are 
borne by the consumer have been declared unfair. 
– Notice 5/1994 warns that, since the IRPH is an AER, if it was used simply as it 
stands as a contractual rate, the AER for the mortgage transaction would be 
higher than the market rate. In order to bring the AER for the transaction into 
line with the market rate it would be necessary to apply a negative differential, 
the amount of which would vary depending on the fees charged for the 
transaction and the frequency of payments. In other words, while Euribor, 
another reference index for this type of mortgage loan agreement, is a nominal 
interest rate (NIR), the IRPH is an actual rate (AER). The values of actual rates 
are higher than nominal (or ‘simple’) rates. The AER is always higher than the 
NIR and the average of the AERs (which is used in the IRPH) is always higher 
than the average of the NIRs. 
– Where agreements include the IRPH plus a positive differential, the total of 
those two values is taken as the NIR payable by the consumer, who is also 
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charged other fees and costs. This means that, firstly, an AER (the IRPH) is 
used as an NIR and, secondly, the consumer is charged fees and other costs 
twice: the first time because the agreement uses an IRPH which already 
includes fees and other costs applicable to the loans granted previously and on 
the basis of which that index is calculated; and the second time when the bank 
charges the consumer fees and other costs in relation to the specific agreement 
entered into with the particular consumer. 
3 In respect of how the IRPH was included in the agreement at issue, the referring 
court submits that the term by which the index is included is not transparent and 
did not enable the consumer to know the precise economic consequences of the 
decision he was taking, for the following reasons: 
– The average consumer is not in a position him or herself to understand key 
concepts such as ‘reference index’, ‘AER’ and ‘NIR’ and is not familiar with 
the notices that the Bank of Spain addresses to financial institutions. 
– The financial institutions did not provide information about the need to apply a 
negative differential to the IRPH, as stated in Notice 5/1994. The referring 
court observes that Notice 5/1994 does not impose a requirement to apply a 
negative differential, but does warn that, if one is not applied, the AER for the 
transaction will be above the average market AER. 
– The agreement at issue appears to reproduce the definition of the IRPH, but it 
omits the last part which states that the weighted average interest rates which 
the Bank of Spain uses to calculate the simple average which determines the 
IRPH for savings banks rate are AERs. 
– When they marketed the mortgages referenced to the IRPH, banks emphasised 
the lower positive differential applied to the IRPH compared with the 
differential above Euribor for mortgages calculated using the latter index, but 
omitted to state that the IRPH was inherently higher than Euribor. 
4 On 4 March 2022, the applicant brought ordinary proceedings seeking a 
declaration that the term establishing the IRPH as the reference index for 
calculating the variable interest of his loan was void on grounds of unfairness. 
The essential arguments of the parties in the main proceedings 
5 The applicant argues that the request for a preliminary ruling is necessary in the 
light of contradictions between, on the one hand, the judgment of the Court of 
Justice of 3 March 2020, Gómez del Moral Guasch, C-125/18, and the orders of 
17 November 2021, Gómez del Moral Guasch II, C-655/20, and Unión de 
Créditos Inmobiliarios, C-79/21, and, on the other, the interpretation of those 
decisions by the Spanish Supreme Court, specifically in judgments 595/2020, 
596/2020, 597/2020, 598/2020 and 599/2020 of 12 November 2020 and decisions 
42/2022, 43/2022 and 44/2022 of 27 January 2022, in which the Supreme Court 
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made a finding of inadmissibility in respect of the appeals brought by consumers 
whose applications for a declaration of nullity on grounds of the unfairness of the 
term by which the IRPH for savings banks was included in their mortgage 
agreements had been dismissed, on the basis that there were no grounds for those 
appeals because the issues raised in them had been resolved in judgments 
42/2022, 43/2022 and 44/2022 of 27 January 2022. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
I) The requirement that inclusion of the IRPH as a component of the 
interest calculation term must be transparent 
6 The referring court cites the following rulings of the Court of Justice setting out 
the principles which in its view define the requirements to be complied with for a 
term to be included transparently in an agreement: 
Judgment of 3 March 2020, Gómez del Moral Guasch, C-125/183 
Paragraph 52: it is for the national court to carry out the necessary checks, in 
the light of all the relevant information, including the promotional material 
and information provided by the lender in the negotiation of a loan 
agreement, and, in particular, it is for the national court, when it considers 
all the circumstances surrounding the conclusion of the contract, to ascertain 
whether, in the case concerned, all the information likely to have a bearing 
on the extent of his or her commitment have been communicated to the 
consumer, enabling the consumer to estimate in particular the total cost of 
the loan. First, whether the terms are drafted in plain, intelligible language 
enabling an average consumer, as described in paragraph 51 above, to 
estimate such a cost and, secondly, the fact of failing to mention in the loan 
agreement the information regarded as being essential with regard to the 
nature of the goods or services which are the subject matter of that 
agreement play a decisive role in that assessment. 
