Joined Cases C-96/16 and C-94/17: Judgment of the Court (Fifth Chamber) of 7 August 2018 (request for a preliminary ruling from the Juzgado de Primera Instancia No 38 de Barcelona, Tribunal Supremo — Spain) — Banco Santander SA v Mahamadou Demba, Mercedes Godoy Bonet (C-96/16), Rafael Ramón Escobedo Cortés v Banco de Sabadell SA (C-94/17) (Reference for a preliminary ruling — Directive 93/13/EEC — Unfair terms — Scope — Assignment of debts — Loan agreement concluded with a consumer — Criteria for assessing the unfairness of a contractual term setting the default interest rate — Consequences of that unfairness)
Date: 2018-08-07
Institutions: Court of Justice
Subjects: consumer credit, consumer protection, debt, interest, loan, unfair terms of contract








C_2018352EN.01000201.xml










1.10.2018   


EN


Official Journal of the European Union


C 352/2






Judgment of the Court (Fifth Chamber) of 7 August 2018 (request for a preliminary ruling from the Juzgado de Primera Instancia No 38 de Barcelona, Tribunal Supremo — Spain) — Banco Santander SA v Mahamadou Demba, Mercedes Godoy Bonet (C-96/16), Rafael Ramón Escobedo Cortés v Banco de Sabadell SA (C-94/17)
(Joined Cases C-96/16 and C-94/17) (1)

((Reference for a preliminary ruling - Directive 93/13/EEC - Unfair terms - Scope - Assignment of debts - Loan agreement concluded with a consumer - Criteria for assessing the unfairness of a contractual term setting the default interest rate - Consequences of that unfairness))
(2018/C 352/02)
Language of the case: Spanish

Referring court

Juzgado de Primera Instancia No 38 de Barcelona, Tribunal Supremo

Parties to the main proceedings


Applicants: Banco Santander SA (C-96/16), Rafael Ramón Escobedo Cortés (C-94/17)

Defendants: Mahamadou Demba, Mercedes Godoy Bonet (C-96/16), Banco de Sabadell SA (C-94/17)

Operative part of the judgment







1.


Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, must be interpreted, first, as not applying to a business practice consisting in assigning or purchasing a consumer’s debt, without any provision for such an assignment having been made in the loan agreement concluded with the consumer, without giving the consumer prior notice of that assignment, without his consent and without giving him the opportunity to buy back and thereby extinguish his debt by reimbursing to the assignee the price it paid in respect of that assignment, plus the applicable interest, expenses and costs. Secondly, that directive does not apply to national provisions, such as those contained in Article 1535 of the Código Civil (Civil Code) and Articles 17 and 540 of Ley 1/2000 de Enjuiciamiento Civil (Civil Procedure Code) of 7 January 2000, which regulate that opportunity to buy back a debt and govern the replacement of the assignor by the assignee in ongoing proceedings.










2.


Directive 93/13 must be interpreted as not precluding national case-law, such as that of the Tribunal Supremo (Supreme Court, Spain) at issue in the main proceedings, whereby, in a loan agreement concluded with a consumer, a non-negotiated term fixing the default interest rate applicable is unfair, on the ground that the consumer who is late performing his payment obligation is required to pay a disproportionately high sum in compensation, where that rate exceeds by more than two percentage points the ordinary interest rate provided for in that agreement.










3.


Directive 93/13 must be interpreted as not precluding national case-law, such as that of the Tribunal Supremo (Supreme Court) at issue in the main proceedings, whereby the consequence of the unfairness of a non-negotiated term fixing the default interest rate in a loan agreement concluded with a consumer consists in the complete elimination of that interest, while the ordinary interest provided for in that agreement continues to run.






(1)  OJ C 145, 25.4.2016.

OJ C 151, 15.5.2017.