29 March 2022 (*1)

(Reference for a preliminary ruling – Admissibility – Article 267 TFEU – Concept of ‘court or tribunal’ – Article 19(1) TEU – Article 47 of the Charter of Fundamental Rights of the European Union – Rule of law – Effective judicial protection – Principle of judicial independence – Tribunal previously established by law – Judicial body, a member of which was appointed for the first time to the position of judge by a political body within the executive branch of an undemocratic regime – Way in which the Krajowa Rada Sądownictwa (National Council of the Judiciary, Poland) operates – Unconstitutionality of the law on the basis of which that council was composed – Whether that body is to be considered to be an impartial and independent court or tribunal within the meaning of EU law)

In Case C‑132/20,

REQUEST for a preliminary ruling under Article 267 TFEU from the Sąd Najwyższy (Supreme Court, Poland), made by decision of 18 December 2019, received at the Court on 10 March 2020, in the proceedings

BN,

DM,

intervening parties:

Rzecznik Praw Obywatelskich,

THE COURT (Grand Chamber),

composed of K. Lenaerts, President, L. Bay Larsen, Vice-President, A. Arabadjiev, A. Prechal, K. Jürimäe, C. Lycourgos, I. Jarukaitis (Rapporteur), I. Ziemele and J. Passer, Presidents of Chambers, M. Ilešič, T. von Danwitz, A. Kumin and N. Wahl, Judges,

Advocate General: M. Bobek,

Registrar: M. Aleksejev, Head of Unit,

having regard to the written procedure and further to the hearing on 2 March 2021,

after considering the observations submitted on behalf of:

–the Rzecznik Praw Obywatelskich, by M. Taborowski and P. Filipek,

–the Polish Government, by B. Majczyna, A. Dalkowska and S. Żyrek, acting as Agents,

–the European Commission, by K. Herrmann, N. Ruiz García and P.J.O. Van Nuffel, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 8 July 2021,

gives the following

1This request for a preliminary ruling concerns the interpretation of Article 2, Article 4(3), Article 6(1) and (3) and the second subparagraph of Article 19(1) TEU, Article 38 and the first and second paragraphs of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), the third paragraph of Article 267 TFEU as well as Article 7(1) and (2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).

2The request has been made in a dispute between BN, DM and EN, on the one hand and Getin Noble Bank S.A., a bank, on the other, concerning the alleged unfairness of a term in a loan agreement concluded by BN, DM and EN with that bank.

Legal context

European Union law

3Article 7(1) and (2) of Directive 93/13 provides:

‘1. 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.

Polish law

The Constitution

4Article 179 of the Constitution provides:

‘The President of the Republic shall appoint judges, on a proposal of the Krajowa Rada Sądownictwa [(National Council of the Judiciary, Poland) (“the KRS”)], for an indefinite period.’

5 According to Article 180(1) of the Constitution, judges are irremovable.

6 Under Article 186(1) of the Constitution:

‘The [KRS] shall be the guardian of the independence of the courts and of the judges.’

7 Article 187 of the Constitution provides:

‘1. The [KRS] shall be composed of:

(1) the First President of the [Sąd Najwyższy (Supreme Court, Poland)], the Minister for Justice, the President of the [Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland)] and a person designated by the President of the Republic,

(2) fifteen elected members from among the judges of the [Sąd Najwyższy (Supreme Court)], the ordinary courts, the administrative courts and the military courts,

(3) four members elected by [the Sejm (Lower Chamber of the Polish Parliament)] from among the members [of the Lower Chamber] and two members elected by the Senate from among the senators.

…

8 Article 190(1) of the Constitution states:

‘The decisions of the [Trybunał Konstytucyjny (Constitutional Court, Poland)] are binding erga omnes and final.’

The Decree Law of 6 February 1928 on the organisation of the ordinary courts

9The rozporządzenie z mocą ustawy – Prawo o ustroju sądów powszechnych (Decree Law on the organisation of the ordinary courts) of 6 February 1928, in the version in force until 1 September 1985, relevant in the dispute in the main proceedings (Dz. U. of 1964, No 6, item 40; ‘the Decree Law of 6 February 1928 on the organisation of the ordinary courts’), provided, in its Article 2:

‘In the Polish People’s Republic, the administration of justice seeks to protect:

(a) the people’s democratic system and its development towards socialism;

…’

10 Pursuant to Article 53 of that decree law, judges of the ordinary courts were appointed by the Rada Państwa (Council of State) of the Polish People’s Republic on the proposal of the Minister for Justice.

11 In accordance with Article 57 of that decree law, when taking up office, a judge appointed by the Council of State of the Polish People’s Republic would take an oath before the president of the relevant court using the prescribed wording, but would not take a new oath when taking up a new position.

