Hungary’s Kúria (supreme court) is assessing Thursday’s ruling of the European Union’s Court of Justice (CJEU) affecting forex borrowers, the Kúria said in a statement.
The ruling stated that “the unfairness of an unclear contractual term which places the exchange rate risk on the borrower and does not reflect statutory provisions may be subject to judicial review.”
The CJEU, in a preliminary ruling requested by Hungary’s Budapest Regional Court of Appeal, said that financial institutions are required to provide borrowers with adequate information to enable them to take well-informed and prudent decisions.
Two Hungarian borrowers brought legal proceedings before the Hungarian courts against OTP Bank and OTP Faktoring concerning a credit contract for the provision of a loan denominated in Swiss francs. The Hungarian courts referred the case to the CJEU to determine if elements of the contract were unfair.
The Kúria said the ruling concerns “extremely complex legal issues”, and in order to discuss its interpretation, the Kúria’s chairman will call a meeting of a consultative body which includes representatives of all levels of the judiciary involved in cases linked to forex loans.
The opposition Socialists said in response to the CJEU ruling that Hungary’s parliament should pass a law stating that banks misled forex loan-holders, and borrowers should not be the sole bearers of the losses resulting from exchange rate changes.
Socialist deputy leader László Szakács told a press conference that the CJEU ruling could result in hundreds of individual lawsuits. Instead parliament should pass legislation on the matter, especially considering that it concerned about 10 percent of Hungarians, he said.