Loans in Swiss francs – ruling of the Civil Chamber of the Supreme Court

On Thursday after 18.00 The Civil Chamber of the Supreme Court adopted a resolution regarding five key problems regarding Swiss franc loans presented in questions from 2021 by the First President of the Supreme Court, Małgorzata Manowska. 18 out of 30 judges of this Chamber listed on the Supreme Court's website participated in the adoption of the resolution.

The resolution of these questions was influenced by the dispute over the judiciary in Poland and the issue of appointing and adjudicating by judges selected by the National Council of the Judiciary, changed in 2018. The majority of the Civil Chamber are judges appointed after 2017. As reported in the media in recent days, nine judges of the Civil Chamber, appointed before 2018, issued a statement in which they assessed that a possible resolution would de facto lead to complications regarding the legal force of such a decision due to – in their opinion – defective composition of this Chamber.

– The Supreme Court in its current composition can only express regret and disappointment that some judges adjudicating in the Civil Chamber refused to participate in the issuance of the resolution – said President Misztal-Konecka.

The President of the Civil Chamber also assessed in her justification that “the social and legal importance of the legal questions raised over three years ago by the First President of the Supreme Court is no less today than in 2021.”

– Although many judgments of the Supreme Court and the Court of Justice of the European Union were issued at that time, it cannot be concluded that the problems related to resolving disputes regarding loans denominated in foreign currencies or indexed in these currencies have lost their relevance – said the president of the Civil Chamber.

The resolution included five points:

1. If it is considered that a provision of an indexed or denominated loan agreement relating to the method of determining the foreign currency exchange rate constitutes an unlawful contractual provision and is not binding, under the applicable legal status it cannot be assumed that this provision is replaced by another method of determining the foreign currency exchange rate resulting from the provisions law or custom.

2. If it is impossible to establish a binding foreign currency exchange rate for the parties in an indexed or denominated loan agreement, the agreement is also not binding in other respects.

3. If, in the performance of a loan agreement that is not binding due to the unlawful nature of its provisions, the bank paid the borrower all or part of the loan amount, and the borrower repaid the loan, independent claims arise for the return of undue benefits to each party.

4. If the loan agreement is not binding due to the unlawful nature of its provisions, the limitation period for the bank's claim for reimbursement of amounts paid under the loan generally starts from the day following the day on which the borrower challenged the bank to be bound by the provisions of the agreement.

5. If the loan agreement is not binding due to the unlawful nature of its provisions, there is no legal basis for either party to demand interest or other remuneration for the use of its funds in the period from the provision of the undue benefit until the delay in the return of this benefit.

“The resolution, in accordance with the statement of 9 judges of the Civil Chamber of the Supreme Court appointed before 2017, was adopted by an unconstitutional composition and does not fulfill its basic systemic function, aimed at unifying the jurisprudence of courts. Therefore, there are serious doubts as to the correctness of the adjudicating composition. Therefore, they arise questions about the force and effectiveness of this Resolution,” the Polish Bank Association said.

“Moreover, it should be noted that as many as 6 judges submitted dissenting opinions, primarily regarding whether the agreement should be maintained in force after eliminating the conversion clauses, which further deepens doubts as to the uniformity of the views expressed in the Resolution,” he added.

According to the Polish Bank Association, the Supreme Court did not assess whether the conversion provisions were abusive and the courts will still have to individually assess the abusive nature of these provisions.

“The Supreme Court ruled out the possibility of replacing abusive provisions contained in a loan agreement relating to the exchange rate of a foreign currency with a provision or norm of common law. Once the abusive provisions (conversion clauses) have been eliminated, the agreement cannot be upheld unless the remaining part of the agreement allows for further its implementation,” the statement said.

ZBP reported that the Supreme Court confirmed the position expressed in the resolution of 7 judges of May 7, 2021 (III CZP 6/21) that in the event of the invalidity of the contract, each party is entitled to a claim for the return of the performance provided by that party (the so-called two-condition theory). .

“The limitation period for claims may begin to run only on the day following the borrower's questioning of the provisions of the contract against the bank. The above is in line with the latest rulings of the CJEU,” the Polish Bank Association reported.

According to the Polish Bank Association, the Supreme Court clearly ruled out the possibility of the borrower demanding remuneration for the use of capital.