The resolution expected by all "Frankovichs" by the entire composition of the Supreme Court's Civil Chamber on the resolution of legal issues related to loans indexed and denominated with the Swiss franc (CHF) will be taken on April 13, 2021.
The meeting of the entire panel was originally scheduled for March 25, 2021, however, due to the hospital stay of the first president of the Supreme Court, Prof. Margaret Manowska, who was to conduct the meeting, the date was postponed.
Discrepancies in case law
The resolution, which is to be adopted by the entire composition of the Civil Chamber of the Supreme Court, is important insofar as it aims to unify the very many divergences in the interpretation of legal provisions occurring in the case law of the Supreme Court and common courts. This is because it is not uncommon for situations to arise in which judgments issued by common courts or the Supreme Court stand in opposition to the well-established line of case law of the Court of Justice of the European Union. A very significant problem is also the fact that both the Supreme Court and the common courts take positions in individual cases that are simply contradictory to each other.
Issues relevant to the "franking"
Accordingly, Malgorzata Manowska, First President of the Supreme Court, referred 6 questions to the full Civil Chamber:
(1) If a provision of an indexed or denominated loan agreement relating to the method of determining the foreign currency exchange rate is deemed to be an illegal contractual provision and not binding on the consumer, is it possible to assume that another method of determining the foreign currency exchange rate resulting from law or custom takes its place?
(2) If it is impossible to establish a foreign currency exchange rate that is binding on the parties in a loan agreement indexed to such a currency, can the agreement bind the parties for the rest?
(3) If it is impossible to establish a foreign currency exchange rate that is binding on the parties in a foreign currency denominated loan agreement, can the agreement bind the parties for the rest?
(4) If a loan agreement, in the performance of which the bank disbursed all or part of the loan amount to the borrower and the borrower made loan repayments, is invalid or ineffective, do separate claims for undue consideration arise in favor of each party, or does only one claim arise, equal to the difference of the benefits rendered, in favor of the party whose total consideration was higher?
(5) If a loan agreement is invalid or ineffective due to the illegal nature of some of its provisions, does the statute of limitations on the bank's claim for reimbursement of amounts paid on account of the loan begin to run from the time of their disbursement?
(6) If a credit agreement is invalid or ineffective, if either party has a claim for reimbursement of the performance of such agreement, may that party also claim remuneration for the use of its funds by the other party?
Problematic questions asked
The scope of the request for a resolution includes key issues related to the existing discrepancies in the case law of the Supreme Court and common courts.
Question No. 1
In general, the question relates to the already obvious issue of supplementing a credit agreement - an issue that has already been addressed and decided by the CJEU on many occasions.
As a rule, gaps left by prohibited contractual provisions cannot be supplemented. The Court allows such a possibility only when the lack of supplementation leads to the invalidity of the contract, which, according to the consumer, would be detrimental to him. Then the contract can be supplemented, but only by a dispositive provision. For this reason, the Supreme Court is likely to refuse to answer this question and point out that the CJEU has already decided this issue.
Question No. 2 and No. 3
Questions No. 2 and No. 3 are very important and crucial because of the divergence in case law regarding the validity of an indexed and denominated loan agreement. This is because the Supreme Court will answer the question of whether the contract can be "unfranked" or whether it must be invalidated. To date, the verdicts issued by the courts have been extremely different.
Question No. 4
The fourth question relates to the theory of the balance and the two conditions, that is, the issue related to the settlement of mutual benefits of the parties to the loan agreement.
Question No. 5
The fifth question concerns the issue of the statute of limitations on claims. Part of the jurisprudence takes the position that the limitation period runs from the moment of judgment. On the other hand, most professional attorneys representing franking clients in franking cases before the courts believe that the period begins to run from the moment of fulfillment, i.e. payment.
Question No. 6
The sixth question concerns the issue related to remuneration for the use of the capital provided to borrowers by the bank. The answer to this question is very important for the franking community, because it will settle the dispute related to the possibility of banks demanding remuneration for the use of funds provided to the borrowers-franchisees under the loan.
If you have any questions on matters related to franking credits, please feel free to contact us by email at kontakt@kancelaria-pozniak.pl or by calling +48 665 246 969.