1 This request for a preliminary ruling concerns the interpretation of Article 7(1) 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 the context of two sets of proceedings between, first, mBank S.A., on the one hand, and BL and CY, on the other, and, second, PU and QS, on the one hand, and mBank, on the other, concerning claims for repayment of sums paid under loan agreements rendered invalid by the presence of unfair terms.
3 Article 6(1) of Directive 93/13 states: ‘Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.’
4 Under Article 7(1) of that directive: ‘Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.’
5 Article 58(1) of the Ustawa Kodeks cywilny (Law establishing the Civil Code) of 23 April 1964 (Dz. U. of 1964, No 16, item 93), in the version applicable to the dispute in the main proceedings, (‘the Civil Code’), provides that a legal transaction which is contrary to the law or intended to circumvent the law is to be null and void, unless a relevant provision provides otherwise, in particular that the invalid terms of the legal transaction are to be substituted by relevant provisions of the law.
6 In accordance with the first sentence of Article 3581(1) of the Civil Code, terms of a contract concluded with a consumer which have not been individually negotiated are not to be binding on the consumer if his or her rights and obligations are set forth in a way that is contrary to good practice and grossly infringes his or her interests.
7 Article 405 of that code provides: ‘Any person who, without legal grounds, obtains an economic advantage at the expense of another person shall be required to restore that advantage in kind and, where that is not possible, to return the value thereof.’
8 Article 410 of the Civil Code provides: ‘1. The provisions of the preceding articles shall apply in particular to undue payments. 2. A performance shall be undue if the person who rendered it was not under an obligation to render it or was not under an obligation to render it to the person to whom it was rendered, if the basis for the performance has ceased to exist, if the objective of the performance has not been achieved or if the legal act requiring that performance was invalid and has not become valid since the performance was rendered.’
9 Article 498 of that code states: ‘1. If two persons are simultaneously and mutually debtors and creditors with respect to each other, each of them may set off their claim against the claim of the other party, if the object of both claims is money or generic goods of the same quality, and both claims are due and can be enforced before a court or other State body. 2. As a result of set-off, the two claims are offset against each other to the extent of the lower claim.’
10 Under Article 499 of the Civil Code: ‘A set-off shall be effected by a declaration to the other party. The declaration shall have retroactive effect from the time when the set-off became possible.’
11 Article 98 of the Ustawa Kodeks postępowania cywilnego (Law establishing the Code of Civil Procedure) of 17 November 1964 (Dz. U. of 2023, item 1550), in the version applicable to the dispute in the main proceedings (‘the Code of Civil Procedure’), provides: ‘The unsuccessful party shall be obliged to reimburse the opposing party, upon request by the latter, for any costs necessary for the purposes of duly enforcing or defending the opposing party’s rights (costs of the proceedings).’
12 Under Article 102 of the Code of Civil Procedure: ‘In particularly justified cases, the court may order the unsuccessful party to pay only part of the costs or no costs at all.’
13 Article 2031(2) and (3) of that code states: ‘2. The defence of set-off may be asserted by the defendant at the latest when entering into a dispute on the merits, or within two weeks of the date on which his or her claim became due. 3. The defence of set-off may only be asserted in a procedural document. The provisions concerning statements of claims shall apply mutatis mutandis to this document, with the exception of the provisions concerning charges.’
14 Article 320 of the Code of Civil Procedure provides: ‘In particularly justified cases, the court may direct that the award be divided into instalments and, in cases involving the handover of immoveable property or the vacation of premises, set a date which is appropriate for complying with the award made.’
15 Article 333(1) of that code provides: ‘The court shall have an ex officio obligation, when handing down a judgment, to direct that the judgment be made immediately enforceable if: … (2) it grants a claim accepted by the defendant; …’
16 Under Article 334(1) and (2) of the Code of Civil Procedure: ‘1. The court may make the immediate enforceability of the judgment conditional upon the claimant lodging an appropriate security. 2. The security may also involve halting the handover to the claimant of assets collected from the defendant or sums of money following their recovery, or halting the sale of seized moveable property.’
17 Article 335(1) of that code provides: ‘The court will not declare its judgment enforceable, even with the addition of a guarantee, if the enforcement of the judgment risks causing irreparable harm to the defendant. …’.
18 The two cases in the main proceedings, joined by the Sąd Okręgowy w Krakowie (Regional Court, Krakow, Poland), which is the referring court, arose out of two mortgage loan agreements concluded by consumers, the first by BL and CY, and the second, by PU and QS.
