Judgment;Summary — ECLI:EU:C:2023:578
Date: 2023-07-13
Language of the case: Spanish
Court formation: Ninth Chamber
Subject matter: Approximation of laws
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - inadmissible
Origin: Spain

Summary C-265/22 – 1 
Case C-265/22 
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:  
20 April 2022 
Referring court:  
Juzgado de Primera Instancia No 17 de Palma de Mallorca (Spain) 
Date of the decision to refer:  
19 April 2022 
Applicants:  
ZR 
PI 
Defendant:  
Banco Santander, S. A. 
  
Subject matter of the main proceedings 
Mortgage loan agreement linked to a variable interest rate – Claim for a 
declaration that the clause contained in that agreement, to the effect that the 
variable interest rate will be linked to the Índice de Referencia de Préstamos 
Hipotecarios (Mortgage Loan Reference Index) (IRPH), to which a positive 
margin will be added, is void – Possible unfairness of that clause because it is 
contrary to the policy rule laid down by the regulatory body (Banco de España 
(Bank of Spain)) whereby the margin added to an IRPH index must be negative in 
order for the annual percentage rate of charge (APRC) of that loan to be equal to 
the APRCs of loans linked to the Euribor index.  
Subject matter and legal basis of the request for a preliminary ruling 
Request for a preliminary ruling on interpretation – Article 267 TFEU – 
Consumer protection – Interpretation of Directive 93/13/EEC – Unfair 
commercial practices – Interpretation of Directive 2005/29/EC – Compatibility 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-265/22 
 
2  
with Directive 2005/29/EC of a national practice entailing a departure from the 
policy rule laid down by the regulatory body for the financial sector in Spain – 
Unfairness of the national practice as an element in any assessment as to its 
unfairness [under Directive 93/13/EEC] – Compatibility of the national case-law 
with Directives 93/13/EEC and 2005/29/EC – Compatibility with Directives 
93/13/EEC and 2005/29/EC of the fact of not applying an inclusion and unfairness 
check to an allegedly unfair clause.  
Questions referred for a preliminary ruling 
1: Given that the calculation of the variable interest index known as the 
‘AVERAGE RATE FOR MORTGAGE LOANS OF A TERM GREATER THAN 
THREE YEARS GRANTED BY ALL [FINANCIAL] INSTITUTIONS’ includes 
any fees and margins applied, which are incorporated into the interest rate, thus 
making that rate more onerous for the consumer than the other annual percentage 
rates of charge on the market, and given that the rules laid down in Bank of Spain 
Notice 5/1994 – which represents the regulatory body’s policy rule in this 
sphere – require such margins to be negative, a requirement which financial 
institutions have widely failed to disclose and fulfil, IS A COMPLETE 
DEPARTURE FROM THE REGULATORY BODY’S POLICY RULE 
CONTRARY TO ARTICLES 5 AND 7 OF DIRECTIVE 2005/29/EC? 
2: If it is shown that departing from the aforementioned policy rule is contrary 
to Articles 5 and 7 of Directive 2005/29/EC, in accordance with the case-law of 
the Court of Justice of the European Union [referred to] in CASE C-689/20, 
DOES THAT UNFAIR PRACTICE CONSTITUTE AN ELEMENT IN THE 
EVALUATION AND ASSESSMENT OF THE UNFAIRNESS OF THE 
CLAUSE IN QUESTION AND IS IT CONTRARY TO ARTICLES 3 AND 4 OF 
DIRECTIVE 93/13? 
3: If Bank of Spain Notice 5/1994, which is specific to the financial sector but 
not common knowledge to the general public, was not taken into account in any 
way, and if the fact of its not being taken into account is declared to be contrary 
to Article 7 of Directive 2005/29/EC, DOES THIS CONSTITUTE AN 
ELEMENT IN THE ASSESSMENT OF UNFAIRNESS UNDER ARTICLE 6(1) 
OF DIRECTIVE 93/13 [AND DOES THIS] WARRANT THE APPLICATION 
OF A TRANSPARENCY CHECK TO THE AFOREMENTIONED INDEX 
COMPRISING A ‘reference rate plus margin’? 
