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Croatian top court sides with CHF borrowers in dispute with banks

Croatia's Supreme Court rejected the request of local banks to review a lower instance ruling handed in collective proceedings regarding Swiss franc-indexed loans, Addiko Bank AG said Sept. 17, adding that it was analyzing the potential consequences of the verdict.

The Supreme Court confirmed that clauses linking local currency payments to the Swiss franc in the loan agreements are null and void. Austria-based Addiko, which operates in Croatia via Addiko Bank d.d., said that the judgment will make it possible for clients of its Croatian subsidiary to claim nullity of the CHF clause in individual lawsuits.

In addition to Addiko, other lenders involved in the dispute included UniCredit SpA unit Zagrebacka Banka d.d., Intesa Sanpaolo SpA unit Privredna banka Zagreb d.d., Erste Group Bank AG unit Erste&Steiermärkische Bank d.d., Raiffeisen Bank International AG unit Raiffeisenbank Austria d.d., OTP Bank Nyrt. unit OTP banka Hrvatska d.d., Splitska banka, hich is now part of OTP banka Hrvatska, and PAO Sberbank of Russia unit Sberbank d.d., SEENews noted Sept. 18.

The Supreme Court's decision refers to a high commercial court ruling which in 2018 rejected the appeal filed by the eight banks and upheld a 2013 ruling of Zagreb's commercial court. The 2013 ruling sided with around 100,000 bank clients represented by Croatia's consumer protection association. The CHF-indexed loans were offered between 2004 and 2008 and the costs of their servicing grew significantly following the strengthening of the Swiss franc in the wake of the 2008 global financial crisis. Local banks also decided to raise interest rates, which increased monthly repayments on the loans even further, the report said.