The Court of Justice of the European Union has asked the Spanish courts to verify the possible unfairness of a clause contained in mortgage loan agreements granted by certain Spanish banks and providing for the application of a variable interest rate based on the Spanish savings banks’ index, in a judgment delivered on Tuesday 3 March (Case C-125/18).
In the context of a reference for a preliminary ruling from the Barcelona District Court, the Court was asked to interpret the allegedly unfair nature of a clause providing for the use of a variable and remunerative interest rate contained in the mortgage loan agreement concluded between Mr Gómez del Moral Guasch and Bankia SA.
Under the disputed clause, the interest rate varies according to a PPI index provided for by national legislation and based on the mortgage loans of the Spanish savings banks. However, this index was less favourable than that calculated on the basis of the average European interbank rate (Euribor), which is used in 90% of the mortgage loans taken out in Spain. The additional cost was thus estimated to be in the range of €18,000 to €21,000.
In its judgment, the Court finds that the disputed term falls within the scope of the Directive (93/13/EEC) on unfair terms in consumer contracts. The Spanish legislation did not require the use of an official reference index for variable interest rate loans, but merely laid down the conditions which had to be met by the reference indices or rates in order for them to be used by banks.
Furthermore, the EU judge is of the opinion that a court of a Member State is always obliged to review the clarity and comprehensibility of a contractual term relating to the main subject matter of a contract.
It is for the Spanish court to examine whether the disputed term is intelligible from a formal and grammatical point of view and whether it enables an average consumer, who is normally informed and reasonably attentive and circumspect, to understand the practical operation of the method of calculating the variable interest rate and to assess, by means of precise and intelligible criteria, the potentially negative financial consequences of such a term.
The Court notes in that regard that the method of calculation of the PPI index was published in Spain’s Official Gazette. Another “particularly relevant” element is the mandatory provision on by the professional to his or her client of information on the past evolution of the index on the basis of which the interest rate is calculated.
Finally, the Court considers that the Spanish court may remove a term of a contract between a company and a consumer which it considers unfair and replace it with a supplementary national provision where the outright cancellation of the contract would have particularly harmful consequences for the consumer and in the absence of an agreement to the contrary between the parties. Indeed, cancelling the contract could oblige the consumer to immediately reimburse the outstanding amount.
The Spanish court must therefore ascertain whether the Spanish legislation, which introduced a substitute index after the conclusion of the contract at issue, is of a supplementary nature.
See the judgment of the Court: http://bit.ly/2TA1Nxr (Original version in French by Mathieu Bion)