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Case Details

Case Details
National ID I C 662/14
Member State Poland
Common Name link
Decision type Court decision, first degree
Decision date 02/03/2016
Court District Court Warsaw-Praga in Warsaw
Subject
Plaintiff (...) Bank (...) S.A. with registered office in G.
Defendant K. R. i S. R.
Keywords consumer rights, credit agreement, general discussion, judicial review, unfair terms

Consumer Rights Directive, Chapter 1, Article 1

(1) Granting of a special protection to consumers in respect of contracts concluded with banks, is justified by the requirement to protect the consumer's interest.

(2) Unfair conditions in the agreement are not binding on consumer. However, the remaining part of the agreement continues to be in in force, if it is lawful after the exclusion of unfair provisions. This thesis is justified on the basis of EU directives i.e.: Directive 2011/83/EU of 25 October 2011 on consumer rights.
In 2005, a loan agreement was concluded between a bank and a married couple. Most of the funds from the loan were applied to cover the costs of construction of a house. Unfortunately, after the husband’s death, the wife and the debtor’s successors were not able to repay the installments of the loan.

Moreover, the loan agreement included a so-called "indexation clause" concerning the recalculation of the repayments at the exchange rate of CHF. For this reason, the representative of one of the successors argued that this fact made the whole agreement invalid.

The agreement also included a clause on variable interest rates and some provisions concerning an amount of interest for delay. These clauses were analyzed in the context of consumer protection requirement as well.

Due to significant delays in repaying the loan, the bank terminated the agreement and filed a claim against debtors for an overdue payment.
The court analyzed the claim of the plaintiff and the responds of the defendants. The court considered also arguments concerning abusive clauses included in the loan agreement, raised by the curator representing an absent successor. One of the arguments was the fact that the agreement between the bank and the debtor included an indexation clause. In the curator's opinion, the legal construction of a loan agreement, as defined in the article 69 of the Banking Law, does not provide for a possibility of indexation. Moreover, the curator referred to the adjudications indicating that indexation clauses have an abusive character, because they are contrary to the principles of community existence. As a result, the curator claimed that in the event an indexation clause, as an important provision of the contract without which the agreement would not have been concluded, is contrary to the law, the whole agreement is null and void under article 58 of the Civil Code.

Moreover, the agreement included a so-called variable-interest-rate clause, defining the conditions on which the bank can change the interest rate of the loan. These conditions were out of the bank's control and the bank had no impact on the parameters enabling change of the interest rate.

The court analyzed the clauses questioned in the context of the consumer protection. The court referred not only to the extensive case law describing the permissibility of specific clauses, but also to the EU directives. The judgment states that the granting of a special protection to consumers in respect of contracts concluded with banks is justified by the requirement to protect the consumer's interest . Hence, unfair terms in contracts concluded with consumers by a seller or supplier are not binding on the consumer, while the remaining part of such contracts are binding on the parties if the contract is still lawful and valid after removing the unfair terms (vide provisions of the Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council and case law on the basis of the Council Directive 93/ 13/EEC of 5 April 1993 on unfair terms in consumer contracts and provisions for the protection of consumer rights that implement the standards of this Directive).

Consequently, the court considered that the indexation clause did not violate the consumer's interest in this case and is not contrary to good morals. Furthermore, a variable-interest-rate clause is compliant with the restrictions imposed by case law, i.e. it is specific, to be expected , subject to judicial review with regard to the grounds for changing the interest rate, and based solely on changes in market interest rates that are out of bank's control.

In this case the court did not find that these two clauses constitute a violation of the consumer's interest. In the court's opinion, these provisions of the agreement are not contrary to good morals.

Nevertheless, it should be noted that the court assessed that the provisions of the agreement determining the amount of interest for delay violate the interests of borrowers. Mainly, the amount of interest for delay was conditioned by the decision of the bank and based on the indices adopted by the bank. It means that the provisions of this agreement regulating the amount of interest for delay constitute an abusive clause.
(1) Does granting of a special protection to consumers in respect of contracts concluded with banks is justifed in the context of consumer's interest protection?

(2) Can the unfair conditions in the agreement be binding on consumer?
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District Court granted the claim of the plaintiff. This adjudication is not final.