High Commercial Court Confirms Nullity of Swiss Franc Currency Clause

The High Commercial Court rejected the appeals of the defendant banks as unfounded and confirmed the ruling of the Commercial Court regarding the nullity of the currency clause in the case of loans in Swiss francs that banks provided from 2004 to the end of 2008.

The ruling, spanning approximately 70 pages, was published on Wednesday on the website of the High Commercial Court of the Republic of Croatia, which dismissed the banks’ appeals against the ruling of the Commercial Court in Zagreb. That court ruled in July 2013 in favor of the Alliance of Consumer Protection Associations “Potrošač,” which sued eight banks due to loans in “Swiss francs” – Zagrebačka, Privredna, Erste and Steiermarkische banks, Raiffeisenbank Austria, Addiko bank (formerly Hypo Alpe-Adria-Bank), OTP bank of Croatia, Splitska (formerly Societe Generale – Splitska banka), and Sberbank (formerly Volksbank).

>>> Aleksić: Banks could return 10 billion kuna to debtors in the ‘Swiss franc’ case

The High Commercial Court rejected the banks’ appeals as unfounded and confirmed the ruling of the Commercial Court in Zagreb that the defendant banks violated collective interests and consumer rights, i.e., the rights of loan users by using “null and unfair contractual provisions in contracts” when they contracted the Swiss franc as the currency linked to the principal, without fully informing consumers about all necessary parameters essential for making an informed decision before concluding the contract. This resulted in “an imbalance in the rights and obligations of the contracting parties,” states the court decision.

The decision notes that the defendants acted contrary to the provisions of the then-applicable Consumer Protection Act, and from August 7, 2007, to December 31, 2008, contrary to the provisions of the then-applicable Consumer Protection Act and the Obligations Act.

The decision of the High Commercial Court was made by a panel chaired by Judge Jagoda Crnokrak, reporting judge Marina Veljak, and council member Branka Šabarić Zovko. The court panel amended part of the rulings of the Commercial Court in Zagreb from July 4, 2013, and ruled that “each party bears its own costs.” The decision specifies the period for each bank during which it contracted such loans contrary to the aforementioned laws, covering the years from 2004 to the end of 2008.

>>> Possible new ‘franc case’, but for legal entities

Representatives of the Strength party Goran Aleksić and Change Croatia Ivan Lovrinović, along with lawyer Nicole Kwiatkowski, stated at a press conference in the Parliament on Wednesday, marking the fifth anniversary of the ruling that declared the Swiss franc currency clause unfair and null, that debtors would be compensated with a total of 10 billion kuna.

They reminded that Judge Radovan Dobronić ruled on July 4, 2013, that all eight defendant banks had contracted an unfair and therefore null contractual provision regarding the CHF currency clause and an unfair and therefore null contractual provision regarding the change of interest rates at the bank’s discretion in all consumer loan agreements contracted between September 10, 2003, and December 31, 2008.