Judgment;Summary — ECLI:EU:C:2022:242
Date: 2022-03-31
Language of the case: Hungarian
Court formation: Sixth Chamber
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Hungary

Summary C-472/20 – 1 
Case C-472/20 
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: 
30 September 2020 
Referring court: 
Fővárosi Törvényszék (Budapest High Court, Hungary) 
Date of the decision to refer: 
28 August 2020 
Applicant and appellant: 
Lombard Lízing Zrt. 
Defendant and respondent: 
PN 
  
Subject matter of the main proceedings 
Appeal against the judgment at first instance in proceedings concerning a loan 
contract denominated in a foreign currency 
Purpose and legal basis of the request for a preliminary ruling 
Legal consequences of the invalidity of the main subject matter of the contract on 
grounds of the unfairness of a contractual term which places the foreign exchange 
risk on the consumer – Determination of such legal consequences in a position 
statement adopted by the highest court of a Member State which is, however, not 
binding on lower courts – National legislation establishing special procedural 
requirements concerning the invalidity of contracts – Ex post regulation of the 
legal consequences through legislation – Effectiveness of Directive 93/13 
Legal basis: Article 267 TFEU 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-472/20  
 
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Questions referred 
1. If the unfair contract term concerns the main subject matter of the contract 
(the information on the exchange rate was not compliant), with the result 
that the contract cannot continue in existence, and there is no agreement 
between the parties, does the fact that, in the absence of any default rule 
under national law, guidance on a declaration of the validity or effectiveness 
of the contract is provided by a position statement adopted by the highest 
court which is, however, not binding on lower courts, ensure the full 
effectiveness of Directive 93/13? 
2. If the answer to the first question referred is in the negative, is it possible to 
restore the original position in a situation where the contract cannot continue 
in existence due to the unfairness of a term concerning its main subject 
matter, there is no agreement between the parties, and the position statement 
referred to above cannot be applied? 
3. If the answer to the second question referred is in the affirmative, can the 
law impose a requirement in respect of [this] type of contract stipulating 
that, when making an application for a declaration of invalidity in respect of 
the main subject matter of the contract, the consumer must also make an 
application for a declaration of the validity or effectiveness of the contract? 
- If the answer to the second question referred is in the negative, where it is 
not possible to restore the original position, is it possible for contracts to be 
declared valid or effective by means of ex post legislation, in the interests of 
ensuring a balance between the parties? 
Provisions of EU law cited 
– Articles 1, 6 and 7 of Council Directive 93/13/EEC of 5 April 1993 on unfair 
terms in consumer contracts (OJ 1993 L 95, p. 29) 
– Judgment of the Court of Justice of 30 April 2014, Kásler and Káslerné Rábai 
(C-26/13, EU:C:2014:282) 
– Judgment of the Court of Justice of 14 March 2019, Dunai (C-118/17, 
EU:C:2019:207) 
– Judgment of the Court of Justice of 3 October 2019, Dziubak (C-260/18, 
EU:C:2019:819) 
Provisions of national law cited 
– A Polgári Törvénykönyvről szóló 1959. évi IV. törvény (Law IV of 1959 
establishing the Civil Code), in force when the loan contract at issue was 
concluded: Articles 200, 209, 209/A, 237 and 239/A. 
LOMBARD LÍZING 
 
