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Case Details

Case Details
National ID SKC-108/2013
Member State Latvia
Common Name link
Decision type Supreme court decision
Decision date 12/03/2013
Court Senate of the Supreme Court
Plaintiff Unknown plaintiff
Defendant AS „Reverta” (previously – AS “Parex banka”) and V.S. (unknown natural person)
Keywords enforcement, penalties, unfair terms

Unfair Contract Terms Directive, Article 7 Unfair Contract Terms Directive, Article 7, 1. Unfair Contract Terms Directive, ANNEX I, 1., (e)

Even when a claim requesting to declare a contractual term as invalid has not been raised, the court has an obligation to invalidate a contractual term if it is unfair from the viewpoint of consumer rights.
Both defendants concluded a credit contract and a pledge contract in which V.S. (first defendant) pledged his/her apartment to AS “Parex banka” (second defendant). Afterwards, the plaintiff and both defendants concluded a guarantee contract in which the plaintiff agreed to take liability over the first defendant’s debts to the second defendant in the case the first defendant does not fulfil his/her obligations arising from the credit contract. The first defendant did not fulfil the obligations and therefore the second defendant initiated an undisputed enforcement of obligation procedure against both the plaintiff and the first defendant as solidary liable. The plaintiff then brought a claim against both defendant requesting to invalidate the contractual term in the credit, pledge and guarantee contract that conferred a right to the second defendant (AS “Parex banka”) to choose the institution of dispute resolution while not conferring equal right to the plaintiff. The plaintiff claimed that such a term should be considered as unfair. Nevertheless, the lower instance courts did not addressed this argument of the plaintiff in their judgments.
The court found that the plaintiff had indicated to the previous courts that the disputed contractual term was unfair according to the Consumer Rights Protection Law, but the previous courts had not examined this argument. The court stated that even when a claim for invalidation of a contractual term has not been raised, the court has an obligation to invalidate a contractual term, if it should be regarded as unfair from the viewpoint of consumer rights.
Does the court have an obligation to invalidate an unfair contractual term even if a corresponding claim has not been raised by the plaintiff?
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The court repealed the decision of second instance court in the disputed part.