4: DO ARTICLES 3(1), 4 AND 5 OF DIRECTIVE 93/13/EEC PRECLUDE 
NATIONAL CASE-LAW, IN THE LIGHT OF THE SPECIFIC RULES OF THE 
IRPH, [ACCORDING TO WHICH] A FAILURE TO APPLY A NEGATIVE 
MARGIN DOES NOT CONSTITUTE AN UNFAIR PRACTICE, DESPITE THE 
REQUIREMENT TO DO SO LAID DOWN IN THE PREAMBLE TO THE 
BANK OF SPAIN NOTICE, AND THE FACT THAT THE IRPH, WHICH IS 
LESS ADVANTAGEOUS THAN ALL THE EXISTING ANNUAL 
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PERCENTAGE RATES OF CHARGE, HAS BEEN MARKETED AS IF IT 
WERE A PRODUCT AS ADVANTAGEOUS AS THE EURIBOR, EVEN 
THOUGH IT DOES NOT TAKE INTO ACCOUNT THE REQUIREMENT TO 
ADD A NEGATIVE MARGIN AND, [CONSEQUENTLY], CONTRACTS 
MAY CEASE TO BE CONCLUDED BECAUSE THE CLAUSES PROVIDING 
FOR ITS APPLICATION ARE CONSIDERED TO BE VOID, BANKS MAY IN 
FUTURE REFRAIN FROM USING THOSE CLAUSES BECAUSE 
MARKETING THIS SERVICE TO VULNERABLE CONSUMERS MAY 
AFFECT [THEIR] ECONOMIC BEHAVIOUR AND IT MAY BE FOUND 
THAT THESE CLAUSES MUST BE EXCLUDED FROM COMMERCIAL 
CONTRACTS BECAUSE THEY ARE UNFAIR IN VIEW OF THE FACT 
THAT THEY HAVE BEEN INCLUDED IN THE PRICE OF THE INTEREST, 
CONTRARY TO DIRECTIVE 2005/29/EC? 
5a: IS IT CONTRARY TO ARTICLE 6(1) OF DIRECTIVE 93/13/EEC FOR 
A DISCLOSURE AND UNFAIRNESS CHECK NOT TO BE CARRIED OUT 
IN THE CASE WHERE A MARGIN HAS BEEN COVERTLY IMPOSED, 
GIVEN THAT, IN AN OFFER MADE BY A BANK, THE MARGIN MUST BE 
NEGATIVE, AND FOR CONSUMERS NOT TO HAVE BEEN MADE 
AWARE AT THE PRE-CONTRACTUAL INFORMATION STAGE OF THE 
ECONOMIC BEHAVIOUR OF THE INTEREST APPLIED TO THEIR LOAN, 
CONTRARY TO DIRECTIVE 2005/29/EC? 
Provisions of European Union law relied on  
Directive 93/13/EEC, Articles 3, 4, 5, 6 and 7. 
Directive 2005/29/EC, Articles 5 and 7.  
Provisions of national law relied on  
I. Real Decreto Legislativo 1/2007, de 16 de noviembre, por el que se aprueba 
el texto refundido de la Ley General para la Defensa de los 
Consumidores y Usuarios y otras leyes complementarias (Royal 
Legislative Decree 1/2007 of 16 November 2007 approving the 
consolidated text of the General Law for the protection of consumers 
and other supplementary laws (‘TRLGDCU’). The following provisions 
from that text are cited below:  
Article 8. Basic rights of consumers and users. 
1. Consumers and users and vulnerable consumers shall enjoy the following 
basic rights: 
[…] 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-265/22 
 
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b) To have their legitimate economic and social interests protected, in 
particular from unfair commercial practices and the inclusion of unfair terms in 
contracts. 
c) To receive compensation for any damage caused and reparation for any loss 
sustained. 
d) To receive accurate information on the goods or services in question in a 
format ensuring its accessibility, as well as instruction and familiarisation to 
facilitate knowledge of the proper use, consumption or enjoyment of those goods 
or services, and to inform the making of decisions that are in their best interests. 
