Judgment;Summary — ECLI:EU:C:2023:177
Date: 2023-03-09
Language of the case: French
Court formation: Third Chamber
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: France

Anonymised version 
Translation  C-50/22 – 1 
Case C-50/22 
Request for a preliminary ruling 
Date lodged: 
25 January 2022 
Referring court: 
Cour d’appel de Paris (France) 
Date of the decision to refer: 
16 December 2021 
Appellant: 
SOGEFINANCEMENT 
Respondents: 
RW 
UV 
  
[…] 
COUR D’APPEL DE PARIS (COURT OF APPEAL, PARIS, FRANCE) 
Division 4 – Chamber 9 – A 
JUDMENT OF 16 DECEMBER 2021 REFERRING A QUESTION TO THE 
COURT OF JUSTICE OF THE EUROPEAN UNION FOR A 
PRELIMINARY RULING 
[…] 
APPELLANT 
EN 
REQUEST FOR A PRELIMINARY RULING OF 16. 12. 2021 – CASE C-50/22 
 
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SOGEFINANCEMENT, a simplified joint stock company, acting through its 
legal representatives, with address as such at the registered office mentioned 
herein 
[…] 
92724 NANTERRE CEDEX 
 
[…] 
RESPONDENTS 
RW 
[…] 
93160 NOISY LE GRAND 
 
[…] 
UV 
[…] 
93160 NOISY LE GRAND 
 
[…] [Procedural formalities] 
FACTS, PROCEDURE AND CLAIMS OF THE PARTIES 
On 5 November 2011 Sogefinancement granted RW and UV a personal loan of 
EUR 15 362.90, repayable in 84 monthly instalments of EUR 430.85, excluding 
insurance, at an annual fixed borrowing rate of 7.60%. 
On 20 October 2015 the parties agreed to restructure the debt of EUR 15 362.90, 
repayable in 83 monthly instalments of EUR 258.54 with effect from 
15 December 2015. 
In an action brought before it by Sogefinancement seeking, primarily, an order 
against RW and UV requiring them to pay the outstanding balance, the tribunal 
d’instance du Raincy (District Court, Raincy, France), by an inter partes judgment 
delivered on 25 January 2018: 
— declared the action for payment admissible; 
— declared the agreement concluded between the parties on 5 November 2011 
null and void; 
SOGEFINANCEMENT 
 
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— disapplied Article 1231-6 of the code civil (French Civil Code) and Article 
L. 313-3 of the code monétaire et financier (French Monetary and Financial 
Code); 
— ordered RW and UV to pay Sogefinancement EUR 1 309.65 under the loan 
agreement and declared that no interest would be payable on that sum; 
— drew attention to Article L. 311-48 (now Article L. 341-8) of the code de la 
consommation (French Consumer Code) and stated that interest at the statutory 
rate calculated on the interest received by the lender would be deducted from the 
sum payable by RW and UV; 
— set a payment deadline by which RW and UV would have to repay the debt 
in six monthly instalments of EUR 200 and one final instalment comprising the 
balance of the debt, failing which all outstanding sums would become repayable 
forthwith; 
— dismissed the remainder of Sogefinancement’s claims. 
After examining the admissibility of the action, the District Court raised of its own 
motion a ground alleging infringement of Article L. 312-25 of the Consumer Code 
and held that, since the funds had been disbursed to the borrowers less than seven 
days after acceptance of the loan offer, the agreement had to be annulled under 
Article 6 of the Civil Code. 
By declaration dated 24 May 2018, Sogefinancement appealed against that 
decision. 
As set out in its most recent heads of claim submitted on 8 February 2021, the 
appellant claims that the Court of Appeal should: 
— set aside, or at least vary, the judgment under appeal in its entirety; 
— dismiss all of RW and UV’s claims; 
— declare the ground based on the nullity of the agreement to be inadmissible 
or, in the alternative, dismiss that ground; 
— declare the borrowers’ application for forfeiture of the entitlement to 
contractual interest to be inadmissible; dismiss that application; 
— declare the repayment term accelerated or, in the alternative, declare the 
termination the loan agreement; 
— order RW and UV jointly and severally to pay it EUR 13 974.41, together 
with interest at the contractual rate of 7.60% per annum from 31 July 2018, in 
cash or using other valid means of payment for settlements carried out after 
30 July 2018; 
REQUEST FOR A PRELIMINARY RULING OF 16. 12. 2021 – CASE C-50/22 
 
