The Supreme Court of Cassation has said that it advocates the stance that banks can conclude a loan contract with the foreign currency clause in order to preserve the equity of the dinar loan amount and the repayment amount, indexed in euros, however, it has declared the contractual clause whereby the debt in dinars is indexed in Swiss francs as null and void.
“The provision of a loan agreement whereby the debt in dinars is indexed in Swiss francs is invalid unless the bank provides reliable written evidence that it had to borrow the dinars that were subsequently granted as a loan,” the Court’s statement reads.
The Cassation Court also said that even before they concluded a loan contract with a client, the bank had an obligation to give the client written information about all potential risks and economic and financial consequences that would arise as a result of the dinar loan being indexed in Swiss francs.
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The Court concluded that the loan contract still had a legal effect even after determining the nullity of the indexation of the debt in Swiss francs.
“After the determination of the nullity of the indexation clause, the contracts will be executed by conversion, while preserving the equality of mutual benefits, i.e. the market value of a granted loan will be determined on the basis of the euro/dinar exchange rate on the day of the conclusion of the contract and the payment of interest rate in the amount specified by the loan contract of the same type and duration,”, the Court adds.
In a civil procedure regarding the decision on the legal validity of a loan contract or a contractual clause on the indexation of debt in Swiss francs, the court will, at the request of the plaintiff, determine a provisional measure that prohibits the loan provider from using the collateral for securing repayment of the loan, providing the enforcement has not already been initiated.
In the case where the enforcement procedure has already been initiated, the court or the public executor will, at the request of the enforcement debtor, postpone the execution of the debt through collateral.
This post is also available in: Italiano