62020CO0670
ORDER OF THE COURT (Sixth Chamber)
6 December 2021 (
*1
)
(Reference for a preliminary ruling – Article 99 of the Rules of Procedure of the Court of Justice – Consumer protection – Directive 93/13/EEC – Unfair terms in consumer contracts – Loan agreement denominated in a foreign currency – Terms exposing the borrower to a foreign exchange risk – Article 4(2) – Requirements of intelligibility and transparency – Lack of effect of the declaration by the consumer under which he or she is fully aware of the potential risks arising from a loan denominated in a foreign currency – Contractual term that is in plain, intelligible language)
In Case C‑670/20,
REQUEST for a preliminary ruling under Article 267 TFEU from the Ráckevei Járásbíróság (District Court, Ráckeve, Hungary), made by decision of 9 November 2020, received at the Court on 8 December 2020, in the proceedings
EP,
TA,
FV,
TB
v
ERSTE Bank Hungary Zrt.,
THE COURT (Sixth Chamber),
composed of L. Bay Larsen, Vice-President of the Court, acting as President of the Sixth Chamber, N. Jääskinen (Rapporteur) and M. Safjan, Judges,
Advocate General: J. Kokott,
Registrar: A. Calot Escobar,
having decided, after hearing the Advocate General, to give a decision by reasoned order, pursuant to Article 99 of the Rules of Procedure of the Court of Justice,
makes the following
Order
1
This request for a preliminary ruling concerns the interpretation of Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).
2
The request has been made in proceedings between EP, TA, FV and TB and ERSTE Bank Hungary Zrt. (‘the Bank’), concerning the alleged unfairness of a term inserted into a loan agreement denominated in a foreign currency, providing for repayment of the loan in the national currency.
Legal context
3
Article 4 of Directive 93/13 provides:
‘1.   Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, 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 it is dependent.
2.   Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplie[d] in exchange, on the other, in so far as these terms are in plain intelligible language.’
4
Article 5 of that directive provides:
‘In the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language. …’
The dispute in the main proceedings and the questions referred for a preliminary ruling
5
On 9 January 2007, the applicants in the main proceedings, who are consumers, concluded a loan agreement with the Bank by notarial act for the purposes of the renovation of a family home. Under that loan agreement, the amount of the loan was denominated in Swiss francs (CHF), but the advance and the repayment of that amount were to be made in forint (HUF).
6
Consequently, at each repayment date, the Bank determined the amount of the monthly instalment due by converting into forint the amount of the repayment which had been agreed to be made in Swiss francs.
7
When the loan agreement at issue was concluded, the Bank provided the applicants in the main proceedings with an information leaflet on the general risks linked to financing denominated in a foreign currency. That information leaflet stated the following, with regard to the foreign exchange risk:
‘We draw your attention to the fact that, in choosing a loan denominated in a foreign currency, you can benefit from the advantages of the market for the chosen currency, but that you also bear the risks. By concluding the loan agreement, you take formal notice of the fact that the amount of the loan is held by the Bank in the foreign currency chosen, and you undertake to repay it in the currency that you have chosen. Since the exchange rate between forint and the foreign currency chosen by you in the loan agreement – the exchange rate – is likely to vary depending on daily market fluctuations, we draw your attention to the fact that a potential variation or adverse increase in the exchange rate is likely to lead to an additional cost for you, of which neither the actual occurrence or the amount can be foreseen.
The advantage of this type of financing is that, as soon as the exchange rate of the foreign currency in which the financing is denominated decreases in relation to the forint, the “countervalue” in forints of the financing diminishes; in other words, less forints are required in order to buy the currency covering the monthly instalments used to repay the capital and interest, and that purchase will then cost you less – in that case, the burden is lower, and this may even have the consequence that you must repay less than that expected on the basis of the countervalue in forints calculated at the time the loan/credit agreement was concluded.
In the opposite case, where the exchange rate of the foreign currency in which the financing is denominated increases relative to the forint, the “countervalue” of the financing increases; in that case, a more significant amount in forints is required in order to pay the monthly (repayment) instalments of the capital and interest, converted into the relevant foreign currency; in that case, more forints are therefore required in order to repay the credit in the currency that was entered into.