Paragraph 53: as to a term such as the term in question, the fact that the 
essential information relating to the calculation of the IRPH of the Spanish 
savings banks was easily accessible to anyone intending to take out a 
mortgage loan is relevant for the purposes of that examination, since that 
information was set out in Notice 8/1990, published in the Boletín Oficial 
del Estado, enabled a reasonably observant and circumspect consumer to 
understand that the index was calculated on the basis of the average rate of 
mortgage loans of a duration greater than three years for the purpose of 
acquiring a residential property, thus including the average margins and fees 
charged by those institutions. 
Paragraph 54: of relevance also to assess the transparency of the term at 
issue is the fact that, under the national legislation in force at the time the 
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agreement at issue in the main proceedings was entered into, credit 
institutions were required to provide consumers with data relating to the 
fluctuations of the IRPH of the Spanish savings banks during the two 
calendar years preceding the conclusion of loan agreements as well as with 
the last available value. Such data is also capable of giving the consumer an 
objective indication as to the economic consequences arising from the 
application of such an index and constitutes a useful point of comparison 
between the calculation of the variable interest rate based on the IRPH of the 
Spanish savings banks and other formulas for calculating interest rates. 
Paragraph 55: the national court will therefore have to ascertain whether, in 
the context of the conclusion of the agreement at issue in the main 
proceedings, the seller or supplier has actually complied with all the 
obligations to provide information laid down in the national legislation. 
Paragraph 56: Article 4(2) and Article 5 of Directive 93/13 must be 
interpreted as meaning that, with a view to complying with the transparency 
requirement of a contractual term setting a variable interest rate under a 
mortgage loan agreement, that term not only must be formally and 
grammatically intelligible but also enable an average consumer, who is 
reasonably well-informed and reasonably observant and circumspect, to be 
in a position to understand the specific functioning of the method used for 
calculating that rate and thus evaluate, on the basis of clear, intelligible 
criteria, the potentially significant economic consequences of such a term on 
his or her financial obligations. Information which is particularly relevant 
for the purposes of the assessment to be carried out by the national court in 
that regard includes (i) the fact that essential information relating to the 
calculation of that interest rate is easily accessible to anyone intending to 
take out a mortgage loan, on account of the publication of the method used 
for calculating that rate, and (ii) the provision of data relating to past 
fluctuations of the index on the basis of which that rate is calculated. 
(b) Opinion of Advocate General Szpunar delivered on 10 September 2019 in 
Case C-125/18 
Point 2: consumers are not in a position to understand certain concepts, such 
as ‘interest rate’ (fixed or variable), ‘reference index’ or ‘annual percentage 
rate of charge’ (APRC), and, in particular, the differences between those 
concepts. That also applies to the functioning or the actual calculation not 
only of the variable interest rates but also of the APRCs on the basis of 
which those interest rates are calculated, which is why the information 
provided by the seller or supplier is crucial. 
Point 125: the calculation formula for the IRPH for savings banks is 
complex and lacking in transparency and in order to satisfy the transparency 
review the seller or supplier must provide information enabling the 
consumer to take his decision prudently and in full knowledge of the facts as 
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regards the calculation method, making clear not only the full definition of 
the reference index used but the relevant provisions of the national 
legislation determining that index and its past fluctuations. 
(c) Observations submitted by the Commission in Case C-125/18 
Paragraph 57: the seller or supplier must explain to consumers how the 
reference rate was calculated and how it fluctuated in the past and the 
predictions for the future in so far as can be known. 
