Judgment — ECLI:EU:C:2026:339
Date: 2026-04-23
Language of the case: Hungarian

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Translation C-761/24 – 1 
Case C-761/24 
Request for a preliminary ruling 
Date lodged: 
5 November 2024 
Referring court: 
Budapest Környéki Törvényszék (Budapest Regional Court, 
Hungary) 
Date of the decision to refer: 
10 October 2024 
Applicants: 
HM 
JD 
Defendants: 
AXA Bank Belgium SA 
OTP Bank Nyrt. 
OTP Faktoring Követeléskezelő Zrt. 
… 
The Budapest Környéki Törvényszék (Budapest Regional Court, Hungary) 
[…] 
in the dispute concerning the declaration as to the invalidity of a loan agreement 
denominated in foreign currency, in which the parties are the applicants HM […], 
as applicant No 1, and JD […], as applicant No 2 (‘the applicants’), and the 
defendants AXA Bank Belgium SA ([…] Brussels […]), as defendant No 1, OTP 
EN 
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Bank Nyrt. ([…] Budapest […]), as defendant No 2, and OTP Faktoring 
Követeléskezelő Zrt. ([…] Budapest […]), as defendant No 3 (‘the defendants’), 
has adopted the following 
DECISION: 
Without prejudice to the stay of proceedings and in accordance with paragraph 27 
of the order of 9 April 2024, AXA Bank Europe and Others, C-628/23, not 
published, EU:C:2024:317, the Budapest Környéki Törvényszék (Budapest 
Regional Court) amends its order for reference as follows and, by a full order, 
reiterates its request for a preliminary ruling on the following questions: 
(1) Do Articles 6(1) and 7(1) of Council Directive 93/13/EEC on unfair 
terms in consumer contracts preclude national case-law or an 
interpretation of domestic law which, in the event that a consumer 
contract is found to be totally invalid on account of an unfair term 
applied therein: 
– does not remedy the legal consequences of the invalidity in the 
legal relationship between the original lender and the consumer 
as debtor, because national legislation makes it possible for the 
original lender and a third party to conclude an agreement that 
results in a change in the parties to the contract[;] 
– remedies the legal consequences of the invalidity only as 
between the consumer and the successor in law entering the 
contractual relationship as a new party as a result of the transfer 
of the contract, in such a way that the consumer is obliged to 
make any payment to the new party to the contract rather than to 
the original lender and, conversely, may only claim from the new 
party entering the contractual relationship any amount that may 
have to be reimbursed to that consumer, even though the 
consumer has not made any payment to that party[?] 
(2) Does national case-law or an interpretation of domestic law, according 
to which the legal consequences of the invalidity of an unfair 
consumer contract may be inferred only as between the current parties 
to that contract, that is to say between the new lender entering the 
contractual relationship as a consequence of a change in the parties to 
that relationship and the consumer as debtor, contravene the concept of 
‘seller or supplier’ as defined in Article 2(c) of Council Directive 
93/13/EEC on unfair terms in consumer contracts [?] 
[…] [Matters of national procedural law] 
Grounds 
Subject matter and legal basis of the request for a preliminary ruling: 
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1 Application for the total invalidity of a consumer credit agreement to be remedied 
on the basis of Article 6 of Directive 93/13 and for a decision on whether the legal 
consequences thereof must be applied to the original lender or its successor. 
2 The interpretation of EU Law requested is intended to provide the national court 
with a useful answer that will enable it to decide whether to apply domestic law or 
refrain from applying it. 
Legislative framework 
3 Provisions of European Union law relied on 
Charter of Fundamental Rights of the European Union: Article 38 
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer 
contracts (‘the Directive’): Articles 2, 6 and 7 
4 Provisions of national law relied on: 
Paragraph 3(1) and (2) of [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, 
Hungary) to harmonise the case-law on loan agreements concluded between credit 
institutions and consumers); ‘Law DH1’]: 
‘1 In loan agreements concluded with consumers, terms – with the exception of 
contractual terms that have been negotiated individually – pursuant to which the 
credit institution stipulates that, for the purposes of paying out the amount of 
finance granted for the purchase of the subject of the loan or financial leasing, the 
buying rate is to apply, and that, for the purposes of repayment of the debt, the 
selling rate, or a different rate from that set when the loan was paid out, is to 
apply, shall be void. 
2 Instead of the void term referred to in subparagraph 1 — and without 
prejudice to subparagraph 3 — the official exchange rate set by the National Bank 
for the foreign currency concerned shall apply in relation to both the paying-out 
and the repayment of the loan (including payment of the instalments and all the 
costs, fees and commissions expressed in foreign currencies).’ 