You show by your signature that you have been clearly informed of the risks presented by this financing, that you know the components of the risk and that you wish to take out the loan with full knowledge of the facts.’
8
According to the referring court, the information leaflet concerned was in the context of a stable situation on exchange rates, which prevailed when the loan agreement at issue was concluded. It is true that that leaflet mentions the possibility of a fall in the exchange rate and that of an increase in that exchange rate, as well as the advantages and the disadvantages arising from that, but it does not contain information on the fact that a change in macroeconomic conditions and the situation on the international money market could lead to a significant, even unlimited, increase in monthly repayment instalments, or information that the exchange rate between the forint and the Swiss franc could undergo significant fluctuations, irrespective of the stable nature of that rate in the past.
9
Following a significant change in that exchange rate, which occurred during the performance of the loan agreement at issue, the amount of the monthly repayments due under that loan agreement increased significantly.
10
The applicants in the main proceedings being unable to fulfil their repayment obligation, the Bank terminated the loan agreement at issue in 2015.
11
On 10 July 2015, at the request of the Bank, enforcement proceedings were initiated against the applicants in the main proceedings.
12
On 30 September 2016, the applicants applied for a prohibitory injunction before the referring court, on the ground that the loan agreement at issue was invalid. In support of that action, the applicants in the main proceedings claim that the Bank had not provided them with sufficient information on the actual risks associated with entering into a loan agreement denominated in a foreign currency. Specifically, the Bank failed to draw their attention to the fact that:
–
the positive and adverse effects of a fluctuation in the exchange rate balance out only if the exchange rates of the forint and Swiss franc move within a stable and constant range;
–
a lasting and significant change in the macroeconomic conditions and the situation on the international money market was likely to lead to a significant, or even unlimited, increase in the monthly repayment instalments; and
–
the assumption of a sustained increase in the exchange rate of the Swiss franc in relation to that of the forint was likely to occur at any time, and that the moderate nature of the previous fluctuations in those exchange rates did not provide any guarantee as regards their future stability.
13
The Bank claims that the information which it provided on the foreign exchange risk was sufficient, since the theoretical possibility of a variation in the exchange rate was mentioned in the information leaflet referred to in paragraph 7 of the present order. In that context, the correlation between the fluctuation of that exchange rate and that of the amount of the monthly repayment instalment was referred to. Consumers were therefore put in a position to understand that the amount of monthly instalments could increase indefinitely, on the basis of the fluctuation of that exchange rate. The Bank also refers to the case-law of the Kúria (Supreme Court, Hungary), according to which, ‘in itself, the fact that the defendant provided information on the foreign exchange risk is the sign that the applicants had to consider it as a realistic assumption’.
14
The referring court refers to the judgment of 20 September 2017, Andriciuc and Others (C‑186/16, EU:C:2017:703), noting that, according to that judgment, the information relating to the foreign exchange risk provided by the Bank must enable an average consumer, who is reasonably well informed and reasonably observant and circumspect, to be aware not only of the possibility of a rise or fall in the value of the foreign currency in which the loan was taken out, but also to assess the potentially significant economic consequences of such a term with regard to his or her financial obligations.
15
That court raises the question, however, of the scope of that requirement put by the Court of Justice and wonders whether such economic consequences must be explicitly apparent from the information provided by the Bank. More specifically, it raises the question whether it is sufficient, in order to satisfy that requirement, that by the loan agreement signature, the consumer concerned states generally that he or she knows and assumes the risks of the lending transaction, taking into account a potential variation in the exchange rate, or whether it is also necessary for the Bank to provide explicit information as to the unlimited nature of the risk assumed.