[…] 
f) To have their rights protected through effective procedures, particularly in 
the case of vulnerable consumers. 
2. The rights of vulnerable consumers shall be the subject of special provisions 
enacted by regulation and by the sectoral legislation applicable in each case. The 
public authorities shall promote policies and actions aimed at ensuring that such 
consumers enjoy their rights on an equal basis commensurate with the particular 
vulnerability affecting them, and shall in any event seek to avoid processes that 
might impede the exercise of those rights. 
EXPLANATORY NOTE: Article 8 drafted pursuant to the second paragraph of the 
first article of Law 4/2022 of 25 February 2022 on the protection of consumers 
and users in situations of social and economic vulnerability. 
Article 60. Pre-contractual information. 
1. Before the consumer or user is bound by a contract or corresponding offer, 
the seller or supplier shall provide to him in a plain, intelligible and accessible 
format relevant, accurate and adequate information on the main features of the 
contract, in particular its legal and financial terms. 
Without prejudice to any sectoral legislation that may be applicable, such 
information shall, in particular in the case of vulnerable consumers, be provided 
not only in language that is plain, intelligible and accurate, but also in an easily 
accessible format affording any assistance that may be required, so as to ensure 
that it is properly understood and enables consumers to make decisions that are in 
their best interests. 
[EXPLANATORY NOTE: Article 60(1) amended pursuant to the eighth paragraph 
of the first article of Law 4/2022 of 25 February 2022 on the protection of 
consumers and users in situations of social and economic vulnerability] 
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2. The following shall be considered relevant: the obligations to provide 
information on goods or services which are laid down in this and any other 
applicable laws, as well as: 
a) The main characteristics of the goods or services, to the extent appropriate 
to the medium used and to the goods or services concerned. 
[…] 
c) The total price inclusive of all taxes and charges. Where the nature of the 
goods or services is such that the price cannot reasonably be calculated in 
advance or is subject to the preparation of an estimate, the manner in which the 
price is to be calculated, as well as all additional transport, delivery or postal 
costs or, where those costs cannot reasonably be calculated in advance, the fact 
that such additional costs may be chargeable. 
All information provided to the consumer or user concerning the price of goods or 
services, including advertising, shall state the total price, with a breakdown, 
where appropriate, of the amount of any increases or discounts that may be 
applicable, any costs charged to the consumer or user and any additional costs 
connected with ancillary services, financing, use of different payment methods or 
other similar payment terms.  
d) The procedures for payment, delivery and performance, the date on which 
the seller or supplier undertakes to deliver the goods or perform the service. 
[…] 
4. The pre-contractual information must be provided to the consumer or user 
free of charge and at least in Spanish, and shall also, where appropriate and at 
the request of any of the parties, be drafted in any of the other official languages 
of the place where the contract is concluded. 
[EXPLANATORY NOTE: Article 60(4) drafted pursuant to the eighth paragraph 
of the first article of Law 4/2022 of 25 February 2022 on the protection of 
consumers and users in situations of social and economic vulnerability.] 
Article 80. Requirements applicable to terms not individually negotiated. 
1. In contracts with consumers and users which contain terms not negotiated 
individually, including contracts concluded by the public authorities or bodies or 
undertakings answerable to them, those terms must comply with the following 
requirements. They must be: 
a) Worded precisely, clearly and simply so as to be immediately 
intelligible, containing no references to texts or documents not provided 
before or at the same time as the contract is concluded. Any such texts or 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-265/22 
 
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documents shall in any event be expressly referred to in the contract 
document. 
b) Accessible and legible, so that the consumer or user is apprised of 
their existence and content before the contract is concluded. This 
requirement shall not under any circumstances be deemed to be fulfilled if 
the size of the lettering of the contract is less than one and a half millimetres 
or if the contract is difficult to read because of an inadequate contrast 
between the lettering and its background. 
[…] 
c) Characterised by good faith and a fair balance between the rights and 
obligations of the parties, which requirement excludes, in all circumstances, 
the use of unfair terms. 