Paragraph 37(1) of the Kúriának a pénzügyi intézmények fogyasztói 
kölcsönszerződéseire vonatkozó jogegységi határozatával kapcsolatos egyes 
kérdések rendezéséről szóló 2014. évi XXXVIII. törvényben rögzített elszámolás 
szabályairól és egyes egyéb rendelkezésekről szóló 2014. évi XL. törvény [Law 
XL of 2014 on the provisions governing the settlement of accounts referred to in 
[Law DH1] and concerning a number of other provisions; ‘Law DH2’] provides as 
follows: 
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‘In relation to contracts falling within the scope of this Law, the parties may apply 
to the court for a declaration as to the invalidity of the contract or of certain 
contractual terms (“partial invalidity”) – irrespective of the grounds for such 
invalidity – only if they also ask the court to apply the legal consequences of 
invalidity (namely, a declaration as to the validity or effectiveness of the contract 
up to the date of the judgment). Failing any such request – and after the 
opportunity to remedy the defects has been given but not taken – the application 
shall be inadmissible and the substance of the case may not be examined. If the 
parties request determination of the legal consequences of total or partial 
invalidity, they must also indicate what legal consequence the court should apply. 
As regards the application of the legal consequences, the parties must put forward 
an express, quantitatively defined claim which also includes the settlement of 
accounts between them.’ 
Pursuant to Paragraph 17(1) of the hitelintézetekről és pénzügyi vállalkozásokról 
szóló 2013. évi CCXXXVII. törvény (Law CCXXXVII of 2013 on Credit 
Institutions and Financial Institutions; ‘the Law on Credit Institutions’): ‘Deposits 
and other repayable funds, as well as portfolios of framework contracts for 
payment services, may be transferred by agreement between the transferor credit 
institution and the transferee credit institution with the authorisation of the 
Supervisory Authority. The rules of the Civil Code on the transfer of contracts 
must be applied to portfolio transfers, with the exception that portfolio transfers 
do not have the effect of extinguishing the guarantees relating to the contract and 
do not require a legal declaration by the other party to the contract. The 
authorisation granted by the Supervisory Authority does not replace the 
authorisation of the Gazdasági Versenyhivatal (Economic Competition Authority, 
Hungary) pursuant to the a tisztességtelen piaci magatartás és a versenykorlátozás 
tilalmáról szóló 1996. évi LVII. törvény (Law LVII of 1996 on the Prohibition of 
Unfair Market Practices and Restrictions of Competition).’ 
A Polgári Törvénykönyvről szóló 2013. évi V. törvény (Law V of 2013 on the 
Civil Code; ‘the Civil Code’): 
Paragraph 6:202 (Subrogation) 
‘1. The holder of a right may subrogate it to a third party, unless the law 
precludes the negotiability of the right or the latter is clearly non-negotiable by its 
nature. 
2. Unless this Law provides otherwise, the acquisition of a right by subrogation 
shall require a contract to that effect, or other legal instrument, and the 
subrogation of the right. Under the subrogation contract, the new right holder shall 
be subrogated to the contractual position of the previous right holder. 
3. The relevant provisions on transfer shall apply mutatis mutandis to 
subrogation. 
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4. The subrogation of a publicly registered right shall require, in addition to the 
transfer deed, that the change of right holder be recorded in the register 
concerned.’ 
5 Paragraph 6:208 (Effects of the transfer of contracts) 
‘1. The party leaving the contractual relationship, the other party to that 
relationship and the party entering that relationship may agree to subrogate to the 
party entering that relationship all of the rights and obligations of the party leaving 
that relationship. 
2. The party entering the contractual relationship shall enjoy the same rights 
and shall bear the same obligations, under the contract in question, as those 
enjoyed or borne by the party leaving the contractual relationship vis-à-vis the 
other party to that relationship. The party entering the contractual relationship may 
not offset any other claim which the party leaving the contractual relationship 
might have had against the other party to that relationship. The other party to that 
relationship may not offset any other claim which it might have had against the 
party leaving the contractual relationship. 
3. The guarantees securing the rights transferred to the party entering the 
contractual relationship shall be maintained. The guarantees of compliance with 
the obligations transferred to the party entering the contractual relationship shall 
be extinguished, unless the guarantor consents to the transfer of the contract.’ 
6 Paragraph 3 of Decision 2/2014 PJE of the Kúria: 
‘3. The application by the financial institution of the buying rate at the time 
when the loan is paid out and of the selling rate at the time when the loan is repaid 
(different exchange rates) is unfair because it does not constitute consideration for 
any service provided directly to the consumer and is therefore an unjustified cost 
to the consumer. Such terms are also unfair because the economic rationale for 
their application is not clear, comprehensible and transparent to the consumer. In 
the light of the supplementary nature of the provisions of Paragraph 231(2) of the 
Civil Code, in consumer loan agreements denominated in a foreign currency, the 
official exchange rate of the Magyar Nemzeti Bank (National Bank of Hungary) 
becomes part of the contract, replacing the buying and selling rates as conversion 
rates, until such time as this is replaced by a mandatory statutory provision.’ 
Succinct presentation of the facts and procedure in the main proceedings 
7 The applicants concluded a consumer credit agreement (‘the contested loan 
agreement’) falling within the scope of the Directive with ELLA Első Lakáshitel 
Kereskedelmi Bank Rt, predecessor in law to defendant No 1, as (professional) 
lender. The parties to the proceedings do not dispute that the content of the public 
instrument headed ‘loan agreement relating to an independently secured loan 
denominated in a foreign currency aimed at partially subrogating a loan 
denominated in a foreign currency’, notarially executed on 12 June 2008, is the 
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same as that of the agreement between the parties. By way of security for that 
loan, the parties also concluded a contract establishing an independent security in 
the form of an immovable property in Érd (Hungary), of which applicant No 1 
was the sole owner. 