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— in the alternative, in the event that the agreement is null and void, to order 
them jointly and severally to pay it EUR 28 000 by way of repayment of the loan 
capital, together with interest at the statutory rate, and to declare that they remain 
liable to pay EUR 517.40 together with interest at the statutory rate; 
— in the alternative, in the event of forfeiture of the entitlement to contractual 
interest, order RW and UV jointly and severally to pay it EUR 2 504.36 together 
with interest at the statutory rate from 6 March 2017; 
— dismiss RW and UV’s application for further time or, in the alternative, 
declare the debt to be repayable forthwith in the event of failure to comply with 
only one of the due dates; 
— order them to pay it EUR 1 000 under Article 700 of the code de procédure 
civile (French Civil Procedure Code). 
Relying on Article L. 311-14 and Article R. 632-1 of the Consumer Code in the 
version applicable to the case, the appellant submits that the court of first instance 
was not entitled to declare the agreement null and void of its own motion, since 
only the consumer can plead a public policy provision designed to protect specific 
interests. In that connection, it alleges misuse of powers. It submits that the nullity 
of the agreement cannot be raised beyond the five-year limitation period laid 
down in Article L. 110-4 of the code de commerce (French Commercial Code). 
The appellant also argues that the seven-day period before the funds can be 
released was indeed observed and complains of confusion between the internal 
‘release’ of the funds and their actual payment to the borrowers. It notes that the 
borrowers do not provide proof of the date on which they received the funds. 
It provides details of the amount of the debt owed to it. 
Lastly, the appellant pleads that RW and UV’s claim relating to the forfeiture of 
the entitlement to contractual interest is time-barred. 
By their heads of claim submitted on 29 October 2018, RW and UV contend that 
the Court of Appeal should: 
— confirm the judgment under appeal in its entirety, save in so far as it 
determined the debt owed to Sogefinancement to be the principal sum of 
EUR 1 309.65; 
— order them jointly and severally to pay the appellant company the principal 
sum of EUR 517.40, plus interest at the statutory rate from the date of service of 
the present judgment; 
— in the alternative, order the forfeiture of Sogefinancement’s entitlement to 
contractual interest and grant them the longest payment period possible to 
discharge their debt; 
SOGEFINANCEMENT 
 
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— dismiss Sogefinancement’s claims and order it to pay them EUR 2 000 
under Article 700 of the Civil Procedure Code. 
The respondents submit that the public policy nature of the applicable provisions 
justifies the court of first instance having raised of its own motion the nullity of 
the agreement under Article L. 141-4 of the Consumer Code. On the basis of 
Article 2224 of the Civil Code, they also argue that the five-year limitation period 
for applications for nullity does not begin on the date on which the agreement was 
entered into but on the date on which the holder of a right knew or ought to have 
known of the facts enabling him or her to bring an action, which in this case was 
the hearing before the court of first instance. 
They maintain that the appellant did not observe the seven-day period for release 
of the funds, laid down in Article L. 311-14 of the Consumer Code in the version 
applicable in the instant case, and express surprise that the bank has not provided 
proof of the date on which the amount borrowed was transferred. 
They argue that the elimination of interest is justified under Article 1343-5 of the 
Civil Code and contend that the court of first instance erred in calculating the sum 
outstanding for payment by them. 
They describe their precarious financial situation. 
[…] [Procedural matters] 
After receiving the observations of the parties and the opinion of the public 
prosecutor’s office, this court, by judgment delivered on 1 July 2021, submitted a 
request for an opinion to the Cour de cassation (Court of Cassation, France) on the 
following two questions: 
— in the light of Article L. 141-4, now Article R. 632-1, of the Consumer 
Code, Article 6 of the Civil Code, Article L. 110-4 of the Commercial Code and 
the Court of Justice of the European Union’s interpretation of Directive 
2008/48/EC of 23 April 2008 on the role of the courts in ensuring compliance 
with the provisions of European economic public policy, may a court raise of its 
own motion the nullity of a consumer credit agreement, in particular pursuant to 
Article L. 312-25 of the Consumer Code, after the expiry of the five-year 
limitation period enforceable against a party? 
— in the light of Article L. 141-4, now Article R. 632-1, of the Consumer 
Code, Article 6 of the Civil Code, Article L. 110-4 of the Commercial Code, 
Articles 4 and 5 of the Civil Procedure Code and the Court of Justice of the 
European Union’s interpretation of Directive 2008/48/EC of 23 April 2008 on the 
role of the courts in ensuring compliance with the provisions of European 
economic public policy, may a court declare a consumer credit agreement null and 
void, in particular pursuant to Article L. 312-25 of the Consumer Code, without 
any application for annulment having being made by one of the parties? 
REQUEST FOR A PRELIMINARY RULING OF 16. 12. 2021 – CASE C-50/22 
 
