Valorisation of Swiss franc loans - validity confirmed by first judgments

Despite the recent Judgment of the Court of Justice of the European Union in Case No. C-520/21, which resolved in favour of borrowers the disputed issues concerning loan agreements, indexed by the CHF exchange rate, in terms of remuneration for the use of the capital after the loan agreement was declared invalid, the issue of capital valorisation of such loans has now become the subject of intense discussion.

In the absence of any indication in the wording of the aforementioned judgment whether, in the opinion of the CJEU, the significant change in the purchasing power of money over the last several years should be reflected in the settlements between the parties to the annulled loan agreements on a mass scale, the attorneys for the borrowers and their opponents representing the interests of the banks are eagerly awaiting answers to the following preliminary questions posed by the Regional Court in Warsaw.

According to the position of the Association of Polish Banks, another doubt of the Regional Court stems from the lack of an explicit statement in the text of the June CJEU judgment regarding valorisation, but only regarding compensation or damages, which are concepts that do not clearly indicate whether capital valorisation should also be included in the above.

According to the lawyers representing the debtors, the wording of the ruling makes it clear that the banks are not entitled to any additional form of 'compensation' in excess of the amount of capital made available under the loan agreement. However, should the fundamental difference between the value of the amount of the credit granted a dozen years ago and the current, real value of the same amount not make any difference in the present case?

Given the scale of market changes over the past several years, combined with the scale of invalidation by the courts of loan agreements valorised by the Swiss franc exchange rate and the principles of settlements between the parties to the legal proceedings, it is impossible to ignore the apparent disproportions and the resulting groundless ignorance of the arguments raised by the banks sued.

The fact is that, at the time the agreement was concluded, the borrower was able to fully finance his housing goals, which, translated into current market conditions, would not realistically be possible, assuming that the amount of the loan taken out in the present time would correspond in amount to the sum indicated in the placement years ago. For this reason, banks providing their customers with the capital in question in the past would have to face an unjustified loss, which, given the number of revoked loan agreements, would hit the entire banking sector excessively hard.

The reimbursement of only the loan principal has nothing to do with the real settlement between the parties to the credit agreement in the face of its annulment, as it does not correspond even remotely to the benefits which arise for the borrower from the annulment of the legal relationship under the credit agreement. The bank's insistence on the valorisation of the loan principal should in no way be treated as an assertion of an additional claim or compensation, but only as an attempt to adjust the settlement of the parties to the credit agreement to the real circumstances

In accordance with the interpretation of the provisions of the Civil Code and the analysis of the situation of the parties to the dispute, the same conclusions are drawn by the Polish courts, issuing successive rulings indicating the legitimacy of taking into account the valorisation of the loan principal in mutual settlements between the parties to the franking disputes. Based on the provisions of Article 3851 and Article 405 et seq. of the Civil Code, failure to take into account the difference in purchasing power of the zloty over the last several years should be treated as an example of unjust enrichment of the borrower at the expense of the bank. The same position can be found, inter alia, in the decisions of the Regional Court in Gdańsk or the Regional Court in Elbląg.

In conclusion, the phenomenon of inflation, which is currently faced by every consumer and entrepreneur, should not be unjustifiably excluded only in relation to settlements between franc debtors and banks, because all previous concessions to borrowers and the number of cancelled credit agreements cannot obscure the social and market circumstances of either party. They should be taken into account regardless of other aspects of the ongoing mass franking disputes, and the interests of both parties to the proceedings in these cases should have the same value in the light of the final decisions.