Foreign currency loans – Court quashed in four lawsuits

Last year, in all four cases, the Metropolitan Court of Appeal (Ab) appealed to the Constitutional Court (Ab) on the ground that certain sections of Act 38 of 2014 – First Foreign Currency Certified – were in conflict with the Basic Law.
The panel argued, inter alia, that the law violated the principle of the rule of law, the fundamental constitutional right to a fair trial and the principle of legal certainty.

The court’s non-constitutional sections


Ab’s ruling of January 29, 2015, ruled that the court’s non-constitutional sections of the first Foreign Currency Loan Act were not unlawful, and the panel therefore rejected judicial initiatives to determine and unconstitutionalize them. Suspended lawsuits could continue.
In its ruling on Friday, the court rejected Goodbank Bank’s and E-bank Bank’s request for the court to initiate a preliminary ruling before the Court of Justice of the European Union and, in the case of E-Money Bank, the confirmatory application for recourse to Ab.
In its appeal, Goodbank Bank Zrt. Stated, inter alia, that the law on foreign currency loans infringes EU law because the state failed to notify the European Commission.

National law deviated from the directive in favor of the consumer


He pointed out that the Curia had found that, in the implementation of the EU Unfairness Directive, national law deviated from the directive in favor of the consumer. According to the applicant, the Directive was infringed by failure to notify, which would render the national legislation inapplicable. If the court does not share this opinion, a preliminary ruling procedure should be initiated before the Court of Justice of the European Union, the petitioner said. According to the defendant Hungarian State, there is no obligation to notify in this case, there is no place for a preliminary ruling procedure, and the law cannot be considered as legislation transposing the Directive.

Among other things, E-Money Bank repeatedly asked Ab to do so because, in its view, the Board did not investigate all aspects of the issue and rejected certain questions without any substantive examination. According to the bank, the law has created doubly irrefutable presumptions, and the rebuttal of the presumption by the means of logic cannot be successful either.

The law does not seek to balance the interests of the parties to the contract, only the interests of the consumers, according to the applicant. The law also violates the right to property, because its provisions result in a reduction in the assets acquired by the financial institution in the course of law-abiding behavior, without naming a public interest that could restrict the right to property.

The Metropolitan Court dismissed the bank’s claim against the bank


In a lawsuit on E-bank Bank on September 2, 2014, the Metropolitan Court dismissed the bank’s claim against the bank. On 29 September 2014, the Metropolitan Court of Appeal, acting at second instance, referred the matter to the Constitutional Court (Ab), considering that several sections of the Foreign Currency Credit Act were unconstitutional and suspended the trial pending the decision of Ab. In a lawsuit filed by Porsche Bank Zrt. In September last year, the defendant appealed against the judgment of the Court of First Instance.

At that time, the court rejected the bank’s claim because it considered that the contractual terms did not fall within the scope of the FX Act. The Metropolitan Court of Appeal, acting at second instance, appealed to Ab on its own jurisdiction – not at the request of the bank – on 14 October 2014.
At the request of the court, the applicant’s legal counsel for the bank stated that he maintained the grounds of his appeal and requested that the judgment at first instance be upheld. The defendant Hungarian State also upheld its appeal.