40

In those circumstances, the Juzgado de Primera Instancia no 1 de Barcelona (Court of First Instance No 1, Barcelona) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Is case-law incompatible with Articles 6 and 7 of [Directive 93/13] when it (a judgment of the Tribunal Supremo (Supreme Court) of 18 February 2016) holds that, despite the unfairness of the early repayment term and even though the application for enforcement is based on that term, mortgage enforcement proceedings are not to be closed because their continuation is more favourable to the consumer, given that, in the event of any enforcement of a judgment given [following] proceedings brought under Article 1124 of the Civil Code, a consumer would not enjoy the procedural privileges applicable in mortgage enforcement proceedings, and when that case-law does not take into account the settled case-law of the Tribunal Supremo (Supreme Court) to the effect that Article 1124 of the Civil Code (laid down for contracts creating reciprocal obligations) is not applicable to loan agreements, because such an agreement is a real, unilateral contract which does not become valid until the money is handed over and which, therefore, creates obligations for the borrower alone and not for the lender (creditor), so that, if that case-law of the Tribunal Supremo (Supreme Court) were to be applied in declaratory proceedings, a consumer could obtain a ruling dismissing the claim for termination and compensation and it could no longer be argued that continuation of the mortgage enforcement proceedings was more favourable to him? (2) If the application of Article 1124 of the Civil Code to loan agreements or in the case of all credit agreements should be accepted, is case-law like that referred to incompatible with Articles 6 and 7 of [Directive 93/13] when that case-law does not take into account, for the purpose of assessing whether it is more favourable to the consumer for the mortgage enforcement proceedings to continue or more detrimental to hold declaratory proceedings under Article 1124 of the Civil Code, the fact that, in declaratory proceedings, the claim for termination of the agreement and the claim for compensation may be dismissed if the court applies the stipulation in Article 1124 of the Civil Code that “the court shall order the termination requested, unless there are justified grounds allowing it to fix a period [for performance of the obligation]”, bearing in mind that, precisely in the context of long-term (20 or 30 years) loans and mortgages for the purchase of dwellings, it is relatively likely that the courts will apply that ground for dismissal, particularly where the non-performance of the payment obligation has not been very serious? (3) If it were to be accepted that it is more favourable to the consumer to continue enforcement of the mortgage with the effects of early repayment, is case-law like that referred to incompatible with Articles 6 and 7 of [Directive 93/13] when that case-law applies on a supplementary basis a statutory provision (Article 693(2) [of the LEC]), even though the contract is capable of continuing to exist without the early repayment term, and when that case-law gives effects to Article 693(2) of the LEC, even though the essential condition stipulated therein has not been met: that there should be in the contract a valid and effective agreement regarding early repayment, and the early repayment term has in fact been declared unfair, void and ineffective?’