Judgment of the Court of Justice in WIBOR. The conflict for gold loans won by banks, but the war is inactive ongoing

Judgment of the Court of Justice in WIBOR. The conflict for gold credits won by banks, but the war continues. On Thursday 12 February, the Court of Justice of the European Union issued a judgement in the long-awaited question of the preliminary ruling of the Polish court concerning the application by banks of the variable interest rate clause based on the WIBOR benchmark, i.e. gold loans. Although in the judgement of the TEU, it has resolved a number of crucial issues concerning these credits, limiting any grounds for contesting the clauses used, it has yet not closed the way for borrowers to prosecute their claims. The legal war between banks and gold borrowers will so continue, changing only its centre of gravity. The application of the WIBOR shall be without prejudice to the contractual balance of the parties in principle. In fact, the Court has decided in a unambiguous way only one, albeit rather important, issue. The mention in the credit agreement by the bank to the key WIBOR benchmark recognised under the EU Regulation, without providing it with detailed information on the methodology for determining it, does not in itself constitute an omission of information obligations and so cannot prejudge the unfairness of specified contractual provision. According to the Court, the EU legal framework in which key benchmarks have been in place since 2018 and the information obligations of administrators of these indicators make it possible for a reasonable, model consumer to realize the operation of the contractual interest rate mechanism. In this respect, the position of the TEU is undoubtedly in line with the banks’ submissions on variable interest rates based on WIBOR indicators. The borrowers may inactive undermine the variable interest rate clause of the TEU did not put a dot at this point, but added ‘but’. Firstly, the judgement of the TEU is truly only applicable for gold loans drawn after 2018, erstwhile the European Parliament Regulation on the establishment of key benchmarks (2016/1011) began to apply. It is on the requirements introduced by this regulation that the Court based its conclusions on the overall assessment of the WIBOR indicator. Second, the Court pointed out that the specified fact that the benchmark does not comply with Union government does not make it impossible to competition it. However, specified a challenge will require an indication in an individual case that the information provided to the borrower by the bank at the phase of the negotiation of the credit agreement was not adequate to measure the hazard of a variable rate credit or to compare the various offers available on the market. Therefore, borrowers wishing to proceed to competition their contracts will gotta show in court evidence that in their circumstantial case the information provided by the bank was not complete, complete or misleading in assessing the economical impact of the contract. What about the WIBOR litigation? This judgement will undoubtedly be applicable to the further destiny of gold loans in Polish courts. It is likely that the number of lawsuits filed by borrowers will be slowed down. The submission of a suit against the bank in a case concerning gold credit drawn after 2018 will undoubtedly entail a more hard judicial proceeding and thus a greater hazard to the borrower. However, it is doubtful that the cases concerning WIBOR clauses left by the Court should vanish completely from the Polish courts. Not yet. The subject was developed by Adam Zakrzewski, indicating the effects of the TEU judgement on WIBOR for gold loans, the anticipation to undermine variable interest rates clauses and further legal disputes between borrowers and banks. The law firm Chalas and Partners assists borrowers and entrepreneurs in analysing gold lending contracts based on WIBOR, assessing the bank's information obligations and preparing a procedural strategy in variable interest clauses disputes. We advise on redress against banks, cancellation of a credit agreement or elimination of unfair contractual terms. We invitation you to contact our squad to discuss the impact of the TEU judgement on your gold credit agreement, measure the chances of effectively undermining WIBOR in court and safe your interests in proceedings against the bank.