8 The contested loan agreement is a consumer contract denominated in a foreign 
currency. The amount of the loan, recorded at 141 536 Swiss francs (CHF), was 
equivalent to a maximum of 20 075 000 Hungarian forints (HUF), converted at 
the foreign exchange buying rate applied by the bank on the date of disbursement. 
The repayment period was nineteen years, the final maturity date was set at 
12 May 2028 at the latest, the number of instalments was 228 and the debtor was 
required to pay HUF 75 000 as a disbursement fee. The debtor was obliged to pay 
ordinary interest calculated at a rate determined according to the bank tariffs in 
force at any given time and unliterally changeable every six months, the initial 
interest rate being 4.65%. The debtor was also obliged to pay a monthly handling 
fee, depending on the amount of the loan, at a rate unilaterally changeable by the 
bank and initially 1.9% per annum. The initial annual percentage rate of charge 
(APR) was 7.06% per annum. 
9 The contested loan agreement is to be regarded as revised within the meaning of 
the DH Laws. According to the settlement of accounts drawn up on 4 March 2015 
by AXA Bank Europe SA Magyarországi Fióktelepe [Hungarian Branch of AXA 
Bank Europe SA], as legal representative of defendant No 1, the applicants’ 
overdue debt to defendant No 1 was HUF 42 815 836 HUF, after settlement and 
conversion to forints of the amounts wrongly charged. 
10 Since 10 July 2008, ELLA Első Lakáshitel Kereskedelmi Bank Zártkörűen 
Működő Részvénytársaság had been listed in the [Hungarian] Commercial 
Register and operating under the company name AXA Kereskedelmi Bank 
Zártkörűen Működő Részvénytársaság, AXA Holding SA having purchased all of 
the shares in ELLA Bank in 2007. 
11 Through a so-called cross-border merger by absorption, AXA Kereskedelmi Bank 
Zártkörűen Működő Részvénytársaság was absorbed by AXA Bank Europe SA, in 
accordance with the a tőkeegyesítő társaságok határon átnyúló egyesüléséről szóló 
2007. évi CXL törvény (Law CXL of 2007 on Cross-border Mergers of Limited 
Liability Companies). As a result of the absorption, AXA Bank Europe SA 
became the universal successor to AXA Bank. At the same time, AXA Bank 
Europe SA established a branch in Hungary. 
12 On 31 October 2016, AXA Bank Europe SA Magyarországi Fióktelepe 
(Hungarian branch of AXA Bank Europe SA), as legal representative of AXA 
Bank Europe SA, concluded with OTP Bank Nyrt. a portfolio transfer agreement 
giving rise, as far as the (professional) lender is concerned, to a universal 
succession to the contested loan agreement and to all of the rights and obligations 
arising from that agreement. 
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13 Next, on 2 November 2016, OTP Bank Nyrt as transferor and OTP Faktoring Zrt. 
as transferee concluded a transfer agreement in relation to the debt arising from 
the contested loan agreement. 
14 AXA Bank Europe SA Magyarországi Fióktelepe ceased to exist on 31 July 2017 
and AXA Bank Europe SA is now called AXA Bank Belgium SA. 
15 On 21 October 2015, the applicants brought an action against AXA Bank Europe 
SA. On 13 December 2016, AXA Bank Europe SA made the court aware that the 
legal successions described above had taken place. In connection with the first of 
these (from AXA to OTP), OTP Bank Nyrt. expressed its intention to enter a 
voluntary appearance in those proceedings. AXA Bank Europe SA indicated its 
consent for OTP Bank Nyrt. to enter an appearance in those proceedings and 
asked to be removed from them. In connection with the second succession (from 
OTP to OTP Faktoring), OTP Faktoring Zrt. expressed its intention to enter a 
voluntary appearance in those proceedings. OTP Bank Nyrt. indicated its consent 
for OTP Faktoring Zrt. to enter an appearance in those proceedings and asked to 
be removed from them. The applicants expressed their disagreement with the 
removal of the aforementioned institutions from the proceedings. The referring 
court allowed the aforementioned appearances in the proceedings but refused the 
requests to be removed from them. 
Relevant [case-law] of the Member State and of the Court of Justice of the 
European Union (‘the CJEU’) 
16 The national court of first instance notes that the contested agreement is a 
consumer credit agreement in connection with which it is important to take into 
account Articles 6(1) and 7(1) of the Directive. Given, in particular, that the 
Member State correctly transposed the Directive by making an amendment which 
has been in force since 22 May 2009, at the time when the contested agreement 
was concluded, the relevant provisions of the Association Agreement, enacted by 
Law No 1 of 1994, were applicable, as those of the Directive already were, and 
directly so, by virtue of Hungary’s accession to the European Union. 
