Information;Order — ECLI:EU:C:2024:317
Date: 2024-04-09
Language of the case: Hungarian
Court formation: Seventh Chamber
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling - inadmissible
Origin: Hungary

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Translation C-628/23 – 1 
Case C-628/23 
Request for a preliminary ruling 
Date lodged: 
16 October 2023 
Referring court: 
Budapest Környéki Törvényszék (Hungary) 
Date of the decision to refer: 
21 September 2023 
Applicants: 
YG 
NI 
Defendants: 
AXA Bank Europe SA 
OTP Bank Nyrt. 
OTP Faktoring Követeléskezelő Zrt. 
  
The Budapest Környéki Törvényszék (Budapest Regional Court, Hungary), 
in proceedings concerning the declaration of invalidity of a loan agreement 
denominated in foreign currency, the applicants being YG (… Érd, Hungary), as 
applicant 1, and NI (… Érd) …, as applicant 2, and the defendants being AXA 
Bank Europe SA (… Budapest), as defendant 1, OTP Bank Nyrt. (… Budapest), as 
defendant 2, and OTP Faktoring Követeléskezelő Zrt. (… Budapest) …, as 
defendant 3, has adopted the following 
ORDER: 
EN 
REQUEST FOR A PRELIMINARY RULING OF 21. 9. 2023 – CASE C-628/23 
 
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The Budapest Regional Court refers the following question to the Court of Justice 
of the European Union for a preliminary ruling: 
Is it consistent with the concept of ‘seller or supplier’ as defined in Article 2(c) of 
Council Directive 93/13/EEC on unfair terms in consumer contracts to interpret 
that concept as meaning that: 
(a) it refers only to the original contracting party that introduced the unfair 
contract term; or 
(b) it should also be deemed to cover a new seller or supplier that has been 
subrogated to the contract by means of an assignment of the contract (by 
subjective novation) and that, although it did not introduce the unfair term, gains 
benefit from the financial and economic effects of the contract following 
subrogation to that contract; or 
(c) as a result of the subjective novation, only the current seller or supplier 
should be understood as such, irrespective of which party occupied the position of 
seller or supplier as the original contracting party? 
… [Considerations of national procedural law] 
Grounds: 
In the present case, the applicants contacted ELLA Első Lakáshitel Kereskedelmi 
Bank Rt. on the recommendation of a credit intermediary and on 31 March 2008 
completed and signed an application for credit. The applicants, as debtors and 
guarantors (consumers), and ELLA Első Lakáshitel Kereskedelmi Bank Rt., as 
lender (seller or supplier), concluded a contract on 12 June 2008, which they 
executed as a public deed and which was entitled ‘loan agreement concerning a 
loan denominated in foreign currency, provided with a personal guarantee, 
intended for the partial subrogation of a credit denominated in foreign currency’ 
(‘the loan agreement at issue’). In order to secure that loan, the parties also 
concluded an independent security agreement on a property situated in Érd, which 
was fully owned by applicant 1. 
The loan agreement at issue is a consumer contract denominated in foreign 
currency. The amount of the credit – recorded as CHF 141 536 – was the 
equivalent of a maximum amount of HUF 20 075 000, converted at the foreign 
exchange buy rate applied by the bank on the date the loan amount was paid out. 
The repayment period was nineteen years, with the final maturity date set as 
12 May 2028 at the latest. There were to be 228 instalments and the debtor party 
was required to pay HUF 75 000 as a disbursement fee. The debtor was required 
to pay ordinary interest calculated at a rate determined according to the bank’s 
rates in force at the time, which could be changed unilaterally every six-month 
period. The initial interest rate was 4.65%. The debtor was also required to pay 
monthly management fees depending on the amount of the loan, at a rate that 
AXA BANK EUROPE AND OTHERS 
 