16
In those circumstances, the Ráckevei Járásbíróság (District Court, Ráckeve, Hungary) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)
Having regard to the interpretation of Article 4(2) of Directive [93/13] on unfair terms in consumer contracts adopted in the judgment [of 20 September 2017, Andriciuc and Others (C‑186/16, EU:C:2017:703)], is a contractual term concerning foreign exchange risk which, without expressly establishing that that risk is to be borne exclusively and entirely by the debtor, contains only a declaration by the debtor in which it is stated that the latter “is fully aware of the possible risks of the transaction, and in particular the fact that fluctuations in the currency in question against the Hungarian forint can both increase and reduce the burden of repayment of the loan in forint[”], to be regarded as clear and unambiguous?
(2)
Does the contractual term described above satisfy the requirement, laid down in the judgment [of 20 September 2017, Andriciuc and Others (C‑186/16, EU:C:2017:703)], that the consumer must be able to assess, on the basis of such a term, the potentially significant economic consequences of the assumption of foreign exchange risk with regard to his or her financial obligations, having regard to the fact that the document entitled [“]Information on the general risks of foreign currency financing[”], which the consumer signed when entering into the contract, makes reference in identical wording to the favourable and unfavourable effects of changes in the exchange rate, and thereby suggests that the typical trend in a stable exchange rate – also communicated by the Hungarian Banking Association – is that those favourable and unfavourable economic effects are offset in the long run?
(3)
Does the contractual term described above satisfy the requirement, laid down in the judgment [of 20 September 2017, Andriciuc and Others (C‑186/16, EU:C:2017:703)], that the consumer must be able to assess, on the basis of such a term, the potentially significant economic consequences of such a term with regard to his or her financial obligations, where neither the contract nor the information document on the foreign exchange risk, which is signed when the contract is concluded, expressly or implicitly states that the increase in repayments may be significant or can also, in fact, reach any level?
(4)
Having regard to the interpretation of Article 4(2) of Directive [93/13] on unfair terms in consumer contracts adopted in the judgment [of 20 September 2017, Andriciuc and Others (C‑186/16, EU:C:2017:703)], is a contractual term concerning the foreign exchange risk, in which it is not expressly stated that the foreign exchange risk is to be borne exclusively and entirely by the consumer, to be regarded as clear and unambiguous when it does not expressly follow from the terms of the contract that the increase in repayments may be significant and can also, in fact, reach any level?
(5)
Is the declaration made to that effect by the consumer, which is set out in general terms in a standard clause in the contract, sufficient per se to assess whether the information on the foreign exchange risk satisfied the requirement, laid down in the judgment [of 20 September 2017, Andriciuc and Others (C‑186/16, EU:C:2017:703)], that that information must allow the consumer to assess, on the basis of that term, the potentially significant economic consequences of the transfer of the foreign exchange risk with regard to his or her financial obligations, where no other clause in either the contract or the information document supports that finding?
(6)
Having regard to the content of the judgment [of 20 September 2017, Andriciuc and Others (C‑186/16, EU:C:2017:703)], is the interpretation given by the Kúria [(Supreme Court)] according to which “the fact that the defendant provided information on the foreign exchange risk in itself means that the applicant should realistically have expected that risk” in conformity with Article 4(2) of Directive [93/13]?’
Consideration of the questions referred
17
Under Article 99 of its Rules of Procedure, the Court may at any time, on a proposal from the Judge-Rapporteur and after hearing the Advocate General, give its decision by reasoned order where, in particular, a question referred to the Court for a preliminary ruling is identical to a question on which the Court has already ruled or where the answer to such a question may be clearly deduced from existing case-law.
18
That provision must be applied in the present case.
19
By its questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement of transparency of the terms of a loan agreement denominated in a foreign currency, which expose the borrower to a foreign exchange risk, is satisfied where the seller or supplier has provided him or her with general information on the foreign exchange risk, including on the effect of changes in exchange rates on his or her financial obligations, and where that consumer has stated that he or she is fully aware of the potential risks arising from entering into that contract.
20
As a preliminary point, it should be recalled that it is for the referring court alone to rule on the classification of terms allegedly unfair in accordance with the particular circumstances of the case. The fact remains that the Court has jurisdiction to elicit from the provisions of Directive 93/13, in this case the provisions of Article 4(2) thereof, the criteria that the referring court may or must apply when examining contractual terms in the light of those provisions (judgment of 20 September 2018, OTP Bank and OTP Faktoring, C‑51/17, EU:C:2018:750, paragraph 72 and the case-law cited).
