The CJEU ruled today in case C 260/18 (Dziubak) on loans based on foreign currency (including so-called “franking credits”).
This judgment, may be of great importance for Polish consumers who have or have had such banking products.

What does the CJEU judgment say?

The CJEU indicated, among other things, that the consumer will have a de facto choice as to whether a contract stripped of its key and also unfair “currency” provisions will:

a) continued as a “PLN” credit or
b) declared invalid in its entirety.

The decision in this respect will be subject to assessment taking into account the benefits that the consumer may obtain in a given factual situation. The CJEU thus held that the Courts are not free to fill in the missing provisions of a contract if some of its clauses turn out to be unfair and consequently invalid.

What will be the consequences of the CJEU judgment?

As a result of declaring a credit agreement invalid in its entirety, a situation may arise in which the consumer will not have to return the amount of credit received to the bank, since the bank’s claims may be time-barred. On the other hand, it is the consumer who, in many cases, will be able to demand payment from the bank in the amount of the credit instalments unduly drawn. It may also happen that defective foreign currency loans will become loans denominated in PLN and bear interest at the LIBOR rate.

While today’s CJEU judgment will not result in an automatic amendment of loan agreements, it may make it easier for consumers to pursue claims in the future. It should be borne in mind that CJEU judgments are not universally binding. However, the effect of EU judgments often extends beyond the proceedings in the case in which they were issued. The courts of member states, when considering cases of a similar nature, should not adopt a different interpretation of the law than that which was previously analysed in the CJEU judgment.