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The Supreme Court canceled the hearing on the settlement of invalid Swiss franc contracts

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Wednesday’s meeting of a wider panel of the Civil Chamber of the Supreme Court, regarding the settlement of invalid Swiss franc contracts, has been canceled – the Supreme Court announced on Tuesday. The reason for the appeal is that the bank filing the case initiated the “independence test” against all judges on the bench.

It was originally planned that the legal issue relating to the effects of the invalidity of Swiss franc loan agreements and the method of calculating the amounts due to be returned to borrowers would be heard by the Supreme Court on Wednesday at 13. The meeting met with great interest, the Supreme Court introduced tickets for journalists and the public. On Tuesday, however, it was reported on the Supreme Court’s website that the public hearing scheduled for December 6 in order to resolve the legal issue regarding the effects of determining the invalidity of the so-called contracts Swiss franc loans have been canceled. “The reason for the cancellation of the meeting is that the defendant bank submitted, two days before the meeting, motions questioning the impartiality and independence of all seven judges adjudicating in the case (Article 29, paragraph 5 of the Act on the Supreme Court),” it was reported. As the Supreme Court noted in its Tuesday statement, “the need to resolve these applications makes it impossible to answer the legal question.”

Swiss franc loans and the regulations on the Supreme Court

The legal issue to be dealt with by the Supreme Court was formulated in July 2021 by a panel of three Supreme Court judges, chaired by Teresa Bielska-Sobkowicz, in connection with the consideration of one of the cassation appeals in matters relating to mutual settlements between borrowers and the bank. The question was submitted to an extended panel of seven judges headed by the president of the Civil Chamber, Joanna Misztal-Konecka. The case’s rapporteur was to be Judge Jacek Grela, and the panel, apart from the president of the Civil Chamber of the Supreme Court, included: Maciej Kowalski, Marcin Krajewski, Mariusz Łodko, Marcin Łochowski and Beata Janiszewska. Each of the seven judges appointed to this issue was selected for the Supreme Court in a procedure before the National Council of the Judiciary, which was developed after changes in the method of selecting its composition in 2018. Meanwhile, last summer an amendment to the Act on the Supreme Court entered into force, according to which, among others, the Disciplinary Chamber ceased to exist, and in its place the Chamber of Professional Responsibility of the Supreme Court was established. That amendment also included a provision on the so-called test of independence and impartiality of a judge. It states that “it is permissible to examine the fulfillment of the requirements of independence and impartiality by a Supreme Court judge, taking into account the circumstances surrounding his appointment and his conduct after his appointment (…) if, in the circumstances of a given case, this may lead to a violation of the standard of independence or impartiality, affecting on the outcome of the case, taking into account the circumstances relating to the entitled person and the nature of the case. Pursuant to the Act, such an application is examined within two weeks from the date of its receipt, at a closed session by five judges of the Supreme Court selected by lot, and its examination is preceded by a hearing from the judge. “The authorized applicant and the judge to whom the application relates may file an appeal against the issued decision within one week from the date of delivery of the issued decision. The appeal proceedings are conducted in the same manner as above, except that they are heard by a seven-person panel,” he informed last year. year of the Supreme Court. The last amendment to the Act on the Supreme Court – from January this year – extended this “test”, among others. supplemented the possibility of examining the requirements of independence and impartiality with the premise of establishing a court “on the basis of a statute”. At the same time, the requirement of “impact on the outcome” of a given case was deleted from the provision on this test. This latest amendment was made by the president Andrzej Duda – before signing – however, he submitted a complaint to the Constitutional Tribunal, inter alia, revised “test” provision. The Constitutional Tribunal hearing in this case is currently scheduled for December 11.

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Swiss franc loans. The problem of refunding overpaid installments

Meanwhile, the legal issue to be dealt with by the Civil Chamber of the Supreme Court on Wednesday concerns the essence of settlements between the bank and the borrower after the contract was invalidated due to abusive clauses. The question formulated was a direct consequence of previous resolutions of the Supreme Court adopted in February and May 2021. Then the Supreme Court decided that in the event of invalidation of a foreign currency loan agreement, the so-called two-condition rule. This principle means that each claim – both of the borrower and the bank – for the issuance of enrichment should be treated separately and independently of the other. Therefore, if – as recalled in the justification for the question asked – “after concluding the contract, each party provided performance to the other party, then if the contract is deemed invalid, each of them has its own claim for the return of the performance provided.” In the practice of such settlement, a problem occurred with regard to the refund of overpayment of installments in the event of invalidation of the indexation clauses contained in the contract, according to which these installments were calculated. This includes: whether, in connection with the recalculation in such situations, the interest rate on the agreed installments should be based on the LIBOR rate or the WIBOR rate.

Main photo source: TVN24

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