In order to settle with the bank, the Swiss Franc credit holder must declare whether they will maintain the contract with unlawful clauses or wish to cancel it.
That is the crux of Friday’s resolution of the seven judges of the Civil Chamber of the Supreme Court responding to a question from the Financial Ombudsman.
The effect of the Supreme Court’s resolution, which has the force of a legal principle, is also that the claims of both parties to loan agreements with defective clauses have essentially not become time-barred. There are claims for reimbursement of the loan amount paid out on the part of the bank and on the part of the consumer – for loan instalments already paid.
TO RESCUE OR NOT TO RESCUE
As the Supreme Court Judge Roman Trzaskowski argued in the substantiation of the resolution, once borrowers learn that a provision in an agreement (usually a franc conversion clause) is abusive, they may agree to remain bound by that agreement with that clause, and this “improvement” thereof will be valid from the beginning of the contract. But they also have the right to refuse to be bound by a defective agreement. Then the agreement becomes definitively invalid (in practice, this happens during the litigation or too long before it) and only then can the bank demand repayment of the capital. Consequently, the three-year statute of limitations for the bank’s claims runs from this point only.
“From the statement that the three-year statute of limitations for the bank’s claims begins to run from the date of the complaint filed by the client, comes the most important consequence of this resolution of the Supreme Court: that, in principle, the amount of the loan will have to be returned even if the agreement is invalid,” says Mariusz Korpalski, PhD, attorney-at-law.
HOW MANY CLAIMS
– The Supreme Court also confirmed its previous ruling rendered by a three-judge panel that each party is entitled to a separate claim for reimbursement of the amounts paid if the contract is invalid, i.e. it opted for the so-called two-condictiones, not the balance theory, consisting in the court’s awarding only the surplus over the other party’s claim. Such a settlement may occur when the other party makes a declaration of set-off of its claims under general principles, but the court will not examine this on its own initiative.
The Supreme Court has explicitly stated that the limitation period for claims begins to run from the moment the consumer has become aware – or should have become aware – of the unlawful nature of the term of the agreement.
“It can, therefore, be concluded that the time limit may start to run, for example, from the adoption of the Supreme Court’s resolution, which means that the cases of loans linked to foreign currency exchange rates are not yet time-barred,” assesses Anna Wolna-Sroka, attorney of Jacek Czabański & Partners law firm.
Let us add that a borrower’s claim for repayment of repaid instalments is time-barred ten years after the payment, and those repaid from mid-2018 after six years.
“The Supreme Court’s exclusion of counting the start of the statute of limitations from the moment of disbursement of the loan, as proposed by some borrowers, and shifting the start of the statute of limitations to the time after the agreement was challenged is far more justified, as supported by elementary fairness,” points out Wojciech Wandzel, attorney-at-law, Kubas Kos Gałkowski. “The purpose of Directive 93/13 and national provisions implemented on its basis is not to grant special benefits to consumers, but to restore contractual balance”.
WAITING FOR THE FULL CHAMBER
The Supreme Court’s vested its resolution of 7 May 2021 with the force of legal principle; thus, the resolution will be binding for other Supreme Court panels and indirectly for other civil courts in Poland. In fact, Judge Trzaskowski noted in the substantiation that the Supreme Court did not strictly adhere to the Financial Ombudsman’s questions and only commented on specific issues arising in Franc disputes. Generally, they should be regulated by the legislator.
On Friday, the Supreme Court did not rule, for example, on the consideration for the use of the bank’s money. This question is among six to be addressed by the Supreme Court’s Civil Chamber next Tuesday at the request of the Supreme Court President Małgorzata Manowska. If the answer is affirmative, it could discourage some Swiss Franc credit holders from claiming invalidity of the agreement. Among the questions posed by the first President of the Supreme Court, one asks whether, in the event of a finding that a clause setting the franc exchange rate is abusive, a civil court can fill the gap – and what with.
The Civil Chamber’s Tuesday session itself, and especially whether it will end with a resolution, is uncertain. It has been rumoured for several weeks that the “old” judges of the Civil Chamber of the Supreme Court, of whom there are eighteen, may not want to sit at the same table with the judges elected under the new rules (there are ten of them), due to a well-known case of questioning of the latter’s competence and continued ostracism within the Supreme Court.
However, Dariusz Zawistowski, President of the Civil Chamber of the Supreme Court, told the Rzeczpospolita daily that judges would probably attend Tuesday’s session because it is their duty, as was the case when the First President of the Supreme Court was elected. However, he made the reservation that it was another matter whether and what legal objections they might raise during the Chamber’s session.
Let us add that the Chamber’s resolution will also have the force of a legal principle. Moreover, it can introduce corrections to Friday’s resolution of the seven judges.
File ref. no.: III CZP 6/21
Edited by: Marek Domagalski
The text was originally published in Rzeczpospolita, 9 May 2021