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On 21 October 2021 the Court of Cassation issued its opinion that the questions 
should be referred by the court hearing the case to the Court of Justice of the 
European Union pursuant to Article 267 of the Treaty on the Functioning of the 
European Union. 
The appellant submitted observations on 30 November 2021 stating that Article L. 
311-17 of the Consumer Code, which provides that funds may not be made 
available before the expiry of a period of seven days, has only an indirect 
connection with Article 14 of the abovementioned directive and proposes that two 
questions be submitted for a preliminary ruling referring to the principles of legal 
certainty and of States’ procedural autonomy. 
The respondents made it known on 10 November 2021 that they had no 
observations on the possible reference for a preliminary ruling. 
[…] 
GROUNDS FOR THE DECISION 
It is not disputed that the provisions applicable to the dispute are Article L. 311-1 
et seq. of the Consumer Code resulting from Law No 2010-737 enacted on 1 July 
2010, which transposes into national law the provisions of Directive 2008/48/EC 
of the European Parliament and of the Council of 28 April 2008 (now Article L. 
312-1 et seq. of that code). 
The court of first instance declared the contested credit agreement null and void of 
its own motion the ground that the funds had been disbursed to the borrowers 
before expiry of the withdrawal period, in breach of former Article L. 311-14 
(now Article L. 312-25) of the Consumer Code. 
The appellant complains that the court of first instance exceeded its powers 
because only one party may invoke the nullity of an agreement on the basis of 
those provisions, which are public policy provisions designed to protect specific 
interests. It observes that the nullity at issue here is a relative nullity and that it is 
open to the consumer to confirm an agreement which falls to be annulled. The 
appellant states that the borrowers, appearing before the District Court, did not 
seek annulment of the agreement or claim infringement of Article L. 312-25. 
The appellant also maintains that the District Court was not entitled to raise of its 
own motion a ground capable of bringing about the annulment of the agreement 
beyond the limitation period within which the borrowers themselves may seek 
annulment of the agreement. 
Before the Court of Appeal, the respondents endorse the grounds of the judgment 
which they seek to have upheld. They contend that the court of first instance was 
entitled to raise of its own motion a public policy provision, in respect of which 
SOGEFINANCEMENT 
 
