1

This reference for a preliminary ruling concerns the interpretation of Article 7 of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29), read in conjunction with Articles 47, 34(3) and 7 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

2

The request has been made in proceedings between Mr Sánchez Morcillo and Ms Abril García, on the one hand, and Banco Bilbao Vizcaya Argentaria SA (‘Banco Bilbao’), on the other hand, concerning their objection to the mortgage enforcement in respect of their property.

3

Article 1(1) of Directive 93/13 reads as follows:

‘The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer’.

4

Article 3 of that directive provides:

‘1.   A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.

2.   A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.

...

3.   The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.’

5

Under Article 7(1) of the directive:

‘Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.’

6

Following the Judgment in Aziz (C‑415/11, EU:C:2013:164), chapter III of Law 1/2013 on strengthening the protection of mortgage debtors, on debt restructuring and on social housing (Ley 1/2013, de medidas para reforzar la protección a los deudores hipotecarios, reestructuración de deuda y alquiler social), of 14 May 2013, (BOE No 116, of 15 May 2013, p. 36373), amended the Civil Procedure Code (Ley de enjuiciamiento civil), of 7 January 2000 (BOE No 7, of 8 January 2000, p. 575, ‘the LEC’).

7

The third final provision of the Decree Law 11/2014 on urgent measures in the area of insolvency (decreto-ley 11/2014 de medidas urgentes en materia concursal), of 5 September 2014 (BOE No 217, of 6 September 2014, p. 69767), subsequently amended the LEC (‘the amended LEC’) in order to ‘to bring it into line with the recent judgment of the Court of Justice of the European Union of 17 July 2014’.

8

Article 695 of the amended LEC, concerning the objection procedure against the enforcement of mortgages, provides:

‘1.   In proceedings under this chapter, an objection to enforcement by the party against whom enforcement is sought may be admitted only if it is based on the following grounds:

2.   If an objection is lodged under the preceding paragraph, the registrar shall stay enforcement and summon the parties to appear before the court which ordered the enforcement. There shall be at least fifteen days between the summons and the date of the hearing in question. At that hearing, the court shall hear the parties, admit the documents that are submitted and issue the decision that it considers reasonable within two days in the form of an order.

3.   An order upholding the objection to enforcement on grounds 1 and 3 of paragraph 1 of the present article shall stay enforcement; an order upholding the objection to the enforcement on ground 2 shall determine the sum in respect of which enforcement is to continue.

If ground 4 of paragraph 1 of the present article is upheld, enforcement shall be discontinued where it is based on the contractual term. In other cases, enforcement shall be continued without the application of the unfair term.

4.   An appeal may lie against the order discontinuing enforcement or disapplying an unfair term or rejecting the opposition on the ground laid down in paragraph 1(4) of the present article.

Save in those circumstances, no appeal shall lie against orders adjudicating upon the objection to enforcement referred to in the present article and the effects of those orders shall be confined exclusively to the enforcement proceedings in which they are made.’

9

Article 698 of the amended LEC provides:

‘1.   Any application made by a debtor, third-party holder or other interested party, which is not covered by the preceding articles, including applications concerning nullity of title, maturity, certainty, extinguishment or the amount of the debt, shall be settled by an appropriate judgment, without ever having the effect of staying or terminating the judicial enforcement proceedings provided for in the present chapter.

…’

10

Article 552 of the LEC, which relates to the availability of an appeal if the court refuses to make an enforcement order, provides:

‘1.   If the court considers that the rules and requirements laid down by law for issuing an enforcement order have not been observed, it shall make an order refusing enforcement.

If the court finds that any of the terms that appear in one of the enforceable instruments referred to in Article 557(1) may be considered to be unfair, it shall hear the parties within 15 days. After hearing the parties, it shall give a ruling within 5 working days, in accordance with the provisions of Article 561(1)(3).

2.   An appeal may lie directly against an order refusing enforcement; only the creditor shall take part in this procedure. The creditor may also, if it chooses, apply for review by the same court before bringing the appeal.

3.   Once the order refusing enforcement has become final, the creditor may assert its rights only in the relevant ordinary procedure, if this is not precluded by the principle of res judicata of the judgment or the final decision on which the request for enforcement was based.’

