Request for a preliminary ruling from the Juzgado de Primera Instancia n.º 8 de Donostia – San Sebastián (Spain) lodged on 10 May 2023 – NB v Kutxabank, SA
(Case C-300/23, Kutxabank)
Language of the case: Spanish
Referring court
Juzgado de Primera Instancia n.º 8 de Donostia – San Sebastián
Parties to the main proceedings
Applicant: NB
Defendant: Kutxabank, SA
Questions referred
Whether, given that, in Notice 5/1994 of 22 June 1994 by which it incorporated the IRPH [Mortgage Loan Reference Index] rates into the Spanish mortgage market, the Bank of Spain also warned that using the rates simply as they stood meant setting an AER [annual equivalent rate] for the transaction above the market AER and that to avoid that outcome it was necessary to include the appropriate negative differential, the fact that the warning is disregarded and that no negative differential is included may be regarded as a means of giving rise to the imbalance contrary to the requirement of good faith referred to in Article 3(1) of Directive 93/13/EEC. 1
Whether the fact that financial institutions apply negative differentials, correction coefficients or IRPH percentages, as the Bank of Spain envisages, only where mortgage loan agreements are for the purchase of officially protected housing and are supervised by the public administration, but do not apply those negative differentials, correction coefficients or IRPH percentages where the mortgage loan taken out is for the purchase of residential property on the open market and is not supervised by the public administration, may amount to a means of giving rise to the imbalance contrary to the requirement of good faith referred to in Article 3(1) of Directive 93/13/EEC.
Whether, since component elements of the AERs of the mortgage loan transactions used on a monthly basis to determine the IRPH for savings banks rate, such as the commitment fee and certain costs which should have been paid by the seller or supplier, have been found to be unfair, Article 6(1) of Directive 93/13/EEC is infringed by the continued validity of a term which includes in an agreement the IRPH for savings banks rate which has been determined, on a monthly basis, using data obtained from transactions applying terms which have been declared unfair.
Whether national case-law, such as that established by the Tribunal Supremo (Supreme Court, Spain), according to which the national court must find that a term by which the IRPH mortgage rate is included in an agreement concluded by a consumer and a seller or supplier passes the transparency test, in all circumstances and with no requirement to carry out the checks and ascertain the information required by paragraphs 51, 52, 54 and 55 of the judgment of 3 March 2020 in Case C-125/18, 1 on the grounds that the mortgage rate in question is defined in the Boletín Oficial del Estado (Spanish Official State Gazette, BOE), specifically in Bank of Spain Notice 5/1994, published in BOE No 184 of 3 August 1994, from page 25106 to page 25111, even though the consumer is unaware of that information, is contrary to those paragraphs.
5. Whether, with a view to complying with the transparency requirement of a term in a mortgage loan agreement with a variable interest rate, where the remunerative interest is referenced to an official index such as the IRPH which, as a result of how it is calculated, does not reflect remunerative interest alone; requires the application of a differential which is complex to calculate in order to be comparable with other indices; and entails a risk that the consumer will have to pay partly duplicated bank fees, Article 5 of Directive 93/13/EEC must be interpreted as precluding legislation or case-law according to which it is permissible for the seller or supplier not to include the following information in the agreement or expressly provide it to the consumer sufficiently in advance of conclusion of the agreement:
a. the fact that the reference rate reflects not only remunerative interest but also fees;
b. the actual increase this represents;
c. whether it applies a negative differential to the reference rate margin to offset that increase,
so that consumers can easily make a genuine comparison between the different possible reference rates and ascertain whether, under the agreement to be concluded, they will be liable to pay partly duplicated fees and the amount of any such fees, and so that they can challenge any such fees.
6. Whether national case-law, such as that established by the Spanish Supreme Court, according to which the seller or supplier party to an agreement is relieved of any responsibility for informing consumers about the functioning of the method of calculating the IRPH mortgage rate and the resulting economic consequences and that responsibility is transferred to the consumers who, although lacking any financial knowledge, must look for that information themselves by finding and understanding a definition published in the BOE, which contains no explicit information to the effect that the index in question includes differentials and costs, and must infer that circumstance themselves from the fact that the mortgage rate is determined on a monthly basis using an average of the AERs of the reference transactions, is contrary to paragraph 57 of the Observations of the European Commission of 31 May 2018, points 2 and 125 of the Advocate General’s Opinion of 10 September 2019 1 and paragraphs 51, 52, 54 and 55 of the judgment of 3 March 2020 in Case C-125/18.