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could be changed unilaterally by the bank and was initially 1.9% per annum. The 
initial annual percentage rate of charge (APR) was 7.06% per annum. 
The loan agreement at issue is deemed to be revised [in accordance with 
Hungarian Law XL 2014 on the rules applicable to the settlement of accounts, 
referred to in Law XXXVIII 2014, cited below]. According to the settlement of 
accounts drawn up on 4 March 2015 by AXA Bank Europe SA Magyarországi 
Fióktelepe [the Hungarian branch of AXA Bank Europe SA], as legal 
representative of defendant 1, the applicants owed defendant 1 an outstanding debt 
of HUF 42 815 836 resulting from the settlement of wrongfully charged amounts 
and the conversion of those amounts into forints. 
Since 10 July 2008, ELLA Első Lakáshitel Kereskedelmi Bank Zártkörűen 
Működő Részvénytársaság has been listed in the Commercial Register and has 
carried out its activities under the company name AXA Kereskedelmi Bank 
Zártkörűen Működő Részvénytársaság, as AXA Holding S.A. acquired all shares 
in ELLA Bank in 2007. 
AXA Kereskedelmi Bank Zártkörűen Működő Részvénytársaság was taken over 
by AXA Bank Europe SA as part of a cross-border merger by acquisition, in 
accordance with the a tőkeegyesítő társaságok határon átnyúló egyesüléséről szóló 
2007. évi CXL törvény (Law CXL 2007 on cross-border mergers of limited 
liability companies). As a result of the takeover, AXA Bank Europe SA became 
the universal successor to AXA Bank. At the same time, AXA Bank Europe SA 
established a branch in Hungary. 
On 31 October 2016, the Hungarian branch AXA Bank Europe SA Magyarországi 
Fióktelepe, as legal representative of AXA Bank Europe SA, concluded a 
portfolio transfer agreement with OTP Bank Nyrt., meaning that – as far as the 
lender (seller or supplier) is concerned – a universal succession of the loan 
agreement at issue and all the rights and obligations arising from that agreement 
took place. 
Subsequently, on 2 November 2016, an assignment-of-claims agreement was 
concluded between OTP Bank Nyrt. as assignor and OTP Faktoring Zrt. as 
assignee in relation to the debt arising from the loan agreement at issue. 
On 21 October 2015, the plaintiffs filed a lawsuit against AXA Bank Europe SA. 
On 13 December 2016, AXA Bank Europe SA informed the court that the 
business successions described above had taken place. In relation to the first 
succession (AXA – OTP), OTP Bank Nyrt. stated its intention to join the 
proceedings voluntarily, and AXA Bank Europe SA expressed its agreement to 
OTP Bank Nyrt. doing so and requested that it itself be severed from the 
proceedings. In relation to the second succession (OTP – OTP Faktoring), OTP 
Faktoring Zrt. stated its intention to join the proceedings voluntarily, and OTP 
Bank Nyrt. expressed its agreement to OTP Faktoring Zrt. doing so and requested 
that it itself be severed from the proceedings. The applicants expressed their 
REQUEST FOR A PRELIMINARY RULING OF 21. 9. 2023 – CASE C-628/23 
 
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disagreement in relation to the severance of the abovementioned entities from the 
proceedings. The referring court permitted the parties concerned to join the 
proceedings, but rejected the requests for severance. 
In accordance with Article 3(1) of the a Kúriának a pénzügyi intézmények 
fogyasztói kölcsönszerződéseire vonatkozó jogegységi határozatával kapcsolatos 
egyes kérdések rendezéséről szóló 2014. évi XXXVIII. törvény (Law XXXVIII 
2014 on the resolution of certain issues relating to the decision adopted by the 
Kúria (Supreme Court, Hungary) with a view to ensuring consistent interpretation 
of the provisions of civil law concerning loan agreements concluded by financial 
institutions with consumers; ‘the DH1 Law’), in loan agreements concluded with 
consumers, terms – with the exception of contractual terms which have been 
individually negotiated – pursuant to which the financial institution stipulates that, 
for the purpose 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 purpose of repayment of the debt, the selling rate, or a different exchange rate 
from that set when the loan was paid out, is to apply, are void. 
It is common ground that the loan agreement at issue is unfair and void, due to the 
application of different exchange rates. 
The national court of first instance examined the invalidity of the agreement at 
issue solely on the basis of the main claim by the applicants and declared in an 
interim judgment that the agreement was invalid in its entirety on the ground that 
the information relating to the exchange rate risk was unfair. However, the 
national court of second instance did not share this view and, setting aside the 
interim judgment, ordered the court of first instance to examine the other grounds 
of invalidity. 
When the proceedings were reopened, the applicants continued to assert their 
claim that the agreement at issue is unlawful and completely void (invalid) 
because it does not include the amount of the loan, since, despite being 
denominated in foreign currency, only the amount in CHF was indicated and the 
amount of the instalments and the maturity date were omitted from the agreement. 
In addition to the above, they also argue that the agreement is invalid in its 
entirety on the ground that the application of the exchange rate differential is 
unfair based on the irrebuttable legal presumption iuris et de iure laid down in 
Article 3(1) of the DH1 Law. 
According to the applicants, the agreement cannot survive the severance of the 
unfair terms, since the remaining content alters the essence of the agreement, its 
essential elements. Consequently, if the court were to uphold the effectiveness of 
the remaining content, it would infringe the principle of bargaining autonomy, 
since it would impose an agreement on the parties that they would not otherwise 
have wished to conclude. 
AXA BANK EUROPE AND OTHERS 
 
