A Court in Barcelona has stated that abusive contract terms conditions may only be invoked on clauses that are subject to foreclosure proceedings, and not with regard to any clause agreed in the mortgage agreement.
It is becoming increasingly common that opposition to foreclosure proceedings is made against all the clauses of a contract, whether those are subject to enforcement or not. The decision of the Court was that an abusive contract terms allegation may only be invoked in those clauses which are subject to enforcement, and not in any of the remaining clauses established in the mortgage agreement.
The judgment dated 15 January 2014 was issued by the Court of First Instance No. 20 in Barcelona. It partially allows the opposition to the foreclosure proceedings and declares null and void the mortgage clause that sets a default interest of 19%.
The judgment considered the scope of the exceptional opposition procedure in the foreclosure proceedings to finally decide that the only abusive contract terms to be analyzed shall be those included in clauses subject to the relevant foreclosure procedure. The narrow framework of the foreclosure opposition does not allow a party to invoke the abusiveness of any agreed mortgage clause, otherwise the principle of legal certainty and the right to effective judicial protection would be violated. In the event of the existence of any other abusive clause or where enforcement is requested, the relevant court would conduct public control.
Moreover, the procedural law allows the defendant to file ordinary proceedings to request the annulment of the clauses that it deems fit. Any party that may be considered aggrieved is entitled to apply for an injunction, intended to prevent the damage that may cause the application of the clause.
The clause that the Court deemed abusive sets a default interest of 19%, which was considered disproportionate compared with other kinds of interests set out in both the Spanish legal system and the legal rate of interest on money existing at the time that the agreement was entered. The judgment, following a doctrine that is increasingly being consolidated, states that the transitional second provision included in the Act 1/2013 (that allows recalculating the penalty interest that are abusive) shall not be applied. This calculation would be contrary to the prohibition of integration of unfair terms set by the EU law.
However, following another line of decisions quietly making headway, the judgment considers that the only penalty interest that may be applied is that set out in Section 1108 of the Civil Code, which applies to all obligations to deliver capital where no interest is agreed. This is the same as the case before the Court, since the agreed penalty interest is voided.
However, in contrast, a recent judgment has established that it is not possible to apply Section 1108 of the Civil Code if it is not specifically requested by the claimant at an early stage of the foreclosure proceedings.
In any case, this Court judgment exemplifies the possibility of objection of the opposition with regards to the invalidity of the clauses.