Here’s the translation to American English:
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The Court of First Instance No. 101 bis in Madrid has issued a favorable ruling for consumers, following a lawsuit filed by Arriaga Asociados, declaring the IRPH clause present in a mortgage loan null and void. The judge determined that this clause should be replaced by the Euribor, as its inclusion lacked the necessary transparency and caused significant harm to the consumer. Additionally, the court ordered the reimbursement of any excess charges collected.
The court highlighted that the banking entity did not provide sufficient information about the characteristics of the IRPH, its calculation formula, and its economic implications. In particular, the ruling emphasizes the lack of explanations regarding how the IRPH compares to other indexes, such as the Euribor, as well as the failure to mention the negative differential noted in the Bank of Spain’s Circular 5/1994. According to the judge, the mere inclusion of the definition of the IRPH in the contract or its publication in the Official State Bulletin cannot be considered a guarantee that the customer was adequately informed.
The ruling underscores that the lack of transparency in the clause has led to its classification as abusive, resulting in a significant imbalance between the rights and obligations of the parties. The judge criticized the bank’s behavior, stating that it did not act in good faith and that its actions harmed the consumer. Consequently, the mortgage loan will be referenced to the Euribor, and the customer will be able to recover the amounts paid in excess.
Furthermore, the ruling aligns with the doctrine of the Court of Justice of the European Union (CJEU), which establishes that once the clause is declared null and void, the consumer must be consulted on whether they prefer a complete annulment of the contract or the substitution of the IRPH with another index. The judge acknowledged having adjusted his criteria following the recent CJEU rulings issued in July 2023 and December 2024.
From Arriaga Asociados, there is confidence that the Supreme Court will maintain this line of jurisprudence in its upcoming decision regarding the IRPH, anticipated in the coming weeks. This case highlights the importance of transparency and clarity in financial contracts, in line with the protection of consumer rights.
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Source: MiMub in Spanish
