Keywords

Summary



Keywords

1. Approximation of laws – Unfair terms in consumer contracts – Directive 93/13 – Application for enforcement of an arbitration award issued by default that has become res judicata

(Council Directive 93/13, Art. 6(1))

2. Approximation of laws – Unfair terms in consumer contracts – Directive 93/13 – Unfair term – General assessment criteria

(Council Directive 93/13, Arts 3 and 4)

3. Approximation of laws – Consumer protection concerning consumer credit – Directive 87/102 – Consumer credit contract – No mention in the contract of the annual percentage rate of charge

(Council Directives 87/102, as amended by Directive 98/7, Art. 4, and 93/13, Arts 3 and 4)

Summary

1. Directive 93/13 on unfair terms in consumer contracts requires a national court hearing an application for enforcement of an arbitration award having become final and issued by default, in the consumer’s absence, to consider, even of its own motion, the fairness of the penalty contained in a credit agreement concluded by a creditor with a consumer, that penalty having been applied in that award, when the necessary information on the legal and factual state of affairs is available to it for this purpose and when, according to national procedural rules, such an assessment may be conducted in similar proceedings under national law.

In view of the nature and importance of the public interest underlying the protection conferred on consumers by Directive 93/13, Article 6 of the directive must be regarded as a provision equivalent to national rules which rank, within the domestic legal system, as rules of public policy

(see paras 50, 54, operative part 1)

2. As to the question whether a particular term in a contract is, or is not, unfair, Article 4 of Directive 93/13 on unfair terms in consumer contracts provides that the answer must be reached 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 that conclusion. In that respect, the consequences of the term under the law applicable to the contract must also be taken into account, which entails examination of the national legal system.

It follows that, in the context of its jurisdiction under Article 267 TFEU to interpret Union law, the Court may interpret general criteria used by the Union legislature in order to define the concept of unfair terms. However, it is not to rule on the application of these general criteria to a particular term, which must be considered in the light of the particular circumstances of the case in question.

Therefore, it is for the national court concerned to determine whether a term in a credit agreement providing for the consumer to pay a disproportionately high sum in compensation must, in the light of all the circumstances attending the conclusion of the contract, be regarded as unfair within the meaning of Articles 3 and 4 of Directive 93/13. If that is the case, it is for that court to establish all the consequences thereby arising under national law, in order to ensure that the consumer is not bound by that term. That court will also, in accordance with Article 6(1) of that directive, have to examine whether the contract can continue in existence without that unfair term.

(see paras 59-61, 63, operative part 2)

3. The failure to mention the annual percentage rate (APR) in a consumer credit contract, the mention of the APR being essential information in the context of Directive 87/102 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit, as amended by Directive 98/7, may be a decisive factor in the assessment by a national court of whether a term of a consumer credit agreement concerning the cost of that credit in which no such mention is made is written in plain, intelligible language within the meaning of Article 4 of Directive 93/13 on unfair terms in consumer contracts. If that is not the case, that court has the power to assess, of its own motion, whether, in the light of all the circumstances attending the conclusion of that contract, the failure to mention the APR in the term of that contract concerning the cost of that credit is likely to confer on that term an unfair nature within the meaning of Articles 3 and 4 of Directive 93/13.

However, the power which is given to assess that contract in the light of Directive 93/13 notwithstanding, Directive 87/102 is to be interpreted as allowing national courts to apply of their own motion the provisions transposing Article 4 of the latter directive into national law and as providing that the failure to mention the APR in a consumer credit contract means that the credit granted is deemed to be interest-free and free of charge.

(see para. 77, operative part 3)