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the parties were able to exchange arguments, even though the respondents had not 
applied for annulment of the agreement. 
Referring to Articles 1179 and 1180 of the Civil Code, they submit that the public 
policy provisions relating to consumer credit are penalised by absolute nullity 
which may be applied for by any interested party and by the public prosecutor’s 
office and that the limitation period begins on the date on which the person 
invoking nullity became aware of the irregularity, that is to say, in the present 
case, so far as the courts are concerned, the date of the originating application or 
the hearing. 
*** 
Directive 2008/48/EC of the European Parliament and of the Council of 23 April 
2008 on credit agreements for consumers and repealing Council Directive 
87/102/EEC was transposed into French law by Law No 2010-737 of 1 July 2010. 
It is directly applicable by national courts. 
Under Article 14 of that directive: 
‘1. The consumer shall have a period of 14 calendar days in which to withdraw 
from the credit agreement without giving any reason. That period of withdrawal 
shall begin 
either from the day of the conclusion of the credit agreement, or from the day on 
which the consumer receives the contractual terms and conditions and 
information in accordance with Article 10, if that day is later than the date 
referred to in point (a) of this subparagraph. 
… 
7. This Article shall be without prejudice to any rule of national law 
establishing a period of time during which the performance of the contract may 
not begin.’ 
Article 22 provides that ‘Member States shall ensure that consumers may not 
waive the rights conferred on them by the provisions of national law implementing 
or corresponding to this Directive’. 
Under Article 23, ‘Member States shall lay down the rules on penalties applicable 
to infringements of the national provisions adopted pursuant to this Directive and 
shall take all measures necessary to ensure that they are implemented. The 
penalties provided for must be effective, proportionate and dissuasive’. 
Under Article L. 311-14 of the Consumer Code, in the version applicable to the 
dispute (now Article L. 312-25), ‘during a period of seven days from the 
borrower’s acceptance of the agreement, no payment in any form or for any 
reason whatsoever may be made by the lender to the borrower or for the 
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borrower’s account, or by the borrower to the lender. Nor may the borrower, 
during that period, make any deposit to the lender or for the lender’s account in 
respect of the operation in question. If the borrower signs a direct debit 
authorisation in respect of his or her bank account, its validity and entry into 
effect shall be subject to the validity and entry into effect of the credit agreement’. 
It should be noted that that provision falls within the framework of Article 14(7), 
cited above. 
National law accepts that disbursement of the loan before expiry of the seven-day 
period entails the nullity of the agreement pursuant to Article 6 of the Civil Code, 
which provides that it is not possible, by private agreement, to derogate from laws 
that concern public policy and accepted principles of morality. Annulment of the 
agreement triggers repayment by the borrower of the loan capital. 
*** 
Under Article L. 141-4, now Article R. 632-1, of the Consumer Code, ‘a court 
may, of its own motion, raise all the provisions of this Code in disputes arising 
from its application. It shall, of its own motion, after receiving the observations of 
the parties, disapply a term the unfairness of which is evident from the arguments 
submitted before it’. 
Article L. 311-52 of the Consumer Code provides that ‘actions for payment by the 
lender following non-performance by the borrower shall be time-barred two years 
after the event giving rise to them’. 
According to Article L. 110-4 of the Commercial Code, ‘obligations deriving 
from trade between traders or between traders and non-traders shall be time-
barred after five years unless they are subject to special shorter limitation 
periods’. 
Article 2224 of the Civil Code provides that ‘personal actions or actions involving 
moveable property shall be time-barred five years from the date on which the 
holder of a right knew or ought to have known of the facts enabling him or her to 
bring such an action’. 
Consumer actions – including actions with a view to having an agreement 
annulled – such as applications for annulment of an agreement brought by way of 
objection by the consumer are subject to the limitation period of five years from 
the conclusion of the agreement, as provided for in both Article 110-4 of the 
Commercial Code and Article 2224 of the Civil Code. However, those rules on 
time bar do not prevent the consumer in any circumstances from raising a 
substantive ground of defence in an action for payment such as to frustrate the 
lender’s claim in whole or in part, without deriving any other benefit from doing 
so. 
SOGEFINANCEMENT 
 