2. In the case of individual actions, in the event of uncertainty as to the 
meaning of a contractual term, the interpretation most favourable to the consumer 
shall prevail. 
Article 82. Concept of unfair terms. 
1. All stipulations not negotiated individually and all practices not expressly 
agreed which, in contravention of the requirements of good faith, give rise, in a 
manner detrimental to the consumer or user, to a significant imbalance in the 
rights and obligations of the parties as arising from the contract, shall be 
regarded as unfair terms. 
2. The fact that certain aspects of a term or one specific term have been 
individually negotiated 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 proving this to be the case. 
3. The unfairness of a contractual term shall be assessed in the light of the 
nature of the goods or services for which the contract was concluded and with 
reference to all the circumstances attending the conclusion of the contract and to 
all the other terms of the contract or of another contract on which this is 
dependent. 
4. Notwithstanding the provisions of the foregoing paragraphs, terms which, in 
accordance with Articles 85 to 90 inclusive: 
a) make the contract dependent upon the will of the seller or supplier; 
b) limit the rights of the consumer or user; 
BANCO SANTANDER 
 
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c) provide for a lack of reciprocity in the contract; 
d) impose disproportionate guarantees on the consumer or user or 
improperly impose the burden of proof on the consumer or user; 
e) are disproportionate to the conclusion and performance of the 
contract; or 
f) breach the rules on jurisdiction and applicable law; 
shall in any event be unfair. 
Article 83 Invalidity of unfair terms and continued existence of the contract: 
Unfair contractual terms shall automatically be void and shall be deemed not to 
have been laid down. To that end, the court shall, after consulting the parties, 
declare void any 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.  
Conditions included in contracts in a non-transparent manner to the detriment 
of consumers shall automatically be void. […] 
II. Civil Code: 
Article 1.258: ‘Contracts are concluded by mere consent and thereafter bind the 
parties not only to compliance with what has been expressly agreed but also to all 
of the consequences which, depending on their nature, are consistent with good 
faith, custom and the law’. 
Article 1.303: ‘Where an obligation has been declared void, the contracting 
parties must restore to one another those things that formed the subject matter of 
the contract, together with the proceeds therefrom, and the price plus interest, 
unless the provisions of the following articles provide otherwise’. 
III. Ley 7/98, de 13 de abril, sobre condiciones generales de la contratación 
(Law 7/1998 of 13 April 1998 on general conditions of contract) 
Article 7:  
‘The following general conditions shall be deemed not to be included in the 
contract: 
a) Those of which the consumer did not have a genuine opportunity to take full 
cognisance at the time when the contract was concluded or which were not 
signed, where this is necessary, in accordance with Article 5; 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-265/22 
 
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b) Those that are illegible, ambiguous, obscure or incomprehensible, unless, in 
the case of the latter, they have been expressly accepted in writing by the 
contracting party and comply with the specific rules on the required transparency 
of contractual terms in the field concerned’. 
Article 8: 
‘1. General conditions which infringe the provisions of this Law or any other 
rule ordering or prohibiting certain conduct, to the detriment of the contracting 
party, shall automatically be void, unless they provide for different consequences 
in the event of breach. 
2. In particular, where a contract has been concluded with a consumer …, 
general conditions which are unfair shall be void’. 
IV. BANK OF SPAIN Notice 5/1994 of 22 July 1994 to credit institutions, 
amending Notice 8/1990 on the transparency of transactions and the 
protection of customers. 
Preamble: ‘The average rates selected are, in the final analysis, annual 
percentage rates of charge [APRC]. The average rates of mortgage loans from 
banks and all entities for the acquisition of a residential property on the private 
housing market are entirely [APRCs], since they also include the effect of fees. 
Consequently, using them simply and directly as contractual rates would have the 
effect of putting the [APRC] for the mortgage transaction above the market rate. 
In order to bring the [APRC] for that transaction into line with the market rate, 
it would be necessary to apply a negative margin the value of which would vary 
depending on the transaction fees and the frequency of payments’. 
