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Swiss franc debtors (Pol. "Frankowicze")

Updated: Nov 26, 2021

After the CJEU judgment of 3 October 2019 in case C-260/18 (the so-called "Mr. and Mrs. Dziubak case" - the problem of loans indexed and denominated in CHF), both customers in Poland and bankers are still waiting for the resolution of the Supreme Court (III CZP 11/21). It will answer six key questions related to the settlement of these agreements.

In the CJEU's judgment of 3 October 2019 in Case C-260/18, the Court indicated, among other things, that:

  1. Article 6(1) of Council Directive 93/13/EEC does not preclude a national court from finding, once it has established the unfair nature of certain terms in a contract for credit indexed to a foreign currency, that that contract cannot continue to operate without those terms on the ground that their removal would alter the nature of the main subject-matter of the contract.

  2. The above mentioned provision precludes the filling of gaps in the contract caused by the removal of unfair terms from it solely on the basis of national provisions of general application.

  3. The above mentioned provision precludes the maintenance of unfair terms in a contract if their elimination would lead to the cancellation of that contract, and the court takes the view that such cancellation would have adverse consequences for the consumer if the latter did not consent to such maintenance.

On 7 May 2021 the Supreme Court adopted a resolution on limitation of claims of parties to an invalid credit agreement (III CZP 6/21) which reads:

"(1) An illicit contractual provision (Article 3851 § 1 of the Civil Code) is from the outset, by operation of law, rendered ineffective in favour of the consumer, who may give his subsequent informed and free consent to the provision and thus restore its retroactive effectiveness.

(2) If, without an ineffective provision, a credit agreement cannot be binding, the consumer and the creditor shall have separate claims for the return of pecuniary performances made in performance of that agreement (Article 410 § 1 in conjunction with Article 405 of the Civil Code). The creditor may demand the return of the performance from the moment the credit agreement has become permanently ineffective.

(3) Gives the resolution the force of legal principle.".

The resolution of the entire composition of the Civil Chamber of the Supreme Court (the publication of which has already been postponed three times) will be very important. The Supreme Court will answer the following 6 questions:

  1. If it is held that a term in an index-linked or denominated credit agreement which relates to the manner in which the rate of exchange of the foreign currency is to be determined constitutes an illicit contractual term and is not binding on the consumer, may it be assumed that that term is replaced by another manner of determining the rate of exchange of the foreign currency which results from legal or customary rules? If the answer to the above question is in the negative:

  2. In the event that it is not possible to fix a foreign currency exchange rate binding on the parties in a credit agreement indexed to such a currency, may the agreement remain binding on the parties?

  3. If it is not possible to establish a rate of exchange binding on the parties in a credit agreement denominated in a foreign currency, can the agreement be binding on the parties for the rest? Regardless of the content of the answers to questions 1-3:

  4. Where a credit agreement is invalid or ineffective, in the performance of which the bank has disbursed to the borrower all or part of the amount of the credit and the borrower has made repayments on the credit, do separate claims for wrongful performance arise in favour of each of the parties, or does a single claim, equal to the difference in performance, arise in favour of the party whose total performance was higher?

  5. If the credit agreement is invalid or ineffective as a result of the unlawful nature of certain of its provisions, does the limitation period for the bank's claim for repayment of the sums paid under the credit begin to run from the time at which those sums were paid?

  6. If a credit agreement is invalid or ineffective, is either party entitled to a claim for repayment of the consideration given in performance of such agreement, may that party also claim consideration for the use of its money by the other party?

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