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It has been held that the setting of appropriate time limits for bringing actions in 
the form of limitation periods is not liable to make it impossible in practice or 
excessively difficult to exercise the rights conferred on consumers; it seeks to 
forestall endless challenges to an agreement and thus takes account of the 
fundamental principle of legal certainty (judgment of 6 October 2009, Asturcom 
Télécommunicaciones, C-40/08). 
However, it has also been held that the principle of effectiveness of the provisions 
of the abovementioned directive precludes the penalty of nullity of the credit 
agreement linked with an obligation to return the capital amount from being 
subject to the condition that the nullity must be raised by the consumer within a 
limitation period of three years (judgment of 5 March 2020, OPR – Finance, 
C-679/18). 
It is therefore necessary to refer a question to the Court of Justice of the European 
Union for a preliminary ruling in the terms set out below. 
Furthermore, according to Articles 4 and 5 of the Code of Civil Procedure, ‘the 
subject matter of the dispute shall be determined by the respective claims of the 
parties’ and ‘the court shall rule on the entire subject matter of the dispute and 
shall go no further than that subject matter’. 
Those provisions, which derive from States’ procedural autonomy, prevent a court 
from ruling ultra petita. 
The principle that the subject matter of an action is delimited by the parties 
(‘principe dispositive’), which is recognised by EU law in particular in so far as it 
contributes to legal certainty, also precludes a court from raising a counterclaim. 
Nonetheless, Article L. 141-4, now Article R. 632-1, of the Consumer Code 
provides – in order to ensure the effectiveness of the consumer protection 
established by the abovementioned directive – that a court may, of its own motion, 
raise all the provisions of that code in disputes arising from its application; it 
must, of its own motion, after receiving the observations of the parties, disapply a 
term the unfairness of which is apparent from the arguments submitted before it. 
Pursuant to the latter provision, national law accepts that a court may, of its own 
motion, declare the forfeiture of the lender’s entitlement to collect contractual 
interest even where the consumer has not taken a view on that matter, whether he 
or she be the appearing party or the defaulting party, provided that the ground has 
been the subject of an exchange of arguments. 
In national law, invoking the nullity of the agreement is not only a substantive 
ground of defence against an action for payment brought by the lender, but also a 
self-standing claim. 
In addition to what has been said on the associated limitation period, the 
annulment of the agreement by a court in the absence of an application to that 
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effect by the consumer – whether he or she be the appearing party or the 
defaulting party – or of the consumer’s acquiescence to such annulment, after the 
court has raised of its own motion the irregularity liable to be penalised by such 
nullity, is capable of undermining the principle that the subject matter of an action 
is delimited by the parties and undermine individual and collective legal certainty. 
Nonetheless, the principle of effectiveness, which must seek in general terms to 
discourage traders from engaging in non-compliant practices, must take into 
account the low level of consumer participation in judicial proceedings, from 
which neither the consumer’s acceptance of the merits of the lender’s claims nor 
his or her acquiescence to the possible annulment of the agreement can be inferred 
at individual level. 
It is therefore necessary to ask the Court of Justice, in the terms set out below, 
about the criteria for striking a balance between the principle of effectiveness, the 
principle that the subject matter of an action is delimited by the parties and the 
principle of legal certainty in relation to the declaration by a court, of its own 
motion, that a credit agreement is null and void, where the consumer has not taken 
a view on that matter. 
ON THOSE GROUNDS 
THE COURT OF APPEAL, 
[…] 
Having regard to Article 267 of the Treaty on the Functioning of the European 
Union, 
— refers the case and the parties to the Court of Justice of the European Union, 
to which the following questions are submitted for a preliminary ruling: 
1. Does the principle that penalties must be effective, deriving from Article 23 
of Directive 2008/48/EC, in the light of the principles of legal certainty and of 
States’ procedural autonomy, preclude a situation whereby a court may not raise 
of its own motion a national legal provision, resulting from Article 14 of that 
directive and penalised under national law by the nullity of the agreement, beyond 
the five-year limitation period within which the consumer may seek the annulment 
of the credit agreement by bringing legal proceedings or by raising an objection? 
2. Does the principle that penalties must be effective, deriving from Article 23 
of Directive 2008/48/EC, in the light of the principles of legal certainty and of 
States’ procedural autonomy and the principle that the subject matter of an action 
is delimited by the parties, preclude a situation whereby a court may not declare a 
credit agreement null and void after raising of its own motion a provision of 
national law, resulting from Article 14 of that directive, where the consumer has 
not applied for or at least acquiesced in such annulment? 
SOGEFINANCEMENT 
 
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[…]