Netherlands, High Court of Amsterdam, 5 March 2019 200.035.826/01

Identification of the case

• Right to an effective remedy and to a fair trial (art. 47 CFREU)

• Art. 1:88(1) BW
• Art. 1:89(1) BW
• Art. 7:907(1) BW

• Directive 93/13

Summary of the case

Dexia and the respondent have concluded two lease agreements. As the respondent failed to pay after repeated warnings, Dexia terminated the lease agreements on 6 June 2005. The lease agreements were for loans which Dexia subsequently invested in the stock market for which the respondent paid an annual interest rate of 12.4%. Whether the respondent earned, or lost money depended on the stocks appreciating more than 12.4% annually. The preliminary questions asked by the Court concern article 6 of the lease agreements in light of Directive 93/13. Article 6 of the lease agreements sets out the amount to be paid by the respondent to Dexia if the agreement is terminated. In a decision on 18 September 2018, the Dutch Supreme Court found that article 6 of the lease agreement must be regarded as an unfair term within the meaning of Directive 93/13. The applicable interest rates are thus determined by national law. The Supreme Court instructed all national judges to disapply article 6 of the lease agreement, regardless of whether this term is more favourable to the consumer than the applicable national law provision. Whether the term is more or less favourable to the consumer depends on the interest rate. The preliminary question asked by the Court concerns whether Directive 93/13 must be interpreted as meaning that a term which has the possibility of causing a significant imbalance between the consumer and the seller must be automatically be disapplied, even if this is to the detriment of the consumer.

• Civil judicial enforcement

Using the preliminary reference procedure to ask judicial questions to the CJEU.

Is Directive 93/13 to be interpreted as meaning that a clause must always be regarded as unfair if that clause, judging from all the circumstances surrounding the conclusion of the contract, including the mere possibility of a substantial imbalance depending on the circumstances that occur during the agreement; in particular because the clause fixes in advance a potential benefit that arises for the seller at the time of early termination of the agreement to a certain percentage of the remaining lease sum, contrary to the applicable rules of national law where that benefit is not fixed in advance but must be determined on the basis of the circumstances surrounding the termination of the agreement; particularly the level of the interest rate at which an amount received early during the remainder the duration can be extended?

Not available yet.

Not available yet.

Role of the Charter and role of the general principles on enforcement

If a national judge is forced to apply national law provisions which are more detrimental to the consumer compared to a term the Supreme Court determined was an unfair term, the consumer does not have access to an effective remedy under Directive 93/13.

• Right to an effective remedy before a tribunal

• Effectiveness

The principle of effectiveness is key to this case. The Dutch Supreme Court found article 6 of the lease agreements between Dexia and consumers to be an unfair term within the meaning of Directive 93/13. The Supreme Court thus instructed national judges to automatically disapply this article and take recourse to the relevant national law provisions which determines the compensation. However, an issue arises when the consumer is worse off under the national law provisions, which is determined by the current interest rate. In order for Directive 93/13 to be effective, it needs to guarantee a higher level of consumer protection. It is clear that the Supreme Court’s interpretation of an unfair term under Directive 93/13 would allow a consumer to potentially be worse off under national law provisions. Article 7 of Directive 93/13 would not be effective if it allows the seller to claim higher compensation under national law provisions than it could under the unfair term.

Elements of judicial dialogue

• Direct dialogue between CJEU and National court (preliminary reference)

• CJEU C-421/14, Banco Primus

Preliminary reference.

To resolve an issue of interpretation of EU law.

Judicial reform.

Additional notes on the decision