11

According to Article 557 of the amended LEC, relating to the procedure for objecting to enforcement based on instruments that are neither judicial nor arbitral:

‘1.   When enforcement is ordered on the basis of instruments referred to in Article 517(2)(4), (5), (6) and (7) and of other enforceable documents referred to in Article 517(2)(9), the party against whom enforcement is sought may lodge an objection, within the period and in the form provided for in the preceding article, only if he relies on one of the following grounds:

…

2.   If an objection referred to in the previous paragraph is made, the registrar shall suspend the enforcement by a measure of organisation of the procedure.’

12

Article 561(1) of the amended LEC concerns orders ruling on the objection on substantive grounds and is worded as follows:

‘1.   After hearing the parties on an objection to enforcement not based on procedural defects and after any hearing that may be held, the court shall adopt, by order, for the purposes of enforcement only, one of the following decisions:

2.   If the objection to enforcement is upheld, the enforcement shall be deprived of effect and the attachments and the measures adopted to secure the charge shall be lifted, and the defendant to the enforcement shall be restored to his situation before the enforcement order, in accordance with the provisions of Articles 533 and 534. The party seeking enforcement shall be ordered to pay the costs of the objection.

3.   The order giving a ruling on the objection may be subject to an appeal, which shall not suspend enforcement if the decision under appeal rejected the objection.

…’

13

In its judgment in Sánchez Morcillo and Abril García (C‑169/14, EU:C:2014:2099), the Court has already interpreted Article 7(1) of Council Directive 93/13, read in conjunction with Article 47 of the Charter, in the same dispute as that at issue in the main proceedings. The facts of the dispute in the main proceedings were stated as follows in paragraphs 13 to 18 of that judgment:

14

The Audiencia Provincial de Castellón therefore decided to refer questions concerning precisely those issues to the Court for a preliminary ruling.

15

By judgment in Sánchez Morcillo and Abril García (C‑169/14, EU:C:2014:2099), the Court replied that Article 7(1) of Directive 93/13, read in conjunction with Article 47 of the Charter, must be interpreted as precluding a system of enforcement, such as that at issue in the main proceedings, which provides that mortgage enforcement proceedings may not be stayed by the first instance court, which, in its final decision, may at most award compensation in respect of the damage suffered by the consumer, in so far as the latter, as the debtor against whom mortgage enforcement proceedings are brought, may not appeal against a decision dismissing his objection to that enforcement, whereas the seller or supplier, the creditor seeking enforcement, may bring an appeal against a decision terminating the proceedings or declaring an unfair term inapplicable.

16

After that judgment was delivered, the Spanish legislature amended Article 695(4) of the LEC by Decree Law 11/2014.

17

None the less, the referring court before which the appeal proceedings were brought states that that amendment allows consumers to bring an appeal against the order dismissing the objection to enforcement only when the court of first instance did not uphold a ground of objection based on the unfairness of a contractual term upon which the enforcement is based, while it allows sellers or suppliers to appeal against any decision terminating proceedings regardless of the ground of objection on which that decision is based.

18

Consequently that court continues to have doubts regarding the compatibility of such a national provision — that should lead to the rejection of the appeal brought by the applicants in the main proceedings — with the objective of consumer protection sought by Directive 93/13, read in conjunction with the principle of equality of arms guaranteed by Article 47 of the Charter, and the rights to housing and to a private and family life enshrined in Articles 34(3) and 7 of the Charter respectively.

19

In those circumstances, the Audiencia Provincial de Castellón decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Must Article 7(1) of [Directive 93/13], read in conjunction with Articles 47, 34(3) and 7 of the [Charter] be interpreted as precluding a procedural provision of the kind laid down in Article 695(4) of [the amended LEC], applicable to appeals against a decision determining the outcome of an objection to enforcement proceedings in relation to mortgaged or pledged goods, which allows an appeal to be brought only against an order terminating the proceedings, disapplying an unfair term or rejecting an objection based on an unfair term, the immediate consequence of which is that more legal remedies on appeal are available to the seller or supplier seeking enforcement than to the consumer against whom enforcement is sought?’

20

On 27 November 2014, the Audencia Provincial de Castellón requested the case be determined pursuant to the expedited procedure provided for in Article 23a of the Statute of the Court of Justice of the European Union and in Article 105(1) of the Rules of Procedure of the Court. According to the national court, the exceptional urgency is due to the fact that the permanent residence of the consumers, in their capacity as debtors subject to mortgage enforcement proceedings, is the subject-matter of the mortgage enforcement at issue in the main proceedings, which carries the risk that the residence may be lost and of putting them and their family in a particularly difficult position.