12 The wording of the oath was laid down in dekret o rocie ślubowania ministrów, funkcjonariuszów państwowych, sędziów i prokuratorów oraz funkcjonariuszów służby bezpieczeństwa publicznego (Decree on the swearing-in of ministers, public officials, judges and public prosecutors as well as officials of public security services) of 6 October 1948 (Dz. U. of 1948, No 49, item 370). Under paragraph C of Article 1 of that decree, judges would be sworn in using the following terms:

‘I solemnly swear that I will contribute …, in the position of judge that has been entrusted to me, in my field of activity and with all my strength, to consolidating the freedom, independence and power of the democratic Polish State, to which I pledge my everlasting loyalty; I will protect and strengthen the order based on the social, economic and political constitutional principles of the Polish People’s Republic; I will resolutely uphold the law, by treating all citizens equally; I will strengthen respect for the law and loyalty towards the democratic Polish State; I will zealously and scrupulously perform the duties pertaining to my position, deliver justice impartially as dictated by my conscience and in accordance with the law, while observing professional secrecy, and be guided, in proceedings, by the principles of dignity, probity and social justice.’

13 Under Article 59(1) of the Decree Law of 6 February 1928 on the organisation of the ordinary courts, the Council of State of the Polish People’s Republic, on the proposal of the Minister for Justice, would remove a judge if the latter did not provide every assurance that he or she will properly perform the duties incumbent on a judge.

The Law of 20 June 1985 on the organisation of the ordinary courts

14The ustawa – Prawo o ustroju sądów powszechnych (Law on the organisation of the ordinary courts) of 20 June 1985 (Dz. U. No 31, item 137), in the version in force until 29 December 1989, provided, in its Article 6(2):

‘Judges shall be appointed and removed by the Council of State [of the Polish People’s Republic] on the proposal of the Minister for Justice.’

15Article 59 of that law was worded as follows:

‘1. Upon taking office, the judge shall take the following oath before the Minister for Justice:

“I solemnly swear that I will contribute, in the position of judge that has been entrusted to me, in my field of activity and with all my strength, to consolidating the freedom, independence and development in all fields of the Polish People’s Republic, to which I pledge my everlasting loyalty; I will protect its political, social and economic structure, safeguard the workers’ achievements, collective property as well as the rights of citizens and their interests protected by law; I will ensure the people’s rule of law and consolidate the citizens’ awareness of the law; I will zealously and scrupulously perform the duties pertaining to my position, deliver justice impartially as dictated by my conscience and in accordance with the law, while observing State secrets and professional secrecy, and be guided, in proceedings, by the principles of dignity, probity and social justice.”

…

16Article 61 of that law specified:

‘1. The Council of State [of the Polish People’s Republic], on the proposal of the Minister for Justice, shall remove a judge if the latter did not provide every assurance that he will properly perform the duties incumbent on a judge. Before submitting its proposal, the Minister for Justice shall hear the judge’s explanations, unless this is impossible. …

…

The Law of 12 May 2011 on the KRS

17Article 11(1) to (5) of the ustawa o Krajowej Radzie Sądownictwa (Law on the National Council of the Judiciary) of 12 May 2011 (Dz. U. No 126 of 2011, item 714; ‘the Law of 12 May 2011 on the KRS’) provided:

‘1. The general assembly of judges of the Supreme Court shall choose from among the judges of that court two Council members.

5. The assembly of judges of the military courts shall choose from among its members one Council member.’

18Article 12 of that law was worded as follows:

‘1. The general assemblies of judges of the regional administrative courts shall choose from among their members two representatives.

19Article 13 of that law provided:

‘1. The assemblies of judges of the appeal courts shall chose the representatives of the assemblies of judges of the appeal courts from among their members for one fifth of the number of judges of a given appeal court.

…’

The Law on the KRS

20Article 20 of the ustawa o Krajowej Radzie Sądownictwa (Law on the National Council of the Judiciary) of 12 May 2011 (Dz. U. No 126 of 2011, item 714; ‘the Law of 12 May 2011 on the KRS’) provided:

The Law of 12 May 2011 on the KRS was amended, inter alia, by the ustawa o zmianie ustawy o Krajowej Radzie Sądownictwa oraz niektórych innych ustaw (Law amending the Law on the National Council of the Judiciary and certain other laws) of 8 December 2017 (Dz. U. of 2018, item 3) and by the ustawa o zmianie ustawy – Prawo o ustroju sád ó w powszechnych oraz niektórych innych ustaw (Law amending the Law on the organisation of the ordinary courts and certain other laws) of 20 July 2018 (Dz. U. of 2018, item 1443) (‘the Law on the KRS’).

Article 9a of the Law on the KRS states:

‘1. The [Lower Chamber of the Polish Parliament] shall elect, from among the judges of the [Sąd Najwyższy (Supreme Court)] and of the ordinary, administrative and military courts, 15 members [of the KRS] for a collective term of four years.