19 As regards the first case, that court states that BRE Bank S.A., of which mBank is the successor, had concluded in 2007 a mortgage loan agreement with BL and CY, indexed to the Swiss franc rate, in the amount of 493 770.02 Polish zlotys (PLN) (approximately EUR 115 500). BL and CY repaid a total of PLN 1 052 843.95 (approximately EUR 247 054), making an early repayment of the loan in 2016. In November 2020, they brought a claim for payment against mBank, before the referring court, in the amount of PLN 571 740.41 (approximately EUR 133 700), plus statutory default interest from the date on which the action was lodged until the date of payment, claiming, inter alia, that terms relating to the essential performance set out in the contract were unlawful.
20 By judgment of 16 May 2022, the referring court ordered mBank to pay BL and CY the amount claimed, plus statutory default interest.
21 mBank then brought an action before that court seeking, in its view, to resolve the issues raised in the complaint alleging that the agreement was null and void, and which it had not been possible to resolve in the proceedings brought by BL and CY. It requested that BL and CY be ordered to pay it the sum of PLN 493 770.02 (approximately EUR 115 500), plus statutory default interest.
22 In the second case, PU and QS brought an action before the referring court against mBank in December 2023, seeking a declaration that certain terms of the mortgage loan agreement indexed to the rate of the Swiss franc were unfair and that the agreement was null and void and, consequently, repayment of sums paid under that agreement, namely PLN 362 801.12 (approximately EUR 84 880) and 65.91 Swiss francs (CHF) (approximately EUR 70), plus statutory interest. mBank contended that the action should be dismissed on the ground that the agreement was valid and brought a counterclaim seeking an order that the applicants in the main proceedings pay it the sum of PLN 360 000.03 (approximately EUR 84 270), namely the amount of the loan granted, plus statutory default interest.
23 PU and QS sought the dismissal of the counterclaim by raising an objection based on the submission of a set-off notice to mBank, an objection which was ultimately withdrawn by their representative.
24 The referring court is uncertain, in the first place, as to the manner in which the restitution in respect of the performance effected by the parties is to be made in the event that a loan agreement is found to be invalid on account of the presence of unfair terms.
25 In that regard, the referring court states that, first, under Polish law, where a loan agreement is declared invalid, payments made under that agreement, whether by the borrowers or by the financial institution, constitute undue payments within the meaning of Article 410(2) of the Civil Code, which must be repaid pursuant to Article 410(1) in conjunction with Article 405 of the Civil Code.
26 Second, it follows from the case-law of the Sąd Najwyższy (Supreme Court, Poland), based since 2021 on the so-called ‘two claims’ theory, that the consumer and the lender each have a right, distinct and independent of each other, to repayment of monetary payments made in performance of that agreement. Each of the parties could therefore claim full repayment of the sums paid, whether or not it is still a debtor of the other party and regardless of the amount of its own debt.
27 That approach would mean that the consumer would be required to repay the full amount of the loan, irrespective of the value of repayments already made, including where he or she has repaid the nominal loan amount in full or has even paid sums exceeding that amount. It follows that the application of the so-called ‘two claims’ theory would lead, in practice, to a situation in which a consumer who wishes to rely on the protection guaranteed under Directive 93/13 must expect the seller or supplier to claim from him or her repayment of all the sums paid in performance of the invalid agreement. In addition, if the consumer does not comply voluntarily, the seller or supplier could take legal action to compel him or her to pay those sums, plus interest, and to order him or her to pay the legal costs, which would be considerable and would pose a significant burden for the average consumer.
28 The referring court adds that the question of the mutual restitution in respect of the performance effected by the parties to a loan agreement which has been declared invalid could be resolved by lodging a declaration of actual set-off in accordance with Article 499 of the Civil Code, which would allow reciprocal claims to be cancelled up to the amount of the lower claim and would, as the case may be, lead to the extinction of the obligation. However, the lodging of such a declaration or the submission of a plea of set-off in the course of legal proceedings is subject to complex procedural requirements, which, according to that court, are likely to penalise the consumer.
29 If the consumer does not successfully plead an objection of set-off in his or her defence, the possibility of obtaining repayment of the sums paid to the bank could result, in practice, in a multiplication of proceedings and, therefore, in additional costs for that consumer.
30 In that context, the referring court considers that the national case-law based on the so-called ‘two claims’ theory is contrary to Article 7(1) of Directive 93/13, in so far as that provision precludes the consumer from being required to make restitution without taking into account, in order to determine the extent of his or her repayment obligation, the payments which he or she made in performance of the agreement declared invalid and, in particular, the fact that he or she was able to repay the amount of the loan. According to that court, that situation penalises the consumer, particularly given that the invalidity of the loan agreement may result in the remaining balance of the loan becoming due immediately to an extent that may be in excess of the consumer’s financial capabilities. In such circumstances, the seller or supplier would not be deterred from inserting unfair terms in his or her agreements.
