FRANC-LY SPEAKING

Even though courts have recently ruled on cancellation of credit agreements indexed and denominated in CHF in the majority of cases, there is still no unequivocal answer to a number of questions, among others, establishing the rate of exchange or a way to make mutual settlements between parties relating in particular to compensation for the use of the capital. In view of uncertainty and the need to consolidate the adjudication, the first president of SN has decided that the full Civil Law Division of the Court should answer those questions.

It is necessary to establish how to determine the exchange rate:

•If clauses in the agreement are considered abusive and do not bind the consumer, can the agreement still bind both parties in other respects?

•If it is impossible to determine the exchange rate, is there any possibility of deduction of mutual claims already at the time of adjudication about the invalidity of the agreement?

•When the limitation period of claims raised by parties for repayments of amounts paid n loan begins — in the case of invalidation of the agreement or proving to be ineffective — can a party demand compensation for the use of the capital by the other party, in case there are claims for repayment of the compensation paid in the implementation of the invalid or ineffective agreement?

The date, when the decision was to be taken by the Civil Law Division of SN, has been postponed three times. Ultimately, the decision was to be taken on May 11, however, on that day the Civil Law Division decided to request the opinion of the ombudsman, financial advocate, Polish National Bank, the Polish Financial Supervision Authority and the ombudsman for children before they take a substantive position on this. The last authority is surprising, whilst the president of the Office of Competition and Consumer Protection is missing and he seems to be the most competent to speak about abusive clauses.

Another decision on indefinite postponing of the issue of resolution stirred disappointment and grief am ng borrowers. Admittedly, the top court issued a resolution of seven judges of the Civil Law Division on May 7 regarding III CZP 6/21. The resolution has the force of the legal principle, however, it does not raise all the matters of interest for borrowers and banks.

SN pointed out that since the beginning, abusive clauses (article 385(1)§1 Civil Code) have been ineffective to the benefit of the consumer, who can later consciously agree to this clause and restore its effectiveness retroactively in this way. Furthermore, they indicated that if the credit agreement without an abusive clause can’t bind, both a consumer and a creditor are entitled to separate claims for repayment of the compensation paid in the implementation of the agreement (article 410 §1 in regard to article 405 Civil Code). The creditor can reclaim the payment from the moment the credit agreement became permanently ineffective.

In other words, in the case of cancellation of Credit Agreement, the borrower should pay back the capital provided to the bank and the bank should return all paid installments to the borrower. If the balance is to the disadvantage of the borrower, he/she will be obliged to pay back the missing capital to the bank.

It follows from the above that claims of both parties are clearly separate, which means they do not automatically cross-compensate and the consumer may request the reimbursement of all paid installments of the credit, regardless of being or not a bank’s debtor on account of the unduly paid amount of the credit. Borrowers will certainly benefit from this solution.

Much less favorable for borrowers are arrangements concerning the date, from which the period of limitation shall be counted. The top court decided that an abusive clause does not bind from the very start. Only the consumer’s consent can fix the clause and bring back its effectiveness if it is free and conscious. At that time, the consumer restores its effectiveness retroactively. As a result, SN considered that the period of limitation runs from the date when the credit’s agreement became permanently ineffective (it can be, for example, the agreement’s annulment by Court or consumer’s decision to refuse to fix the abusive clause and agree to the cancellation of the agreement). In other words, the limitation period for a bank’s claims starts when the agreement becomes definitely ineffective, not from the moment when the ineffective agreement was signed.

Such a ruling opens the way for banks to sue borrowers for the return of the paid-out credit. This ruling has some bright sides for borrowers too. Borrowers’ claims for the reimbursement of paid installments are also due from the moment when the agreement was consciously questioned. To date, in principle, borrowers have been asserting their claims, that go back 10 years, recognizing claims for installments paid earlier as expired. It seems that in the light of the abovementioned resolution, borrowers can recover paid installments for the entire credit period.

It is still unresolved if parties are entitled to compensation for the use of means of the other party. It is an important question, especially for banks, which often assert their claims for the compensation for the use of capital, after the credit agreements’ cancellation. It seems that the resolution of the Civil Law Division of SN should clearly solve this case. It will also let borrowers assess the financial aspects of settlements with banks.

Keeping in mind the line of jurisprudence so far, the recent stance of the top court and TSUE (among others, TSUE took a stand, beneficial for borrowers, in its judgment of April 29, where TSUE referred to an issue of concluding annexes to the agreements, stating that unfair contractual conditions, concluded at the date of signature, can’t be repealed by annex if the consumer has not been informed about the actual purpose and effect of the annex conclusion unless a conscious consumer resigned from such restoration by changing the unfair condition), it should be considered that borrowers are now in a much better legal situation than even a few years ago when courts often recognized the position of banks and even when borrowers won, it was usually a change of credit’s currency. Cancellation of the agreement was kind of rare. Now, this trend has reversed. Undoubtedly, it is also beneficial that the full Civil Law Division of SN finally handled this case (even though we still have to wait for the resolution), because for both parties the legal certainty and establishing a line of jurisprudence should be crucial, especially for borrowers — consumers — to be able to assess the risk connected with directing the case to court and a potential win.

Referring to the current situation of banks, with a view to the recent jurisprudence, it seems that after the resolution of the top court from May 7, a huge burden has been lifted from banks, as the worst scenario will not come true. Banks, despite losing a case brought by a borrower to cancel the agreement, still can assert their claims in court, because their claim will not be expired.

It is unknown when the Civil Law Division of SN is going to issue the resolution, which will draw a final and clear trend in CHF credit cases. It should be noted that indefinite postponing the issue of resolution does not stop borrowers from asserting their claims in court. Consumers know the stance of the Court and TSUE, which permits a beneficial (for consumers) interpretation of provisions and can result in winning a lawsuit. 

Katarzyna Ulma-Raszkowska

Katarzyna Ulma-Raszkowska

Family Business Initiative Association (IFR) is a Warsaw-based alliance that groups entrepreneurs who own family businesses, as well as experts and scientists who support this community. 

Katarzyna Ulma-Raszkowska is an IFR expert, CHF advisor in the law firm Grabowski & Partners (GWLAW).