In the judgment delivered on 21 December 2016 by the Court of Justice of the European Union, it has been decided that the nullity of floor clauses make effect retrospectively. Therefore, it overrules the judgment delivered on 9 May 2013 by the Spanish Supreme Court, which had established a temporal limitation of the nullity.

Regarding the abusive clauses, the Spanish legislation foresees, in article 83 of the Act Number 1/2007, of 16 November, on Consumers and Users Protection, that abusive term clauses will be deemed void and excluded from the agreement.

At the same time, article 1.303 of the Spanish Civil Code establishes the consequences of the nullity:

«Upon an obligation’s being declared null and void, the contracting parties must reciprocally return to one another the things which constituted the subject matter of the contract, with their fruits, and the price, with interest (…). »

Nevertheless, the mentioned judgment of the Spanish Supreme Court stated a temporal limitation to the nullity of floor clauses, in a way that it only affects to the incomes earned due to these clauses after the judgment, but not to the ones before.

After this judgment, the Commercial Court num. 1 from Granada and the Provincial Court from Alicante made a reference for a preliminary ruling to the CJEU, asking whether the temporal limitation established by the judgment of the Supreme Court suits under the scope of the 93/13/EEC Directive, which establishes that unfair terms cannot bind the consumers.

More precisely, article 6 paragraph 1 from the Directive concludes:

« Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms. »

In response to the reference, the CJEU has stated that the European law is opposed to the Spanish jurisprudence, mainly because the temporal limitation of the effects of the nullity implies depriving consumers affected by floor clauses signed before the judgment from returning to the situation they had before signing the unfair terms. In other words: CJEU overrules the Supreme Court judgment because the limitation established by the national court would involve binding the consumer to the unfair term, in contrary to the article 6, paragraph 1, from the Directive.

Finally, the CJEU also considers that the responsible to leave the unfair term without effect is the national judge, who will have to make sure that all the money earned by the banks due to floor clauses can be returned, so that the consumer can go back to the position they would be if they hadn’t had unfair terms on their contracts.