7. Whether an interpretation of paragraphs 53 and 56 of the judgment in Case C-125/18 according to which mere publication of the definition of the IRPH rate in the BOE places consumers in a position to know that the rate includes the differentials and costs applied by the institutions is compatible with settled case-law of the Court of Justice according to which consumers are in a weaker position in respect of information than the seller or supplier with which they contract, and with point 2 of the Advocate General’s Opinion of 10 September 2019 in Case C-125/18 which states that the average consumer is not in a position to understand certain concepts, such as ‘interest rate’, ‘reference index’ or ‘annual percentage rate of charge’ (APRC), and, in particular, the differences between those concepts, and that the same applies to the functioning of the actual calculation not only of the variable interest rates but also of the official reference indices of mortgage loans and of the APRCs on the basis of which those interest rates are calculated.
8. Whether an interpretation of paragraphs 53 and 56 of the judgment in Case C-125/18 according to which a consumer is in a position to know, from the definition published in the BOE, that the IRPH mortgage rate includes differentials and costs even though, in order to do so, the consumer must know what an AER is and what it represents in order to be in a position to infer that, since the IRPH for savings banks rate is calculated using a simple average of AERs, it will necessarily include the fees, differentials and costs applied by the institutions, is contrary to the settled case-law of the Court according to which consumers are in a weaker position in respect of information than the seller or supplier with which they contract, and contrary to point 2 of the Advocate General’s Opinion of 10 September 2019 in Case C-125/18.
9. Whether, where the seller or supplier is permitted, in accordance with the order of the Court of 17 November 2021 in Case C-655/20, 1 not to include in a contract the full definition of the reference index used to calculate a variable interest rate and not to provide an information booklet setting out past fluctuations in that index, that permission is absolute and unconditional or is, in contrast, subject to the consumer being in a position, merely from the official information provided by the seller or supplier, to understand the functioning of the method for calculating the index in question and thus evaluate, on the basis of clear, intelligible criteria, the potentially significant economic consequences on his or her financial situation.
10. Whether that permission also covers situations in which, under the national legislation in force at the time the contract is concluded, the contract must include the full definition of the reference index used to calculate the variable interest rate and the information booklet setting out past fluctuations in that index must be provided.
11. Whether, where Directive 2005/29/EC 1 concerning unfair business-to-consumer commercial practices in the internal market applies, failure by the seller or supplier to provide relevant information such as the specific functioning of the method used to calculate the IRPH rates; the fact that those rates are calculated using AERs from the reference transactions, having the effect that the average differentials, fees and costs of those transactions are included in their nominal rates; the fact that they have been constantly above Euribor throughout the years since its creation; and the existence of a warning by the Bank of Spain to the financial institutions about the need to include a negative differential in order to prevent the AER for the transaction being higher than the market AER, can be regarded as a misleading practice in the light of Article 7 of that directive.
12. Whether, where the national court finds that the practice carried on by the seller or supplier was misleading in the light of Directive 2005/29/EC, it is to be understood, without further ado, that the behaviour of the seller or supplier gives rise to the significant imbalance contrary to the requirement of good faith referred to in Article 3(1) of Directive 93/13/EEC, or, on the contrary, it is compatible for the seller or supplier to act in a misleading manner in the light of Directive 2005/29/EC and in good faith in the light of Directive 93/13/EEC.
13. Whether the principle of effectiveness is infringed by national case-law, such as that established by the Spanish Supreme Court, according to which, where the term by which the IRPH for savings banks rate is included in an agreement concluded between a consumer and a seller or supplier has been found to lack transparency, the provisions of Article 83 of the Texto Refundido de la Ley General para la Defensa de los Consumidores y Usuarios (Consolidated text of the general law for the protection of consumers and users, ‘TRLGDCU’) and of Article 5(5) of Ley 7/98 de Condiciones Generales de la Contratación (Law 7/98 on general contractual conditions) of 13 April 1998 cannot be applied retroactively, thereby giving rise to two levels of protection against the same unfair term, one for consumers who concluded agreements before that amendment and a different one for consumers who concluded agreements subsequently.
14. Whether the principle of effectiveness is infringed by national case-law, such as that established by the Supreme Court, according to which the lack of transparency of a price clause in an agreement, such as a ‘floor clause’, renders the term unfair, because it involves misleading information, whereas the lack of transparency of the term by which the IRPH for savings banks rate is included in the agreement, a term which likewise affects the price of the contract, does not render it unfair.
15. Whether national case-law, such as that established by the Supreme Court, which finds it illogical to argue that the seller or supplier did not act in good faith when it used an official mortgage rate regulated by the Bank of Spain and habitually used by the public administration in its officially protected housing programmes and infers in consequence, in all cases, that the seller or supplier acted in good faith, finding there to be no requirement to enquire whether the seller or supplier could have believed that the consumer, dealt with fairly and equitably, would have agreed to the term at issue in individual negotiations, is contrary to paragraph 69 of the judgment of 14 March 2013 in Case C-415/11 1 and to the concept of an imbalance ‘contrary to the requirement of good faith’.
