The Supreme Court (VS) has formed an Extended Panel that will decide on the right to full compensation for 30,000 plaintiffs with converted loans from Swiss francs to euros. However, it has been confirmed to us by the Croatian Banking Association (HUB) that they will seek the exemption of reporting judge Jadranko Jug, although lawyer Igor Metelko believes that the other side, the affected bank clients, could also find examples of judges to be excluded from the Extended Panel.
The composition of this Extended Panel is known, consisting of thirteen judges: Damir Kontrec, the president of the panel, and Jadranko Jug, the reporting judge (the judge who thoroughly examines the case and prepares it for decision-making), along with council members Darko Milković, Igor Periša, Dražen Jakovina, Josip Turkalj, Mirjana Magud, Ante Perkušić, Renata Šantek, Marina Paulić, Đuro Sessa, Goranka Barać-Ručević, and Neri Radas.
As explained by Metelko, the lawyer representing the affected parties in the ‘Swiss Franc’ case, the selection of judges is regulated by the ‘Rules of Procedure of the Supreme Court, whereby the composition consists of the president of the civil department, then the reporting judge from the case in which the revision was requested and the session of the extended panel, the head of the service for monitoring judicial practice, and the remaining 10 judges who are selected by random selection.’
In HUB, as we mentioned, they believe that the reporting judge should not be Jadranko Jug, arguing that in cases related to loans in Swiss francs, there have long been, they claim, ‘objective circumstances that call into question impartiality and possible conflict of interest, as confirmed by information and analysis from HUB at the level of its members.’
Impact on Outcome
Namely, as they state, it has been established that lawyer Boris Jug, the son of Supreme Court judge Jadranko Jug, represents parties in more than 400 active proceedings against banks related to loans in Swiss francs with a total value of nearly six million euros. HUB estimates that potential legal fees from these proceedings amount to about 1.8 million euros. Furthermore, they remind that judge Jug has participated in deciding a number of cases from the same legal matter, significantly influencing the formation of judicial practice.
– In such circumstances, banks believe that there are professional and financial connections that raise questions of conflict of interest. For this reason, all banks are seeking his exemption in all cases related to CHF loans in which he participates, either as a council member or as a reporting judge. It is crucial to emphasize that the decisions of the Supreme Court, although formally made in individual revision cases, have a broader effect because the task of the Supreme Court is to unify judicial practice. Consequently, such legal understandings can directly affect the outcomes of a large number of proceedings led by lawyer Boris Jug – they state from HUB.
Additionally, they emphasize that another important reason for his exemption is that judge Jug himself was a user of loans in Swiss francs. Due to this fact, HUB believes that objective impartiality in this legal matter should be assessed. They also remind that in an earlier period, while Đuro Sessa presided over the VS, judge Jug was excluded in such cases due to recognized conflict of interest, while the later practice of rejecting such requests raised questions about consistency in the application of exemption rules.
– Given the importance of this topic for the judiciary as a whole, we have recently submitted a series of letters to the VS and the Association of Croatian Judges, pointing out the need for consistent and equal application of exemption rules in such cases, as well as the practice of the Court of Justice of the European Union, according to which it is crucial not only for the court to be impartial but also for there to be no reasonable doubt about its impartiality.
We believe that this issue should not be viewed as personalized nor as a question of just one judge. The principle must be equal for all, and in this context, every judge who finds themselves in a comparable situation, either due to family ties with lawyers involved in ‘CHF cases’ or due to their own direct interest in this legal matter, should be excluded from decision-making. Only consistent and equal application of exemption rules can eliminate any objective doubt about impartiality and ensure trust in the legality and fairness of the proceedings – they state from HUB.
No President of the VS
The spokesperson for the VS, judge Željko Pajalić, states that in this specific case, no exemption of judge Jadranko Jug has been requested so far, nor has he requested his exemption from judge Gordana Jalšovečki, who performs judicial administration duties, which could potentially cast doubt on his impartiality.
– In several other cases regarding proceedings conducted due to so-called converted loans in Swiss francs, parties have requested the exemption of judge Jug, precisely because of the aforementioned circumstances. The decision on the exemption will be made by judge Gordana Jalšovečki, who performs judicial administration duties. As soon as a judge learns that there is any of the mandatory reasons for exemption, they are obliged to cease all work on the case and inform the president of the court, who will appoint a deputy. If the judge believes that there are other circumstances that raise doubts about their impartiality, they will inform the president of the court, who will decide on the exemption – says Pajalić.
He notes that the provisions of Chapter III of the Law on Civil Procedure specify the reasons for which a judge cannot perform judicial duties, and outside of those reasons explicitly prescribed by law, an exemption can also be requested if there are other circumstances that raise doubts about the judge’s impartiality. The president of the VS decides on the exemption, but since he has not yet been elected due to political squabbles between Pantovčak and Banski dvori, it is currently uncertain, if the banks request Jug’s exemption, when a session of the Extended Panel could be scheduled, which should be convened by judge Damir Kontrec, although it can be heard in the corridors that this date could be May 18 of this year.
Lawyer Metelko emphasizes that the Law on Civil Procedure lists exhaustively the reasons for exemption, for example, when the judge is a party in the proceedings themselves, or has decided in earlier phases of that specific case, or is related to one of the parties in the proceedings or their attorney. However, if Jug’s son, the lawyer states, does not represent anyone in the specific case going before the Extended Panel, there are absolutely no grounds for his exemption.
Additionally, Metelko particularly notes that there are judges who are connected, in one way or another, with banks.
– In earlier cases of the Supreme Court where decisions were made regarding converted CHF contracts, where the decisions made were unfavorable for consumers, certain judges who turned out to be related to high-ranking bank employees also participated, yet we did not see that they excluded themselves from decision-making in such cases – emphasizes Metelko.
Position on Conversion by the End of the Year?
In a conversation for the preparation of the text, we could hear that as many as seven judges are allegedly inclined towards the banks, from which, according to some forecasts, it is expected that affected clients will receive compensation, but less than they believe they are entitled to. However, Metelko does not want to prejudge the outcome.
– We will certainly await the decision, whatever it may be, and then it is up to the Constitutional Court, which has at least four constitutional complaints regarding converted CHF contracts on its table. Therefore, we hope that by the end of the year, we will have a known specific position on conversion at all levels – says Metelko.
And the Franak Association has issued a call to the VS to hold the session of the Extended Panel as a public session due to the enormous public interest.
– We request that representatives of the Franak Association be present at that session, of course, only as observers. The plaintiffs in the proceedings are represented by lawyers Ivan Župan and Luka Antunović, who have been collaborating with the Franak Association since 2019, and they will officially request, in accordance with our request, that the session be opened to the public – they state from the Franak Association.
The Association expects a decision from the Extended Panel in accordance with EU law and in accordance with judicial expertise and hopes that the Constitutional Court will not have to annul erroneous decisions of the Supreme Court, as has already been seen in the annulment of the collective decision of the Supreme Court in the case of the franc, and as it is very likely and probable, they believe, that it will annul the current decisions that prevented the determination of the nullity of entire contracts with a null currency and null interest rate.
