EU's top court says national courts should decide on FX loans (updated)

Ipopema Securities SA

29/04/2021 11:01

(Recasts, adds details)
    WARSAW, April 29 (Reuters) - The European Union's top court
said on Thursday that national courts should decide whether a
foreign currency mortgage contract containing an unfair clause
should be annulled or not, setting the scene for a Polish
Supreme Court sitting in May.
    Mortgages taken out in Swiss francs are a major risk factor
for Polish banks, and the ruling by the Court of Justice of the
European Union (CJEU) kicks off a crucial fortnight which may
determine how courts treat such cases and whether banks decide
to sign up to a plan for out-of-court settlements.
    "The effects of a finding by a court of the existence of an
unfair clause in a contract concluded between a business and a
consumer are governed by national law, and the continuation of
such a contract should be assessed... by the national court,"
the CJEU said in a statement.
    The CJEU also said it was the responsibility of national
courts to inform holders of foreign currency mortgages of all
the possible legal consequences of annulling a mortgage
contract.
    Thousands of Polish borrowers took out franc loans more than
a decade ago to take advantage of low Swiss interest rates but
then faced ballooning repayments when the zloty weakened sharply
against the Swiss currency.
    Poland's Supreme Court will issue guidance on the issue of
Swiss-franc mortgages on May 11.
    "Generally (the CJEU ruling) is quite neutral," said Lukasz
Janczak, Deputy Head of Equity Research at Ipopema Securities.
    "CJEU said that a lot of decisions need to be taken by local
courts... Some crucial issues are still not explained so we are
waiting for the ruling of the Polish Supreme Court on May 11."
    

 (Reporting by Alan Charlish and Anna Wlodarczak-Semczuk
Editing by Gareth Jones)
 ((alan.charlish@thomsonreuters.com; +48 22 104 25 27 ;))