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3rd December 2021
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HomeProperty NewsCourt rules in favour of Swiss Franc loan victim

Court rules in favour of Swiss Franc loan victim

THE MONTENEGRIN appeal court ruled against the Hypo bank in a case where it cancelled the Swiss Franc loan agreement with one of its clients and is suing that client for the return of the loan.

The appeal court said that the bank has no right to use two different mechanisms to protect their capital; the bank cannot use the currency clause and the variable interest rate at the same time.

The court concluded that the bank was speculative, and gained more profit than the initial principle contract. The ruling said that the CHF had strengthened 38% against the Euro and therefore the bank and the client are not in equal contractual positions, because the bank made a disproportionate gain:

ATTORNEY of Consumer Protection Center (CEZAP),  ?alasan Dragomir, who represents a group of Swiss Franc clients in cases against Hypo Alpe Adria Bank (HAAB), said that the latest decision of the High Court in Podgorica in a case sheds a different light on transactions conducted by the bank.

Until recently all cases in which the prosecutor was Hypo Alpe Adria bank nothing was certain. By inertia, in the mortgage loans cases, the bank cancelled the contract, and the first courts had ruled that the clients are obligated to return the debt amount that was created using the foreign currency clause and variable interest rate, says ?alasan. He points out that now for the first time the High Court (the appeal court) in this  case has overturned the verdict of the first court and sent the case back for retrial. And what is more important is that the High court stated some legal opinion and position in this case. The High court stated:

“It was noted that the value of the Swiss Franc rose against the Euro after the transfer of loan funds to the date of filing the law suit by 34.88 per cent and, on the day of writing the findings to 38.89 percent. The banks cannot use two or more protective measures to preserve the value of and that the agreed interest income represents the bank invested capital and the cost of risk assumed by the bank’s placement of its capital. In this case, it would follow that the bank gained profit from the contractual interest and from application of CHF indexation, and the first trial court should bear in mind that legal protection cannot be given to parties in contractual obligations that brought a disproportionate gain said ?alasan.

According to ?alasan Dragomir , the High Court in Podgorica partially exposed the speculative actions of the bank and ordered retrial and that the  financial experts should state the amount of profit the bank gained by variable interest rate and by application of CHF indexation, and compare this to normal income, for such loan amount (without indexation and with normal interest).  Then the court, in this matter, will be able to make a proper and lawful decision, on whether the parties are in an obvious discrepancy.

“It will be interesting to hear how the bank will explain the latest verdict of the High Court , considering that their previous statements inconsistent with this opinion and statements of the bank were fully refuted and meaningless when it comes to the validity of contracts on home loans” concluded ?alasan.

Editor’s comment

I am grateful to Ivana Leventic for bringing the decision of the Montenegrin High Court to my attention and for translating the original article – CEZAP: Viši sud razotkrio špekulativne radnje HAAB.


  1. Montenegrin High Court has set a platform but the courts in Cyprus are a law unto themselves. If the EU do not take note then all the cases brought against the banks will have no standing at all.

    Will the solicitors in Cyprus use this decision to base their case on. If the EU allow the Cyprus government to sell the homes of people unless they pay off the developer loans then what chance does this ruling have. Sad days ahead I’m afraid.

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