Fatal news for Frankovich. This is the decision of the Supreme Court

The Supreme Court stated that the fact that there are offensive clauses in the contract does not automatically invalidate the entire contract, this follows from the court’s decision to reject the extraordinary complaint of the Prosecutor General’s Office.

The Supreme Court dismissed the extraordinary appeal of the Prosecutor General’s Office against the decision of the Court of Appeal in Krakow regarding a loan agreement denominated in Swiss francs. The prosecutor in his complaint, in particular, indicated that, as the Supreme Court recalled in its reasoning, “the existence of unfair provisions should lead to the invalidity of loan agreement no. […]concluded by the defendant with the bank, as a result of the general assessment of this agreement as inconsistent with the Law.

Supreme Court decision on Frankowiczow

“In connection with the above statement, it should first of all be noted that in the present case, the key issue for the decision is not to determine whether the contract concluded between the plaintiff and the defendant contained offensive provisions, but whether their influence on the position of the defendant was correctly verified. It is not disputed that certain contractual provisions were related to the abuse of the bank’s dominant position and the defendant’s inability to agree on their content. The Court of Appeal in Krakow, in its decision of 11 December 2019 (I ACa 100/19), did not question these circumstances, but at the same time suggested that the presence of offensive provisions, which entailed the need to exclude them from the content of the contract, does not its invalid as a whole. The reason for the termination of the loan agreement was the defendant’s failure to pay subsequent, due payments on the loan. - read in the justification of the decision of the Supreme Court.

The Supreme Court also recalled that the agreement concerned a denominated loan, and the defendant, by submitting an order to issue a loan in zlotys, independently assumed the currency risk associated with currency conversion.

“The Supreme Court found that the Court of Appeal did not admit any shortcomings in this regard, as stated in the emergency complaint. Making a decision within his freedom, he assessed both the impact of unlawful provisions on the validity of the loan agreement, and the significance of the circumstances in the form of the defendant’s termination of repayment of loan payments on his legal status. SN explained in the communiqué.

The court did not consider violations of consumer protection law

At the same time, he emphasized that “In contrast to the extraordinary complaints considered so far under loan agreements denominated (indexed) in Swiss francs, the Supreme Court did not consider possible violations of the rights of consumers - parties to the agreement in connection with the issuance of a payment order, and the decision on the merits of the court of second instance on the refusal of the defendant in the satisfaction of the appeal.”.

“The Supreme Court indicated that the emergency complaint concerned the legal status of a consumer, a person who, as a weaker party in civil law relations, is entitled to a special type of protection. However, it was emphasized that this protection is not unlimited, and the mere fact that a party is entitled to consumer status does not mean that an unfavorable decision cannot be made in its case. The consumer remains a party to the legal relationship and is not released from the obligation to comply with the law. When making a decision in which one of the parties is a consumer, the court cannot simultaneously ignore the interests of the other party. the court concluded in a press release.