17 By the action which they brought before the national court of first instance, the 
applicants claim that they should not be bound by obligations imposed on them 
under unfair terms. Furthermore, they submit that the contested agreement is 
totally invalid because it is impossible to perform in the absence of the unfair 
terms. They therefore request that the legal consequences of the invalidity be 
remedied. The defendants contend that, since the DH Laws have already remedied 
the invalidity, the consumers have no right which they can assert in the dispute. 
18 In its decision-making process, the referring court relies principally on the case-
law created by the CJEU in its judgment of 30 April 2014, Kásler and Káslerné 
Rábai, C-26/13, EU:C:2014:282, and maintained thereafter, since the indexation 
mechanism applied in the contested loan agreement is essentially the same as that 
in the aforementioned judgment. 
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19 Following delivery of the judgment in Case C-26/13, the Kúria (Hungarian 
Supreme Court) adopted Decision 2/2014 PJE, which the referring court has an 
obligation to apply under a provision of law. In that decision unifying case-law, 
the Kúria classified the application of different exchange rates as unfair and, 
consequently, determined that the unfair terms should be replaced by 
supplementary provisions of the Civil Code. However, the relevant 
Paragraph 231(2) of the a Polgári Törvénykönyvről szóló 1959. évi IV. törvény 
(Law IV of 1959 on the Civil Code; ‘the former Civil Code’) [Debts denominated 
in another currency or in gold shall be converted on the basis of the exchange rate 
(price) in force at the place and on the date of payment], then in force, does not 
support the inference of the rule providing for replacement by the average 
exchange rate of the National Bank of Hungary for the currency in question. 
Decision 2/2014 PJE, on the other hand, provides for the adoption of the 
mandatory replacement provision in contracts. 
20 Paragraph 3(1) of Law DH1 provides that, in loan agreements concluded with 
consumers, terms – with the exception of contractual terms which have been 
negotiated individually – pursuant to which the credit institution stipulates that, 
for the purposes of paying out the amount of finance granted for purchase of the 
subject of the loan or financial leasing, the buying rate is to apply, and that, for the 
purposes of repayment of the debt, the selling rate, or a different rate from that set 
when the loan was paid out, is to apply, shall be void. It follows from this that the 
referring court does not have jurisdiction to make an irrebuttable legal 
presumption the subject matter of the dispute. 
21 The Kúria, the referring court in Case C-26/13, also noted that, since the unfair 
term applied, that is to say the indexation mechanism, concerns the main subject 
matter of the agreement, its exclusion from it completely alters the nature of the 
remaining content of that agreement. The referring court takes the same view, 
which is to say that, without the unfair term, the effectiveness of the content of the 
contract cannot be maintained, since the contractual intention of the parties was 
presumably different. 
22 As regards total or partial nullity, the referring court does not lose sight of the fact 
that, pursuant to Paragraph 239(2) of the former Civil Code, which, in 2009, 
transposed Article 6(1) of the Directive, a consumer contract ceases to exist, in the 
event of partial invalidity, only if it cannot be performed without the invalid part. 
23 The case-law of the national courts is not unanimous with regard to whether the 
irrebuttable legal presumption under Law DH1 causes partial or total nullity. 
However, according to the case-law of the CJEU, this is a matter to be determined 
by the national courts. 
24 According to the applicants, if the unfair terms are removed, the agreement itself 
cannot be performed, since the remaining content alters the essence of the 
agreement, its essential elements. Consequently, if the court were to maintain the 
effectiveness of the remaining content, it would be in breach of the principle of 
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contractual autonomy, since it would impose on the parties an agreement which 
[they] would not otherwise have wished to conclude. In particular, the applicants 
submit that Article 6 of the Directive (in the form of Paragraph 209(4) to (6) of the 
former Civil Code) and, therefore, the entire directive is directly applicable to this 
case. They go on to say that partial invalidity cannot be remedied under Article 6 
of the Directive. They ask the court to apply the judgments of the CJEU in Cases 
C-618/10, C-26/13, C-80/21 to 82/21, C-705/21, C-520/21 and C-26/22 to the 
effect that the provisions of the Directive preclude the possibility of a declaration 
of validity. 
25 The defendants rely in this dispute on Paragraph 3(1) and (2) of Law DH1, 
according to which the legislature’s intention was to replace the unfair term in the 
general terms and conditions of contract forming part of the agreement with a 
mandatory provision on the application of the exchange rate of the National Bank 
of Hungary. 
26 According to the applicants, the decisions of the CJEU do not discriminate with 
respect to the grounds for invalidity. If any ground for invalidity is found to exist, 
the legal consequences must be inferred and applied generally and without 
distinction. 
27 Although the referring court is officially aware that, in Cases C-565/23 and 
C-630/23, there has not as yet been any answer to the question as to how the 
invalidity of a consumer loan agreement can be remedied, it is clear from the 
orders for reference in both those cases that the respective referring courts placed 
at the centre of the questions referred for a preliminary ruling only the ground for 
invalidity arising from infringement of the principle of transparency. 
28 It is apparent from the judgment of the CJEU of 27 April 2023, AxFina Hungary 
(C-705/21, EU:C:2023:352), that, under the applicable Hungarian legislation, the 
loan agreement in question was also invalid because it contained a term stating 
that the buying rate of exchange would be applied when the loan was paid out, 
while the selling rate or any other exchange rate different from that set when the 
loan was paid out, would apply to the repayment of that loan (paragraph 13). The 
applicants infer from this that the referring court is also obliged to apply the 
aforementioned judgment in the case of a ground for invalidity arising from the 
unfair nature of the indexation mechanism. 
