This headline is a paraphrase of the advertising slogan of a well-known whisky brand coined after the National Bank of Switzerland „freed” the exchange rate of Swiss franc on January 15, 2015. This date has been noted as another „Black Thursday”. As a result of this decision Swiss franc strengthened against other currencies, including Polish Zloty, by few to several dozen percent. This resulted in a significant increase in mortgage rates, whereas mortgage loans contracted in Swiss franc were very popular a few years earlier (due to attractive interest rates), and few borrowers took into account the risk of fluctuations in foreign currencies exchange rates in relations to „zloty”.
Recently, the topic of Swiss franc mortgage loan borrowers, the so-called “francmen” is getting more and more interesting from the legal point of view. After the ruling of the Supreme Court of May 15, 2015, in favour of the cassation appeal filed by mBank in a trial against a collective lawsuit of 1247 borrowers, it seemed that the odds for finding a favourable ruling for the francmen in courts were slim.
However, a series of lower court judgements issued in the last year seem not to share the view of the Supreme Court. New, pro-consumer views have been triggered by the ruling of the District Court for Warszawa-Śródmieście of April 29, 2016, in case VI C 1713/15. The court ruled in favour of the borrowers in an individual case against mBank. The court referred to the earlier judgement of the Court of Competition and Consumer Protection in Warsaw (CoCaCP), which concluded that the clause used in the mortgage agreements indexed to a foreign currency, specifically providing for unilateral setting/fixing of foreign exchange rates by the bank as the lender is an illegal (abusive) clause. This means in principle that such clause is not a binding part of the contract and cannot be taken into account when hearing the cases related to the performance of the contract. This is a confirmation of the so-called ‘principle of the extended legitimacy of the CoCaCP judgements, expressed in the resolution of seven Supreme Court Judges of November 20, 2015. In the abovementioned court case, the court in Warsaw stated that in the occurred circumstances, the loan should be repaid in Polish zloty (without indexation to Swiss franc) at the interest rate comprising the bank margin and the LIBOR CHF index (the interest rate clause remained in force), which means a very favourable decision for the borrower. The judgement is not final as the mBank has filed an appeal against it.
So far more similar judgments in favour of borrowers have been given, among others, the final judgement of the District Court in Toruń of July 13, 2016, I C 916/16, the final judgment of the District Court of Świecie of June 28, 2016, I C 145/16 and the non-final judgements of the District Court in Warsaw of August 22, 2016, VIII C 2064/15, of the District Court for Wrocław-Fabryczna of July 20, 2016, XIV C 2126/15 and of the District Court of Łódź of November 16, 2015, I C 1302/15.
There are many ongoing court cases concerning mortgages that have been indexed to Swiss franc. In addition to two collective lawsuits against the Millennium Bank, the President of the Office of Competition and Consumer Protection is often asked to express an opinion material for individual cases. Since September 2016 the President of OCCP shared his views in consumer disputes with banks up to 25 times (of which 20 opinions were published in 2017!), in which he argued for the benefit of the borrowers when the clause as used in their contract had been previously ruled as illegal by the CoCaCP. The views of the President of OCCP even lead to further conclusions (from the legal point of view) that the entire contract should be deemed invalid due to the lack of legal possibility of replacing the invalid provisions of the contract with any applicable law in this matter (there are courts that have already agreed with this view).
While awaiting for politicians to fulfil their election promises, “francmen” unexpectedly received „support” from the courts and from the President of OCCP. In the near future, judgments of courts of higher instance as well as the re-judgment on the mBank collective lawsuit are expected to be given. Only then will we know whether the support will be of any good to the borrowers.
Author: Maciej Górny