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– A hitelintézetekről és a pénzügyi vállalkozásokról szóló 1996. évi CXII. 
törvény (Law CXII of 1996 on Credit Institutions and Financial Enterprises), in 
force when the loan contract at issue was concluded: Article 203. 
– A Kúriának a pénzügyi intézmények fogyasztói kölcsönszerződéseire 
vonatkozó jogegységi határozatával kapcsolatos egyes kérdések rendezéséről 
szóló 2014. évi XXXVIII. törvény (Law XXXVIII of 2014 regulating specific 
matters relating to the decision of the Kúria (Supreme Court) to safeguard the 
uniformity of the law concerning loan contracts concluded by financial 
enterprises with consumers (‘Law DH 1’): Articles 1, 3 and 4. 
– A [DH1 törvényben] rögzített elszámolás szabályairól és egyes egyéb 
rendelkezésekről szóló 2014. évi XL. törvény (Law XL of 2014 on the rules 
relating to the settlement of accounts referred to by [Law DH 1], and other 
provisions) (‘Law DH 2’): Articles 1 and 37. 
Article 37 of Law DH2 establishes special procedural requirements 
concerning the invalidity of contracts. According to this provision, an 
applicant may apply for a declaration of invalidity only if he also requests a 
determination of the legal consequences of invalidity, namely, a declaration 
of validity or effectiveness of the contract up to the time of adoption of the 
judgment. Otherwise, the substance of the application cannot be examined. 
– A bíróságok szervezetéről és igazgatásáról szóló 1997. évi LXVI. törvény (Law 
LXVI of 1997 on the organisation and administration of the courts), in force 
when the contract at issue was concluded: Article 33. 
– A bíróságok szervezetéről és igazgatásáról szóló 2011. évi CLXI. törvény (Law 
CLXI of 2011 on the organisation and administration of the courts), currently 
in force: Article 25. 
– Az érvénytelenség jogkövetkezményeiről szóló 1/2010. (VI. 28) PK vélemény 
(Opinion 1/2010 of 28 June 2010 of the Civil Chamber of the Supreme Court, 
sitting in plenary session, on the legal consequences of invalidity). 
According to point 5 of the opinion, where the grounds for the invalidity can 
be eliminated or subsequently disappear, the court may declare the invalid 
contract valid with retroactive effect from the time it was concluded. The 
possibility of declaring the contract valid is an alternative that is equivalent 
to restoring the original position. If both legal consequences are possible, it 
will be for the court to exercise its discretion in order to decide which to 
apply. 
– Position statement adopted on 19 June 2019 by the majority of the Advisory 
Council of the Supreme Court examining the case-law on the invalidity of loan 
contracts denominated in a foreign currency. 
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This position statement, which is not binding on lower courts, offers lower 
courts two solutions, equally well founded in case-law, regarding the 
invalidity of contract terms that place the foreign exchange risk on the 
consumer. The court may declare the loan contract denominated in a foreign 
currency valid by changing the denomination to Hungarian forint, with 
ordinary interest at the rate applicable to the Hungarian forint on the date of 
signature of the contract, plus the differential. Alternatively, the court may 
also declare the contract valid by establishing a maximum exchange rate 
between the foreign currency and the Hungarian forint and leaving the 
interest rate fixed in the loan contract intact up to the date of the conversion 
into Hungarian forint. 
Brief summary of the facts and the main proceedings 
1 The defendant in the main proceedings (‘the defendant’) wanted to buy a Rover 
car. His own funds amounted to HUF 362 500, 1 which he needed to supplement 
with a loan of HUF 1 417 500. On 3 December 2009 he therefore made an 
application for credit to Lombard Finanszírozási Zrt., the predecessor in law to the 
applicant in the main proceedings (‘the applicant’) In the application the 
defendant undertook to contribute his own funds on 3 December 2009 and 
thereafter, from 5 January 2010 to 5 May 2016, to make monthly payments of 
HUF 34 900, amounting to HUF 2 689 225 in total.  
2 On 4 December 2009 Lombard Finanszírozási Zrt., as the lender, and the 
defendant, as the borrower, concluded an individual consumer loan contract 
denominated in Swiss francs at a variable interest rate. The contracting parties 
established the loan repayment terms and agreed that, where the contract made no 
provision, the general terms and conditions of lending issued by Lombard 
Finanszírozási Zrt. would apply, and the said terms and conditions form an 
integral part of the contract. 
3 On 4 December 2009 the defendant also signed a declaration of notification of 
risk. The declaration informed the borrower of the interest rate risk and of possible 
interest rate fluctuations. The information also advised of the need to take account 
of exchange rate risk. The monthly payments were determined in the foreign 
currency and then converted into Hungarian forint, which produces a different 
exchange rate; it was not possible to predict future fluctuations in the exchange 
rate. The general information on exchange rate variations was included in the 
 
1 According to the reference exchange rate published by the European Central Bank, one euro 
was equal to HUF 269.14 at the time the contract at issue was concluded, that is, on 4 December 
2009; to HUF 313.33 when the contract was terminated on 14 September 2015; to HUF 325.83 
when the court of first instance gave judgment on 11 July 2019; and to HUF 365.53 on the date 
of the request for a preliminary ruling, that is, on 30 September 2020. See 
https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/ht
ml/eurofxref-graph-huf.en.html 
LOMBARD LÍZING 
 
