What are the obligations of national courts in relation to a claim for a payment order based on an unfair term in a consumer credit agreement?

In its reply to the request for a preliminary ruling filed by the Bulgarian courts, CJEU established that the national court, on receiving an application for an order for payment is obliged, under certain conditions, to disapply ex officio an unfair term in the consumer credit agreement. However, the court is not obliged to offset ex officio the payment made on the basis of that term against the balance due under the agreement. If the court could be held to be obliged to make such a set-off of its own motion, that court would be obliged to disregard the case-law of a higher court to the contrary.

Interpreting Art. 6 para. (1) of Directive 93/13/EEC on unfair terms in consumer agreements, the CJEU has held that the national court on receiving an application for an order for payment:

  • Is obliged to disapply ex officio an unfair term (clause on which part of the claim is based) in the consumer credit agreement concluded between that consumer and the seller or supplier concerned, where the debtor-consumer concerned does not take part in the proceedings until the order for payment is issued. In that case, the court has the option of dismissing the application in part, provided that the agreement can continue to exist without any further amendment, revision, or supplementation, which it is for the court to verify;
  • Is not obliged, upon finding the unfair nature of a clause, to offset ex officio the payment made on the basis of that term against the balance due under that agreement, subject, however, to compliance with the principles of equivalence and effectiveness;
  • If it were required to offset ex officio the payment made on the basis of that term against the balance due under that agreement, that court would be obliged to disregard the case-law of a higher court to the contrary.

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