V. Ley 3/1991, de 10 de enero, de Competencia Desleal (Law 3/1991 of 
10 January 1991 on unfair competition): 
‘Article 4. General clause 
1. Any conduct which is objectively contrary to the requirements of good faith 
is deemed to be unfair. 
In relations with consumers and users, any conduct on the part of a trader or 
professional practitioner which is contrary to professional diligence, this being 
understood as the standard of special skill and care which a trader may be 
expected to exercise in the application of honest market practices, and which 
significantly distorts or is capable of significantly distorting the economic 
behaviour of the average consumer, or the average member of the group forming 
the subject of the practice, in the case of a commercial practice directed at a 
specific group of consumers, shall be deemed contrary to the requirements of 
good faith. 
[…] 
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Article 7. Misleading omissions 
1. The omission or concealment of information necessary to enable the 
addressee to make or be capable of making a decision on his economic behaviour 
with due knowledge of the facts is deemed to be unfair. It is also unfair for 
information to be given which is unclear, unintelligible or ambiguous, for 
information not to be given at the proper time, and for the commercial purpose of 
that practice not to be disclosed, where this is not apparent from the context.  
2. For the purposes of determining the misleading nature of the acts referred to 
in the preceding paragraph, regard shall be had to the factual context in which 
those acts occur, account being taken of all the characteristics and circumstances 
thereof and the limitations of the means of communication used’. 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 12 May 2006, ZR and PI concluded with the financial institution BANCO 
SANTANDER, S. A. (formerly BANCO ESPAÑOL DE CRÉDITO, S. A., 
‘BANESTO’) a loan agreement secured by mortgage for a principal sum of 
EUR 197 934.54, subject to the payment of variable interest calculated by 
reference to the IRPH (Mortgage Loan Reference Index). [The loan agreement] 
provides that to the IRPH index will be added either +0.20 percentage points or 
+0.50 percentage points, depending on whether the rate used is the ‘reference rate’ 
or the ‘substitute reference rate’ (the latter is applicable where the Bank of Spain 
does not publish the former – ‘reference rate’ – in time). 
2 On 13 February 2020, ZR and PI brought before the referring court (Juzgado de 
Primera Instancia No 17 de Palma de Mallorca (Court of First Instance No 17, 
Palma de Mallorca, Spain) an application for the commencement of ordinary 
proceedings against the financial institution BANCO SANTANDER, S. A. That 
application seeks a declaration that clause 3a of the mortgage loan agreement is 
void on the ground that it is unfair. By way of claims linked to the foregoing, they 
ask the court to: (i) remove the IRPH index from the mortgage loan agreement 
concluded with the financial institution; (ii) order the bank to reimburse the 
financial damage arising from the application of the IRPH index by reference to 
the lower cost which would have been attendant upon the loan if the Euribor index 
had been used; (iii) carry out an effective recalculation of the loan repayment 
schedule that is to apply up until the end of the agreement, and (iv) order the 
defendant to pay the costs.  
3 In particular, the applicants seek a declaration that the following clause (3a) from 
the mortgage loan agreement is void on the ground that it is unfair: 
‘3a: 
3a – VARIABLE INTEREST RATE 
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3a(1) – Periodicity of reviews: Each 12-month period following the end date of 
the initial interest period as indicated in clause 3 shall be referred to as the 
‘interest period’. 
3a(2) – Margins and rounding: In each interest period up to the end of the 
contract term, a nominal interest rate shall be applied which shall be the sum of 
0.20 points added to the ‘reference rate’ or 0.50 points added to the ‘substitute 
reference rate’. 
3a(3) – Reference rate and substitute reference rate: 
The reference rate shall be the ‘AVERAGE RATE FOR MORTGAGE LOANS OF 
A TERM GREATER THAN THREE YEARS GRANTED BY ALL FINANCIAL 
INSTITUTIONS’, defined as the simple average of the average interest rates 
weighted by the principal amounts of mortgage-secured loan transactions of a 
term equal to or greater than three years, concluded for the purposes of acquiring 
a residential property, which were initiated or renewed by banks, savings banks 
and mortgage credit companies in the month to which the index relates, the rate 
taken for reference being the last of the average rates published by the Bank of 
Spain in the B.O.E. (Boletín Oficial del Estado (Official State Gazette)) prior to 
the start of each new interest period and within the three calendar months 
preceding that period. 