29 The applicants have further noted that the provision in Law DH1 requiring 
replacement with the average rate of exchange of the National Bank of Hungary 
(Paragraph 3(2) of Law DH1) establishes a lower level of protection than that 
available under EU Law and that, for that reason, the application of that provision 
is contrary to EU law and does not meet the objectives which the Directive seeks 
to attain (in particular, to approximate the laws [of the Member States], to restore 
the balance between the consumer and the seller or supplier and to discourage the 
use of unfair terms). They therefore claim that domestic law should not be applied 
and that EU law should be applied directly instead, since the national provision 
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does not guarantee the existence of a genuine balance between the contracting 
parties. 
30 The national court of first instance takes into account the judgment of the CJEU of 
2 September 2021, OTP Jelzálogbank and Others, C-932/19, EU:C:2021:673, in 
which the Court of Justice held, on the basis of an objective assessment, that the 
contested loan agreement was unfair and void owing to the application of different 
exchange rates. Moreover, the national court of first instance must also apply the 
judgment in Case C-705/21. Given that the referring court does not have 
jurisdiction to amend the content of the agreement, in particular to incorporate 
additional content as regards the main contractual obligations, it would seem, in 
the light of the judgment in Simmenthal, that it may disapply a provision of a 
Member State that is contrary to EU law. 
31 According to paragraph 47 of the judgment in Case C-705/21: ‘… if, having 
regard to the nature of the loan agreement at issue, the national court takes the 
view that it is not possible to restore the parties to the situation they would have 
been in if that agreement had not been concluded, the onus is on that court to 
ensure that the consumer is ultimately in the position he or she would have been in 
if the term held to be unfair had never existed (judgment of 31 March 2022, 
Lombard Lízing, C-472/20, EU:C:2022:242, paragraph 5[8])’. In so far as the 
referring court does not apply the national provision, it will have to reinstate the 
original situation (in fact and in law), this being a guarantee which the CJEU also 
gave to consumers in the judgments in Cases C-118/17 and C-932/19. 
32 The referring court cannot seek to deprive consumers of the right to ‘object to 
being protected, under that same system, against the unfavourable consequences 
caused by the agreement being annulled in its entirety where he or she does not 
wish to rely on that protection, in the circumstances referred to in the judgment of 
30 April 2014, Kásler and Káslerné Rábai (C-26/13, EU:C:2014:282), namely in 
the situation in which the removal of the unfair term would require the court to 
annul that agreement in its entirety, thereby exposing the consumer to particularly 
unfavourable consequences, with the result that the consumer would thus be 
penalised (see, to that effect, judgment of 3 October 2019, Dziubak, C-260/18, 
EU:C:2019:819, paragraphs 46 to 48, 55 and 56)’. 
33 On the basis of the judgment of the CJEU of 12 October 2023, Luminor Bank and 
Others, C-645/22, EU:C:2023:774, the national court considers that, in the present 
case, the applicants are not seeking legal protection against the situation brought 
about by the total nullity of the agreement in relation to the repayment in one 
instalment of the amount of the loan received, since they have stated 
unequivocally that they do not consider the legal consequence of the repayment 
obligation to be particularly harmful and that they are asking only to be given a 
reasonable period within which to do so. It would therefore seem, according to 
paragraph 33 of the aforementioned judgment, that the referring court does not 
have jurisdiction and is not empowered to satisfy the applicants’ claim that the 
dispute should be disposed of by replacing – as provided for by law – the rates 
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laid down in the agreement with the exchange rate of the National Bank of 
Hungary. 
34 Whether pursuant to the judgment in Case C-645/22 or the judgment in Case 
C-19/20, the referring court is obliged to provide the parties with clear, 
unequivocal and complete information on the legal consequences that must be 
inferred. It must, in addition, apply the rules of adversarial procedure (Karel de 
Grote – Hogeschool Katholieke Hogeschool Antwerpen, C-147/16, paragraphs 27 
to 29 and 35; Banif Plus Bank, C-472/11, paragraphs 20, 22, 24 and 29; Asturcom 
Telecomunicaciones, C-40/08, paragraphs 31, 32 and 49, and Commission v 
Ireland and Others, C-89/08, paragraphs 55 to 61) and allow an exchange of 
argument and evidence on the facts and rights on which it intends to base its 
judgment. It follows that the referring court is obliged to provide consumers with 
information on the nature and content of the substantive law applicable, whether 
or not they are acting through legal representatives. 
35 As regards the formal and material law on which the applicants rely, the national 
court must first decide, in relation to a contract which is totally invalid for the 
reasons set out in the foregoing paragraphs, from which parts thereof to infer the 
legal consequences. 
36 In applying the legal consequences, the national court of first instance must take 
into account the judgments of the CJEU, which are directly effective, and, 
principally, the findings in paragraph 60 of the judgment of 16 March 2023, M.B. 
and Others (effects of the annulment of a contract), C-6/22, EU:C:2023:216, and 
thus consider that a genuine balance can be restored between the parties in the 
legal relationship between the applicants and defendant No 1, AXA Bank, since 
this bank imposed the unfair terms. 
