A consumer loan contract denominated in a foreign currency cannot be annulled in its entirety merely because it contains unfair terms relating to the exchange rates applied, if the legislator has corrected these terms by replacing them with a national provision which restores the situation in law and in fact for the consumer who considers himself to be wronged, even if the annulment of the contract would be more advantageous to the latter.
This is the substance of the judgment delivered by the Court of Justice of the EU (Case No. C-932/19) on Thursday 2 September, in response to the Györ Regional Court of Appeal (Hungary), which was asked to rule on a consumer’s request to annul a consumer loan contract denominated in a foreign currency on the grounds that it contained unfair terms providing for a difference between the exchange rates applicable at the time of the disbursement of the loan and its repayment.
The Hungarian court asked the Court whether a Hungarian law invalidating clauses containing unfair rates by referring to the official exchange rate set by the Hungarian National Bank for both the disbursement and repayment of the loan and which, as such, prohibits the annulment of the contracts in question, considering that the consumer would no longer be affected by the realisation of the exchange rate risk, was in conformity with the Directive on Unfair Terms in Consumer Contracts (93/13/EEC).
In its judgment, the Court considers that the solution adopted by the Hungarian legislator invalidating only the unfair terms in question corresponds to the objective set by the Directive, which is to restore the balance between the parties while maintaining the validity of the contract as a whole.
It also considers that prohibiting the national court from annulling the entire contract, even if such annulment would be more advantageous for the consumer, is in compliance with the Directive. According to the judges, the Directive does not allow the national court to base its judgment solely on the possible advantages for the consumer of the cancellation of the contract in question as a whole. And, more generally, the jurisprudence of the Court does not allow the situation of one of the parties to the contract to be considered, in national law, as the decisive criterion governing the future fate of the contract.
Based on these factors, the judges say that it is for the national court to determine whether the Hungarian legislation effectively restores the situation, in law and in fact, of the consumer in the main proceedings.
See the judgment: https://bit.ly/3zE1FRq (Original version in French by Francesco Gariazzo)