31 In the second place, the referring court notes that Article 333(1)(2) of the Code of Civil Procedure requires courts to make their judgments immediately enforceable if they uphold a claim which the defendant has accepted.
32 According to that court, where the seller or supplier’s claim, in the event that the agreement is invalid, is generally well founded and the consumer is fully aware of it, the consumer tends to accept that claim on account of the procedural advantages which he or she thereby derives, namely the fact that the case may be treated as a ‘particularly justified case’ within the meaning of Article 102 of the Code of Civil Procedure; this allows the court to order the consumer to pay only part of the costs incurred by the successful seller or supplier, or none of those costs at all. However, that acceptance results in an obligation on the consumer to repay the full amount of the loan obtained and in the lender’s ability to enforce the decision ordering that repayment immediately. Such a situation cannot necessarily be prevented by applying various provisions of the Code of Civil Procedure concerning the possibility of ordering payment by instalments or making the immediate enforceability of the judgment subject to the provision of security, in so far as those possibilities are left to the discretion of the court.
33 The referring court states that that situation penalises the consumer who is exposed to a very high financial risk, including the risk of losing control of his or her seized assets in the context of enforcement proceedings, even if he or she has already repaid the loan in full or for the most part. The consumer may, therefore, be deterred from invoking the unfairness of contractual terms and from relying on the rights provided for under Directive 93/13.
34 In those circumstances the Sąd Okręgowy w Krakowie (Regional Court, Krakow) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Does Article 7(1) of [Directive 93/13] preclude national case-law according to which the consumer is obliged, in the event that an unfair term is found in a contract, in particular a loan agreement concluded with a consumer, and this results in the cancellation of the contract, or in particular the cancellation of the loan agreement, to reimburse the seller or supplier for the entire nominal amount of the loan received from the seller or supplier in performance of the cancelled contract, irrespective of the value of the repayments made by the consumer in performance of this contract and irrespective of the actual amount remaining to be repaid, while the seller or supplier is entitled to demand from the consumer the reimbursement of the entire nominal amount of the loan paid out to the consumer in performance of the cancelled contract, irrespective of the value of the repayments made by the consumer in performance of the contract and irrespective of the actual amount remaining to be repaid? (2) Does Article 7(1) of [Directive 93/13] preclude national case-law according to which the national court, when adjudicating on a case relating to the reimbursement of sums paid by a seller or supplier to a consumer in performance of a cancelled loan agreement, is obliged to award the seller or supplier the entire amount paid out by the latter to the consumer in performance of the cancelled loan agreement, irrespective of whether the consumer remains indebted to the seller or supplier and irrespective of the value of the payments made by the consumer to the seller or supplier in performance of the cancelled loan agreement? (3) Does Article 7(1) of [Directive 93/13] preclude provisions of national law according to which the national court, in the event that the consumer accepts the claim in a case brought by the seller or supplier, has an ex officio obligation to direct that the judgment awarding the claim be made immediately enforceable?’
35 By its first and second questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 7(1) of Directive 93/13 must be interpreted as precluding national case-law according to which, where a loan agreement is declared invalid because it contains a term classified as unfair, the seller or supplier is entitled to require the consumer to repay the full nominal amount of the loan granted, irrespective of the value of repayments made by the consumer in performance of that agreement and irrespective of the amount remaining due.
36 As a preliminary point, it should be recalled that, under Article 6(1) of Directive 93/13, Member States are required to lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier are, as provided for under their national law, not to be binding on the consumer.
37 However, although Directive 93/13 is intended to ensure a high level of consumer protection, it is not intended to advocate uniform solutions as regards the consequences to be drawn from a finding that a contractual term is unfair (see, to that effect, judgment of 16 March 2023, M.B. and Others (Effects of the invalidation of a contract), C‑6/22, EU:C:2023:216, paragraph 58 and the case-law cited).
38 That said, the consequences that should follow from the finding that a term in a contract concluded between a seller or supplier and a consumer is unfair must allow two objectives to be achieved. First, the court must ensure that the equality between the parties, which would have been undermined if a term of the contract that was unfair as regards the consumer was applied, is restored. Second, it is necessary to ensure that the seller or supplier is deterred from including such terms in contracts with consumers (judgment of 25 November 2020, Banca B., C‑269/19, EU:C:2020:954, paragraph 38).