37 In the applicants’ submission, it is well-known national case-law that, on account 
of the portfolio transfer effected in relation to the lender, that is to say between 
AXA Bank and OTP Bank, it is not possible to assert rights against the original 
lender. After all, Paragraph 6:208 of the Civil Code provided for the possibility of 
making changes to the parties to a contract. Consequently, the referring court 
regards as worrying the practice whereby a transfer of contract conducted with the 
authorisation of the National Bank of Hungary enables the original lender to evade 
its obligation and the party entering the contractual relationship to continue to fall 
within the scope of the Directive, meaning that that party, even though it did not 
apply the unfair term concerned in the legal transaction at issue, must bear the 
obligational and substantive legal consequences of the unfair contractual terms 
applied by another party. 
38 Since the case-law of the CJEU precludes a declaration as to the validity of the 
agreement, the referring court must consider whether the restoration of the 
original situation (restitutio in integrum) or a declaration as to the effectiveness of 
the agreement until such time as an order is made for its termination would satisfy 
the requirements of Article 6(1) and 7(1) of the Directive. In other words, in the 
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present case, the referring court must decide, on the basis of the principle of 
deterrence, which seller or supplier must bear the penalties and preventive 
measures laid down in the Directive. This also compels it to rule on whether the 
penalty may be imposed on the new seller or supplier entering the contractual 
relationship, who, although not having imposed the unfair term, benefits from its 
financial and economic effects as a consequence of entering that relationship. 
39 The referring court has taken into consideration the Commission notice entitled 
‘Guidelines on the interpretation and application of Council Directive 93/13/EEC 
on unfair terms in consumer contracts’ (OJ 2019 C 323, p. 4), as well as the 
decisions of the CJEU cited in that notice. The decisions adopted since that notice 
have not addressed the question of the possible subjective changes introduced into 
consumer contracts when a new (natural or legal) person is subrogated to the 
position of the seller or supplier. 
40 In that context, the applicants fear that the principle of deterrence enshrined in the 
case-law of the CJEU may be circumvented by the fact that the lender which acted 
unfairly, in this case, AXA Bank Europe SA (organic successor to ELLA Első 
Lakáshitel Kereskedelmi Bank Zártkörűen Működő Részvénytársaság), 
transferred its contract portfolio to another financial institution (in this case, OTP 
Bank Nyrt.). The applicants are asserting the same right as they asserted against 
AXA Bank, since this is the lender which acted unfairly. In Hungary, the Győri 
Ítélőtábla (Regional Court of Appeal, Győr) and the Győri Törvényszék (High 
Court, Győr) have created a body of case-law according to which legal 
consequences may be enforced only against the new party to the contract (in this 
case, OTP). The applicants regard that rule as being contrary to the Directive and 
as preventing the operation of the principle of deterrence. The applicants also 
submit that, if a contract is invalid, there is no transfer of the contract portfolio, 
but that that transfer must be taken into consideration and account in the event of a 
declaration as to [the] effectiveness [of the contract until such time as an order is 
made for its termination]. 
41 Given that AXA Bank Europe SA transferred the entirety of its portfolio of 
contracts with Hungarian individuals and businesses, including a high number of 
consumer contracts, such a transfer has a significant economic and social impact. 
42 It is also important to note that the Kúria Jogegységi Panasz Tanácsa (Judicial 
Complaints Council of the Hungarian Supreme Court), in its Decision 
10/2024.JEH of 1 July 2024, addressed the question of subrogation in relation to 
transfer. In paragraph [95] of that decision, it stated that ‘… there is nothing to 
stop the parties supplementing their original agreement, in the case of any (basic) 
contract under civil law, by subrogation to the right to determine the legal 
consequences of invalidity’. 
43 This means that, in addition to the transfer of the claim, there may also be between 
the transferor and the transferee a subrogation of the right or rights arising from 
the invalidity of the loan agreement, which is tantamount to a transfer of the 
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contract, the only missing element being subrogation to the obligations of the 
lender. If, in the future, the significant number of transfers is supplemented by 
subrogation, this too will have a significant economic and social impact. 
Position of the referring court: 
44 The position of the referring court, as set out in detail above, is that the legal 
conclusion drawn by the applicants is based on the well-founded assumption that 
the legal provision permitting transfers of contracts has adverse effects on the 
contract. The questions referred for a preliminary ruling by the national court of 
first instance do not seek an examination of the content of domestic law, but rather 
focus the legal concern expressed, first, on the conformity of the legislation cited 
with the principle of full effectiveness set out in Articles 2(c), 6(1) and 7(1) of 
Directive 93/13/CEE, and, secondly, on the lowering of the high level of effective 
judicial protection. 
45 The referring court considers that the fact of permitting subrogation in conjunction 
with transfer and the transfer of contracts has the effect, in essence, of depriving 
consumers of the possibility of enforcing the EU law that is guaranteed to them: 
consumers cannot enforce their right against the lender, while the successor to the 
lender cannot be regarded as such for the purposes of Articles 2, 6 and 7 of the 
Directive. 
