In common courts, the question increasingly being asked is not whether indexation clauses contained in CHF-linked loan agreements are prohibited, but how to settle an invalid loan agreement. In the context of the “frank franc” cases, two solutions emerged in the jurisprudence – the balance theory, which assumes that the court will settle the invalid credit agreement in one proceeding, deducting the amount of capital made available to the borrower from the sum of services paid by the borrower to the bank, and the theory of two conditions, which assumes that there are two independent claims – the borrower’s for the return of services paid to the bank and the bank’s for the return of made available capital. Under the latter, the borrower is limited only by the statute of limitations on his claim, and the court, irrespective of the amount of capital disbursed to the borrower, should order the borrower to repay all the benefits paid to the bank as claimed in the claim.
On 16 February 2021 The Supreme Court issued the following resolution in case ref: III CZP 11/20:
“A party who repaid a loan in the performance of an invalid credit agreement is entitled to a claim for the repayment of the repaid money as an undue benefit (Article 410 § 1 in connection with Article 405 of the Civil Code) regardless of whether and to what extent he is a debtor to the bank for the repayment of the unduly received amount of the loan.”
Thus, the Supreme Court has, in no uncertain terms, opted for the two-condition theory and determined that, in the event that a credit agreement is invalid, the capital provided by the bank cannot be deducted from the amount of the undue consideration claimed by the borrower.
On 25 March 2021. The Supreme Court will issue a resolution to the full membership of the Civil Chamber answering six questions on “franking” cases, which will certainly dispel the remaining doubts in case law.