(d) Order of 17 November 2021, Gómez del Moral Guasch II, C-655/20 
Point 1 of the operative part: Article 5 of Council Directive 93/13/EEC of 
5 April 1993 on unfair terms in consumer contracts and the requirement of 
transparency of contractual terms in the context of a mortgage loan must be 
interpreted as allowing the seller or supplier not to include in such a contract 
the full definition of the reference index used to calculate a variable interest 
rate or not to provide to the consumer an information booklet setting out past 
fluctuations in that index prior to signature of that contract, on the basis that 
the information related to that index has been officially published, provided 
that, in the light of publicly available and accessible information, as well as 
the information provided, where appropriate, by the seller or supplier, an 
average consumer who is reasonably well informed and reasonably 
observant and circumspect was able to understand the specific functioning of 
the method used for calculating the reference index and thus evaluate, on the 
basis of clear, intelligible criteria, the potentially significant economic 
consequences of such a term on his or her financial obligations. 
7 The referring court then alludes to the position taken by the Spanish Supreme 
Court in relation to the judgment delivered in Case C-125/18 and according to 
which the fact that Notice 8/1990 and the procedure for calculating the IRPH for 
savings banks were published in the BOE means that the transparency 
requirement in respect of the composition and calculation of that index, as set out 
in paragraph 56 of the judgment in Case C-125/18, is, in all cases, satisfied 
(judgments delivered on 12 November 2020). In relation to the order of 
17 November 2021, Gómez del Moral Guasch II, C-125/18, the Supreme Court 
considers that the fact that the seller or supplier is permitted not to include a full 
definition of the IRPH is unconditional and applies in all situations. 
8 The referring court believes that the Supreme Court’s stance is incorrect for the 
following reasons: (i) consulting Notice 8/1990 in the BOE ― to which a 
consumer would have recourse ― does not provide any information about the 
IRPH for savings banks because that index was included in that notice by Notice 
5/1994; (ii) by looking at Notice 5/1994 in the BOE consumers would learn the 
definition of the IRPH for savings banks but not how it is calculated, and would 
have to infer for themselves, despite not having financial expertise, that the IRPH 
is an AER which includes differentials, fees and costs; (iii) the Supreme Court 
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emphasises that the fact that Notice 8/1990 was published in the BOE ― referred 
to in paragraph 53 of the judgment in Case C-125/18 ― made it possible to know 
how the IRPH for savings banks was calculated, but disregards the other 
clarifications contained in different paragraphs of that judgment; and iv) the 
Supreme Court itself has not defined the IRPH correctly in its judgments and does 
not distinguish properly between the concepts of ‘reference index’, ‘interest rate’ 
and ‘AER’, since in the judgments of 12 November 2020 it conflates the price of a 
loan and its cost, which suggests that the average consumer is likewise unable to 
understand those complex concepts and mechanisms. 
9 For all those reasons, the referring court is uncertain whether the requirement that 
the term must have been included in the agreement in a transparent manner has 
been satisfied and refers the fourth, fifth, sixth, seventh, eighth, ninth and tenth 
questions for a preliminary ruling on that point. 
II) Whether there may have been a misleading practice within the meaning 
of Directive 2005/29 
10 According to Article 7 of Directive 2005/29, a misleading practice is one in which 
the seller or supplier omits material information which, had it been known to the 
consumer, is likely to have caused the consumer to take a different decision from 
that ultimately taken. 
11 The referring court considers that the fact that the relevant information referred to 
above – which was necessary in order to assess the potentially significant 
economic consequences of the agreement – was omitted by the seller or supplier 
from the term by which the IRPH for savings banks was included in the agreement 
may amount to a misleading practice within the meaning of Directive 2005/29 and 
a sign that the seller or supplier did not act in good faith within the meaning of 
Directive 93/13, thereby creating an imbalance to the detriment of the consumer. 
12 For all those reasons, the referring court refers the eleventh and twelfth questions 
for a preliminary ruling on that point. 
(III) An imbalance in the parties’ rights and obligations, contrary to the 
requirement of good faith 
III-1 The relationship between transparency and unfairness 
13 According to Article 3(1) of Directive 93/13, a contractual term which has not 
been individually negotiated is to 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. 
