Foreign Currency Loans – Now Constitutional Court Turns Ab Judicial Petitions Hearing

The full session of the Constitutional Court (AB) on Tuesday began hearing court motions to attack the law on the unfairness of unilateral changes to foreign currency-denominated contracts, but no decision has been made yet, said Botits Bitskey, Ab’s secretary general.

The body will shortly continue to discuss the matter

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The law, which was adopted a few weeks later, based on the unity ruling of the Mansion in June, states that unfairness and invalidity of unilateral changes to foreign currency loan contracts, such as increases in interest rates, costs or fees, must be presumed.

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

Has merged petitions received so far from the Metropolitan Court

Has merged petitions received so far from the Metropolitan Court

Botits Bitskey has previously indicated that more meetings are likely to be needed to reach a decision, but the board is bound by law and the president or members of Ab are aware of the social significance of the case. The panel has 90 days to take a decision in a court case, which expires in the first half of December in this case.
So far, three court cases in the first instance have been referred to the Ab by the Metropolitan General Court and one court by the Metropolitan Court of Justice in Goodbank,
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.

Arguing that the motions were unfounded 

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On 10 September, Minister of Justice László Trócsányi 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.
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.

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