A domestic court is obligated to examine ex officio conformity of the terms of a consumer credit agreement to the EU law

The request of the Czech court for a preliminary ruling related to the case where under bankruptcy proceedings spouses R. questioned the provisions of the consumer credit agreement concluded with a bank, and hence the amount of money demanded by the bank. For the bank called on the spouses to pay off the total amount of credit after getting the information that in the credit application they had failed to mention that in the past enforcement proceedings had been taken against them. Spouses R. maintained that in the said credit agreement first of all the provisions concerning the total credit amount were disputable (it included also the cost of credit which understated the effective annual interest rate) as well as those concerning high contractual penalties in case the obligation to pay off the credit is not met.

The Court simply stated that a domestic court is obligated to check ex officio if the regulations of the EU law applicable to consumer protection are respected by entrepreneurs. The obligation must be complied with also in bankruptcy proceedings and relates equally to the regulations governing consumer credit agreements.

Simultaneously, the Court emphasized that in accordance with the Directive No. 2008/48/EC of the European Parliament and of the Council of 23rd April 2008 on consumer credit agreements the domestic court adjudicating on a dispute about debts derived from a consumer credit agreement must examine ex officio whether the information concerning such credit (such as for example EAR) which should be contained in the credit agreement has been given in a clear and concise way. The said court is then obligated to take account of all consequences arising under the national law of failing to observe such obligation (while sanctions must be effective, proportional and deterrent).

• judgement of the Court of Justice of the EU of 21st April 2016, file ref No. C-377/14