With its revolutionary decision from 14 March 2013 the Court of Justice of the European Union (CJEU) inflicted a severe blow to banks and and their practically so far undisputed opportunity for apparent arbitrariness over economically weaker mortgage credit borrowers. With this decision, having a binding effect on our country and our national courts regarding the interpretation of EU law, the CJEU is on its way to lead to legislative amendments of the internal law of EU members and our national Civil Procedural Code (CPC) in its part, regulating instant enforcement proceedings.
The so far ubiquitous bank practice was that taking advantage of their doubtlessly stronger party economic state than that of their private individuals clients and abusing their urgent housing needs, with impunity banks used to fill the mortgage credit agreements, which were solely prepared by them, with a myriad of unfair provisions, such as the unilateral declaration of the early collections of the Loan on the late payment of even a single installment on the loan, the murderously high penalties for late payment, etc. Despite the seemingly consumer protecting provisions of the Law on Consumer Protection, proclaiming such agreement provisions void, banks were not disturbed in collecting their receivables, thus leaving many people literally on the street. The legal grounds letting them do so were the lobbyist texts of Art. 417, Para. 1, sec. 2 in respect to Art. 420 from the CPC. By virtue of those provisions, a bank may well demand the issuance of an instant enforcement order and writ of execution against a client solely on the grounds of excerpt from its books, unilaterally determining the amount due by the client. Until now, the debtor could stop the enforcement proceedings in a small number of cases only and the reference to unfairness of a provision in the credit agreement with the bank was not among them. According to the decision of the Court of Justice, however, the national court should have the right to suspend the enforcement proceedings where the debtor-consumer raises the issue of unfairness of a contractual provision from the credit agreement, on which the bank bases its claim.
It should be a matter of time before our legislature reconsiders its attitude in relation to the enforcement process in the aforementioned respect. Bulgarian court, however, based on the principle of direct effect of directives in certain circumstances, is required before the expected change of the CPC comes into being to align consumer protection by mortgage agreements with the interpretation of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, which the Court of Justice makes in its judgment of 14 March 2013 on Case C 415/11.