…’

Article 37(1) of that law provides:

‘If several candidates have applied for a single position of judge, [the KRS] shall examine and evaluate all the applications lodged together. In that case, [the KRS] shall adopt a resolution including its decisions for the purposes of putting forward one proposal for appointment to the position of judge in respect of all candidates.’

Under Article 44 of that law:

‘1. A participant in the procedure may appeal to the [Sąd Najwyższy (Supreme Court)] on the grounds that the [KRS] resolution is unlawful, unless separate provisions provide differently. …

1a. In individual cases concerning appointment to the office of judge at the [Sąd Najwyższy (Supreme Court)], an appeal may be lodged with the [Naczelny Sąd Administracyjny (Supreme Administrative Court)]. In those cases, it is not possible to lodge an appeal with the [Sąd Najwyższy (Supreme Court)]. An appeal before the [Naczelny Sąd Administracyjny (Supreme Administrative Court)] may not be based on an allegation that there was an incorrect assessment of the candidates’ fulfilment of the criteria taken into account when making a decision on the presentation of a proposal for appointment to the position of judge at the [Sąd Najwyższy (Supreme Court)].

1b. Unless all the participants in the procedure have challenged the resolution referred to in Article 37(1) in individual cases concerning appointment to the office of judge at the [Sąd Najwyższy (Supreme Court)], that resolution becomes final in the part comprising the decision to present the proposal for appointment to the position of judge at the [Sąd Najwyższy (Supreme Court)] and in the part comprising the decision not to present the proposal for appointment to the position of judge at that court for participants in the procedure who did not lodge an appeal.

…

The Law on the Civil Code

Article 3851(1) of the ustawa – Kodeks cywilny (Law on the Civil Code) of 23 April 1964 (Dz. U. of 1964, No 16), in its version applicable to the dispute in the main proceedings, provides:

‘The terms of a contract concluded with a consumer which have not been individually negotiated shall not be binding on the consumer if his rights and obligations are set forth in a way that is contrary to good practice and grossly infringes his interests (unlawful terms). This provision shall not apply to terms setting out the principal obligations of the parties, including price or remuneration, so long as they are worded clearly.’

The Code of Civil Procedure

Under Article 367 of the ustawa – Kodeks postępowania cywilnego (Law on the Code of Civil Procedure) of 17 November 1964, in its version applicable to the dispute in the main proceedings (‘the Code of Civil Procedure’):

‘1. Appeals against the judgment of a court of first instance may be brought before a court of second instance.

Article 379 of that code provides:

‘Proceedings shall be invalid:

…

(4) if the composition of the court of trial does not comply with statutory provisions or if the case was heard in the presence of a judge subject to exclusion by operation of law …’

Article 3983 of that code states:

‘1. A party may base an appeal in cassation on the following grounds:

…

(2) breach of procedural provisions where that defect may have had a real impact on the outcome of the dispute.’

Under Article 39813(1) of the Code of Civil Procedure, ‘the [Sąd Najwyższy (Supreme Court)] shall examine the appeal in cassation within the scope of the form of order sought and the grounds of appeal; however, within the scope of the form of order sought, it shall take into consideration of its own motion the invalidity of the proceedings.’

In accordance with Article 39815 of that code:

‘1. If it upholds the appeal in cassation, the [Sąd Najwyższy (Supreme Court)] shall annul the judgment under appeal in its entirety or in part and shall refer the case back to the court that delivered the judgment or another court at the same level for further examination. …

Article 401 of the Code of Civil Procedure states:

‘It is possible to request the reopening of the procedure for invalidity:

(1) where the court formation included an unauthorised person or where a judge subject to exclusion by operation of law gave judgment and the party was unable to rely on the exclusion before the judgment became final.

…’

The dispute in the main proceedings and the questions referred for a preliminary ruling

By request of 28 February 2017, brought on 3 March 2017 before the Sąd Okręgowy w Świdnicy (Regional Court, Świdnica, Poland), BN, DM and EN claimed that Getin Noble Bank should be ordered to pay them jointly and severally the sum of 175 107.10 zlotys (PLN) (approximately EUR 39485), together with statutory default interests, relying on the unfair nature of the loan indexation mechanism contained in a mortgage loan agreement indexed to a foreign currency, namely the Swiss franc (CHF), and that of the package insurance clause in the event of a refusal to establish a mortgage during the first three months of the loan.

By judgment of 21 August 2018, that court ordered Getin Noble Bank to pay the applicants in the main proceedings a total of PLN 16 120.12 (approximately EUR 3634), together with statutory default interests, and found that the contractual terms of the loan agreement at issue in the main proceedings which allowed that bank to determine the exchange rate of the Swiss franc in an arbitrary manner, rather than take account of the average rate determined by the Narodowy Bank Polski (National Bank of Poland) were unlawful, without, however, invalidating the indexation mechanism in its entirety.