21

Under Article 99 of the Rules of Procedure, where a question referred to the Court for a preliminary ruling is identical to a question on which the Court has already ruled, where the reply to such a question may be clearly deduced from existing case-law or where the answer to the question referred for a preliminary ruling admits of no reasonable doubt, the Court may at any time, on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decide to rule by reasoned order.

22

That article must be applied in the present case.

23

In its request for a preliminary ruling, the referring court asks, in essence, if Article 7(1) of Directive 93/13, read in conjunction with Articles 47, 34(3) and 7 of the Charter, must be interpreted as precluding a national provision of the kind at issue in the main proceedings, by which the consumer, as a mortgage debtor against whom enforcement proceedings are brought, may bring an appeal against the decision rejecting his objection to the enforcement only when the court of first instance has not upheld an objection based on the unfairness of the contractual term upon which the enforcement is based, while the seller or supplier, may, by contrast, appeal against any decision terminating the proceedings regardless of the ground of objection on which that decision is based.

24

In that regard, it should be observed, first, that according to settled case-law, the system of protection introduced by Directive 93/13 is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge (judgments in Aziz, C‑415/11, EU:C:2013:164, paragraph 44, and Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 22).

25

As regards that weaker position, Article 6(1) of the directive provides that unfair terms are not binding on the consumer. That is a mandatory provision which aims to replace the formal balance which the contract establishes between the rights and obligations of the parties with an effective balance which re-establishes equality between them (judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 23 and the case-law cited).

26

For those purposes, Article 7(1) of Directive 93/13 imposes the obligation on Member States to ensure that, in their legal orders, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded between consumers and sellers or suppliers (judgment in Baczó and Vizsnyiczai, C‑567/13, EU:C:2015:88, paragraph 39).

27

In that context, the Court has already stated on several occasions that the national court is required to assess of its own motion whether a contractual term falling within the scope of the directive is unfair, compensating in this way for the imbalance which exists between the consumer and the seller or supplier, where it has available to it the legal and factual elements necessary to that end (judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 24).

28

National enforcement proceedings, such as mortgage enforcement proceedings, are subject to the requirements arising out of that case-law of the Court which seeks to ensure the effective protection of consumers (judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 25).

29

In particular, the Court has already ruled that Directive 93/13 requires to be interpreted as precluding legislation of a Member State which, while not providing in mortgage enforcement proceedings for grounds of objection based on the unfairness of a contractual term on which the right to seek enforcement is based, does not permit the court before which proceedings on the substance of the case have been brought, which has jurisdiction to assess the unfairness of such a term, to grant interim relief, including, in particular, the staying of those enforcement proceedings, where the grant of such relief is necessary to guarantee the full effectiveness of its final decision (judgment in Aziz, C‑415/11, EU:C:2013:164, paragraph 64).

30

The Court has also interpreted Directive 93/13 as precluding national legislation, which does not allow the court responsible for the enforcement, in mortgage enforcement proceedings, either to assess of its own motion or at the consumer’s request, the unfairness of a term contained in the contract which gives rise to the debt claimed and which constitutes the basis of the right to enforcement, or to grant interim relief capable of staying or terminating the mortgage enforcement proceedings, where such relief is necessary to ensure the full effectiveness of the final decision of the court hearing the proceedings on the substance of the case before which the consumer argues that that term is unfair (order in Banco Popular Español and Banco de Valencia, C‑537/12 and C‑116/13, EU:C:2013:759, paragraph 60).

31

In this connection, the Court has stated that Article 7(1) of Directive 93/13, read in conjunction with Article 47 of the Charter, must be interpreted as precluding a system of enforcement which provides that mortgage enforcement proceedings may not be stayed by the court hearing the proceedings on the substance of the case, which, in its final decision, may at most award compensation in respect of the damage suffered by the consumer, inasmuch as the latter, the debtor against whom mortgage enforcement proceedings are brought, may not appeal against a decision dismissing his objection to that enforcement, whereas the seller or supplier, the creditor seeking enforcement, may bring an appeal against a decision terminating the proceedings or ordering an unfair term to be disapplied (judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 51).

