Upstract Image1

Related Practice Areas

Related Practice Areas

Upstract Image2

Related Industry Sectors

Related Industry Sectors


The legislation was prompted by a decision of the Court of Justice of the European Union (CJEU), which allows the district courts to examine cases of unfair terms in their own initiative. This ruling was issued following requests by EU Member States for an interpretation of the EU Directive 93/13 and whether national procedural principles may limit the powers of the national courts when assessing contractual terms which can potentially be unfair.[1] More specifically, the issue that was examined was the following: are principles of national law that do not allow the assessment at the enforcement stage, including the enforcing court of its own motion, because of the existence of prior national judicial decisions, compatible with Directive 93/13?

As it stands today, Cyprus law does not oblige the judiciary to proceed with the mandatory examination of unfair clauses ex officio, and that applies to banking litigation too. In a typical Borrower/Lender scenario, traditionally the Defence submits arguments before the Court in support of abusive/ unfair contract terms against the Bank in an attempt to protect the borrower’s position by suggesting that the Bank engaged in unfair practices and exploited their dominant position. The introduction of the new Bill for Consumer Protection will oblige national courts to examine on their own initiative the potential unfairness of contractual terms. Arguably, this will offer greater protection to the borrowers and will change the dynamics in the cases that are being currently litigated in Court.

Other Countries: In Ireland, the Consumer Rights Bill 2022 provides for the court to consider whether a clause in a consumer contract is unfair. Meanwhile, in Austria, Belgium, Bulgaria, Bulgaria, Croatia, France, Germany, Greece, Ireland, Ireland, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia, Spain, Sweden, Poland, Portugal, Romania, and Slovakia, national courts examine the potentially unfair nature of a clause in a consumer contract on their own initiative, either under national procedural rules or on the basis of established case law.

In Croatia, at a meeting of the Presidents of the Civil Divisions of the District Courts and the Civil Division of the Supreme Court, it was decided that national courts have the power and obligation to examine ex officio the potentially unfair nature of clauses in consumer contracts. In Hungary, the Code of Civil Procedure does not provide for ex officio examination of unfair contract terms, but in the case of a consumer contract, ex officio examination is applicable. In Slovenia, national courts do not examine ex officio the unfairness of a term falling within the scope of Directive 93/13.

We shall expect to see what direction will Cyprus follow, and the developments in the case law and observe how the judiciary will respond under such circumstances.


For more information, please visit our microsite on Banking & Finance or send your queries to This email address is being protected from spambots. You need JavaScript enabled to view it.


[1] In the Judgments in Case C-600/19 Ibercaja banco, in Joined Cases C-693/19 SPV Project 1503, C-831/19 Banco di Desio e della Brianza and Others, and in Cases C-725/19 Impuls Leasing România and C-869/19 Unicaja.

Back to News

1 Kinyra Street, 5th floor
1102 Nicosia


115 Faneromenis Avenue,
Antouanettas Building
6031 Larnaca


12 Platonos Street,
3027 Limassol


4 Nicou Nicolaidi & Kinyra,
2nd floor, 8011 Paphos


164A Georgiou Gourounia,
1st floor, 5289 Paralimni

Monday – Thursday

8:00 – 18:00


8:00 – 16:00

TEL: +357 24 201 600

FAX: +357 24 201 601

Privacy Policy