The applicants in the main proceedings brought an appeal against that judgment before the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław, Poland). By judgment of 28 February 2019, that court confirmed the said judgment.

The applicants in the main proceedings brought an appeal in cassation against that judgment before the referring court, the Sąd Najwyższy (Supreme Court), by which they claimed, in essence, that the said judgment infringes Article 3851 of the Law on the Civil Code, in its version applicable to the dispute in the main proceedings, in that it does not recognise that the unfairness of the indexation clause contained in the agreement at issue in the main proceedings renders the entire indexation mechanism contained in that agreement inapplicable between the parties.

As part of the examination of admissibility of that appeal, the referring court, composed of one judge of the Civil Chamber of the Sąd Najwyższy (Supreme Court, Poland), notes that, pursuant to Article 7(1) and (2) of Directive 93/13, Member States must provide for the possibility of bringing proceedings, whether administrative or judicial, to determine whether contractual terms are unfair and that Polish law provides that such an action is judicial in nature. Consequently, the referring court is of the view that the national body which examines the unfairness of contractual terms must satisfy all the conditions to be considered to be a ‘court or tribunal’ within the meaning of EU law.

In that regard, the referring court notes that the panel of judges of the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław) who delivered the judgment of 28 Feburary 2019 which is under appeal before the referring court (‘the judgment under appeal’) included three judges, namely FO, GP and HK, whose independence could be called in question, given circumstances surrounding their appointments as judges.

The referring court explains, first of all, that FO’s initial appointment to the position of judge resulted from a resolution of 9 March 1978 of the Council of State of the Polish People’s Republic, then that judge was appointed to the position of judge in a Sąd Wojewódzki (regional court, Poland) by resolution of 18 April 1984 of the Council of State of the People’s Republic of Poland, and finally he was appointed to the position of judge at the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław) by decision of the President of the Republic of Poland of 23 January 1998, adopted on a proposal of the KRS. As regards GP and HK, they were appointed to the position of judge at the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław) by decisions of the President of the Republic of Poland of 12 March 2015 and 16 April 2012 respectively.

The referring court notes that FO was thus appointed to his first position of judge at a time when the Polish People’s Republic (‘the PPR’) was a communist State and considers that his subsequent appointment to the position of judge at the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław) resulted from an earlier decision of bodies that were neither democratic nor impartial. In addition, after the PPR communist regime ended, no review was carried out with regard to whether, for the period during which that regime was in place, the judges appointed by that same regime complied with the principle of judicial independence.

The referring court also states that in 1998, when FO was appointed to the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław), not only did the resolutions of the KRS not have to be substantiated but, in addition, they were not open to challenge before the courts.

Moreover, the referring court notes that the Trybunał Konstytucyjny (Constitutional Court), in a judgment of 20 June 2017, found that between 2000 and 2018 the KRS did not operate transparently and that the composition of its panels was contrary to the Constitution. According to the referring court, it is at that time that GP and HK were appointed to the office of judge at the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław).

In that context, the referring court asks whether, in order to guarantee compliance with the right to effective judicial protection, it is obliged to assess ex officio whether the panel of judges of the Sąd Apelacyjny we Wrocławiu (Court of Appeal, Wrocław) who delivered the judgment under appeal complies with the requirement of independence and impartiality, despite the constitutional provisions guaranteeing the irremovability of judges.

According to the referring court, factual and legal factors in connection with the appointment of a judge should be subject, at each stage of the court proceedings, to examination in order to establish the independence of the court formation to which that judge is attached. Compliance with the requirements of independence and impartiality should thus be assessed in concreto, that is to say by taking account of the possible impact on the case under examination of the way in which judges were appointed.

The referring court argues that if the question whether a court or tribunal is independent or whether a judge was appointed properly were to be assessed in abstracto, namely without examining whether the process for appointing the judge concerned had any impact on the case under examination, this could create the possibility of circumventing the rules on the irremovability of judges, which, generally, are laid down in constitutional provisions. In that regard, the referring court points out that it is in principle impossible in the light of the Constitution and Polish constitutional case-law to challenge a judicial appointment.

Thus, according to the referring court, only an examination in concreto of the ‘individual characteristics’ of a judge, such as his or her position ethically, in the context of the assessment of that judge’s independence, would safeguard the confidence of individuals in judicial institutions.

However, the referring court takes the view that, in the light of the judgment of 19 November 2019, A.K. and Others (Independence of the Disciplinary Chamber of the Supreme Court) (C‑585/18, C‑624/18 and C‑625/18, EU:C:2019:982), the questions whether a court or tribunal is independent and whether a judge was appointed properly can be assessed only in abstracto.