Is this yet another CJEU ruling in favor of borrowers with Swiss franc loans?

On June 15, 2023, the Court of Justice of the European Union is set to issue a ruling on whether banks may claim compensation for borrowers’ use of capital in the event that a loan agreement is declared void. All signs point to the Court ruling out this possibility. In his opinion, the Advocate General of the CJEU argued against compensating banks that included prohibited contractual provisions in their foreign-currency loan agreements. His reasoning echoes the position of the legal community, which has been known for quite some time—essentially since the moment banks began publicly threatening to pursue such claims against borrowers with Swiss franc loans. Allowing banks to demand compensation for the use of capital would undermine the very purpose of annulling loan agreements and, in effect, would deprive borrowers of any protection against unscrupulous banks. Undoubtedly, however, this threat effectively deterred some borrowers from filing lawsuits to annul their loan agreements. The CJEU’s ruling may therefore be doubly disadvantageous for the banks, since it will not only strip them of any remaining illusions regarding the legal possibility of demanding compensation from affected borrowers for the use of the loan principal granted to them, but will also embolden foreign-currency borrowers who have so far refrained from seeking the invalidation of their loan agreements in court.