16. Whether, in the context of a dispute relating to the inclusion of an IRPH for savings banks rate in an agreement in order to determine the contractual remuneration, paragraph 69 of the judgment of 14 March 2013 in Case C-415/11 must be interpreted as meaning that the national court is required to examine whether the seller or supplier could have believed that a consumer, who understood the functioning of the method of calculating the IRPH for savings banks rate, knew the fluctuations in the IRPH for savings banks rate in at least the two years preceding conclusion of the agreement and had been informed that, in Notice 5/1994, the Bank of Spain warned that it was necessary, where applicable, to include a negative differential – a warning which the seller or supplier did not intend to heed – would have agreed to that term in individual negotiations.
17. Whether, applied to a term by which the IRPH for savings banks rate is included in an agreement concluded between a consumer and a seller, paragraph 67 of the judgment of 26 January 2017 in Case C-421/14 1 must be interpreted as meaning that, in order to determine whether there is an imbalance contrary to the requirement of good faith, the national court must compare on the one hand the method of calculating that rate with the method used to determine the Euribor rate, the most widely used rate, and on the other the resulting actual rate in each case for loans of equivalent amounts and durations.
18. Whether, for the purpose of determining, in accordance with paragraph 67 of the judgment of 26 January 2017 in Case C-421/14, whether a term by which the IRPH for savings banks rate is included in an agreement concluded between a consumer and a seller gives rise to an imbalance contrary to the requirement of good faith, it is relevant that the actual rate resulting from calculation of the Euribor rate represents the price at which institutions purchase the money which they subsequently lend to their customers, whereas the actual rate resulting from calculation of the IRPH for savings banks rate, which is always higher, represents the total cost borne by the customers to whom the savings banks have lent that money.
19. Whether Article 7(1) of Directive 93/13/EEC is infringed where, once a term by which the IRPH for savings banks rate is included in an agreement concluded between a consumer and a seller has been found to be unfair and it has transpired that the agreement cannot continue to exist after removal of that term, the term is replaced in accordance with the 15th additional provision of Ley 14/2013 de apoyo a los emprendedores y su internacionalización (Law 14/2013 to support entrepreneurs and their internationalisation) of 27 September 2013, since that replacement would have the effect that the imbalance to the benefit of the seller or supplier, which the national court declared unlawful, remains in place, because that supplementary provision was intended to replace the index automatically and sought to ensure that doing so did not affect the situation existing before the index was abolished.
20. Whether, having regard to the fact that, according to the Bank of Spain, all the criticisms which can be levelled against the IRPH for savings banks mortgage rate would have been neutralised if the corresponding negative differential had been included, Article 6(1) of Directive 93/13/EEC must be interpreted as meaning that, where the term by which the IRPH for savings banks rate is included in an agreement concluded between a consumer and a seller or supplier has been found to be unfair, the national court is not precluded from retroactively replacing the differential included in the agreement with the negative differential which should have been included at the time it was concluded, reimbursing the consumer the amount unfairly charged, plus interest, with the aim of preventing the agreement from being void and of transforming it into the agreement which should have been entered into in accordance with the warning by the Bank of Spain.
21. Whether Article 7(1) of Directive 93/13/EEC is infringed where, once the term by which the IRPH for savings banks rate is included in an agreement concluded between a consumer and a seller has been found to be unfair and the agreement has been declared void because it cannot continue to exist once that term has been removed, Article 1303 of the Código Civil (Civil Code) is applied, with the effect that the infringing party benefits because it recovers the entire amount lent, plus statutory interest higher than the interest under the agreement and applicable to the entire amount of the loan from the first day.
22. Whether, bearing in mind that we are dealing with a pre-formulated standard contract comprising non-negotiated general contract terms which have been imposed by the seller or supplier, which is solely responsible for including unfair terms relating to essential aspects of the price, Article 7(1) of Directive 93/13/EEC must be interpreted as meaning that the seller or supplier is liable for the illegality or immorality which rendered the agreement void in its entirety and, in consequence, that Article 1306(2) of the Civil Code should apply.
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1 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).
1 Judgment of 3 March 2020, G
ómez del Moral Guasch (C-125/18, EU C:2020:138).
1 Opinion of Advocate General Szpunar in
Gómez del Moral Guasch (C-125/18, EU:C:2019:695).
1 Order of 17 November 2021,
Gómez del Moral Guasch II (C-655/20, EU:C:2021:943).
1 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) OJ 2005 L 149, p. 22.
1 Judgment of 14 March 2013,
Aziz (Case C-415/11, EU:C:2013:164).
1 Judgment of 26 January 2017,
Banco Primus (C-421/14, EU:C:2017:60)