Judgment;Summary — ECLI:EU:C:2021:673
Date: 2021-09-02
Language of the case: Hungarian
Court formation: Sixth Chamber
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Hungary

Translation C-932/19 — 1 
Case C-932/19 
Request for a preliminary ruling 
Date lodged: 
20 December 2019 
Referring court: 
Győri Ítélőtábla (Regional Court of Appeal, Győr, Hungary) 
Date of the decision to refer: 
10 December 2019 
Applicant: 
J.Z. 
Defendants: 
OTP Jelzálogbank Zrt. 
OTP Bank Nyrt. 
OTP Faktoring Követeléskezelő Zrt. 
  
… 
In the proceedings brought by way of the appeal … lodged by J.Z. against the 
judgment … delivered by the Veszprémi Törvényszék (High Court, Veszprém, 
Hungary) on 3 July 2019 in the proceedings instituted by J.Z. (… Tapolca, …), 
applicant, against OTP Jelzálogbank Zártkörűen Működő Részvénytársaság 
(… Budapest, …), first defendant, OTP Bank Nyilvánosan Működő 
Részvénytársaság (… Budapest, …), second defendant, and OTP Faktoring 
Követeléskezelő Zártkörűen Működő Részvénytársaság (… Budapest, …), 
third defendant, in connection with a claim of contractual invalidity, the Győri 
Ítélőtábla (Regional Court of Appeal, Győr, Hungary) has made the following 
Order 
1 The Győri Ítélőtábla (Regional Court of Appeal, Győr, Hungary) hereby makes a 
reference to the Court of Justice of the European Union for a preliminary ruling on 
the following question: 
EN 
REQUEST FOR A PRELIMINARY RULING OF 10. 12. 2019 — CASE C-932/19 
 
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Does Article 6(1) [of Council Directive 93/13/EEC on unfair terms in consumer 
contracts] preclude a rule of national law which, in loan agreements concluded 
with consumers, states that 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 to be void, 
and replaces the void terms with a provision which, in the case of both 
disbursement and repayment, applies the official exchange rate set by the National 
Bank of Hungary for the currency in question, without considering whether — in 
the light of all of the terms in the contract — that provision actually protects the 
consumer against particularly unfavourable consequences, and also without giving 
the consumer the opportunity to express a view as to whether he wishes to avail 
himself of the protection afforded by that legislative provision? 
2 … 
3 … [matters of national procedural law] 
Grounds 
Background to the reference for a preliminary ruling 
4 The applicant and the second defendant concluded a personal loan agreement on 
16 May 2007. On 4 June 2007, the applicant and the first and second defendants 
concluded a mortgage loan agreement for the purchase of a residential property 
and, on 4 September 2008, the applicant and the second defendant concluded a 
loan agreement for the refinancing of the debt. In each of those three agreements, 
the lenders undertook to grant the applicant, as a consumer, a foreign-currency-
based loan. All of those agreements are consumer contracts. 
Subsequently, the lenders terminated the loan agreements concluded on 16 May 
2007 and 4 June 2007 and assigned their claims to the third applicant. The 
agreement of 4 September 2008 was terminated when the applicant discharged his 
obligations thereunder.  
5 In his application, the applicant claimed that the three loan agreements were 
invalid. As regards the home purchase loan, he requested that the agreement be 
declared effective up until the date of delivery of the judgment and that the 
amount of his debt be fixed at HUF 3 310 525, plus agreed interest at 5.99% per 
annum from 13 March 2015 to the date of the judgment and default interest at the 
statutory rate from that date until full payment of the debt. He requested that the 
second defendant be ordered to pay HUF 619 460 in connection with the personal 
loan and HUF 605 159 in connection with the debt-refinancing loan, plus interest 
on both amounts.  
OTP JELZÁLOGBANK AND OTHERS 
 