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general terms and conditions of lending under the definitions ‘Change in exchange 
rate I’ and ‘Change in exchange rate II’. 
4 Lombard Finanszírozási Zrt. was dissolved as the result of a takeover on 
31 August 2010 and its universal successor in law became the applicant. 
5 The settlement of accounts established by Law DH2, passed by the Hungarian 
legislature in 2014, also applied to the loan contract between the parties to the 
main proceedings. In accordance with those provisions, the applicant settled the 
amount which, according to Law DH1, had been calculated unfairly and was due 
to the defendant. The breakdown of the payment calculation also gave the annual 
ordinary interest rate as 22.32%, both before and after the amendment to the 
contract. The defendant did not challenge the settlement of accounts, which is 
therefore final. 
6 The defendant defaulted on the monthly payments. The applicant therefore 
terminated the loan contract on 14 September 2015 and lodged an action against 
the defendant with the Pesti Központi Kerületi Bíróság (Central District Court of 
Pest, ‘the court of first instance’). In that action it asked the court to declare that 
the loan contract concluded by the parties to the main proceedings on 4 December 
2009 was valid, with retroactive effect from the date of conclusion, thus fixing the 
initial interest rate at 23.07% per annum. It also asked the court, in enforcing the 
contract, to order the defendant to make a principal repayment of HUF 490 102 
plus default interest, and to pay the applicant’s costs. 
7 In his defence, the defendant submitted that the terms in the loan contract which 
placed the foreign exchange risk solely on the defendant were unfair, and he 
denied that the information provided in relation to the risk was plain and 
intelligible. He also argued that the contract was invalid because it did not clearly 
define the ordinary interest rate, in contravention of the relevant provisions of 
Hungarian law. The defendant complained that the applicant had not appended a 
detailed calculation of changes in the debt over time to the contract, which would 
have enabled detailed monitoring. The defendant also lodged a counterclaim in 
which he stated that since concluding the contract he had paid the applicant a total 
of HUF 3 151 644, whereas the initial amount of the loan was only 
HUF 1 417 500; he therefore considered all payments made from October 2012 to 
be overpayments. In his counterclaim he therefore asked the court to order the 
applicant to pay HUF 1 734 144 on grounds of the invalidity of the contract and 
unjust enrichment. He also asked the court to order the applicant to transfer title to 
the Rover car to him and to cancel the applicant’s right of option. 
8 While the applicant did not challenge the amount of the loan repayments made by 
the defendant up to that point, it did dispute the counterclaim based on unjust 
enrichment and it did not accept the quantitative deduction claimed on that 
ground. It also stated that it had provided information on the exchange rate risk in 
plain, intelligible language. Moreover, it argued that the fact that the contract did 
not state the ordinary interest rate could, at most, be grounds for partial invalidity, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-472/20  
 
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which would be curable. Finally, the applicant underlined that the defendant had 
not challenged the interest rate stated in the settlement of accounts performed in 
accordance with the provisions of Law DH2, and therefore the court could supply 
the ordinary interest rate, thereby curing the invalidity of the contract. 
9 In its judgment of 11 July 2019 the court of first instance classified the contract at 
issue as a loan contract denominated in Hungarian forint and declared it valid with 
retroactive effect from the date of conclusion, fixing the ordinary interest rate in 
Hungarian forint at 23.07% per annum. It dismissed the remaining claims in the 
application. With regard to the counterclaim brought by the defendant, it ordered 
the applicant to pay the defendant HUF 462 419 and to transfer title to the Rover 
car to him, and ordered the cancellation of the applicant’s right of option. It 
dismissed the counterclaim as to the remainder. 
10 With regard to the ordinary interest rate in foreign currency, in the grounds for the 
decision the court of first instance declared that the interest rate stated by the 
applicant could not be properly inferred from either the loan contract or the 
general terms and conditions of lending, and that the interest rate had not been 
proved. The court of first instance agreed with the defendant that the ordinary 
interest stated by the applicant is contrary to the very nature of a foreign currency-
based system. In practice, at the time the parties concluded the loan contract the 
interest rate for loans denominated in Hungarian forint was around 20%, whereas 
the interest rate for loans denominated in foreign currency concluded at that time 
was 10% or even less. According to the court of first instance, the onus was on the 
applicant to support its claim by proving the essential content of the contract and 
the ordinary interest rate in foreign currency; it had, however, failed to do so. 
11 With regard to information on the exchange rate risk, the court of first instance 
ruled that the contractual term which placed the foreign exchange risk on the 
consumer was unfair, having regard to Directive 93/13, the judgment of the Court 
of Justice of 20 September 2018, OTP Bank and OTP Faktoring (C-51/17, 
EU:C:2018:750), and Decision No 6/2013 PJE of the Supreme Court adopted with 
a view to ensuring consistent interpretation of the provisions of civil law. The 
court also ruled that all the legal consequences – that is, the consequences of the 
unfairness of the contractual term which placed the foreign exchange risk on the 
consumer and the consequences of the partial invalidity on grounds of failure to 
determine the interest – should be applied jointly. 
12 With regard to the application of the legal consequences of invalidity, the court of 
first instance based its reasoning on the position statement issued by the Advisory 
Council of the Supreme Court on 19 June 2019. It ruled that the loan contract 
between the parties was valid, deeming it to be denominated in Hungarian forint 
due to the unfairness of the exchange rate risk. Based on the settlement of 
accounts produced by the applicant to take account of the difference between the 
total monthly payments (HUF 2 689 225) and the amount of the loan 
(HUF 1 417 500), the court fixed the initial ordinary interest rate at 23.07% per 
annum. However, in view of the difference between the HUF 3 151 644 actually 
LOMBARD LÍZING 
 
