Promissory note enforcement vs. an ex officio review of unfair terms (Profi Credit Polska: C-176/17)


On 17 February 2017, the District Court in Siemianowice Śląskie (the “Court”) referred to the CJEU a preliminary question (C-176/17), asking whether the provisions of Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, especially Article  6(1) and Article 7(1), and the provisions of Directive 2008/48/EC of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC, especially Article 17(1) and Article 22(1), are to be interpreted as precluding the entrepreneur (the lender) from pursuing a claim against the consumer (the borrower), where the claim is acknowledged by a duly completed promissory note, by way of payment order proceedings specified in Article 485 § 2 and subsequent provisions of the Polish Civil Procedure Code, in relation to Article 41 of the Act on Consumer Credit of 12 May 2011, which limit the national court solely to examining the validity of the promissory note obligation with regard to the formal requirements of the promissory note, excluding examining the basic relation (the loan agreement).

Enforcement of promissory notes in consumer contracts

The defendant (the consumer) concluded a loan agreement with the claimant (the Court has no knowledge regarding the amount of the loan). As security on the loan repayment, the defendant issued an in-blanco promissory note. As a result of non-repayment of the debt, the claimant filled in the promissory note. The claimant requested an order of payment on the basis of the promissory note in payment order proceedings. Apart from the promissory note, the claimant did not present the loan agreement confirming the existence of the basic relation between the defendant and the claimant.

The promissory note obligation is an abstract obligation and is therefore detached from its legal cause (so-called causa). As a result, the holder of a promissory note does not have to prove either the economic basis of the promissory note obligation, or the fact that the basis existed at all. It is necessary for the creditor only to present the promissory note. That means the court might not be able to examine whether the obligations of the lender arising out of provisions on the protection of the consumer’s rights have been fulfilled

According to Article 485 § 2 of the Civil Procedure Code, the court issues an order of payment against the drawee of a correct promissory note, whose authenticity and content do not raise any doubts. It is commonly agreed that this provision introduces an obligation on the court to issue an order of payment in such a situation, notwithstanding the basic relation. As noted by the Court, such proceedings allows the claimant to only present the promissory note, without the need to present the basic relation (for instance, the consumer loan agreement). Only in the second phase of the proceedings, after filing a notice of objections, can the defendant raise any pleas in law, not only against the promissory note obligation, but also against the basic relation (consumer loan agreement).

On the other hand, according to the Court, the EU legislator, both in Directive 2008/48 and Directive 93/13, has set common goals in the form of a well-functioning EU market and maintenance of a high level of protection of consumer interests. These goals are fulfilled, among other things, by Articles 5 and 10 of Directive 2008/48 (the information obligations). The Polish Act on Consumer Credit of 12 May 2011 contains the provisions that are a transposition of Directive 2008/48. Article 485 § 2 of the Civil Procedure Code must be interpreted in relation with Article 41 of the Act on Consumer Credit, which states the admissibility of securing the entrepreneur’s claims by the promissory note received from the consumer.

The reasons for the preliminary question

The Court stated that its doubts in this case are twofold. Firstly, the court assessing the admissibility of issuing the order of payment according to Article 485 § 2 of the Civil Procedure Code has to assess the admissibility of the promissory note in consumer transactions, having regard to Directive 2008/48 (in particular Articles 17 and 22.1) and Directive 93/13 (in particular Article 3.1 in relation with Article 6). Secondly, at the same time there is a doubt whether the order of payment proceedings on the basis of a promissory note itself does not make it difficult or even impossible for the consumer to exercise his rights resulting from the consumer protection system, including EU law. The obstacles to the consumer are the lack of any requirement to disclose the basic relation between the consumer and the entrepreneur, as well the shifting of the burden of proof (reference) of abusiveness of the contract’s clauses onto the consumer.

The Court pointed out that the practical meaning of the promissory note appears mainly in connection with the order of payment proceedings. As a result, the promissory note, as well as these kinds of proceedings, constitute an integrated and functional whole. Therefore, the Court’s doubts concerning the interpretation of Directives 2008/48 and 93/13 must be connected with Article 485 § 2 of the Civil Procedure Code and Article 41 of the Act on Consumer Credit. 

The Court noticed that the CJEU has already spoken on similar issues to those of this case in two other cases regarding the orders of payment: Banco Español de Crédito (C-618/10) and Finanmadrid EFC (C-49/14). In these judgements, the CJEU dealt with the issue of assessment of national provisions that exclude a judicial review of a court’s own motion and in limine litis on whether a clause in a consumer agreement is unfair, even though the court had all necessary data (legal and factual elements) to determine that. In both these cases, the national courts were aware of the circumstances regarding the concluded contracts, and had the documents regarding these contracts (loan agreements).

However, as has been underlined by the Court, the circumstances of this case are different, and this, in the opinion of the Court, raises doubts that require the judgement of the CJEU.

The difference between this case and the previously mentioned cases (C-618/10 and C-49/14) is in the fact that the Spanish national courts were able to raise doubts with respect to the content of the consumer contracts (the basic relation), because these documents were available for the courts. By contrast, in this case the Court is required to assess the legal relationship only through the prism of the laws regarding promissory notes. The basic relationship (loan agreement) was removed from the court’s considerations in accordance with Polish law. The Court has no evidence on the basis of which could raise doubts whether the information obligations were fulfilled, or whether or not the contract contains unfair terms etc.

In cases C-618/10 and C-49/14, the CJEU, declaring the inadmissibility of limiting the national courts to investigate unfair clauses, used such criteria as the need to have all the legal and factual elements that allow an assessment of the unfair nature of the clause. In this case, the Court has no knowledge about the circumstances of concluding the loan agreement and the content of this agreement. Therefore, the Court does not know whether the information obligations required by Articles 5 and 10 of Directive 2008/48 were fulfilled, and whether there was a significant imbalance in the obligations of the consumer and the entrepreneur. Therefore, the whole burden with reference to unfair clauses, of a failure of information obligations stays on the consumer. In the opinion of the Court, this affects the provisions of Articles 3 and 6 of Directive 93/13, and many of the provisions of Directive 2008/48.

The text is an outcome of the project “Roadmap to European effective justice (RE-Jus)”, co-funded by the European Commission (JUST/2015/JTRA/AG/EJTR/8703).

Posted on by Krzysztof Riedl in Civil Procedure, Consumer Law, Contract Law, General Issues

About the author

Krzysztof Riedl
Krzysztof Riedl

Ph.D. candidate at the Department of Civil Law at the University of Warsaw, a trainee legal adviser at the Warsaw Regional Chamber of Legal Advisers, an associate at the Polish law firm and a collaborator at INPRIS Institute for Law and Society. He prepares a doctoral dissertation on natural obligations in the Polish civil law.