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The defendants contended that the application should be dismissed. 
6 The court of first instance dismissed the action as unfounded. The applicant 
lodged an appeal against that judgment. 
7 In the appeal, the applicant also claims that the court of second instance should 
find [the terms of the agreements] to be unfair by virtue of the application of 
different exchange rates, in accordance with the judgment of the Court of Justice 
in Case C-260/18. He also submits that the information provided by the bank on 
the exchange rate risk was inadequate.  
Relevant legal provisions 
8 Directive 93/13/EEC (‘the Directive’). In accordance with Article 1(2) of the 
Directive, the contractual terms which reflect mandatory statutory or regulatory 
provisions and the provisions or principles of international conventions to which 
the Member States or the Community are party, particularly in the transport area, 
are not to be subject to the provisions of that directive. 
9 Article 3(1) of the Directive provides that a contractual term which has not been 
individually negotiated is to be regarded as unfair if, contrary to the requirement 
of good faith, it causes a significant imbalance in the parties’ rights and 
obligations under the contract, to the detriment of the consumer. 
10 According to Article 6(1) of that directive, Member States are to lay down that 
unfair terms used in a contract concluded with a consumer by a seller or supplier 
must, as provided for under their national law, not be binding on the consumer, 
and that the contract must continue to bind the parties upon those terms if it is 
capable of continuing in existence without those terms. 
11 In accordance with Paragraph 209(1) of the Polgári Törvénykönyvről szóló 1959. 
évi IV. törvény (Law No IV of 1959 establishing the Civil Code; ‘the former Civil 
Code’), any standard contract term or any term of a consumer contract which has 
not been individually negotiated is to be regarded as unfair if, in breach of the 
obligation to act in good faith and fairly, it unilaterally and unjustifiably 
establishes the contractual rights and obligations of the parties to the detriment of 
the party other than the one imposing the contractual term in question. 
12 In accordance with Paragraph 209(5) of the former Civil Code, a contract term 
may not be regarded as unfair if it was established by a statutory provision or 
framed in accordance with the requirements of a statutory provision. 
13 Paragraph 209/A(2) of the former Civil Code provides that, in consumer contracts, 
unfair terms which are included as standard contract terms, or which the party 
concluding the contract with the consumer has pre-formulated unilaterally and 
without individual negotiation, are to be invalid. Invalidity may be invoked only 
in favour of the consumer. 
REQUEST FOR A PRELIMINARY RULING OF 10. 12. 2019 — CASE C-932/19 
 
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14 Paragraph 3(1) of the Kúriának a pénzügyi intézmények fogyasztói 
kölcsönszerződéseire vonatkozó jogegységi határozatával kapcsolatos egyes 
kérdések rendezéséről szóló 2014. évi XXXVIII. törvény (Law No XXXVIII of 
2014 on the resolution of certain issues relating to the decision adopted by the 
Kúria (Supreme Court, Hungary) with a view to ensuring the consistent 
interpretation of the provisions of civil law concerning loan agreements concluded 
by financial institutions with consumers, ‘Law DH 1’) provides that, 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 to be void. 
15 Subparagraph 2 of that paragraph provides that, without prejudice to the provision 
contained in subparagraph 3, instead of the void term referred to in subparagraph 
1, the official exchange rate set by the National Bank of Hungary for the foreign 
currency concerned is to apply in relation to the disbursement and repayment of 
the loan (including payment of the instalments and all the costs, fees and 
commissions expressed in foreign currency). 
Relevant judgments of the Court of Justice 
16 In the judgment given in Case C-618/10, Banco Español de Crédito, the Court of 
Justice stated that the expression ‘shall … not be binding on the consumer’, 
contained in Article 6(1) of the Directive, aims to replace the formal balance 
which the contract establishes between the rights and obligations of the parties 
with an effective balance which re-establishes equality between them 
(paragraph 63). It also held that modifying the contract would not be such as to 
ensure such efficient protection of the consumer’s rights as that resulting from 
non-application of the unfair terms (paragraph 70). 
17 In accordance with the judgment in Case C-26/13, Kásler and Káslerné Rábai, in 
a situation such as that at issue in the main proceedings, in which a contract 
concluded between a seller or supplier and a consumer may not continue in 
existence after the deletion of an unfair term, that provision does not preclude 
national legislation which allows the national court to cure the invalidity of the 
unfair term by substituting a supplementary provision of national law. The reason 
for this is that the consumer must not be exposed to particularly unfavourable 
consequences, so as to ensure that the dissuasive effect resulting from the 
annulment of the contract cannot be jeopardised (paragraph 83). The fact that the 
outstanding balance of the loan becomes due forthwith [as a result of annulment] 
carries with it the risk that that balance will be in excess of the consumer’s 
financial capacities and, for that reason, may penalise the consumer rather than the 
OTP JELZÁLOGBANK AND OTHERS 
 
