In credit agreements linked to the exchange rate of the Swiss franc, we can observe almost universal application by banks of so-called prohibited clauses, i.e. clauses which grossly infringe consumer interests. These clauses mainly concern the disbursement of the loan amount at the Swiss franc purchase rate set at the bank’s discretion, and determining the amount of monthly capital and interest instalments at the selling rate also derived from the bank’s exchange rate table. The fact that the financial institution includes prohibited clauses in the agreement means that these clauses do not apply to the consumer from the very beginning of the agreement. This pattern is repeated in most credit agreements of this type, which opens the way for an action for payment against the bank and for a declaration that the credit agreement is void.
As follows from the already precedent-setting judgment of the Court of Justice of the European Union in the case of Mr. and Mrs. Dziubak (ref. C-260/18), the national court should assess whether the credit agreement, after eliminating the prohibited clauses from it, may continue to be in force as a PLN contract with the remaining parameters of the agreement preserved, including the interest rate favourable to the borrower, or whether the agreement is invalid from the outset due to its unenforceability or contradiction with the Banking Act, the principles of social co-existence or the nature of the contractual relationship. The CJEU emphasises that the court must be guided by the will of the consumer as to the continuation of the contract and may not interfere with the rest of the contract.
What does winning with a bank give? In a nutshell – if the agreement is found to be invalid, the mutual benefits are returned and the mortgage is released, whereas in the case of the so-called “de-franking” of the agreement, the bank is obliged to return to the borrower the overpaid loan instalments and establish a much lower loan balance for the future, eliminating the indexation mechanism from the agreement. In the case of winning, the borrower, firstly, ceases to be a “slave” to the constantly rising exchange rate of the Swiss franc and, secondly, opens the way to release the mortgage on his real estate.
At present, there is a rash of final judgments in favour of borrowers, with two lines of argument in common courts – some courts base their judgments on the invalidity of the agreement, while others are more inclined to continue its validity without any link to the CHF currency. In both variants, the borrower is able to obtain in total even several hundred thousand zlotys.
Analysing the extensive case law of the Court of Justice of the European Union, the Supreme Court, as well as common courts, one can undoubtedly conclude that the view on the prohibited nature of indexation clauses in credit agreements is already widely established, and the courts are only beginning to face a choice – invalidity or “de-franchising”.