ABUSE CLAUSES IN CREDIT AGREEMENTS

In recent months, judges are more often recognising abusive clauses as a sufficient reason to annul credit agreements with banks – writes Paweł Michalak, partner and legal advisor at Michalak Kosicka Zawolski and Partners Legal Advisers, in Dziennik Gazeta Prawna.

In November 2018, the District Court in Warsaw annulled the mortgage loan contract indexed in Swiss francs because of the abusive clauses contained therein. The Court justified this by the fact that the bank did not indicate unambiguous and verifiable rules for determining this exchange rate. In this situation, the other party to the contract was exposed to arbitrariness of its decisions and could not verify whether the rate was actually established correctly – there were no tools for this. Thus, the amount of the debtor’s liabilities was dependent on the bank’s will. On this basis, the Court considered these contractual provisions as unlawful and non-binding to debtors.

This decision is very pleasing because at the beginning of 2018, the same Court sent to CJEU questions for a preliminary ruling in reference to abusive clauses. Part of the judges considered this to be the reason for suspending proceedings regarding loans taken in francs, in the case of which the application of prohibited contractual clauses was included in the contracts.

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In the judgement of January 21, 2015 in joined cases C-482/13, C-484/13, C-485/13 and C-487/13, the CJEU considered Article 6(1) of Council Directive 93/13/EEC of April 5, 1993 on unfair terms in consumer contracts should be interpreted as not precluding the application of a national provision under which the national court in which the proceedings are pending regarding object of enforcement of a claim secured by a mortgage, is obliged to order the conversion of amounts due under the condition of the mortgage agreement, which sets the interest rate for late payment in the amount exceeding three times the statutory rate, so that the interest does not exceed this threshold, provided that the application of this national provision it does not affect the assessment made by the national court as to the unfairness of such a condition and does not preclude this Court from excluding above-mentioned condition if it finds that it is unfair in terms of Art. 3(1) of the directive. Thus, by agreeing to the introduction of national provisions by the Court, the CJEU stipulated that this could only be done if the Court found such a solution fair to the Client. The new conditions can not only be “a little more favourable”, but in total “unfair”.

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