The substitute reference rate shall be the ‘AVERAGE RATE FOR MORTGAGE 
LOANS OF A TERM GREATER THAN THREE YEARS GRANTED BY BANKS’, 
defined as the simple average of the average interest rates weighted by the 
principal amounts of mortgage-secured loan transactions of a term equal to or 
greater than three years, concluded for the purposes of acquiring a residential 
property, which were initiated or renewed by banks, savings banks, and mortgage 
credit companies in the month to which the index relates, the rate taken for 
reference being the last of the average rates published by the Bank of Spain in the 
B.O.E. (Boletín Oficial del Estado (Official State Gazette)) prior to the start of 
each new interest period and within the three calendar months preceding that 
period. 
The descriptions of both the reference rate and the substitute reference rate are 
taken from Annex VIII to Bank of Spain Notice 8/90. 
The substitute reference rate shall be used where, in whatever circumstances, the 
Bank of Spain has not published the reference rate in the Boletín Oficial del 
Estado (Official State Gazette) (B.O.E.) within the three calendar months 
preceding the start of each new interest period. At the end of the interest period 
affected by such circumstances, the interest rate applicable to the following period 
shall again be determined in accordance with the agreed reference rate’. 
4 In its defence, the defendant opposes the application and contends that it should be 
dismissed in its entirety. 
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The essential arguments of the parties in the main proceedings 
5 In the main proceedings, the applicant consumers (or applicants) seek, in 
accordance with the Spanish and European consumer and user protection 
legislation, inter alia, a declaration as to the nullity on grounds of unfairness of the 
clause indiscriminately imposing the IRPH variable interest rate plus a positive 
margin which the borrower agreed to pay to the defendant financial institution, 
together with reimbursement of the sums unduly paid pursuant to that clause, this 
being a consequence inherent in a declaration of nullity under Article 1303 of the 
Civil Code and in the principle that consumers are not bound by unfair terms that 
is laid down in Article 6(1) of Directive 13/93/EEC. The effects sought are the 
reimbursement of the sums paid under the aforementioned clause. 
The applicants claim that that clause must be declared void on the ground that it is 
unfair. As the basis for the question seeking a preliminary ruling on the 
declaration as to the nullity of that clause, it should be noted that, at the time when 
the variable interest rate is imposed, by surprise and, therefore, in a manner that is 
contrary to good faith and such as to create an imbalance between the parties, the 
policy rule laid down in the preamble to Bank of Spain Notice 5/1994 stating 
that a negative margin must be applied in order to bring the APRC of the 
IRPH into line [with other APRCs on the market] is not disclosed to the 
consumer. It must be added that, in the experience of this judge in this 
specialised court, the imposition of a positive margin to this type of variable 
interest rate is not a one-off event but a customary practice of banking 
institutions. 
6 The financial institution opposed the application on the general ground that the 
clause is valid, since it passes the content, disclosure and transparency tests and 
was agreed by the parties. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
7 The main points of law raised in this case are as follows. 
1. If we take into account the wording of the preamble to Bank of Spain Notice 
5/1994, the debate centres around the fact that banking institutions have, 
according to the applicant[s], tried to market the IRPH as if it were a more 
beneficial index than the Euribor, whereas it is inherent in the IRPH that the 
transactions subject to it will always be more expensive for the consumer because 
the data which the banking institutions send to the Bank of Spain every month for 
publication are always ‘an average of all transactions’, it being assumed that such 
transactions are inclusive of fees, including the margins of +0.20, 0.25 or 0.50 
applied to them, which are incorporated into the interest rate. The preamble to 
the aforementioned Notice states that those margins must be negative in 
order to bring the APRC of the IRPH into line with the other APRCs on the 
market. 
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[The aforementioned requirement laid down in the Bank of Spain Notice] has not 
been fulfilled inasmuch as the [loan] instrument provides for a POSITIVE margin: 
a nominal interest rate shall be applied which shall be the sum of adding 0.20 
points to the ‘reference rate’ or 0.50 points to the ‘substitute reference rate’. 