39 Where the contract cannot continue to exist following the removal of the unfair terms in question, annulment of the contract would have particularly unfavourable consequences for the consumer and there are no supplementary provisions under national law, the national court must, while taking into account all of its national law, take all the measures necessary to protect the consumer from the particularly unfavourable consequences which could result from annulment of the loan agreement in question (judgment of 25 November 2020, Banca B., C‑269/19, EU:C:2020:954, paragraph 45).
40 In the present case, the determination by a court that a loan agreement is invalid on account of the presence of an unfair term in that agreement has the consequence, under Polish law, that payments made in performance of that agreement, whether by the borrowers or by the financial institution, constitute undue payments within the meaning of Article 410(2) of the Civil Code, which must be repaid pursuant to Article 410(1) in conjunction with Article 405 of the Civil Code.
41 According to the referring court, it follows, in essence, from the case-law of the Sąd Najwyższy (Supreme Court), referred to in paragraphs 26 and 27 above and which is based on the so-called ‘two claims’ theory, that each party to such an agreement which, as a result of that agreement having been declared invalid, has at the same time been unjustly enriched and impoverished, may claim full repayment of the sums paid in performance of the contract declared void, irrespective of the amount of the repayments made and the amount remaining due under the loan. According to the Polish Government, that line of case-law replaced another line of case-law applied by the majority of the Polish courts, which, after the mutual settlement made by the parties to the invalid loan agreement had been determined, made it possible to retain a single claim in favour of the party who made the largest payment under that agreement.
42 In that regard, it should be borne in mind that national courts must do whatever lies within their jurisdiction, taking the whole body of national law into consideration and applying the interpretive methods recognised by it, with a view to ensuring that Directive 93/13 is fully effective and to achieving an outcome consistent with the objective pursued by it (see, to that effect, judgment of 15 June 2023, Getin Noble Bank (Suspension of the performance of a loan agreement), C‑287/22, EU:C:2023:491, paragraph 56 and the case-law cited).
43 The requirement of such an interpretation entails, in particular, the obligation for national courts to change established case-law, where necessary, if it is based on an interpretation of national law that is incompatible with the objectives of a directive. Consequently, a national court cannot validly claim that it is impossible for it to interpret a provision of national law in a manner that is consistent with EU law merely because that provision has consistently been interpreted in a manner that is incompatible with EU law (judgment of 15 June 2023, Getin Noble Bank (Suspension of the performance of a loan agreement), C‑287/22, EU:C:2023:491, paragraph 57 and the case-law cited).
44 In the light of the foregoing, the answer to the first and second questions is that Article 7(1) of Directive 93/13 must be interpreted as precluding national case-law according to which, where a term of a loan agreement classified as unfair renders that agreement invalid, the seller or supplier is entitled to require the consumer to repay the full nominal amount of the loan obtained, irrespective of the value of repayments made by the consumer in performance of that agreement and irrespective of the amount remaining due.
45 By its third question, the referring court asks, in essence, whether Article 7(1) of Directive 93/13 must be interpreted as precluding national legislation under which, in the event of acceptance by the consumer of a claim brought by a seller or supplier for repayment of sums paid under a loan agreement declared invalid based on the presence of an unfair term in that agreement, the court seised is required to declare of its own motion the judgment granting that claim immediately enforceable.
46 In their written observations, mBank and the Polish Government express doubts as to the admissibility of the third question in so far as it would be hypothetical, in the absence of any declaration of acceptance on the part of the borrowers in the two cases in the main proceedings.
47 In that regard, it must be borne in mind that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court, which enjoy a presumption of relevance. Therefore, in so far as a question referred concerns the interpretation or validity of a rule of Union law, the Court is, in principle, required to give a ruling, unless it is quite obvious that the interpretation sought bears no relation to the actual facts of the main action or its purpose, if the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the question submitted to it (judgment of 21 December 2021, Trapeza Peiraios, C‑243/20, EU:C:2021:1045, paragraph 25 and the case-law cited).
48 In the present case, it is apparent from the order for reference, first, that the defendant may accept the opposing party’s claim at any stage of the proceedings. Second, the consumer would tend to accept the seller or supplier’s claim for repayment of the funds paid under a loan agreement rendered invalid due to the presence of an unfair term, since that acceptance would result in a reduction in the amount of the costs of the proceedings to be borne by the defendant.
49 In those circumstances, it cannot be held that the interpretation of Directive 93/13 that is sought bears no relation to the actual facts of the main action or its purpose or that the problem raised is hypothetical.