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The applicants also argue that, after the agreement was concluded, Article 6 of 
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer 
contracts (‘the Directive’) was transposed in 2009 (by Article 209(4) to (6) of the 
a Polgári Törvénykönyvről szóló 1959. évi IV. törvény (Law IV 1959 establishing 
the Hungarian Civil Code)), and the Directive is therefore directly applicable in 
the present case. They also argue that Article 6 of the Directive does not provide 
for the remedying of partial invalidity. They interpret the decisions of the Court of 
Justice of the European Union (CJEU) in Cases C-618/10, C-26/13, C-80/21 to 
C-82/21, C-705/21, C-520/21 and C-[6]/22 as meaning that the provisions of the 
Directive preclude the possibility of declaring that the agreement is validated. 
The applicants further submit that the provision of the DH1 Law permitting 
substitution by the average exchange rate of the National Bank of Hungary 
(Article 3(2) of the DH1 Law) establishes a lower level of protection than that 
provided by EU law and that, for that reason, its application is contrary to EU law 
and does not meet the objectives pursued by the Directive (in particular, 
approximation of laws, restoration of the balance between the consumer and the 
seller or supplier and discouragement of the use of unfair terms). According to the 
applicants, the decisions of the CJEU do not distinguish between the grounds for 
invalidity, but, where any of those grounds apply, it is generally ordered that the 
legal consequences are to be taken into account and implemented. 
The referring court must also decide in the present case – in accordance with the 
principle of deterrence – which seller or supplier must face the penalties and 
preventive measures laid down by the Directive, and it must therefore rule on the 
question as to whether the penalty may be imposed on the new seller or supplier 
that has been subrogated to the agreement and that gains benefit from the financial 
and economic effects of the agreement following its subrogation to that 
agreement, although it did not introduce the unfair term. 
The referring court has taken into consideration the Commission Notice entitled 
Guidance on the interpretation and application of Council Directive 93/13/EEC on 
unfair terms in consumer contracts (OJ 2019 C 323, p. 4), and the decisions of the 
CJEU cited in that notice. 
The Notice highlights the conclusion of the contract, in relation to which the 
concept of ‘seller or supplier’ must be understood as a functional concept in a 
broad sense, while also considering the existence of a more advantageous 
situation. Experience shows that this situation continues even after the contract 
has been concluded. 
Decisions adopted since that Notice have not addressed the issue of possible 
subjective changes to consumer contracts where a new (natural or legal) person is 
subrogated to the position of seller or supplier. 
In this case, the applicants fear that the implementation of the deterrent effect 
enshrined in the case-law of the CJEU could be circumvented by the fact that the 
REQUEST FOR A PRELIMINARY RULING OF 21. 9. 2023 – CASE C-628/23 
 
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lender that acted unfairly – in this case AXA Bank Europe SA (the direct 
successor to ELLA Első Lakáshitel Kereskedelmi Bank Zártkörűen Működő 
Részvénytársaság) – has transferred its portfolio of contracts to another financial 
institution (in this case OTP Bank Nyrt.). The right asserted by the applicants is 
the right they asserted against AXA Bank Europe SA, since it is the lender that 
acted unfairly. In Hungary, the Győri Ítélőtábla (Győr Regional Court of Appeal) 
and the Győri Törvényszék (Győr High Court) have developed a body of case-law 
according to which legal consequences can only be enforced against the new 
contracting party (in this case OTP). The applicants consider that this criterion is 
contrary to the Directive and does not have a deterrent effect. 
The applicants also argue that, if a contract is invalid, the assignment of the 
contract portfolio is not possible, but that such an assignment must be considered 
and taken into account if a declaration of effectiveness is made [in relation to the 
contract pending a decision]. 
As AXA Bank Europe SA has divested its entire portfolio of contracts with 
Hungarian individuals and companies, including a large number of consumer 
contracts, this divestiture of contracts has a significant economic and social 
impact. 
In the light of the above considerations, the referring court asks the CJEU to rule 
on which entity is the seller or supplier against which the legal consequences of 
invalidity may be asserted under the Directive and in respect of which of them are 
subject to application of the provisions of the Directive. 
… [Considerations of national procedural law] 
Budapest, 21 September 2023. 
… [signatures]