FOURTH SECTION
DECISION
Application no. 56131/15
SOPRON BANK BURGENLAND 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 application lodged on 9 November 2015,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant company,
Having deliberated, decides as follows:
THE FACTS
1. The applicant company has its registered seat in Sopron, Hungary. It was represented before the Court by Mr P. Simon, 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 company is a financial institution which had been unsuccessful in domestic proceedings concerning fairness of 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 its loan contracts. 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.
1. Proceedings instituted by the applicant company
4. On 18 August 2014 and 10 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 the STCs used in their (i) foreign-currency based loan contracts and (ii) forint based loan contracts and foreign-currency loan contract, 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 Court of Justice of the European Union (“the CJEU”).
5. On 10 September 2014 and 20 February 2015, respectively, 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 domestic 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. Referring to the case-law of the CJEU, it noted, inter alia, that the CJEU did not in the context of a preliminary ruling have a jurisdiction to give a ruling on the compatibility of a national measure with the EU law.
6. The applicant company lodged appeals which were unsuccessful.
7. The applicant company subsequently submitted petitions for review to the Kúria.
8. On 19 November 2014 and 8 May 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 v. Hungary (dec.), no. 22853/15 and 4 other applications, §§ 35-39, 27 November 2018).
9. In the proceedings concerning the foreign-currency based loan contracts, the applicant company lodged a constitutional complaint. It was partly rejected and partly dismissed on 7 July 2015. This decision was served on the applicant company on 7 August 2015. No constitutional complaint was lodged in the proceedings concerning the applicant company’s forint based loan contracts and foreign-currency loan contracts. In the latter proceedings, the applicant company received the Kúria’s decision (see paragraph 8 above) on 15 May 2015.
2. Proceedings instituted by the Hungarian National Bank against the applicant company
10. On 29 April 2015 the Hungarian National Bank brought a legal action in the public interest against the applicant company challenging fairness of the STCs published after 26 November 2010 (see section 6 (2) of the Uniformity Act, cited in paragraph 13 below). On 2 July 2015 the Budapest High Court found that certain STCs applied after the aforementioned date in foreign-currency loans were unfair and thus null and void.
11. The applicant company appealed unsuccessfully.
12. It subsequently submitted a petition for review to the Kúria, which upheld the lower courts’ decisions on 6 October 2015. The Kúria’s decision was served on the applicant company on 8 October 2015.
B. Domestic law
13. The Uniformity Act (see paragraph 3 above) 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, cited above, §§ 49-53). Moreover, as relevant to the proceedings instituted by the Hungarian National Bank against the applicant company (see paragraphs 10 to 12 above), section 6 (2) of the Uniformity Act provides as follows:
“In the case of forint based consumer loan agreements or consumer loan agreements provided for in section 1(1)a), STCs published after 26 November 2010, and amendments to previous STCs published after 26 November 2010 need not be presumed unfair, having regard to the provisions set out in section 4(1). The [National Bank of Hungary] shall carry out the proceedings provided for in Act CXXXIX of 2013 on the National Bank of Hungary and may ex officio bring [a legal] action between 14 February and 30 April 2015 in the public interest. In actions brought in the public interest the provisions set out in the [Uniformity Act] apply.”
14. Act no. XL of 2014 on the rules of settlement laid down in the Uniformity Act (“the Settlement Act”) entered into force on 1 November 2014 and regulated settlements between consumers and financial institutions resulting from the application of the Uniformity Act (see Merkantil Car Zrt. and Others, cited above, § 15).
15. 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.
COMPLAINTS
16. The applicant company complained under Article 6 § 1 of the Convention about the adoption and effect of the Uniformity Act and the Settlement Act on its operations. In particular, it complained about the presumption of unfairness of the relevant STCs in their loan contracts and the proceedings it instituted in this connection. It also complained about the proceedings instituted against it by the Hungarian National Bank. It alleged that their rights to access to court and the principle of equality of arms had been violated on account of the short time-limits and other strict procedural rules. Furthermore, in its view, the Budapest High Court was not impartial, the domestic decisions were not adequately reasoned and the changes to the legislation, such as the inclusion of the foreign-currency loans and introduction of actio popularis, lacked justification.
17. The applicant company further complained that Article 1 of Protocol No. 1 had been violated because the Uniformity Act had unlawfully, retrospectively and disproportionately interfered with its right to property.
THE LAW
18. The applicant company 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 ...”
19. It 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
20. The Government objected that the applicant company 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.
21. The applicant company 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 company to refute the presumption of unfairness of the relevant STCs and that such restrictions had not been justified. It also argued that the requirement of an independent and impartial tribunal had been breached because the judges had been “overwhelmed by a heavy influence provoked by – inter alia – political factors” and the Budapest Higher Court, as the only court dealing with such cases, had been overburdened with the caseload. In addition, the applicant company argued that the decisions of the domestic courts in its cases were insufficiently reasoned and its request to refer the cases to the CJEU had been rejected without proper explanation.
22. The applicant company further argued that because of the Uniformity Act and the related legislation several already concluded and preformed contracts had been declared null and void, including as regards claims which had become time-barred. In their view, the interference with their right to property was against the rule of law. They alleged to have sustained approximately 13 million euros loss on account of impugned legislation and its application to their loan contracts.
B. The Court’s assessment
23. 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 20 above), because the application is in any event inadmissible for the following reasons.
24. The Court notes that the present complaints (see paragraphs 16 and 17 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 (§§ 70-74). As regards the presumption that STCs allowing the unilateral increase of interest rates, fees and costs were unfair, the Court found in the aforementioned decision that there was no indication that this presumption had operated 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.
25. The Court further takes note of its finding in Merkantil Car Zrt. and Others that the right to a fair trial of the applicant companies had not been impaired because of the strict procedural rules governing the proceedings under the Uniformity Act (cited above, §§ 70-74). This finding was reached regarding the proceedings instituted by the financial institutions with respect to the STCs to which the presumption of unfairness applied. However, noting that the relevant provisions of the Uniformity Act likewise applied to the proceedings brought by the Hungarian National Bank (see paragraphs 10-12 and section 6(2) of the Uniformity Act cited in paragraph 13 above) and having regard to the applicant company’s submissions on that issue, the Court sees no reason to reach with respect to these proceedings a conclusion different from the one reached in Merkantil Car Zrt. and Others (ibid.).
26. 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 company’s submissions (see paragraphs 21 and 22 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.
27. Lastly, as regards the applicant company’s complaints that the Budapest High Court was not impartial and its decisions were not sufficiently reasoned as well as the complaint about the changes to the legislation, such as the inclusion of the foreign-currency loans and introduction of actio popularis (see paragraphs 16 and 21 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,
Declares the application inadmissible.
Done in English and notified in writing on 21 March 2019.
Andrea Tamietti Paulo Pinto de Albuquerque
Deputy RegistrarPresident
Full & Egal Universal Law Academy