(MTI) – A Budapest court turned down a claim filed by savings cooperative Kethely és Videke against the Hungarian state, in connection with the lawfulness of unilateral changes to forex loans, on Friday.
The first-instance ruling established the unlawfulness of every unilateral contract modification of foreign-exchange denominated loans at the savings cooperative.
The cooperative initiated the suspension of the procedure and wanted the Budapest Capital Regional Court to turn to the constitutional court as it claimed the relevant law to be unconstitutional. However, the court said that no constitutional rights had been infringed.
Under the ruling the savings cooperative must pay the state — the defendant — about gross 500,000 forints in court expenses within 15 days.
The savings cooperative will most likely not appeal the ruling, its legal representative said.
The ruling left the unilateral amendments made by the savings cooperative to its retail loan contracts as declared unfair in general in legislation approved by Hungary’s lawmakers in July. Under the so-called debtors’ relief law, financial institutions must refund clients for the damages caused by the unilateral amendments unless they prove their fairness in court.
The July act also invalidated banks’ use of differing exchange rates when calculating dues and obligations on FX contracts, and obliged banks to make refunds to clients calculated through the central bank’s daily fixings.
The savings’ cooperative’s challenge was the first one of over 30 cases initiated by financial institutions to be heard by the court during the next month. The next one will be the filing of K and H Bank, the unit of Belgium’s KBC, to be heard on Monday.