FOURTH SECTION
\nDECISION<\/p>\n
Applications nos.28270\/15 and 28273\/15
\nRAIFFEISEN BANK ZRT.againstHungary
\nandRAIFFEISEN L\u00cdZING ZRT. against Hungary<\/p>\n
The European Court of Human Rights (Fourth Section), sitting on 26\u00a0February 2019 as a Committee composed of:<\/p>\n
Paulo Pinto de Albuquerque, President,
\nEgidijusK\u016bris,
\nIulia AntoanellaMotoc, judges,
\nand Andrea Tamietti, Deputy Section Registrar,<\/p>\n
Having regard to the above applications lodged on 9 June 2015,<\/p>\n
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant companies,<\/p>\n
Having deliberated, decides as follows:<\/p>\n
THE FACTS<\/strong><\/p>\n 1.\u00a0\u00a0The applicant companies have their registered seats in Budapest. They were represented before the Court by Mr Z. Ok\u00e1nyi, a lawyer practising in Budapest.<\/p>\n 2.\u00a0\u00a0The Hungarian Government (\u201cthe Government\u201d) were represented by their Agent, Mr Zolt\u00e1nTall\u00f3di, Ministry of Justice.<\/p>\n A.\u00a0\u00a0The circumstances of the case<\/strong><\/p>\n 3.\u00a0\u00a0The applicant companies are financial institutions which had unsuccessfully initiated domestic proceedings to prove that the standard terms of contract (hereinafter \u201cSTCs\u201d) \u2013 that is to say, terms which had not been individually negotiated \u2013 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 (\u201cthe Uniformity Act\u201d), enacted by Parliament on 4\u00a0July 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 Othersv.\u00a0Hungary (dec.), no. 22853\/15<\/a> and 4 other applications, \u00a7\u00a7 49-53, 27\u00a0November 2018).<\/p>\n 4.\u00a0\u00a0As regards the background, legislative and case-law developments leading to and surrounding the adoption of the Uniformity Act see\u00a0Merkantil Car Zrt. and Others, citedabove, \u00a7\u00a7 5-16 and 35-39.<\/p>\n 5.\u00a0\u00a0Below is the summary of the particular proceedings instituted by the applicant companies in the present cases:<\/p>\n 1.\u00a0\u00a0Raiffeisen Bank Zrt. (application no. 28270\/15)<\/em><\/p>\n 6.\u00a0\u00a0On 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 (\u201cthe CJEU\u201d).<\/p>\n 7.\u00a0\u00a0In each of the two cases the court held one hearing.<\/p>\n 8.\u00a0\u00a0On 10 September 2014 and 10 February 2015 the court delivered its judgments dismissing the applicant company\u2019s both claims. As regards the applicant company\u2019s 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\u2019s view, no issue as to the interpretation of the EU Treaties and other EU acts arose with respect to the legal dispute at issue.<\/p>\n 9.\u00a0\u00a0The applicant company lodged appeals which were unsuccessful.<\/p>\n 10.\u00a0\u00a0The applicant company subsequently submitted petitions for review to the K\u00faria.<\/p>\n 11.\u00a0\u00a0On 1 December 2014 and 29 April 2015, respectively, the K\u00fariaupheld the lower courts\u2019 decisions. The K\u00faria 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\u00a0November 2014 (seeMerkantil Car Zrt. and Others, citedabove, \u00a7\u00a7 35-39).<\/p>\n 12.\u00a0\u00a0Following the above proceedings, the applicant company has so far reimbursed their costumers approximately 154.1 million euros (EUR).<\/p>\n 2.\u00a0\u00a0RaiffeisenL\u00edzingZrt. (application no. 28273\/15)<\/em><\/p>\n 13.\u00a0\u00a0On 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.<\/p>\n 14.\u00a0\u00a0In each of the two cases the court held one hearing.<\/p>\n 15.\u00a0\u00a0On 10 September 2014 and 10 February 2015 the court delivered its judgments dismissing the applicant company\u2019s both claims. As regards the applicant company\u2019s 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\u2019s 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.<\/p>\n 16.\u00a0\u00a0The applicant company lodged appeals which were unsuccessful.<\/p>\n 17.\u00a0\u00a0The applicant company subsequently submitted petitions for review to the K\u00faria.<\/p>\n 18.\u00a0\u00a0On 1 December 2014 and 30 April 2015, respectively, the K\u00fariaupheld the lower courts\u2019 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.\u2019s 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 (seeMerkantil Car Zrt. and Others, loc. cit.).<\/p>\n 19.\u00a0\u00a0Following the above proceedings, the applicant company has so far reimbursed their costumers approximately EUR 29.5 million.<\/p>\n COMPLAINTS<\/strong><\/p>\n 20.\u00a0\u00a0The applicant companies complained under Article 6 \u00a7 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.<\/p>\n 21.\u00a0\u00a0The 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.<\/p>\n THE LAW<\/strong><\/p>\n 22.\u00a0\u00a0Having regard to the similar subject matter of the applications, the Court finds it appropriate to order their joinder (Rule\u00a042\u00a0\u00a7 1 of the Rules of Court).<\/p>\n 23.\u00a0\u00a0The applicant companies complained under Article 6\u00a0\u00a7 1 of the Convention, which, in so far as relevant, read as follows:<\/p>\n \u201cIn the determination of his civil rights and obligations … everyone is entitled to a fair … hearing … by [a] … tribunal …\u201d<\/p>\n 24.\u00a0\u00a0They further complained under Article 1 of Protocol No. 1, which provides as follow:<\/p>\n \u201cEvery 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.<\/p>\n 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.\u201d<\/p>\n