The view might be taken that this fact constituted a breach which in turn amounts 
to a misleading omission that may have been prejudicial to the contracting 
consumer[s] inasmuch as, if they had known that a negative rate should have been 
applied in order to balance the IRPH index to which they were committing 
themselves with the Euribor index and other APRCs on the market, they would 
never have chosen the IRPH index. 
The banks have been using the lure of the low margin of 0%, 0.25% and 0.5% 
offered on IRPH-linked loans in order to persuade consumers to sign up to that 
index, consumers having been unaware that they were actually going to pay more 
interest and uninformed of the fact that the preamble to the Notice governing the 
IRPH index requires the margin to be negative, which was not the case here. 
This is not a case of IRPH customers being used to offset Euribor customers. 
Rather, the bank did not inform or explain to the applicant consumers that, while 
the Euribor was 2%, the IRPH was 4%, meaning that, although they had signed up 
to a margin of 0.5%, they would be paying more for their mortgage. 
According to the recent case-law of the Supreme Court on this subject, it is not 
known whether the IRPH will in future be lower than the Euribor and it cannot 
therefore be said to be more prejudicial to customers. However, if a financial 
institution fails to mention that the Bank of Spain requires the margin applied to 
be negative, it is acting contrary to the requirement of good faith and creating an 
imbalance between the parties. 
2. The Ley de Competencia (Ley 3/1991, de 10 de enero, de Competencia 
Desleal) (Law on competition (Law 3/1991 of 10 January 1991 on unfair 
competition)) censures any conduct that runs counter to the requirement of good 
faith, as does the commercial practice at issue here, which has been highlighted by 
the Supreme Court and whereby financial institutions use the marketing of 
margins a little lower than the Euribor rates to act as a commercial hook, a 
measure that constitutes a misleading and, therefore, unfair omission, since the 
concealment of this information, which the Bank of Spain considers necessary to 
ensure that interest rates are fairer, prevents consumers from being able to make 
decisions on their economic behaviour with due knowledge of the facts.  
3. The declaration of nullity sought covers the entire variable interest clause, 
which, in the absence of a negative index, cannot remain in place since it does not 
pass the transparency test to which the variable interest clause is subject.  
4. Legal commentators argue that the fact that preambles do not have any 
direct prescriptive value in governing legal situations and relations does not 
support the inference that they do not have any other value or that they are entirely 
BANCO SANTANDER 
 
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immaterial from a legal point of view. They state that preambles are the formal 
vehicle by means of which the content of a law is usually expressed and serve to 
make clear the intention that informed the adoption of that law, which itself seeks 
to be an ‘authentic interpretation’ of the will of the legislature. 
If we apply the foregoing to this case, an authentic interpretation of the notice at 
issue shows that the rules governing the IRPH intended that that index should be 
marketed on the basis of negative margins. This prompts this court to ask whether 
the commercial practice at issue is misleading, inasmuch as the aforementioned 
intention was concealed to the detriment of the consumer and positive margins 
were applied. 
The Court of Justice of the European Union (CJEU) considered a similar question 
and found in favour of the consumer. 
In its judgment of 16 January 2014 in Case C-226/12, interpreting 
Article 3(1) of Directive 93/13, the CJEU held that the existence of a ‘significant 
imbalance’ does not necessarily require that the costs charged to the consumer by 
a contractual term have, as regards that consumer, a significant economic impact 
having regard to the value of the transaction in question, but can result solely from 
a sufficiently serious impairment of the legal situation in which that consumer, as 
a party to the contract, is placed by reason of the relevant national provisions, 
whether this be in the form of a restriction of the rights which, in accordance with 
those provisions, he enjoys under that contract, or a constraint on the exercise of 
those rights, or the imposition on him of an additional obligation not envisaged by 
the national rules. 
