OTP BANKA d.d. A OSTATNÍ proti Chorvatsku

FIRST SECTION

DECISION

Application no. 38541/21
OTP BANKA d.d. against Croatia
and 4 other applications
(see list appended)

The European Court of Human Rights (First Section), sitting on 8 November 2022 as a Committee composed of:

Péter Paczolay, President,
Alena Poláčková,
Davor Derenčinović, judges,
and Liv Tigerstedt, Deputy Section Registrar,

Having regard to:

the applications against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by the applicants listed in the appended table (“the applicant banks”), on the various dates indicated therein;

Having deliberated, decides as follows:

SUBJECT MATTER OF THE CASE

1. The case concerns the alleged unfairness of civil proceedings before commercial courts concerning a collective consumer dispute in which the domestic courts ruled against the applicant banks. Specifically, those courts found that in loan contracts indexed to Swiss francs or denominated in that currency which the banks had concluded with their customers, the banks had used invalid and unfair contract terms and thereby breached consumer’s rights and collective interests.

2. By a judgment of 4 July 2013 Zagreb Commercial Court ruled against the applicant banks. Following their appeals that judgment was upheld in part and overturned in part by the judgment of the High Commercial Court of 13 June 2014.

3. The parties then lodged appeals on points of law with the Supreme Court. Among other arguments, the applicant banks asked that court to refer certain questions of European Union (EU) law to the Court of Justice of the European Union (CJEU) for a preliminary ruling. In its judgment of 9 April 2015 dismissing all the appeals on points of law the Supreme Court did not address that request. On 13 December 2016 the Constitutional Court quashed that judgment and remitted the case, inter alia, because of the Supreme Court’s failure to address the applicant banks’ request.

4. In the resumed proceedings, in a judgment of 3 October 2017 the Supreme Court explicitly refused to refer the questions raised by the applicant banks to the CJEU for a preliminary ruling. It held that the EU Unfair Contract Terms Directive (93/13/EEC) did not apply in the case at hand because the loan contracts in question had been concluded before Croatia had joined the EU on 1 July 2013. In so deciding the Supreme Court relied on the CJEU’s case-law which it considered to be in support of its view. In that judgment the Supreme Court also quashed the second-instance decision of the High Commercial Court of 13 June 2014 (see paragraph 2 above) and remitted the case.

5. In the resumed proceedings, on 14 June 2018 the High Commercial Court dismissed the applicant banks’ appeals and upheld the first-instance judgment of the Commercial Court of 4 July 2013 ruling against the applicant banks (see paragraph 2 above).

6. The applicant banks then again lodged appeals on points of law with the Supreme Court in which they, inter alia, (i) challenged the reasons given by that court in its decision of 3 October 2017 for refusing to refer the questions raised by the applicant banks to the CJEU, and (ii) asked that court to refer some other questions of EU law to the CJEU for a preliminary ruling.

7. In a judgment of 3 September 2019, the Supreme Court dismissed the appeals on points of law whereupon the applicant banks lodged constitutional complaints arguing that the court did not address their arguments nor their new request for referral to the CJEU. The first applicant bank also asked the Constitutional Court to refer yet another set of questions of EU law to the CJEU for a preliminary ruling.

8. On 3 February 2021 the Constitutional Court dismissed the applicant banks’ constitutional complaints. It held (i) that the EU Unfair Contract Terms Directive did not apply because the loan contracts at issue had been concluded before Croatia’s accession to the EU and that all related questions of the EU law which the banks asked to be referred had already been interpreted by the CJEU (and thus constituted actes éclairés, see paragraph 12 below), and (ii) that, therefore, even though in its judgment of 3 September 2019 the Supreme Court had not replied to the applicant banks’ arguments and the new request, this had not rendered the proceedings unfair.

9. The applicant banks complained under Article 6 § 1 of the Convention that the domestic courts had unjustifiably refused to refer certain questions of EU law to the CJEU for a preliminary ruling. They further complained about the breach of the principle of equality of arms in that the domestic courts heard testimonies from the banks’ customers but refused to hear testimonies from the banks’ clerks who had negotiated the contracts in question. The applicant banks also complained about other various instances of unfairness in the proceedings complained of.

THE COURT’S ASSESSMENT

1. Joinder of the applications

10. Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single decision.

