Courts Preparing For Wave Of Bank Lawsuits In FX Loans Cases

Budapest, July 15 (MTI) – Hungary’s courts are making preparations for a big wave of lawsuits filed by banks in connection with the government’s bailout scheme for borrowers in foreign currency, the daily Magyar Nemzet said today.

In Budapest 305 judges and a large number of clerks are awaiting legal action to be brought by banks against the state, Sandor Fazekas, the head of the Budapest Court of Justice, said. Only the Budapest municipal court is allowed to hear these types of cases in the country. Most of them are expected to be launched by August 20, Fazekas said.

One task of the courts will be to suspend some 4,000 ongoing forex loan cases, he said. These cases were started before a new law on a forex bailout passed in parliament on July 4.

A new type of forex lawsuit is expected to be launched by about 410 banks. In these cases the defendant will be the state, represented by the relevant ministry.

Lower courts must come to a ruling within a month.

Judges specialising in civic business cases and related personnel have been called on to cut their holidays short to complete the work, the paper said.

A law recently passed in parliament stipulates that different exchange rates applied in the disbursement and repayment of forex loans as well as unilateral changes to retail loans are void. Foreign-currency denominated loans will be converted to forint-based ones by year-end.

Banks refunds to clients are estimated at 700-900 billion forints (EUR 2.3-2.9bn) according to the central bank, unless they are able to prove in court the legality of their practices.

Source: http://mtva.hu/hu/hungary-matters