CJEU verdict - francophiles have been helped

Landmark CJEU ruling of October 3, 2019

On October 3, 2019, the judgment of the Court of Justice of the European Union (CJEU) was handed down in the case of Mr. and Mrs. Dziubak (reference C-260/18), which had a significant impact on the positions taken by Polish courts in cases of loans indexed and denominated to foreign currencies, particularly the Swiss franc.

The case involved a claim by the Plaintiffs for the invalidity of a loan agreement indexed to the currency of the Swiss franc. The Plaintiffs argued that the provisions of the indexation clauses in the agreement are illegal because they allow banks to unilaterally and arbitrarily set the exchange rate, resulting in sudden increases in loan installments for borrowers. The plaintiffs demanded the invalidation of the indexation clauses, which they considered abusive, and the possibility of continuing the contract without these unfair terms.

Significance of the verdict for the francophiles

The CJEU ruling was a major breakthrough for people with Swiss franc loans. The Court ruled that Directive 93/13/EEC gives national courts the ability to invalidate contractual clauses deemed abusive, meaning that contracts should not include these unfair provisions. The Court pointed out that it is also possible to replace abusive clauses with provisions of national law, but only if the parties agree to this. Declaring indexation clauses abusive allows consumers to fight for their rights and protect themselves against the unfair practices of banks.

The basis for asserting your rights before Polish courts

With the CJEU's October 3, 2019 ruling, Polish courts received clear guidance on resolving Swiss franc loan cases. The CJEU limited the ability of national courts to adjudicate, focusing on the issue of indexation clauses, but at the same time inspired courts to also take into account other reasons for defective contracts, such as the failure to adequately inform consumers about currency risks and the failure to balance these risks between the parties. The verdict opened the way to fair settlements for francophone borrowers, giving them a basis for asserting their rights before Polish courts in the fight for fair loan repayments.