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paid by the defendant up to that point and the original total of all the monthly 
payments, which amounted to HUF 2 689 225, the court ordered the applicant to 
pay the defendant HUF 462 419 HUF on grounds of unjust enrichment. 
13 The applicant lodged an appeal against the judgment at first instance with the 
referring court, which has made a request to the Court of Justice for a preliminary 
ruling.  
Main arguments of the parties to the main proceedings 
14 The applicant asks the referring court to amend the judgment at first instance so as 
to omit the classification of the contract at issue as a loan contract denominated in 
Hungarian forint and to order the defendant to pay HUF 490 102 by way of 
principal – a sum it also claimed at first instance – plus default interest and the 
applicant’s costs. It also asks the court to dismiss the counterclaim in its entirety 
and to omit the operative provisions of the judgment concerning the transfer of 
title to the car and the cancellation of the right of option. 
15 The applicant argues that the declaration of notification of risk clearly stated that 
the defendant should take the exchange rate risk into account. The applicant also 
drew the defendant’s attention to the uncertainty over future exchange rate 
fluctuations. According to the applicant, the fact that the borrower bears the 
exchange rate risk in return for a more favourable interest rate does not in itself 
mean that a loan contract denominated in foreign currency is unlawful or contrary 
to honest practices, that it is usurious, that performance is impossible, or that the 
contract is a sham. 
16 The applicant cites point 1 of Decision No 2/2014 PJE of the Supreme Court 
adopted with a view to ensuring consistent interpretation of the provisions of civil 
law, which establishes that the consumer bears the exchange rate risk without 
limitation. A contractual term concerning exchange rate risk can be examined only 
if, at the time of the conclusion of the agreement, its content was neither plain nor 
intelligible for an average consumer who is reasonably well informed and 
reasonably observant and circumspect. If, based on the contractual terms and the 
information provided by the financial institution, such a consumer was able 
clearly to understand that he bore the entire and unlimited exchange rate risk and 
that there was no upper limit on potentially adverse exchange rate fluctuations, the 
term under examination could not be regarded as unfair. According to the 
applicant, the information it had provided is compliant with the judgments of 
30 April 2014, Kásler and Káslerné Rábai (C-26/13, EU:C:2014:282), and of 
20 September 2017, Andriciuc and Others (C-186/16, EU:C:2017:703). It stressed 
that, based on the general terms and conditions of lending, it was possible to 
establish unequivocally that the borrower has to pay for fluctuations in exchange 
rates, and that the exchange rate may be subject to extreme fluctuations with no 
upper limit. 
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17 The applicant disputes the finding by the court of first instance that it had failed to 
prove the interest rate of 23.07%, which had been determined by the court itself. 
During the proceedings at first instance it gave a detailed account of the amount of 
ordinary interest. When the court of first instance declared the contract to be valid, 
it should also have been required to amend the ordinary interest, using the interest 
rate for the relevant foreign currency plus the differential. A declaration that a 
contract is valid cannot entail a change in the contractual balance between the 
parties which has the effect of creating a major disparity between the value of 
obligation and consideration in the legal relationship. 
18 In his response to the appeal, the defendant asks the court to uphold the judgment 
given at first instance. He points out that, according to the Supreme Court, the 
information to be provided on exchange rate risk must be deemed part of the main 
contractual obligation, and that if the information is not provided or is unfair, the 
contract becomes invalid in its entirety. His response is accompanied by various 
individual judgments in support of his argument. 
Brief summary of the reasons for the request for a preliminary ruling 
19 In the light of the previous case-law of the Court of Justice, the referring court 
seeks clarification of the possibilities available in law for declaring a contract to 
be valid and effective where its main subject matter is invalid.