Last week, the Civil Chamber of the Supreme Court adopted a resolution in which it responded to questions posed by the First President of the Supreme Court in January 2021. The purpose of the questions and the Supreme Court’s responses was to provide a binding interpretation of the law in the so-called “Swiss franc cases” and, as a result, to resolve alleged discrepancies in case law. From the outset, some members of the legal community considered the Supreme Court’s adoption of a resolution on this matter to be unnecessary and the alleged discrepancy in case law to be superficial. These views proved to be correct.
The resolution contains five points that essentially confirm what has been known for a long time. The Supreme Court has once again confirmed that if provisions regarding the method of determining the exchange rate (CHF/PLN) are removed from loan agreements, the loan agreement is not binding in other respects—in other words, it is simply invalid.
The Supreme Court ruled that in the event of the nullity of a loan agreement, neither party (the bank or the borrower) is entitled to any additional claims beyond the demand for the return of the funds transferred; that is, the bank has the right to recover the principal of the loan, whereas a borrower who is a consumer may only demand the return of funds paid to the bank in performance of the invalid loan agreement (loan installments, fees, commissions, and charges collected by the bank). For borrowers, the Supreme Court’s resolution comes as a surprise, as it contradicts the case law of the Court of Justice of the European Union, which has allowed consumer borrowers to also pursue additional claims against the bank in connection with the invalidity of the loan agreement. The panel of the Supreme Court that issued the resolution in question thus took a “pro-bank” stance, whereas the CJEU consistently takes a “pro-consumer” stance.
However, in my opinion, the most significant point from the perspective of case law is point 4 of the Supreme Court’s resolution. In this point, the Supreme Court explained that the statute of limitations for the bank’s claim for repayment of the loan principal begins on the day following the date on which the borrower “contested the binding nature of the provisions of the loan agreement vis-à-vis the bank.” This means that any conduct by the borrower toward the bank that indicates the borrower considers the provisions of the loan agreement to be invalid or non-binding triggers the statute of limitations for the bank’s claim for repayment of the loan principal. This is noteworthy because, until now, there has been no uniform view in case law on this matter. Some legal experts have argued that the statute of limitations on the bank’s claims should begin on the date the judgment declaring the loan agreement invalid becomes final. Defining the start of this period as the date the agreement was “challenged” may prove very advantageous for borrowers. Such a “challenge” to the agreement most often takes the form of a pre-litigation demand sent to the bank for the return of the money paid due to the agreement’s invalidity. However, pursuant to Article 118 of the Civil Code, the statute of limitations for claims by a bank acting as a business entity is 3 years. Therefore, if the bank did not itself file a lawsuit for payment against the borrower within 3 years of receiving the borrower’s pre-litigation demand, its claim has become time-barred in accordance with the aforementioned Supreme Court resolution. As a result, it appears that thanks to the Supreme Court’s resolution of April 25, 2024, a significant portion of borrowers who are currently engaged in legal battles with banks to invalidate their loan agreements will not have to repay even the principal to the banks due to the statute of limitations on the banks’ claims.