21
In that regard, according to settled case-law on the requirement of transparency, information provided before the conclusion of a contract, on the terms of the contract and the consequences of concluding it, is of fundamental importance for a consumer. It is on the basis of that information in particular that the consumer decides whether he or she wishes to be contractually bound to a seller or supplier by the terms previously drawn up by the latter (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 41, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 62 and the case-law cited).
22
It follows that the requirement of transparency of contractual terms, as resulting from Article 4(2) and Article 5 of Directive 93/13, cannot be reduced merely to their being formally and grammatically intelligible. As the system of protection introduced by that directive is based on the idea that consumers are in a weak position vis-à-vis sellers or suppliers, in particular as regards their level of knowledge, the requirement, laid down by the directive, that the contractual terms are to be drafted in plain, intelligible language and, accordingly, that they be transparent, must be understood in a broad sense (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 42, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 63 and the case-law cited).
23
Consequently, that requirement must be understood as requiring not only that the term in question must be formally and grammatically intelligible to the consumer, but also that an average consumer, who is reasonably well informed and reasonably observant and circumspect, is in a position to understand the specific functioning of that term and thus evaluate, on the basis of clear, intelligible criteria, the potentially significant economic consequences of such a term for his or her financial obligations (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 43, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 64 and the case-law cited).
24
The question whether, in the present case, the requirement of transparency has been observed must be examined by the referring court in the light of all the relevant information, including the promotional material and information provided, in the negotiation of the loan agreements at issue in the main proceedings, by the lender (see, to that effect, judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 45, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 66).
25
Specifically, it is for the referring court, when it considers all the circumstances surrounding the conclusion of the loan agreement, to ascertain whether, in the case concerned, all the information likely to have a bearing on the extent of his or her commitment has been communicated to the consumer, enabling the consumer to estimate in particular the total cost of the loan. First, whether the terms of the loan agreement are drafted in plain, intelligible language enabling an average consumer, who is reasonably well informed and reasonably observant and circumspect, to estimate such a cost and, second, the fact of failing to mention in the loan agreement the information regarded as being essential with regard to the nature of the goods or services which are the subject matter of that loan agreement play a decisive role in that assessment (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 46, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 67 and the case-law cited).
26
In the present case, the referring court notes that the applicants in the main proceedings received, before entering into their loans, an information leaflet containing general information on the foreign exchange risk. It also notes that that document, which the applicants in the main proceedings signed, drew their attention to the fact that any variations in the parity between the forint and the Swiss franc could entail an additional cost for the borrower, of which neither the actual occurrence or the amount could be foreseen. No specific information was nonetheless provided to the applicants in the main proceedings concerning the increase, potentially unlimited, of monthly repayment instalments, that a significant fluctuation in exchange rates could cause. The information provided to the applicants in the main proceedings in that regard was based on the assumption that that parity remained stable.
27
As regards loan agreements denominated in a foreign currency, such as those at issue in the main proceedings, the Court has already noted that, any information provided by the seller or supplier which seeks to inform the consumer about the functioning of the exchange mechanism and the risk associated with it, is relevant for the purposes of the assessment under paragraph 25 of this order. Details of the risks faced by the borrower in the event of a severe depreciation of the legal tender of the Member State in which the borrower is domiciled and an increase in foreign interest rates are factors of particular importance (see, to that effect, judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 48, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 69).
28
In that regard, as the European Systemic Risk Board stated in its Recommendation ESRB/2011/1 of 21 September 2011 on lending in foreign currencies (OJ 2011 C 342, p. 1), financial institutions must provide borrowers with adequate information to enable them to take well-informed and prudent decisions and should at least encompass the impact on instalments of a severe depreciation of the legal tender of the Member State in which a borrower is domiciled and of an increase of the foreign interest rate (Recommendation A – Risk awareness of borrowers, paragraph 1) (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 49, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 70 and the case-law cited).