32

Therefore, the response to be given to the question asked in the present case can be clearly deduced from the guidance given in the Court’s case-law on those different points, in so far as it concerns, in essence, the question whether the legislative amendment of Article 695(4) of the LEC, introduced following the Court’s judgment in Sánchez Morcillo and Abril García, (C‑169/14, EU:C:2014:2099), is not contrary to the interpretation of Directive 93/13 resulting from that judgment.

33

For those purposes, it must be noted that, in accordance with settled case-law, in the absence of harmonisation of national enforcement procedures, the detailed rules establishing the right of appeal against a decision ruling on the legality of a contractual term, arising in the course of mortgage enforcement proceedings, are matters falling within the domestic legal order of each Member State, in accordance with the principle of the procedural autonomy of the Member States provided, however, that they should be no less favourable than those governing similar domestic situations (principle of equivalence) and that they should not in practice render impossible or excessively difficult the exercise of rights conferred by the European Union legal order (principle of effectiveness) (judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 31).

34

As regards the principle of equivalence, it must be observed that the Court does not have before it any information which might raise doubts as to the compliance with the principle of the legislation at issue in the main proceedings.

35

As regards the principle of effectiveness, the Court has already held that every case in which the question arises whether a national procedural provision makes the application of EU law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national bodies. In that context, it is necessary to take into consideration the principles which lie at the basis of the national legal system, such as the protection of the rights of the defence, the principle of legal certainty and the proper conduct of the proceedings (judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 34).

36

Thus, the obligation for the Member States to ensure the effectiveness of the rights that the parties derive from Directive 93/13 against the use of unfair clauses implies a requirement of judicial protection, also guaranteed by Article 47 of the Charter, that is binding on the national court. That protection must be assured both as regards the designation of courts having jurisdiction to hear and determine actions based on EU law and as regards the definition of detailed procedural rules relating to such actions (judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 35).

37

In that regard, it should be recalled that, in response to the delivery of the judgment in Aziz (C‑415/11, EU:C:2013:164), Law 1/2013 amended, those articles of the LEC relating to enforcement proceedings against mortgaged or pledged assets by introducing into Article 695(1) the possibility for the party opposing the mortgage enforcement proceedings to object to those proceedings on the ground that the contractual clause upon which the enforcement was based was unfair.

38

In that context, Decree Law 11/2014 also amended Article 695(4) of the LEC in order to comply with the judgment in Sánchez Morcillo and Abril García (C‑169/14, EU:C:2014:2099).

39

It is undisputed that the provision as so amended does indeed give consumers the right to bring an appeal against the decision of the court responsible for enforcement rejecting their objection to the mortgage enforcement proceedings, if that objection is based on the unfairness of a term, within the meaning of Article 3 Directive 93/13, contained in the contract from which the debt arises and which is the basis for the enforcement order.

40

Accordingly, the procedural rule established by that provision as so amended allows the court responsible for enforcement to assess, before the end of the enforcement proceedings and in a context which allows for a right of review, the unfairness of a contractual term that may provide the basis for setting the amount due or may be the basis of the enforcement order, and, in that last case, allows the court to declare the mortgage enforcement proceedings themselves to be invalid.

41

Consequently, unlike the procedural rule at issue in the case that led to the judgment in Sánchez Morcillo and Abril García, (C‑169/14, EU:C:2014:2099, paragraph 43), such a national provision no longer exposes the consumer, and possibly his family, to the risk of losing his dwelling in a forced sale, in a context where mortgage enforcement proceedings may not be stayed by the court dealing with the substance of the case and where the court responsible for enforcement may have, at most, undertaken a summary assessment of the validity of the contractual term upon which the seller or supplier bases his application.

42

It is true, as was stated by the referring court, that Article 695(4) of the amended LEC, while giving the consumer the right to bring an appeal against an order rejecting an objection based on the unfairness of a term contained in the contract which gives rise to the sum sued for and forms the basis of the right of enforcement, excludes the right of appeal as regards decisions rejecting the objection, when that objection is based on the other grounds listed under Article 695(1) of the amended LEC. That court states that such a limitation to the right to bring an appeal is not, by contrast, effective against the seller or supplier, who, as the creditor seeking enforcement, may bring an appeal against any decision terminating the proceedings, regardless of the ground of objection on which that decision is based.

