FOURTH SECTION
DECISION
Applications nos. 28270/15 and 28273/15
RAIFFEISEN BANK ZRT. against Hungary
and RAIFFEISEN LÍZING ZRT. against Hungary
The European Court of Human Rights (Fourth Section), sitting on 26 February 2019 as a Committee composed of:
Paulo Pinto de Albuquerque, President,
Egidijus Kūris,
Iulia Antoanella Motoc, judges,
and Andrea Tamietti, Deputy Section Registrar,
Having regard to the above applications lodged on 9 June 2015,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant companies,
Having deliberated, decides as follows:
THE FACTS
1. The applicant companies have their registered seats in Budapest. They were represented before the Court by Mr Z. Okányi, a lawyer practising in Budapest.
2. The Hungarian Government (“the Government”) were represented by their Agent, Mr Zoltán Tallódi, Ministry of Justice.
A. The circumstances of the case
3. The applicant companies are financial institutions which had unsuccessfully initiated domestic proceedings to prove that the standard terms of contract (hereinafter “STCs”) – that is to say, terms which had not been individually negotiated – allowing for unilateral increase of interest rates, fees and costs used in their loan contracts were fair and thus valid. These proceedings were instituted under Act no. XXXVIII of 2014 concerning questions related to the Uniformity Decision for the settlement of issues related to loan contracts between consumers and financial institutions (“the Uniformity Act”), enacted by Parliament on 4 July and promulgated by the President of the Republic on 18 July 2014. The aforementioned Act provides that STCs that allow unilateral increase of interest rates, fees and costs and do not comply with seven specific principles (section 4(1) of the Act) are to be deemed unfair (for the detailed provisions of the Uniformity Act see Merkantil Car Zrt. and Others v. Hungary (dec.), no. 22853/15 and 4 other applications, §§ 49-53, 27 November 2018).
4. As regards the background, legislative and case-law developments leading to and surrounding the adoption of the Uniformity Act see Merkantil Car Zrt. and Others, cited above, §§ 5-16 and 35-39.
5. Below is the summary of the particular proceedings instituted by the applicant companies in the present cases:
1. Raiffeisen Bank Zrt. (application no. 28270/15)
6. On 18 August 2014 and 12 January 2015 the applicant company instituted proceedings under the Uniformity Act before the Budapest High Court, which had exclusive jurisdiction to deal with such cases, seeking to prove that STCs used in its foreign-currency based loan contracts and forint based contracts, respectively, were fair. In the proceedings the applicant company alleged, inter alia, a violation of their constitutional and Convention rights and requested that the case be referred to the Constitutional Court and that a preliminary ruling be sought from the Court of Justice of the European Union (“the CJEU”).
7. In each of the two cases the court held one hearing.
8. On 10 September 2014 and 10 February 2015 the court delivered its judgments dismissing the applicant company’s both claims. As regards the applicant company’s request for a referral of the case to the Constitutional Court and to the CJEU for a preliminary ruling, the court held that the impugned provisions of the Uniformity Act and Uniformity Decision were compatible with both the Fundamental Law and the relevant European Union (EU) law. In the court’s view, no issue as to the interpretation of the EU Treaties and other EU acts arose with respect to the legal dispute at issue.
9. The applicant company lodged appeals which were unsuccessful.
10. The applicant company subsequently submitted petitions for review to the Kúria.
11. On 1 December 2014 and 29 April 2015, respectively, the Kúria upheld the lower courts’ decisions. The Kúria reasoned in some detail why the impugned provisions were compatible with the relevant EU law and why there was no reasonable doubt regarding its interpretation and correct application. It further found that there was no need to refer the case to the Constitutional Court because the latter had already decided a similar matter in its decision of 11 November 2014 (see Merkantil Car Zrt. and Others, cited above, §§ 35-39).
12. Following the above proceedings, the applicant company has so far reimbursed their costumers approximately 154.1 million euros (EUR).
2. Raiffeisen Lízing Zrt. (application no. 28273/15)
13. On 15 August 2014 and 10 January 2015 the applicant company instituted proceedings under the Uniformity Act with the Budapest High Court seeking to prove that the STCs used in their foreign-currency based loan contracts and forint based contracts, respectively, were fair. In the proceedings the applicant company alleged, inter alia, a violation of its constitutional and Convention rights and requested that the case be referred to the Constitutional Court and that a preliminary ruling be sought from the CJEU.
14. In each of the two cases the court held one hearing.
15. On 10 September 2014 and 10 February 2015 the court delivered its judgments dismissing the applicant company’s both claims. As regards the applicant company’s requests for referral of the case to the Constitutional Court and to the CJEU for a preliminary ruling, the court refused them both. It held that the applicant company’s request did not in substance concern a preliminary ruling but in fact sought a finding that the domestic law was incompatible with the EU law, which, however, was not the purpose of a preliminary ruling procedure. The court added that there was no reasonable doubt about the interpretation or correct application of the relevant EU law in the present case.