46 In the light of the foregoing, the referring court cannot decide, first, which 
defendant is directly affected by the necessary decision on the legal consequences 
of the invalidity of the agreement. The referring court points up in this regard the 
importance of ensuring that the procedural rules of the Member States are not 
such as to have the consequence of impeding the full effectiveness of EU law or 
of reducing the level of effective judicial protection. 
47 Public law compels the referring court to rule definitively on rights challenged or 
infringed. To do so, it must examine what effect the provisions of the former Civil 
Code and of the Law on Credit Institutions, that is to say the content of domestic 
law, have on the agreement between the parties. 
48 Paragraph 17(1) of the Law on Financial Institutions provides that the provisions 
of the Civil Code on the transfer of contracts apply to portfolio transfers, with the 
exception that, in the latter case, the contractual guarantees are not extinguished 
and there is no need for a declaration by the other party to the contract. That 
provision also supports the inference, should a contract be found to be invalid, 
first, that a consumer cannot claim any potential overpayment from the party that 
collected it, and cannot therefore enforce his or her right in that legal relationship, 
and, secondly, that the legislature obliges the consumer to take action against the 
person entering the contractual relationship, who may have entered it in order, so 
to speak, to ‘whitewash’ the unfair lender. Many of the actions brought by 
consumers, if upheld, can easily lead to the insolvency of the person entering the 
legal relationship. The consumers affected thus lose the possibility of effective 
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judicial protection, with the result that the legal consequences of the invalidity can 
only be resolved formally. 
49 It follows from the foregoing that the referring court asks the CJEU for a legal 
interpretation with a view to determining whether, in accordance with the 
judgment in Simmenthal, it is obliged to disregard, that is to say to disapply, the 
provisions of the Civil Code and of the Law on Credit Institutions, under which 
the original lender leaves the contractual relationship while the transferee of the 
contract portfolio may enter it. 
50 Secondly, the referring court cannot decide on the scope of its jurisdiction as 
regards the application of the deterrent effect. It finds it worrying that it should 
have to apply the deterrent effect to the unfair original lender, in accordance with 
the case-law established in the judgment in Case C-520/21, whereas the CJEU has 
not as yet ruled in its case-law on whether a person who enters a contractual 
relationship as a party and has shown no signs of unfair conduct in that 
relationship may be penalised without fault. It is also worrying, in its view, that, 
contrary to the principle of effectiveness, the party that originally entered into the 
contract with the consumer may exclude itself. If the CJEU interprets the 
Directive as meaning that the referring court may disregard the transfer of the 
contract portfolio and has jurisdiction to apply the deterrent effect against the 
original lender, that court will have good reason to disregard in the present case 
the relevant provisions of the Civil Code and the Law on Financial Institutions. 
51 Thirdly, the referring court is asking for an interpretation of the Directive because, 
as regards the information that has to be provided both to the consumer and to the 
other parties to the contract in question, it is not entitled to interpret the Directive 
as allowing it to take into account of its own motion the content of acts of EU law 
which the Member State has not transposed into its own legal system. 
52 It is public knowledge that Directive (EU) 2019/61 of the European Parliament 
and of the Council of 27 November 2019 amended, inter alia, Directive 93/13. 
The Parliament and the Council recognised that not all Member States were 
penalising the infringements in question with effective, proportionate and 
dissuasive fines. 
‘To facilitate more consistent application of penalties, in particular in the case of 
intra-Union infringements, widespread infringements and widespread 
infringements with a Union dimension as defined in Regulation (EU) 2017/2394, 
common non-exhaustive and indicative criteria for the application of penalties 
should be included in Directives 93/13/EEC, 98/6/EC, 2005/29/EC and 
2011/83/EU. These criteria should include, for example, the nature, gravity, scale 
and duration of the infringement, and any redress provided by the trader to 
consumers for the harm caused. Repeated infringement by the same perpetrator 
shows a propensity to commit such infringements and is therefore a significant 
indication of the gravity of the conduct and, accordingly, of the need to increase 
the level of the penalty to achieve effective deterrence. The financial benefits 
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gained, or losses avoided, due to the infringement should be taken into account, if 
the relevant data are available. Other aggravating or mitigating factors applicable 
to the circumstances of the case can also be taken into account’. 
53 The Member States were required to notify the Commission of their measures by 
28 November 2021 at the latest. To the referring court’s knowledge, Hungary has 
not adopted any measures. 
54 The law relied on by the applicant in this dispute clearly includes the application 
of the deterrent effect. The court must rule on the rights at issue in this dispute. 
The question is: may the consumer rely directly on the provisions of the 
aforementioned directive if the Member State has not transposed it into its 
domestic law and has not adopted the necessary and expected measures? If, in the 
context of the rights guaranteed to them by Directive 93/13, consumers cannot 
rely directly on the aforementioned legal act, does the court have jurisdiction, in 
the interests of attaining the objective pursued by Articles 6(1) and 7(1) of the 
Directive, to apply an effective, proportionate and dissuasive penalty so as to 
ensure that the law is enforced against the original lender, without regard to the 
fact of the transfer of contracts and the legislation permitting it. 
