Foreign Currency Loans – Launches Legal Trials on Ab Foreign Currency Loan Law Tuesday | Robinson Crusoe

On Tuesday, the Constitutional Court’s (Ab) court’s agenda includes lawsuits against the law on unfairness of unilateral changes to foreign currency-denominated contracts, Bitskey Botond, Ab’s secretary general, told MTI on Friday. The law, which was

On Tuesday, the Constitutional Court’s (Ab) court’s agenda includes lawsuits against the law on unfairness of unilateral changes to foreign currency-denominated contracts, Bitskey Botond, Ab’s secretary general, told MTI on Friday.

The law, which was adopted a few weeks later, based on the June unity decision of the Mansion, also presupposes unfairness and invalidity of unilateral changes to foreign currency loan contracts, such as interest, cost or fee increases.

This presumption may be sought by financial institutions in civil lawsuits against the state.

financial loan

These lawsuits are governed by the law. However, in four cases, the trial court turned to Ab because it considered that the FX-Loan Act violated, among other things, the prohibition of retroactive effect. Both the Banking Association and the Minister of Justice expressed their views on the case.
Ab has merged the petitions received so far from the Metropolitan Court and the preparation of the draft decision has begun.
Botond Bitskey, secretary general of the Ab, said MTI’s interest is that more meetings are expected to take place, so a decision is unlikely next week.

When asked when a decision would be made, the Secretary-General could not answer, but said that the body is bound by law and that the President and members of Ab are aware of the social significance of the matter.

The panel has 90 days to give a ruling on a court application, which expires in the first half of December.


So far, the three courts of first instance and the acting judges of the Metropolitan Court of Appeal and the court of second instance appealed to Ab regarding Flyway Bank, Flyway Mortgage Bank, Flyway Real Estate Leasing, Aman and Labada Savings Cooperative and Kalbank.
The judges complained, inter alia, that the FX law violates the principle of non-retroactivity, the requirement of legal certainty and the rule of law, and unnecessarily restricts procedural rights. According to some motions, the parties’ self-determination is violated by the law that modifies foreign currency-denominated contracts, including those that have already been executed, which it could do at most for the future.

The motions suggest that the legislature is intervening in the legal situation in the light of the 2008 economic and financial crisis, so it is incomprehensible why it is amending the treaties with retroactive effect from 1 May 2004. According to the petitioners, the law restricts the rights to a fair trial, for example, by imposing narrow time limits. And its rules of procedure – among other things, the absence of any remedy or suspension of the lawsuit – violate the right to equality of arms by favoring the defendant. Some Abs judges said there was not enough preparation time, which violated the principle of legal certainty and the law violates the right to redress by shortening the time limits for lodging appeals and appeals.
On 10 September, Minister of Justice Aldo Bagtusil sent a letter to Ab, arguing that the motions were unfounded and that the law was unconstitutional, expressing his hope that the body would take action in view of the social significance of the case.
Aldo Bagtusil , who was a constitutional judge between 2007 and 2010, elaborates in eleven points in his seventeen-page letter to the president and secretary general of the AB on the content of the petition.

Settle disputes in dozens of financial institutions


The Minister recalled that the Act on Settlement of Certain Issues of the Court of Justice on the Uniformity of Financial Institutions on Consumer Loan Contracts, which was challenged by Ab, does not establish new substantive rules, nor does it codify the Churian interpretation of law. Thus, in his view, there can be no retroactive application, since the Unity Decision was based on the interpretation of the European Community Directive on unfair terms in consumer contracts, which became part of Hungarian law with Hungary’s accession to the EU more than two decades ago.
According to the minister, the main purpose of the impugned law is to prevent hundreds of thousands of consumers from litigating for years, but to, expected to be completed within six months. According to Aldo Bagtusil , financial institutions did not strive to strike a balance between rights and obligations between the financial institution and the consumer in accordance with the principles of good faith and fairness.
The Legal Working Group of the Hungarian Banking Association, dated 22 September, has stated its position on Ab in a summary of more than forty pages. In essence, certain provisions of the law violate the rule of law, freedom of contract, the fundamental right of access to justice and fair trial, and the principle of separation of powers, and the adoption of the law is also unconstitutional.