50 Accordingly, it must be held that the third question is admissible.
51 The referring court notes, first, that the consumer’s acceptance of the seller or supplier’s claim for repayment of the sums paid under a loan agreement declared invalid by the effect of an unfair term in that agreement allows the case concerned to be treated as a ‘particularly justified case’ within the meaning of Article 102 of the Code of Civil Procedure, with the result that the consumer could be ordered to pay only part of the costs incurred by the seller or supplier, or none of those costs at all. Second, in the event of acceptance of the claim, the national court is required to make its judgment immediately enforceable, which precludes the application of Article 320 of the Code of Civil Procedure, on the basis of which the court may, in particularly justified cases, order payment in instalments of the amount which the consumer has been ordered to pay. According to that court, such a situation exposes the consumer to a very high financial risk and, consequently, may deter him or her from relying on the unfairness of contractual terms.
52 mBank and the Polish Government observe that the national court may not declare the judgment immediately enforceable if the consumer accepts the claim for repayment brought by the seller or supplier, while also requesting payment of the sums due in instalments, under Article 320 of the Code of Civil Procedure, provided that enforcement of the judgment risks causing the person found liable irreparable harm in accordance with Article 335 of the Code of Civil Procedure.
53 In that regard, it is sufficient to note that it is not for the Court of Justice, in the context of the judicial cooperation established by Article 267 TFEU, to verify or to call into question the accuracy of the interpretation of national law made by the national court, as such interpretation falls within the exclusive jurisdiction of that court. In addition, the Court, when a question is referred to it by a national court, must base its reasoning on the interpretation of national law as described to it by that court (see, to that effect, judgment of 21 December 2021, Trapeza Peiraios, C‑243/20, EU:C:2021:1045, paragraph 53 and the case-law cited).
54 It must be borne in mind that, where the national court takes the view that the loan agreement at issue cannot, in accordance with contract law, legally continue to exist after the unfair terms in question have been removed, and where there are no supplementary provisions of national law or provisions applicable where the parties to the contract at issue so agree which may replace those terms, it must be held that the high level of consumer protection which must be ensured under Directive 93/13 demands that, in order to restore the effective balance between the reciprocal rights and obligations of the parties, the national court must, while taking into account all of its national law, take all the measures necessary to protect the consumer from the particularly unfavourable consequences which could result from the annulment of the loan agreement in question, notably the fact that the seller or supplier could immediately claim the debt from the consumer (judgment of 16 March 2023, M.B. and Others (Effects of the invalidation of a contract), C‑6/22, EU:C:2023:216, paragraph 60 and the case-law cited).
55 In the present case, the duty of the national court to make the judgment granting the seller or supplier’s claim for repayment of the sums paid under an invalid loan agreement immediately enforceable seems likely to discourage the consumer from accepting that claim. Such a situation exposes the consumer to a real financial risk, in that the waiver of acceptance deprives him or her, according to the information provided by the referring court, of a possible order that he or she pay only part of the costs incurred by the seller or supplier, or even an order that he or she is exempt from paying those costs; on the other hand, the formulation of such acceptance requires him or her - as a result of the application of Article 333(1)(2) of the Code of Civil Procedure, relating to the immediate enforceability of the judgment against him or her - to make immediate repayment of the funds paid to him or her by that seller or supplier.
56 In that context, the court seised is required, in so far as possible, to apply national law in such a way that the consequences which, under that law, result from a finding that a contractual term is unfair, do not undermine the objective of Directive 93/13 of ensuring a high level of consumer protection in accordance with the case-law cited in paragraph 54 above.
57 Consequently, it will be for the referring court to identify provisions of national law - such as those relating to the possibility of taking into account of irreparable harm to the consumer which may result from the immediate enforceability of the judgment against him or her and to the possible payment in instalments of the sums due - in order to ensure that its duty to make that judgment immediately enforceable, in the event of the consumer’s acceptance of the seller or supplier’s claim for repayment, does not undermine the objective of a high level of consumer protection pursued by Directive 93/13.
58 In those circumstances, the answer to the third question is that Article 7(1) of Directive 93/13 must be interpreted as precluding national legislation under which, in the event of the consumer’s acceptance of a claim, brought by a seller or supplier, for repayment of the sums paid under a loan agreement declared invalid based on the presence of an unfair term in that agreement, the court seised is required to declare of its own motion the judgment granting that claim immediately enforceable, in so far as national law does not allow that court to adopt all the measures necessary to protect the consumer from the particularly unfavourable consequences which that declaration could have with regard to that consumer.
59 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. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. 1. Article 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, 2. Article 7(1) of Directive 93/13