Unfair Contract Terms Directive, RECITALS Unfair Contract Terms Directive, Article 1, 2. Unfair Contract Terms Directive, Article 4, 2.

The consumer who has signed a loan agreement in a certain currency (Swiss franc, in this case) is given, by law, the facility to settle it either in this foreign currency or by other means, such as the country’s domestic currency. However, this does not mean that their engagement to financial contribution has been converted to a disjunctive obligation. This would mean a change of liability’s legal status and this interpretation cannot be extracted by the present contract. On the contrary, this clause reflects the essence of Article 291 GrCC, thus being a declaratory term, which is not examined as unfair after Directive 93/13.

The court examined a case where a loan agreement of 149,000 Swiss francs had been stipulated between a certain Greek bank and the debtor. The latter needed this loan in order to pay off another loan commitment she had to another banking institution, for acquisition of immovable property. They also signed a second loan agreement of 116,000 Swiss francs, in order to renovate this property. The bank disbursed the sum of money after checking the economic parity and converting the francs into euros. The loan’s repayment would be substantiated by monthly installments, based on the value of the currency on the deposit day. However, due to the revaluation of the franc, the debtor saw the sum of her debts increase considerably. This entailed severe damage for the debtor, regardless of the fact that she had fully undertaken the foreign exchange risk with the signing of the loan.

Is it possible for a loan agreement stipulated in foreign currency to be interpreted according to Article 200 of the Greek Civil Code, i.e., the provision enshrining the good faith imperative in the Greek legal order?

In the loan agreements under discussion, the payables shall be discharged in euros, not in foreign currency. The rationale of the Court of Appeal was that the sum of money should be paid off in francs and that this clause was not declaratory. Consequently, it proceeded to examine it and found it unfair, thus annulling it. Afterwards, the Court decided to fill in the lacuna created by setting forth Article 200 GrCC, which incorporates the good faith principle. The Court of Cassation rejected this decision and emphatically articulated that the terms were indeed declaratory and not susceptible to inquiry as regards their fairness.

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The Court turned down the cassation complaint referring to the Nafplion Court of Appeal decision 356/2018