Perhaps the last hope of the Swiss franc borrowers for justice is fading, after a preliminary ruling by the European Court of Justice, which “left standing” the disputed loan repayment clause based on the current exchange rate of the franc against the euro. , just as the Supreme Court has ruled.
Following the decision of the Supreme Court, which effectively ended the many years of struggles by borrowers in Greek courts, the borrowers had submitted to the European Court their expectations for a reversal of case law in Greece. The Multi-Member Court of First Instance of Athens had requested, in the context of the discussion of the lawsuit of two borrowers against Piraeus Bank, the issuance of a preliminary ruling by the European Court.
With this decision, the European judges were asked to answer the biggest question concerning the Swiss franc loans: whether, that is, the clause requiring borrowers to repay the loans on the basis of the current exchange rate, from which , as is well known, stems from the serious problem that has arisen for more than ten years, as the franc strengthened dramatically against the euro after the outbreak of the great financial crisis, with the consequence that the rest of the loans borrowers paid the installments in full.
Borrowers argued that this clause could be prosecuted for abuse by the courts, based on the Community Consumer Protection Directive. However, the European Court of Justice, in complete agreement with the Supreme Court, ruled that such a review should not be carried out, because it is a clause that reflects national provisions of mandatory law. The European Court of Justice has stated in a statement that “the Abusive Clauses Directive does not preclude the adoption or maintenance of provisions of national law which entail the application of the consumer protection system to clauses which fall outside its scope because they reflect national provisions. compulsory law “.
Following this decision, the margins for litigation of Swiss franc loans are narrowing desperately for borrowers, as all levels of Greek and European Justice have been exhausted and it has been judged that the infamous loan repayment clause based on the current parity can not to be judicially reviewed.
The Communication of the European Court of Justice
Judgment in Case C-243/20: Piraeus Bank. The Court determines the extent of consumer protection in the context of a loan agreement to be repaid in foreign currency.
In 2004, two consumers entered into a mortgage agreement with Piraeus Bank, which was initially negotiated in euros. In 2007 the parties signed two acts amending the loan agreement in order to convert its currency from euros to Swiss francs.
On September 17, 2018, the two consumers filed a lawsuit before the Athens Multi-Member Court of First Instance (Greece) seeking recognition of the misuse of the terms of the contract which stipulated that the loan should be repaid either in Swiss francs or in euro. based on the exchange rate at the date of payment of the installment or the balance of the loan, in case of termination of the contract.
The Abusive Clauses Directive 1 applies, in principle, to all non-negotiable contractual clauses. However, the Directive does not apply in the case of a contractual clause which reflects a legislative or regulatory provision.
The Athens Multi-Member Court of First Instance clarified, on the one hand, that Greek law 2 which transposed the directive did not explicitly repeat the above exception and, on the other hand, that the clauses in question reflect the content of a domestic legal provision. case law on whether it can be accepted that this exemption has been transposed into national law, making it impossible in such a case to check the usability of a loan agreement clause which merely repeats a statutory provision of a law.
In those circumstances, the Athens Multi-Member Court of First Instance applied for a preliminary ruling to the Court.
In its judgment today, the Court recalls, first of all, that the exemption provided for in the Directive of clauses which reflects a national provision of compulsory law is justified by the fact that it is lawfully presumed in principle that the national legislature of the parties to certain contracts. The Court notes that this exception covers not only the provisions of national law applicable to relations between the parties regardless of their choice, but also those provisions which apply in principle in the absence of a different agreement between the parties.
The Court therefore considers that a contractual clause which reflects a national provision of domestic law, that is to say a provision applicable in the absence of a different agreement between the parties, is excluded from its scope under the Directive, even if it has not been individually negotiated.
The Court then states that, if the provision defining the scope of the Directive has not been formally transposed into the legal order of the Member State, the national courts cannot consider that this provision has been indirectly transposed by transposing other provisions of the Directive. which do not have the same object as the provisions concerning the concept of ‘abusive clauses’ and the extent of the assessment of their abusive nature.
Finally, the Court recalls that the directive only partially and minimally harmonizes national laws on abusive clauses, leaving Member States free to provide a higher level of consumer protection than that provided for by it. Consequently, Member States may maintain or introduce, in the area covered by the Directive, which may be subject to the potentially abusive contract clauses concluded between a professional and a consumer, stricter rules than those of the Directive, provided that national These rules are intended to ensure greater consumer protection.
However, the Court finds that clauses which are excluded from the scope of the Directive on the ground that they reflect national provisions of compulsory law do not fall within the scope of the Directive and, therefore, the provision of the Directive concerning the above Member States shall not apply to such clauses.
The Court clarifies, however, that Member States may apply the provisions of the Directive in cases which do not fall within its scope, provided that such application is compatible with the objectives pursued by the Directive and the Treaties.
The Court therefore concludes that The Abusive Clauses Directive does not preclude the adoption or maintenance of provisions of national law which entail the application of the consumer protection system to clauses which are excluded from its scope because they reflect national provisions of mandatory law.