The first court ruling, in favor of Swiss franc loan borrowers, was published recently by the Multi-Member First Instance Court of Athens intensifying the conflict between the loan borrowers and their bank lenders.

According to court ruling No 334/2016, the Bank is obliged to accept payments of monthly installments as well as the partial or full discharge of Swiss franc loans based on the exchange rate of currency valid at the date of the conclusion of the relevant loan agreements and not based on the exchange rate at the day of payment. That makes a dramatic difference as most currencies including euro have been strongly devalued towards the Swiss franc over the last few years.

In particular, the First Instance Court rules the following:

• The Bank is obliged to include all interests of installments and payments made by loan borrowers according to the exchange rate valid during the period of disbursement of the loan.
• The Bank is obliged to accept partial or full payment of installments or the discharge of Swiss franc loans in euros valid at the time of payment of the loan in euros.
• In case of denunciation of the loan agreement, the Bank must omit the conversion of the loan’s balance in euros based on the current sale price of Swiss francs, at the date of the denunciation.

Despite being a lower level court ruling with no immediate execution force, this judicial decision is a positive outcome for thousands of loan borrowers and it will certainly influence settlement of over 9 billion loan agreements denominated in Swiss francs. 

Furthermore, if this judgment is confirmed by Higher Courts it will constitute binding case law for forthcoming similar rulings eventually leading to a legislative intervention or Ministerial decision for settling the matter in compliance with the Court’s rulings.