The EU Court has made two important rulings confirming its position on loan agreements linked to the CHF currency clause, reports the Franak Association. They emphasize that the EU Court’s stance can best be seen through the words of the President of the EU Court, Koen Lenaerts, who stated for the Slovenian Dnevnik last year, I quote: “Banks must not charge an unreasonable exchange rate difference. Consumers have the right to a refund of overpaid amounts.”
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In this spirit, rulings C-119/17 and C-126/17 were made, the first related to a case in Romania, and the second to a case in Hungary. In short, these rulings confirm that the national court, when determining the unfairness of the contracted currency clause, must establish:
– whether the consumer was warned and informed about the risks and all essential information related to the specific contracted currency,
– whether that currency was contracted in good faith, and
– whether such a provision caused subsequent imbalance in rights and obligations to the detriment of the consumer.
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If all of this is established, the national court, according to the EU Court’s decision, can rule that in such a case, due to the unfair contractual provision regarding the currency clause, the entire loan agreement is null and void. This confirms our opinion that it is indeed possible and achievable to demand the nullity of the contract with the CHF currency clause through a lawsuit, due to the unfairly contracted CHF currency clause and additionally due to the unfair contractual provision regarding the variable interest rate, emphasize the Franak Association.
In more detail, by ruling C-119/17, the EU Court determined:
– The provision of the loan agreement that transfers the exchange rate risk to the debtor and which is not drafted in a transparent manner so that the debtor can assess the economic consequences of concluding the contract based on clear and understandable criteria is subject to assessment of unfairness by the national court. In doing so, it must be determined, despite the requirement for good faith, whether such a contractual provision creates a significant imbalance between rights and obligations to the detriment of the consumer. Accordingly, taking into account all circumstances related to possible exchange rate changes and risks inherent in loans denominated in foreign currency, the national court must determine:
- possible non-compliance with the requirement for good faith, and
- the existence of a possible significant imbalance in rights and obligations to the detriment of the consumer.
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By ruling C-126/17, the EU Court determined the following:
– The provision regarding the currency clause must be such that the average consumer who is usually informed and reasonably cautious and informed can assess the validity of precise and understandable criteria, the economic consequences arising from the contract, especially the total cost of his loan. If the national court determines the unlawful nature of the currency clause provision, that court may declare the entire contract invalid if it cannot continue to be valid after the annulment of those provisions.
Both rulings further strengthen our belief that the High Commercial Court will uphold the ruling of Judge Radovan Dobronić in the repeated proceedings. We hope we will not have to wait long for that ruling, states the Franak Association’s statement.