43

However, it must be borne in mind in that regard that the scope of Directive 93/13 is limited to the protection of consumers against unfair terms in contracts which they enter into with sellers and suppliers.

44

Therefore, issues arising from the fact that, under the national legislation at issue, consumers do not have the right to bring an appeal against a decision rejecting their objection based on grounds other than the unfairness of the contractual term which forms the basis of the enforcement order does not fall into the scope of that directive, and is therefore not liable to jeopardise the effectiveness of consumer protection which by the directive seeks to provide.

45

It follows that Article 695(4) of the amended LEC now provides consumers with a full and sufficient means of recourse, which thus constitutes adequate and effective means for the purposes of Article 7(1) of Directive 93/13, for preventing the continued application of unfair terms, in mortgage enforcement proceedings, contained in the instrument establishing the mortgage on the basis of which the seller or supplier brings enforcement proceedings against the property charged by way of security.

46

In that context, it must be added that the characteristics of the legal proceedings before the Spanish court responsible for enforcement also do not, after the amendment introduced by Decree Law 11/2014, constitute a factor liable to affect the legal protection from which consumers must benefit under Article 7(1) of Directive 93/13, read in conjunction with right to respect for private and family life, and the right to respect for the home, guaranteed under Article 7 of the Charter, and the principle of equality of arms, that is an integral part of the principle of effective judicial protection contained in Article 47 of the Charter (see judgment in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 48 and the case-law cited).

47

It must first be observed that the Spanish procedural rules regarding mortgage enforcement, seen as a whole and as applying in the main proceedings, no longer expose the consumer to the risk of final and irreversible loss of their dwelling in a forced sale before a court has even been able to assess the unfairness of the contractual term upon which the seller or supplier bases his application for mortgage enforcement. Furthermore, as was stated in paragraphs 40 and 41 of the present order, those procedural rules effectively reinforce review by the courts in that regard, in providing that an appeal court may, at second instance, review the wellfoundedness of the assessment of such a term carried out at first instance by the court responsible for enforcement.

48

Similarly, as regards, second, compliance with of the principle of equality of arms against the use of unfair terms falling within the scope of Directive 93/13, in national mortgage enforcement proceedings such as those at issue in the main proceedings, it should be stated that, following the amendment of Article 695(4) of the LEC, the Spanish procedural rules do indeed provide the consumer with a reasonable opportunity to take legal action based on rights deriving from that directive in conditions that no longer place him in a clearly less advantageous position than the seller or supplier, the creditor seeking enforcement (see, a contrario, judgement in Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, paragraph 49 and the case-law cited).

49

In that context, it is not necessary, lastly, to rule on the interpretation of Article 7(1), of Directive 93/13, read in conjunction with Article 34(3) of the Charter that the referring court seeks. Contrary to what that court has stated, given that that provision of the Charter does not guarantee the right to housing, but rather ‘the right to social and housing assistance’ in social policies based on Article 153 TFEU, such an interpretation is not relevant for the purposes of resolving the dispute in the main proceedings.

50

In light of those considerations, the answer to the question referred is that Article 7(1), of Directive 93/13, read in conjunction with Articles 7 and 47 of the Charter, must be interpreted as not precluding a national provision of the kind at issue in the main proceedings, by which the consumer, as a mortgage debtor against whom enforcement proceedings are brought, may bring an appeal against the decision rejecting his objection to the enforcement only when the court of first instance has not upheld an objection based on the unfairness of the contractual term upon which the enforcement is based even though sellers or suppliers may, by contrast, appeal against any decision terminating the proceedings regardless of the ground of objection on which that decision is based.

51

Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, the Court (First Chamber) hereby rules:

Article 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, read in conjunction with Articles 47, 34(3) and 7 of the Charter of Fundamental Rights of the European Union, must be interpreted as not precluding a national provision of the kind at issue in the main proceedings, by which the consumer, as a mortgage debtor against whom enforcement proceedings are brought, may bring an appeal against the decision rejecting his objection to the enforcement only when the court of first instance has not upheld an objection based on the unfairness of the contractual term upon which the enforcement is based even though the sellers or suppliers may, by contrast, appeal against any decision terminating proceedings regardless of the ground of objection on which that decision is based.