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lender, who, as a consequence, would not be dissuaded from inserting such terms 
in its contracts (paragraph 84). 
It is clear from the foregoing that that judgment did not address the issue of the 
assumption of the exchange rate risk.  
18 In the judgment in Case C-483/16, Sziber, the Court of Justice did not consider to 
be contrary, in principle, to Article 7 of the Directive national legislation such as 
that contained in Paragraphs 37(1) to (3) and 37/A(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 No XL of 2014 on the provisions governing the settlement of 
accounts referred to in Law No XXXVIII of 2014 governing specific matters 
relating to the decision of the Kúria (Supreme Court) to harmonise the case-law 
on loan agreements concluded between credit institutions and consumers, and 
concerning a number of other provisions; ‘the DH2 Law’), but only if a finding 
that the terms contained in such an agreement are unfair will restore the legal and 
factual situation that the consumer would have been in had those unfair terms not 
existed. 
19 In Case C-51/17, Ilyés, the Court held that Article 1(2) of Directive 93/13 must be 
interpreted as meaning that the scope of that directive does not cover terms which 
reflect mandatory provisions of national law, inserted after the conclusion of a 
loan contract concluded with a consumer and intended to remove a term which is 
null and void from that contract, by imposing an exchange rate set by the National 
Bank. However, a term relating to the foreign exchange risk, such as that at issue 
in the main proceedings, is not excluded from that scope under that provision. 
That judgment stated that the exclusion from the application of the rules of 
Directive 93/13 is justified by the fact that, in principle, it may legitimately be 
supposed that the national legislation struck a balance between all the rights and 
obligations of the parties to certain contracts (paragraph 53). As regards 
Paragraph 3 of Law DH 1, the Court went on to say that such a law was adopted 
in a specific context, in that it is based on Decision No 2/2014 PJE of the Kúria 
(Supreme Court), delivered to safeguard the uniformity of the law, by which that 
court ruled on the unfairness or the presumption of unfairness of terms on the 
difference in exchange rates and the power to make unilateral amendments 
contained in credit or loan contracts denominated in a foreign currency and 
concluded with consumers. Both the decision of the Kúria (Supreme Court) and 
Law DH 1 are based on the judgment in Case C-26/13 (paragraphs 58 and 59). 
20 In the judgment in Case C-118/17, Dunai, the Court starts from the premiss that 
provisions of national law which modify terms relating to exchange rate 
difference by legislative means and at the same time safeguard the validity of loan 
contracts are consistent with the objective pursued by the Directive 
(paragraph 40). However, such provisions must respect the requirements of 
REQUEST FOR A PRELIMINARY RULING OF 10. 12. 2019 — CASE C-932/19 
 
