Legal Effects of Unenforceability or Invalidity of an Agreement for a Denominated in or Indexed to a Foreign Currency Mortgage Loan in The Light of Judicial Decisions

Abstract

An introduction of mortgage currency loans to the banks offers, particularly the indexed to a foreign currency and denominated in a foreign currency loans, based on agreements containing abusive clauses which lead, in the consumer/borrower's individual relations, to the violation of his legal and economic interest and on the financial system level to the creation the risk of its instability (systemic risk). In many European countries, in Hungary for instance, the problem was solved ex post on the statutory level by the legislator’s interference. In others, for example in Romania, such statutory solutions were contested by the constitutional courts. In the remaining ones, such as Poland, Spain or Austria, the problem was left to be solved within the individual cases by the civil or arbitration courts. The latter solution requires however the development of lines of jurisprudence solving the contentious legal issues resulting from the complicated legal relations that occurred between the banks and the consumers/borrowers. Given the above, the author undertook to analyse the judicial decisions of the European Court of Justice, Polish common courts and the Supreme Court in order to indicate these nodal issues which often evoke the discrepancies in jurisprudence, as well as to present the possible solutions. The importance of the issue is crucial not only to the economic condition of the households and financial results of particular banks, but also to the stability of the whole financial sector. The implementation of the research goal adopted in this article requires the application of legal research methods, such as in particular the general theoretical method and the formal-dogmatic method.