16. The applicant company lodged appeals which were unsuccessful.
17. The applicant company subsequently submitted petitions for review to the Kúria.
18. On 1 December 2014 and 30 April 2015, respectively, the Kúria upheld the lower courts’ decisions. It also found the Uniformity Act to be compatible with relevant EU law and refused to seek a preliminary ruling relying on the same argumentation as in the Raffeisen Bank Zrt.’s case (see paragraph 11 above). It further found that there was no need to refer the case to the Constitutional Court because the latter had already decided a similar matter in its decision of 11 November 2014 (see Merkantil Car Zrt. and Others, loc. cit.).
19. Following the above proceedings, the applicant company has so far reimbursed their costumers approximately EUR 29.5 million.
COMPLAINTS
20. The applicant companies complained under Article 6 § 1 of the Convention about the adoption and effect of the Uniformity Act on their operations. In particular they complained that they had had to carry the burden of instituting the proceedings under the aforementioned Act and about the presumption of unfairness of the relevant STCs in their foreign-currency and forint based loan contracts. They further complained that the short time-limits and other strict procedural rules had been in breach of the right to be heard and the principle of equality of arms. Furthermore, in their view, the Budapest High Court was not impartial and its decisions were not sufficiently reasoned.
21. The applicant companies further complained that Article 1 of Protocol No. 1 had been violated because the Uniformity Act had unlawfully, retrospectively and disproportionately interfered with their right to property.
THE LAW
22. Having regard to the similar subject matter of the applications, the Court finds it appropriate to order their joinder (Rule 42 § 1 of the Rules of Court).
23. The applicant companies complained under Article 6 § 1 of the Convention, which, in so far as relevant, read as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
24. They further complained under Article 1 of Protocol No. 1, which provides as follow:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
A. The parties’ submissions
25. The Government objected that the applicant companies had failed to comply with the six-month time limit and the requirement of exhaustion of domestic remedies. They further submitted the same arguments as in Merkantil Car Zrt. and Others v. Hungary (dec.), no. 22853/15, §§ 62, 66‑68 and 91-94, 27 November 2018.
26. The applicant companies argued that the Uniformity Act had created a special expeditious procedure that had provided for unfeasibly short procedural timeframes, which had rendered it practically impossible for the applicant companies to refute the presumption of unfairness of the relevant STCs. They also argued that the requirement of an independent and impartial tribunal had been breached because the judges had been exposed to “heavy undue influence posed from within and outside the court system” and because only one court had been assigned to deal with all the cases under the Uniformity Act and that court had been seriously restricted in its the power to do so. Practically all the cases had been decided against the financial institutions. In addition, the applicant companies argued that important preliminary questions as to constitutionality and compliance with the EU law had been ignored and their requests made in this connection had been rejected without any proper reasoning.
27. The applicant companies further argued that because of the Uniformity Act and the related legislation they had been unable to exercise their right to unilaterally change the loan contracts as originally contracted with the clients, had been unable to enforce their claims for increased amounts and had to repay, as overpayment, already collected amounts arising out of the previous increases of the clients’ payment obligations, irrespectively of whether they had become time-barred. In their view, the interference with their right to property could not be justified by any public interest because the aims of the Uniformity Act could have been reached using other, less onerous, measures.
B. The Court’s assessment
28. The Court does not find it necessary to examine the Government’s objections concerning the compliance with the six-month time limit and the requirement of exhaustion of domestic remedies (see paragraph 25 above), because the applications are in any event inadmissible for the following reasons.
29. The Court notes that the present complaints (see paragraphs 20 and 21 above) largely resemble those submitted in the case Merkantil Car Zrt. and Others, cited above, §§ 59 and 60. In the latter case the Court assessed precisely the effect of the Uniformity Act on the financial institutions. It found that the applicant companies had not been prevented from making use of the proceedings available to them under the Uniformity Act and that their right to a fair trial had not been otherwise impaired because of the strict procedural rules governing those proceedings (§§ 70-74). As regards the presumption that STCs allowing the unilateral increase of interest rates, fees and costs were unfair, which in turn meant that the burden of proving the opposite was on the financial institutions, the Court found no indication that this presumption had been applied in a manner incompatible with Article 6 § 1 of the Convention (§§ 79-81). Having regard to the arguments and materials submitted by the parties, the Court sees no reason to reach a different conclusion in the present case.
30. The Court further notes that in the aforementioned decision it found no indication that the Uniformity Act or its effect on the applicant companies had violated Article 1 of Protocol No. 1 (§§ 98-110). It does not find the applicant companies’ submissions (see paragraphs 26 and 27 above) such as requiring the Court to reach a different conclusion in the present case. Accordingly, the above complaints are manifestly ill‑founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
31. Lastly, as regards the applicant companies’ complaints that the Budapest High Court was not impartial and its decisions were not sufficiently reasoned (see paragraphs 20 and 26 above), the Court considers, in the light of all the material in its possession, that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or the Protocols thereto and that the admissibility criteria set out in Articles 34 and 35 of the Convention have therefore not been met.
For these reasons, the Court, unanimously,
Decides to join the applications;
Declares the applications inadmissible.
Done in English and notified in writing on 21 March 2019.
Andrea TamiettiPaulo Pinto de Albuquerque
Deputy RegistrarPresident
Full & Egal Universal Law Academy