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Article 6(1) of the Directive (paragraph 42). The fact that certain contractual terms 
were declared to be unfair and void and replaced by new terms, in order to allow 
the continued existence of the contract at issue, cannot have the result of 
weakening the protection guaranteed to consumers (paragraph 43). In that case, 
the term relating to the exchange rate risk defines the main subject matter of the 
contract and the continuation of the contract does not appear to be legally 
possible, although this is a matter to be determined by the referring court 
(paragraph 52). The Court emphasised that the substitution of a supplementary 
provision of national law for an unfair term is possible only in cases in which the 
cancellation of the contract in its entirety would expose the consumer to 
particularly unfavourable consequences, and, in the case in question, it was 
apparent that the continuation of the contract would be contrary to the interests of 
the consumer (paragraphs 54 and 55). 
21 In the judgment in Case C-260/18, Dziubak, the Court held that, so far as concerns 
the determination of the legal consequences, the consumer’s interests must be 
assessed in relation to the consequences existing or foreseeable at the time when 
the dispute arose (paragraphs 50 and 51), although the consumer, after having 
been duly informed by the national court, may give his free and informed consent 
to the terms in question, in which case the system of protection mentioned above 
would not be applicable (paragraph 54). The Court supplemented the judgment 
given in Case C-26/13 by adding that the consequences referred to in that 
judgment must be assessed in the light of the existing or foreseeable 
circumstances at the time when the dispute arose, and that, for the purposes of that 
assessment, the wishes expressed by the consumer in that regard are the decisive 
factor. In its opinion, Article 6(1) of the Directive precludes unfair terms 
contained in a contract from being upheld where their removal would lead to the 
annulment of that contract and the court takes the view that that annulment would 
give rise to unfavourable effects for the consumer, if the latter has not consented 
to their being upheld.  
Reasons for the request for a preliminary ruling 
22 As a result of the judgments given by the Court of Justice in Cases C-118/17 and 
C-260/18, the Hungarian courts currently have pending before them a large 
number of cases in which, because of the unfairness of the exchange rate 
difference, it is increasingly common for consumers to ask for the contract to be 
declared invalid in its entirety, and, owing to the consequences arising from the 
significant exchange rate risk that is systematically borne by them, consumers do 
not want the unfair term to be replaced with a supplementary provision of national 
law which, in their opinion, does not protect them from the particularly 
unfavourable consequences of invalidity. It should be noted, however, that, 
according to the case-law established by the Hungarian courts in the period since 
those judgments were delivered, if terms relating to the exchange rate risk cannot 
be declared unfair, it is not possible for the Hungarian courts to extinguish the 
legal relationship in its entirety solely on the basis of the invalidity arising from 
OTP JELZÁLOGBANK AND OTHERS 
 
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the exchange rate difference and to apply the legal consequences of that invalidity 
to the entire contract, thus refraining from applying the provisions of 
Paragraphs 3(1) and (2) of Law DH 1. 
23 The Kúria (Supreme Court), the highest-ranking body in the Hungarian judicial 
system, stated, for example, in a press release of 11 October 2019, that, in Polish 
law, there is no provision similar to the supplementary provision of Hungarian law 
that is contained in Paragraph 231(2) of the former Civil Code, relating to the 
determination of the rate of exchange between currencies, in accordance with 
which debts expressed in another currency are to be converted using the exchange 
rate in force at the place and on the date of payment. Consequently, the approach 
taken by the Court of Justice in Case C-26/13 cannot be applied in Polish law. It 
follows further from this that the findings contained in the judgment [in Case 
C-260/18] with respect to the exchange rate difference and the remedying of the 
unfairness of the exchange rate risk are not applicable to Hungarian cases. The 
Court of Justice has not overruled the approach it took in Case C-26/13. 
According to the aforementioned press release, that judgment does not create new 
means of redress or new legal remedies for Hungarian consumers; the issue of 
exchange rate difference was definitively resolved by the settlement of accounts 
established in point 3 of Decision No 2/2014 PJE of the Kúria (Supreme Court) 
and in Law DH 2. 
24 The court of second instance hearing the present dispute is uncertain whether, 
given that the provision of national law contained in Paragraph 3(1) and (2) of 
Law DH 1 must be applied even in the case where the consumer has expressed 
wishes to the contrary, those provisions are to be regarded as being contrary to 
Article 6(1) of the Directive, and, if so, whether the courts must refrain from 
applying them. 
25 In the light of all the foregoing considerations, the Győri Ítélőtábla (Regional 
Court of Appeal, Győr) makes a reference to the Court of Justice under 
Article 267 TFEU for a preliminary ruling on the question set out in the operative 
part of this order. 
26 … 
27 … [matters of national procedural law] 
Győr, 10 December 2019. 
… 
[signatures]