In its ruling, the European Court of Justice ruled in favor of Polish borrowers, finding that banks cannot impose such large increases in loan installments due to changes in the exchange rate, and that the banks’ relevant terms are unfair and abusive.
In practical terms, what does this mean for Polish borrowers? They can file lawsuits in Polish courts seeking to have the clause requiring installment payments based on the exchange rate in effect at the time declared null and void, and they can also claim compensation from the banks.
How will the banks deal with this development, which is unfavorable to them? Obviously, to avoid further losses, they will try to reach settlements with borrowers on terms favorable to the latter and in accordance with the provisions of the court ruling.
It goes without saying that the CJEU’s ruling cannot be applied in Greece and does not cover Greek borrowers who are still required today to pay exorbitant installments to service these loans, as well asprincipal that has far exceeded the amount they originally borrowed.
What has happened so far with this case in the Greek courts:
Initially, a number of individual rulings had been issued in individual lawsuits filed in the Multi-Judge Courts of First Instance, which ruled in favor of the borrowers. Subsequently, a class-action lawsuit was filed against EUROBANK, which also ruled in favor of the borrowers and deemed the clause unfair. The number of individual lawsuits increased, but the courts did not issue final judgments; instead, they issued interim rulings, awaiting the final decision on the class-action lawsuit.
The bank filed an appeal and prevailed in the Court of Appeals. All courts, both at first instance and on appeal, began to dismiss the individual lawsuits, in accordance with the appellate court’s decision. The case reached the Supreme Court in plenary session, where the decision was also in favor of the banks.
The good news is that appeals and class-action lawsuits against the other banks are still pending.
The Supreme Court failed (not by accident, I believe) to refer the legal issue of Swiss franc-denominated loans to the European Court of Justice, as it could have done to ensure that its decision was consistent with those of the courts in other European countries. As a result, we are currently one of the few countries in Europe where the currency clause is deemed lawful and banks reap substantial profits from these loans through speculative practices, whereas in most (democratic/civilized) European countries, these loans have been ruled abusive, and banks have been ordered to pay compensation to borrowers.
However, as long as the appeals against the class-action rulings against the other banks remain pending—in which case the Supreme Court may be compelled to refer the matter to the CJEU and be required to comply with its ruling—which cannot differ from that issued for the other countries— there is some hope for positive developments in our country as well.
Who stands to benefit from this development at the moment:
In a way, those borrowers who had filed a lawsuit against the bank over the Swiss franc are fortunate and lucky, since the ruling issued was not final but rather a stay of proceedings, and thecase—following developments that were unfavorable to borrowers at the time—did not proceed. Should the situation in Greece change at some point, they will be able to reinstate their lawsuit by filing a motion for a new hearing and potentially secure a ruling in their favor.
Also fortunate are those who, following a first-instance ruling of dismissal, filed an appeal within the prescribed deadline so as not to miss the deadline, but without specifying the grounds for their appeal to the Court of Appeals. They, too, if the case takes a positive turn, will be able to file their appeal and have it heard, resulting in a favorable ruling.
Based on the information we have today, what can those who were caught off guard by these developments and never took legal action regarding these loans do:
Therefore, for any loans that have been terminated or are being serviced under a repayment plan and are still being paid based on the Swiss franc/euro exchange rate, the following option is available:
Filing an individual lawsuit before the Multi-Judge Court of First Instance. In all likelihood, the lawsuit will be dismissed at the first instance by the court because the majority of judges follow the Supreme Court’s decision to the letter.
However, the borrower will be aware of this and will have the right to appeal. The appeal is filed in the usual manner, but without specifying the grounds, as this is not mandatory.
Therefore, the borrower is still in the game, since he has filed an appeal and is letting it «lie dormant.».
Whenever there is a positive development regarding these loans, he will be able to identify it by supplementing his appeal with additional grounds. This will give him a better chance of winning the case in the court of second instance.
If, for any reason, the case is required to be heard by the Court of Appeals before there are any positive developments for him, then he will have the right to appeal to the Supreme Court.
It should be noted that, at least as far as the Athens courts are concerned, hearings in both the first and second instances are scheduled quite far in the future, which is helpful in this particular case, as it allows even more time for positive developments to occur regarding these loans.
Furthermore, filing a regular lawsuit creates a pending case, and this is in the borrower’s best interest for the following reason. If the borrower has filed a lawsuit and the bank subsequently issues a payment order, then depending on the stage of the lawsuit, the borrower will be able to file an objection and a motion for a stay of proceedings, with a high likelihood of success due to procedural violations on the part of the bank.
Consequently, this prevents the bank from potentially proceeding with the foreclosure of a property that was purchased with a loan in Swiss francs.
Of course, the proposed solution does not yield immediate results, but if the bank—which, as has been shown so far, is aware of developments in these matters before the borrower is— it can switch a loan denominated in Swiss francs into euros—given that many loan agreements include a clause granting the bank the right to do so unilaterally—then the borrower may not be entitled to file a lawsuit in the future.
ANASTASIA CHR. APPLE
I'M GOING TO BE A LAWYER.
Ave. 403 Mesogeion Avenue, Agia Paraskevi, Agia Paraskevi
Tel. 6945-028153, 213-0338950
e-mail: natmil@otenet.gr
www.legalaction.gr, fb: Anastasia Miliou