29
The Court has held, in particular, that the borrower must be clearly informed that, in entering into a loan agreement denominated in a foreign currency, the borrower is exposing himself or herself to a certain foreign exchange risk which may be economically difficult to bear in the event of a depreciation of the currency in which the borrower receives his or her income. In addition, the seller or supplier must set out the possible variations in the exchange rate and the risks inherent in entering into such a loan agreement (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 50, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 71 and the case-law cited).
30
It follows that, in order to comply with the requirement of transparency, the information communicated by the seller or supplier must enable the average consumer, who is reasonably well informed and reasonably observant and circumspect, not only to understand that, depending on exchange rate variations, changes in the exchange rate between the account currency and the payment currency may have unfavourable consequences for his or her financial obligations, but also to understand, in the context of taking out a loan denominated in a foreign currency, the actual risk to which he or she is exposed, throughout the term of the loan agreement, in the event of a severe depreciation of the currency in which the borrower receives his or her income as against the foreign currency in which the loan is denominated (see, to that effect, judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 51, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 72).
31
Accordingly, the Court has held that, in the context of a loan agreement denominated in a foreign currency that exposes the consumer to a foreign exchange risk, the requirement of transparency cannot be satisfied by communicating to the consumer information – even a large amount of information – if that information is based on the assumption that the exchange rate between the account currency and the payment currency remained stable throughout the term of the loan agreement. That is the case, in particular, where the consumer has not been informed by the seller or supplier of the economic context liable to have an impact on exchange rate variations, with the result that the consumer was not given the opportunity to understand in concrete terms the potentially serious consequences on his or her financial situation which might result from taking out a loan denominated in a foreign currency (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 53, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 74).
32
Therefore, having regard to the obligation for the seller or supplier to provide information, a declaration by the consumer that he or she is fully aware of the potential risks arising from a loan denominated in a foreign currency cannot, in itself, have any relevance for the purposes of the assessment of whether that seller or supplier has met that requirement of transparency.
33
Lastly, it should also be borne in mind that included among the relevant factors, for the purposes of the assessment referred to in paragraph 25 of the present order, are the language used by the financial institution in the pre-contractual and contractual documentation. In particular, the absence of terms or explanations expressly informing the borrower of the existence of specific risks associated with loan agreements denominated in a foreign currency may confirm that the requirement of transparency, as resulting, inter alia, from Article 4(2) of Directive 93/13, is not satisfied (judgments of 10 June 2021, BNP Paribas Personal Finance, C‑609/19, EU:C:2021:469, paragraph 54, and of 10 June 2021, BNP Paribas Personal Finance, C‑776/19 to C‑782/19, EU:C:2021:470, paragraph 75).
34
In the light of the foregoing, the answer to the questions referred is that Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement of transparency of terms of a loan agreement denominated in a foreign currency, which expose the borrower to a foreign exchange risk, is satisfied only where the seller or supplier has provided him or her with accurate and sufficient information on the foreign exchange risk, to enable an average consumer, who is reasonably well informed and reasonably observant and circumspect to evaluate the risk of potentially significant adverse economic consequences of such terms on his or her financial obligations throughout the term of the agreement. In that regard, the fact that the consumer declares himself or herself to be fully aware of the potential risks arising from entering into that agreement does not, in itself, have any relevance for the purposes of the assessment of whether the seller or supplier has met that requirement of transparency.
Costs
35
Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court.
On those grounds, the Court (Sixth Chamber) hereby orders:
Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that the requirement of transparency of terms of a loan agreement denominated in a foreign currency, which expose the borrower to a foreign exchange risk, is satisfied only where the seller or supplier has provided him or her with accurate and sufficient information on the foreign exchange risk, to enable an average consumer, who is reasonably well informed and reasonably observant and circumspect to evaluate the risk of potentially significant adverse economic consequences of such terms on his or her financial obligations throughout the term of the agreement. In that regard, the fact that the consumer declares himself or herself to be fully aware of the potential risks arising from entering into that agreement does not, in itself, have any relevance for the purposes of the assessment of whether the seller or supplier has met that requirement of transparency.
[Signatures]
(
*1
)	Language of the case: Hungarian.