EU Court puts onus on Polish courts to solve forex mortgage fights

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By LE Desk

April 29: The European Union’s top court said it was up to Polish judges to resolve lawsuits over the country’s $31 billion pile of foreign-currency mortgages, sending bank valuations sharply higher.

The key issue that the EU passed to Polish tribunals is whether lenders can counter-sue for damages, such as years of lost interest and frozen capital, after having their loans annulled by local courts, Bloomberg reported.

The EU court said that under the bloc’s rules, it’s for Polish courts to determine if “a contract concluded between a seller or supplier and a consumer is unfair, even if it has been contractually amended by those parties.”

A landmark 2019 ruling by the EU court led to Polish banks being sued in more than 30,000 Swiss loan cases last year alone. Borrowers have won more than 90% of such cases, pushing Warsaw-listed banks to set aside more than 6.8 billion zloty ($1.8 billion) in provisions for potential defeats, according to Bloomberg.

Banks have been using the threat of counter suits against clients as a way to slow a flood of litigation over non-zloty mortgages, Bloomberg said.

https://www.bloombergquint.com/onweb/eu-court-puts-onus-on-polish-courts-to-solve-fx-mortgage-fights

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