The Croatian Supreme Commercial Court canceled the Swiss franc-denominated mortgage on the grounds that banks had failed to inform their clients of the high risk of such foreign currency loans between 2004 and 2008, wrote the Vecernji List on Thursday.
The panel rejected the banks ‘appeal
The court explained its decision on 70 pages, which it published on its website. The panel rejected the banks ‘appeal and upheld the collective indictment of the franchisees’ interest protection organization against the eight largest banks operating in Croatia. They were accused of unfairly applying the exchange rate clause and unilaterally changing interest rates, which resulted in borrowers’ installments being doubled.
In 2013, in Zagreb, the Commercial Court ruled unlawful both the Swiss franc-denominated loan facility and the unilateral increase of interest rates by banks at seven of the eight banks under investigation. Later, the Supreme Commercial Court overturned that decision and ruled that only a unilateral increase in floating interest rates was unlawful and unfair. Banks and creditors have asked for a review of the decision.
The Constitutional Court ordered a new trial
In 2016, the Constitutional Court ordered a new trial because the Supreme Commercial Court violated the constitutional right to a fair trial by failing to justify its decision on foreign currency loans.
The panel has now upheld its first instance judgment in 2013. According to the ruling, the litigated banks violated their collective interests and the rights of borrowers by not informing their clients about the high risk of foreign currency loans and by entering into void and unfair contracts with their clients. It was pointed out that the said financial institutions acted in breach of the then applicable consumer protection law.
Debtors could recoup the difference
Goran Aleksic and Ivan Lovrinovic, MPs, activists of the Francophone Association and attorney-at-law Nicole Kwiatkowski said in a news conference Wednesday (prior to its official release) that 120,000 debtors could recoup the difference between the overpayment on their loans and the exchange rate.
Banks have to repay over Rs 10 billion (Rs 437 billion) to their clients, but every creditor must file an individual lawsuit against financial institutions. The association will continue to help them, he said.