In Case C-689/20, [the referring court] states: ‘24. In accordance with the case-
law of the Court of Justice of the European Union (paragraphs 43 and 44 of the 
judgment in Case C-453/10, Perenicová and Perenic, and paragraphs 48 to 50 of 
the judgment in Case C-109/17, Bankia), the inclusion of a contractual term as a 
result of the application of an unfair commercial practice within the meaning of 
Directive 2005/29 constitutes one element in the assessment of unfairness under 
Article 4 of Directive 93/13’. 
As regards the relationship between the Community and the Spanish 
legislation, the referring court notes the following: 
An index such as the IRPH, in its various forms, as compared with others on the 
market such as the Euribor index, for example, presupposes that the transactions 
subject to it will always be more expensive for the consumer because the data 
which financial institutions send to the Bank of Spain every month for publication 
are always ‘an average of all transactions’, it being assumed that all such 
transactions are inclusive of fees, including the margins applied to them, which 
are incorporated into the interest rate.  
The question arises as to whether it would therefore be unfair and contrary to the 
EU legislation not to explain the offer, as [the summary of the request for a 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-265/22 
 
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preliminary ruling in] Case C-689/20 states. The inclusion of a contractual term as 
a result of the application of an unfair commercial practice within the meaning of 
Directive 2005/29 constitutes one element in the assessment of unfairness under 
Article 4 of Directive 93/13 and, if, as the Bank of Spain states in the preamble to 
Notice 5/[1]994, [a negative margin MUST be applied to the IRPH], any failure to 
disclose [that requirement] is also an element in the assessment of the unfairness 
of that term under Article 4 of Directive 93/13, which states that a commercial 
practice is to be regarded as unfair if it is contrary to the requirement of good 
faith, inasmuch as something about the economic behaviour of a transaction is 
concealed and economic behaviour is defined as ‘any action by consumers that 
enables them to evaluate different offers on the products or services offered to 
them’. 
In the light of Article 5(b) of Directive [2005/29/EC], concerning material 
distortions to the economic behaviour of the average consumer, such a material 
distortion takes the form in this case of the absence of an authentic interpretation 
of the rule laid down by the regulatory body (the Bank of Spain), which, as 
regards the calculation of the interest rate payable, requires the application of 
negative interest, but that requirement is not fulfilled. 
It would also seem reasonable to take the view that it is contrary to the consumer 
protection laws and Directive 93/13 in conjunction with Directive 29/2005 to 
configure a reference index to which is added a margin that is more detrimental to 
the consumer, and, in addition, not to inform the consumer of that fact. 
As regards the case-law of the Supreme Court, the referring court has analysed: 
a) The Supreme Court’s case-law on terms which are contrary to the 
requirement of good faith and cause an imbalance because they come as a 
surprise. 
It refers in particular to the judgment of the Supreme Court of 3 June 2016. In 
that judgment, the Supreme Court expressly recognises the possibility of 
excluding surprise terms from the contract. For, when it states that it is arguable 
that the general principle of good faith set out in Article 1258 of the Spanish Civil 
Code may be relied on as a provision shaping contractual content which is capable 
of serving as the basis for removing terms which surreptitiously modify the 
content of a contract the party to which had had good reason to imagine that it 
would be consistent with its own nature and functionality, it is applying what is 
known as the rule of ‘surprise terms’, whereby terms which are so unusual in 
relation to the circumstances and the nature of the contract that the party to it 
could not reasonably have expected them to be present are invalid. 
The purport of the judgment of the Supreme Court of 7 November 2017 is 
similar to that of the previous judgment.  
a) The case-law on unfair terms: the dual transparency check.  
BANCO SANTANDER 
 
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The referring court states that the question submitted for a preliminary ruling 
relates to the dual transparency check introduced by the judgment of the 
Supreme Court of 9 May 2013 in which the Supreme Court set out extensive 
case-law on ‘floor clauses’ [minimum interest rate clauses] in mortgage loans 
concluded with consumers, as well as on the unfair practice of concealing a 
negative margin, which must be the subject of a dual transparency check since the 
clause in question is unfair inasmuch as it is contrary to Directive 2005/29/EC and 
Law 3/1991 on unfair competition in conjunction with Directive 93/13/EEC.