14 According to Advocate General Szpunar in point 127 of his Opinion in Case 
C-125/18, it must be considered that if the referring court should conclude that the 
requirement of plain, intelligible drafting of the contractual items and, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – C-300/23 
 
16  
accordingly, of transparency, has been complied with, the fact nonetheless 
remains that the term at issue must, in any event, be the subject matter of an 
assessment of its possible substantive unfairness, taking account of the possibility 
that a significant imbalance is caused, to the detriment of the consumer, between 
the rights and obligations arising under the agreement. 
15 The Supreme Court states that, even where the term relating to the IRPH for 
savings banks rate does not pass the transparency test, that fact does not 
automatically mean that it is unfair, since it must also undergo the test for 
unfairness defined in Article 3(1) of Directive 93/13. This position contradicts that 
taken previously by the Supreme Court, according to which a lack of transparency 
in the ‘floor clause’ necessarily means that it is unfair. 
16 The referring court considers that, whether or not the term at issue passes the 
transparency test, it is necessary to analyse whether that term is unfair because it 
gives rise to a significant imbalance, to the detriment of the consumer, between 
the rights and obligations of the parties arising under the agreement, and requests 
the Court of Justice to confirm that, if the term relating to the IRPH for savings 
banks rate passes the transparency test, the national court must in any event 
examine its possible substantive unfairness, taking account of the possibility that 
such an imbalance may exist. 
– III-2 The requirements of good faith and balance 
17 As regards analysis of whether the term is substantively unfair, the judgment of 
the Court of Justice of 26 January 2017, Banco Primus, C-421/14, states in 
paragraph 67 that, where the national court considers that a contractual term 
relating to the calculation of ordinary interest is not in plain intelligible language, 
within the meaning of Article 4(2) of Directive 93/13, it is required to examine 
whether that term is unfair within the meaning of Article 3(1) of the directive and 
must to that end, inter alia, compare the method of calculation of the rate of 
ordinary interest laid down in that term and the actual sum resulting from that rate 
with the methods of calculation generally used, the statutory interest rate and the 
interest rates applied on the market at the date of conclusion of the agreement at 
issue in the main proceedings for a loan of a comparable sum and duration to 
those of the loan agreement under consideration. In paragraph 69 of the judgment 
of 14 March 2023, Aziz, C-415/11, the Court states that the national court must 
assess whether the seller or supplier, dealing fairly and equitably with the 
consumer, could reasonably assume that the consumer would have agreed to such 
a term in individual contract negotiations. 
18 The Supreme Court considers that the IRPH term cannot give rise to an imbalance 
contrary to the requirement of good faith because it is an official index approved 
by the banking authority and has in fact been used as a reference index by the 
Spanish central government and various regional governments in relation to the 
financing of officially protected housing. 
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19 The referring court believes that the IRPH considered in the abstract as an official 
index is not the same thing as the IRPH where it is included in an agreement to be 
used to calculate variable interest, and the fact that it is official is therefore 
irrelevant. It must also be borne in mind that only official indices may be used in 
agreements with a variable interest rate. In addition, for the financing of officially 
protected housing, the banks apply a negative differential to the IRPH, in all 
likelihood because that financing is supervised by the public administration. 
20 The fact that the index is official and is monitored by the Bank of Spain does not 
mean that a term such as that at issue in the main proceedings complies with the 
requirements of good faith and fair balance under Directive 93/13. The referring 
court is also doubtful whether the consumer would have accepted the term at issue 
in individual negotiations in which the seller or supplier had provided him with all 
the information necessary to understand how his interest was calculated, in 
particular the information in Notice 5/1994 about the negative differential and the 
fluctuations in that index over at least the preceding two years. 
21 The referring court seeks guidance as to the circumstances in which a term can be 
considered to comply with the requirements of good faith and balance and to that 
end refers the first, second, fourteenth, fifteenth, sixteenth, seventeenth and 
eighteenth questions for a preliminary ruling. 
IV) Application of Article 6 of Directive 93/13 to the charges used to 
calculate the IRPH and which should not have been payable by the consumer 
22 The AERs forwarded to the Bank of Spain by the savings banks in order for it to 
determine the IRPH for savings banks for the corresponding month included 
charges whose unfairness is now beyond doubt, such as certain costs charged to 
consumers but which were payable by the seller or supplier, and charges whose 
lawfulness has been called into question, such as the commitment fee. 