Background to the request for a preliminary ruling (Case C-628/23) 
55 By order […], the referring court decided to initiate the preliminary ruling 
procedure. However, the CJEU, by its order in Case C-628/23, did not allow the 
request for a preliminary ruling on the ground that it was manifestly inadmissible. 
56 Since the national court is entitled to submit the request for a preliminary ruling 
again, with amended grounds and content, the referring court takes into account in 
this regard not only the order in Case C-628/23 but also the order of 19 February 
2024 in Getin Noble Bank (Case C-449/23). 
57 Accordingly, the resolution of the dispute in the main proceedings calls for a 
useful answer from the CJEU, since the national court of first instance must, in its 
decision, explain why it is disregarding domestic law and not applying in the 
present case the aforementioned provisions of the Civil Code and the Law on 
Credit Institutions. However, the appropriate grounds for doing so are to be sought 
not in national law but in EU law. The referring court is hearing a particular 
dispute in which the applicants maintain that the law on which they are relying 
calls for the rules on the transfer of contracts contained in the Civil Code and the 
Law on Credit Institutions to be circumvented, whereas the defendants argue that 
the legal consequence of a portfolio transfer is not contrary to the Directive. 
58 In the light of paragraph 26 of the order in Case C-449/23, the referring court is 
not obliged to give a separate (interlocutory) judgment declaring the agreement to 
be invalid, since the subject matter of the dispute is the remedying of the legal 
consequences of nullity and the irrebuttable legal presumption makes an 
interlocutory judgment unnecessary. What is more, the CJEU did not require this 
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in the similar cases C-26/13, C-118/17, C-932/19 and C-705/21, and did not make 
an order of inadmissibility in Case C-630/23. 
59 It follows from the decisions which it gave in Cases C-118/17, C-51/17 and 
C-932/19 that the CJEU is aware that the legislature ordered that the excluded 
contractual terms (providing for the application of buying and selling exchange 
rates) be replaced with the mandatory provision contained in Paragraph 3(2) of 
Law DH1. The Fővárosi Törvényszék (Budapest High Court), which submitted 
the request for a preliminary ruling in Case C-565/23, also noted that 
Paragraph 37 of Law DH2 prevents consumers from asserting the right arising 
from the legal presumption as to the nullity of the indexation mechanism and 
departs from the substance of the mandatory rule of law requiring replacement 
with the exchange rate of the National Bank of Hungary. Given that the referring 
court has inferred as a legal consequence that the agreement in question is totally 
invalid, it must decide how to remedy the legal effects of that invalidity. Although 
the judgments in Cases C-565/23 and C-630/23 concern questions referred for a 
preliminary ruling on related substantive law, the main issue faced by the referring 
court is the determination of the legal person to whom it must apply the legal 
consequences. In the absence of a useful answer from the CJEU, the referring 
court cannot decide whether the party leaving the contractual relationship 
nonetheless continues to fall within the scope of Directive 93/13, or whether the 
legal person entering the contractual relationship may be caught by the scope of 
Directive 93/13 without having concluded a contract with the consumer or having 
applied the unfair terms. 
60 As regards the deterrent effect applied by it, the referring court must decide 
whether the consumers have already paid back HUF 10 052 272 of the 
HUF 20 000 000 paid out by the original lender, meaning that they owe only the 
difference, on the basis of the criterion adopted in Case C-520/23, or whether they 
owe a different amount. So far as concerns the application of the deterrent effect, 
the referring court considers the principle set out in the judgment in Case 
C-520/21 to be applicable, according to which an unfair lender must be deprived 
of any claim under any other heading in excess of recovery of the capital 
disbursed. 
61 The referring court can decide whether the void agreement may be transferred 
(between OTP Bank and OTP Faktoring), but it cannot on its own assess – on the 
basis of Article 267 TFEU – whether it must disregard the legislation on the 
transfer of contracts. 
62 A transfer of contracts has the legal effect of bringing about a subjective change in 
the parties to the contract – which is not the case with the transfer and assumption 
of debt – and its impact on the applicability of Directive 93/13 is such that the 
original lender may be excluded from the scope of that directive, while the party 
entering the contractual relationship falls within its scope. 
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63 Consequently, if the Court of Justice interprets the Directive as meaning that the 
original lender or its successors in law fall within the scope of Directive 93/13 in 
any event, the referring court will be able, first, to provide the information referred 
to in the judgment in Case C-19/20 and, secondly, to give its decision in the light 
of the binding material force of the judgment of the CJEU. 
64 In the light of the foregoing considerations, the referring court asks the CJEU to 
specify the seller or supplier against which the legal consequences of invalidity 
may be enforced in accordance with the Directive, [that is to say,] the seller or 
supplier to which the provisions of the Directive are applicable. 
65 For all of those reasons, the referring court submits to the Court of Justice under 
Article 267 of the Treaty on the Functioning of the European Union a request for a 
preliminary ruling on the questions set out in the operative part of this decision. 
[…] [Matters of national procedural law] 
Budapest, 10 October 2024. 
[…] 
[Signature]