2. Article 267 TFEU must be interpreted as meaning that the jurisdiction of the Court of Justice of the European Union extends to the interpretation of the concept of ‘unfair term’ used in Article 3(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts and in the annex thereto, and to the criteria which the national court may or must apply when examining a contractual term in the light of the provisions of that Directive, bearing in mind that it is for that court to determine, in the light of those criteria, whether a particular contractual term is actually unfair in the circumstances of the case.
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This was a reference by the Spanish Tribunal Supremo for a ruling about the application of Article 4(2) of the Directive (this became regulation 6(2) in the UTCCR). Article 4(2) provides that a term will be exempt from consideration for unfairness in relation neither to the “definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods [to be supplied] in exchange, on the other, in so far as these terms are in plain intelligible language.”
In Spain Article 4(2) has not been transposed into the legal system
On those grounds, the Court (First Chamber) hereby rules:
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that a national court or tribunal hearing an action for enforcement of an arbitration award which has become final and was made in the absence of the consumer is required, where it has available to it the legal and factual elements necessary for that task, to assess of its own motion whether an arbitration clause in a contract concluded between a seller or supplier and a consumer is unfair, in so far as, under national rules of procedure, it can carry out such an assessment in similar actions of a domestic nature. If that is the case, it is for that court or tribunal to establish all the consequences thereby arising under national law, in order to ensure that the consumer is not bound by that clause.
22. It follows, as the Advocate General has observed at point 25 of his Opinion, that in the context of its jurisdiction under Article 234 EC to interpret Community law, the Court may interpret general criteria used by the Community legislature in order to define the concept of unfair terms. However, it should not rule on the application of these general criteria to a particular term, which must be considered in the light of the particular circumstances of the case in question.
23. It is true that in Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial and Salvat Editores  ECR I-4941, paragraphs 21 to 24, the Court held that a term, drafted in advance by the seller, the purpose of which is to confer jurisdiction in respect of all disputes arising under the contract on the court in the territorial jurisdiction of which the seller has his principal place of business, satisfies all the criteria necessary for it to be judged unfair for the purposes of the Directive. Nevertheless, that assessment was reached in relation to a term which was solely to the benefit of the seller and contained no benefit in return for the consumer. Whatever the nature of the contract, it thereby undermined the effectiveness of the legal protection of the rights which the Directive affords to the consumer. It was thus possible to hold that the term was unfair without having to consider all the circumstances in which the contract was concluded and without having to assess the advantages and disadvantages that that term would have under the national law applicable to the contract.
24. As is clear from the observations submitted to the Court, that does not apply to the term at issue in the main proceedings.
1. The protection provided for consumers by Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts entails the national court being able to determine of its own motion whether a term of a contract before it is unfair when making its preliminary assessment as to whether a claim should be allowed to proceed before the national courts.
2. The national court is obliged, when it applies national law provisions predating or postdating the said Directive, to interpret those provisions, so far as possible, in the light of the wording and purpose of the Directive. The requirement for an interpretation in conformity with the Directive requires the national court, in particular, to favour the interpretation that would allow it to decline of its own motion the jurisdiction conferred on it by virtue of an unfair term.
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts precludes a national provision which, in proceedings brought by a seller or supplier against a consumer on the basis of a contract concluded between them, prohibits the national court, on expiry of a limitation period, from finding, of its own motion or following a plea raised by the consumer, that a term of the contract is unfair.
On a proper construction of the first indent of Article 2 of Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises, a contract of guarantee concluded by a natural person who is not acting in the course of his trade or profession does not come within the scope of the directive where it guarantees repayment of a debt contracted by another person who, for his part, is acting within the course of his trade or profession.
This has been cited and interpreted in England & Wales in Barclays Bank v Kufner
Océano Grupo Editorial SA v Roció Murciano Quintero (C-240/98) and Salvat Editores SA v José M. Sánchez Alcón Prades (C-241/98), José Luis Copano Badillo (C-242/98), Mohammed Berroane (C-243/98) and Emilio Viñas Feliú (C-244/98)
I consider that a term agreed to by a consumer but not negotiated individually inasmuch as it is contained in a pre-formulated standard contract which obliges him to bring or defend proceedings before the court of the district where the company has its principal place of business in connection with any dispute arising from the contract has undeniable advantages for the company in question but may diminish, to a substantial extent, the consumer’s rights of defence. As the national court stated, on the basis of practical experience in procedural matters, in the order for reference, the consumers’ obligation to submit to the jurisdiction of the court specified by the company, which may be a very long way from his place of residence, entails the risk that the he may, for practical purposes, be unable to defend himself in view of the high cost associated with entering an appearance, especially if that cost is compared to the modest amount at issue in the dispute; in addition to this, there is the fact that the persons involved in these cases come for the most part from a modest social background and have fairly limited means. Conversely, the term in question confers unquestionable advantages on the seller or supplier who may in this way avoid applying to different courts of competent jurisdiction under the rules of procedure, by concentrating litigation concerning contracts with consumers in the area where he has his principal place of business, which for him is clearly more convenient and less expensive. I believe that a situation of this kind gives rise, without any doubt, to a significant imbalance in the parties’ rights and obligations. It follows that the term in question may be defined as `unfair’ within the meaning of the Directive, with the result that the regime favouring the consumer laid down by the Directive – in particular the fact that, on the basis of Article 6, the jurisdiction clause is not binding – can certainly be applied in this case.
24 It follows that where a jurisdiction clause is included, without being individually negotiated, in a contract between a consumer and a seller or supplier within the meaning of the Directive and where it confers exclusive jurisdiction on a court in the territorial jurisdiction of which the seller or supplier has his principal place of business, it must be regarded as unfair within the meaning of Article 3 of the Directive in so far as it causes, contrary to the requirement of good faith, a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.