2. Alleged violations of Article 6 § 1 of the Convention
   1. As regards the domestic courts’ refusal to seek a preliminary ruling of the CJEU

11. The general principles relating to the obligations of the domestic courts under Article 6 § 1 of the Convention when deciding not to refer a question of EU law that has been raised before them to the CJEU for a preliminary ruling are set out in Ullens de Schooten and Rezabek v. Belgium (nos. 3989/07 and 38353/07, §§ 57-67, 20 September 2011).

12. The gist of those principles is that the domestic courts against whose decisions there is no remedy are obliged, in accordance with the so-called Cilfit criteria, established in the CJEU’s case-law, to state the reasons why they have considered it unnecessary to seek a preliminary ruling; in particular, why they have found that the question is irrelevant, that the EU law provision in question has already been interpreted by the CJEU (acte éclairé), or that the correct application of EU law is so obvious as to leave no scope for any reasonable doubt (acte clair). Whilst the verification of the presence of such reasoning has to be made thoroughly, it is not for the Court to examine any errors that may have been committed by the domestic courts in interpreting or applying the relevant law (see Somorjai v. Hungary, no. 60934/13, § 57, 28 August 2018).

13. Having regard to the facts of the case (see paragraphs 2-8 above), the Court finds that the domestic courts complied with their obligations under Article 6 § 1 of the Convention (see paragraph 12 above). They gave reasons why they considered it unnecessary to seek a preliminary ruling from the CJEU and in so doing relied on one of the Cilfit criteria. Before the Court the applicant banks challenged those reasons by arguing that the interpretation of EU law adopted by the Supreme Court and the Constitutional Court was erroneous. However, this is an area that falls outside the Court’s jurisdiction (see Ullens de Schooten and Rezabek, cited above, § 66, and Somorjai, cited above, § 54). For the Court, it is sufficient to note that the reasons given by the domestic courts for not making a reference to the CJEU could not be considered arbitrary or manifestly unreasonable.

14. It follows that this complaint is therefore inadmissible under Article 35 § 3 (a) of the Convention as manifestly ill-founded and must be rejected pursuant to Article 35 § 4 thereof.

2. As regards the other alleged violations of Article 6 § 1 of the Convention

15. As regards the complaint about the breach of the principle of equality of arms (see paragraph 9 above), the Court notes that the domestic courts gave reasons why hearing testimonies from the banks’ clerks was unnecessary. Specifically, the High Commercial Court and the Constitutional Court explained that the proceedings in question concerned a collective consumer dispute in which it was important to establish whether the impugned contract terms had been intelligible to an average costumer, rather than to each individual customer. Those circumstances had been established from written evidence and could not have been ascertained by hearing the bank clerks. For these reasons the Constitutional Court also added that the testimonies of the applicant banks’ customers had not been decisive nor had the impugned judgment been based solely on that evidence. In view of this, the Court finds that it cannot be said that applicant banks were placed at a substantial disadvantage vis-à-vis their opponent.

16. The Court further notes that nothing suggests that the applicant banks did not have the benefit of adversarial proceedings, namely that they were unable to adduce the arguments and evidence they considered relevant to their case, or that they did not have the opportunity of effectively challenging the arguments and evidence adduced by the other party. All their arguments, which were relevant to the resolution of the case, were duly heard and examined by the domestic courts which set out at length the factual and legal reasons for their decisions, which do not appear arbitrary or manifestly unreasonable. Likewise, there is nothing to suggest that the domestic courts lacked impartiality or that the proceedings were otherwise unfair.

17. It follows that these complaints are therefore inadmissible under Article 35 § 3 (a) of the Convention as manifestly ill-founded and must be rejected pursuant to Article 35 § 4 thereof.

3. Other alleged violations of the Convention

18. The applicant bank in application no. 41145/21 also raised a complaint under Article 18 of the Convention claiming that the domestic courts’ decisions “had ulterior motives and that the proceedings were destined to end in favour of the consumers”.

19. The Court considers that, in the light of all the material in its possession and in so far as the matter complained of is within its competence, this complaint does not disclose any appearance of a violation of the Article in question.

20. It follows that it is inadmissible under Article 35 § 3 (a) of the Convention as manifestly ill-founded and must be rejected pursuant to Article 35 § 4 thereof.

For these reasons, the Court, unanimously,

Decides to join the applications;

Declares the applications inadmissible.

Done in English and notified in writing on 1 December 2022.

Liv Tigerstedt Péter Paczolay
Deputy Registrar President

APPENDIX