CJEU Ruling Could Decimate Polish Banking Sector


On Thursday, December 14, another significant ruling from the CJEU (Court of Justice of the European Union) concerning the settlements of franc borrowers with banks is expected. This could further strengthen the position of the former in court. “In theory, customers could demand the bank refund everything they paid, but the bank wouldn’t be able to claim back the capital provided to them. The court will grapple with this issue on December 14,” says lawyer Andrzej Zorski. He indicates that if the CJEU clearly indicated that banks’ claims for the repayment of the provided capital are time-barred, this could mean an ‘earthquake’ for the banking sector, whose losses would increase manifold. Last week’s CJEU ruling has already led to borrowers’ claims against banks potentially becoming significantly larger.

“The last CJEU judgment from December 7, 2023, will result in borrowers’ claims increasing by several to several dozen percent, depending on how long the process takes,” says Andrzej Zorski, a lawyer from the law firm Pilawska Zorski Adwokaci. He elaborates, using an example: “If customers have already paid, say, PLN 300,000 in loan repayments, which is about average, a three-year process will also cost the bank approximately PLN 100,000 in statutory interest alone for the delay. This is essentially a penalty for the bank for how long the process has lasted. And of course, this amount will increase every year.”

On December 7, the CJEU issued another judgment concerning settlements of franc borrowers with banks. It was a response to preliminary questions from the District Court for Warsaw-Lower City in the case C-140/22 against mBank. One of the questions was when to deem a loan agreement as invalid – from the date of its conclusion or upon the borrower submitting a statement about the effects of the invalidity of the contract in court?

The CJEU stated that borrowers do not have to make a declaration in court agreeing to the annulment of the contract. In the judgment of December 7, the court ruled that linking the effects of the ineffectiveness of an abusive contract clause to the submission of a statement by the consumer contradicts the EU Directive 93/13/EEC (which protects consumers in the EU from unfair terms in the purchase of goods and services contracts).

If the CJEU clearly indicates on December 14 that banks’ claims for the repayment of the provided capital are time-barred and this gets followed by Polish court decisions, it would signify an earthquake for the banking sector. “In practice, it means that customers will get all the installments they paid along with statutory interest for the duration of the process, but the bank will not be able to demand the return of the capital. Then the bank’s losses would increase two or three times compared to the current jurisprudence,” explains Andrzej Zorski.

In summary, a significant CJEU verdict (C-28/22 against Getin Noble Bank), which could further strengthen franc borrowers’ position, is expected on December 14. The prejudicial questions posed by the referring body, the Warsaw District Court, pertain to the moment that constitutes the start of the prescription period for bank claims, among other issues. Currently, about 750,000 franc loans have been granted in total in Poland and approximately half of them are still active. Meanwhile, approximately 150,000 court cases regarding borrower settlements with banks are currently underway in Polish courts. Most of them, about 90%, end with a win for the former party and the annulment of the contract.