23 The referring court therefore poses the third question for a preliminary ruling 
seeking clarification on whether Article 6(1) of Directive 93/13, under which 
unfair terms are not binding on consumers, precludes an IRPH for savings banks 
term from being valid where it has been determined on the basis of data derived 
from the use of terms which have been declared unfair. 
V) The effects of the IRPH term being declared void for unfairness where 
the agreement cannot continue in existence without that term 
24 Should the referring court find that the IRPH term does not pass the transparency 
test, it would have to apply Article 83 of the TRLGDCU and Article 5(5) of Law 
7/1998, both as amended by Ley 5/2019 de regulación de los contratos de crédito 
inmobiliario (Law governing mortgage agreements) of 15 March 2019, which 
provide that terms included in agreements in a non-transparent way, to the 
detriment of consumers, are to be automatically void. Article 83 of the 
TRLGDCU and Article 5(5) of Law 7/1998 cannot apply retrospectively. 
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25 For its part, the order of the Court of Justice of 17 November 2021, Gómez del 
Moral Guasch II, C-655/20, in line with the Court’s judgments of 3 October 2019, 
Dziubak, C-260/18, and of 8 September 2022, D.B.P. and Others (Mortgage loan 
indexed to a foreign currency), C-80/21 to C-82/21, establishes in point 3 of the 
operative part that Article 6(1) of Directive 93/13 must be interpreted as requiring 
the national court to offer the consumer a choice between, on the one hand, 
amending the contract by substituting a contractual term fixing a variable rate of 
interest found to be unfair with a term referring to a supplementary index provided 
for by law, and, on the other hand, annulment of the mortgage loan agreement in 
its entirety if that contract is not capable of continuing in existence without that 
term. 
26 As regards the supplementary index provided for by law (the IRPH for institutions 
instead of the IRPH for savings banks), it should be noted that the 15th additional 
provision of Law 14/2013 was intended to ensure that the automatic 
disappearance of the IRPH for savings banks and the IRPH for banks rates 
preserved the balance in the parties’ obligations existing at that time, and provided 
that the IRPH for savings banks rate would be replaced by the IRPH for 
institutions rate plus a margin equivalent to the arithmetical average of the 
differences between the IRPH for savings banks rate and the IRPH for institutions 
rate, calculated on the basis of the data available between the date on which the 
agreement was concluded and that on which the replacement of the rate took 
effect. 
27 If the finding that the IRPH for savings banks term is unfair presupposes 
recognising that the term created an imbalance in the parties’ obligations, the 
question arises of whether a supplementary provision intended to preserve the 
existing balance (the 15th additional provision of Law 14/2013) is an appropriate 
means of achieving the objective that the finding of unfairness should restore the 
balance of the parties’ obligations. 
28 Furthermore, since according to the Bank of Spain all the criticisms which can be 
levelled against the IRPH for savings banks rate would have been dispelled if the 
corresponding negative differential had been included, the referring court believes 
that, where the term by which the IRPH savings banks rate is included in the 
agreement has been found to be unfair, it may be compatible with Article 6(1) of 
Directive 93/13 for the national court retroactively to replace the differential 
actually included in the agreement with the negative differential which should 
have been included at the time the agreement was concluded, reimbursing the 
consumer for the amount unfairly charged, plus interest, with the aim of 
preventing the nullity of the agreement and transforming it into the agreement 
which should have been entered into in accordance with the Bank of Spain’s 
warning. 
29 Should the consumer elect that the agreement be annulled, the referring court is 
uncertain whether Article 1303 or Article 1306(2) of the Civil Code should apply. 
Under Article 1303 of the Civil Code the parties would each restore what the other 
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party had received under the void agreement, plus interest, which means that the 
bank, the party liable for the breach which gave rise to the annulment, would 
benefit because it would recover the entire amount of the loan plus interest 
calculated at the statutory interest rate, which is higher than the rate contained in 
the agreement and applies to the total amount of the loan from the first day. 
Bearing in mind that we are dealing with a pre-formulated standard contract 
including non-negotiable general contract terms which has been imposed 
exclusively by the seller or supplier, the referring court considers that the seller or 
supplier is solely liable for the illegality or immorality which rendered the 
agreement void and that Article 1306(2) of the Civil Code should apply. 
30 For all those reasons, the referring court refers the thirteenth, nineteenth, 
twentieth, twenty-first and twenty-second questions for a preliminary ruling on 
that point.