The first French law firm to obtain in court the annulment of Swiss franc mortgage loans taken out by cross-border borrowers.

The Court of Justice of the European Union has laid down transparency requirements for the contractual terms of Swiss franc mortgage loans. The bank must therefore provide the borrower with sufficient and accurate information enabling them to understand how the financial mechanism actually works, so that they can assess the risk of potentially significant adverse economic consequences of such a term on their financial obligations throughout the term of the loan, in the event of a significant depreciation of the euro against the Swiss franc. If the loan terms do not contain this information, they must be held unfair by the court reviewing their clarity. French courts have applied these criteria to Swiss franc loans repayable in that same currency since February 2023

In practice : the borrower must be able to assess the exchange-rate losses they could suffer if the euro falls against the Swiss franc during the term of the loan, by means of numerical simulations provided by the bank. Failing that, the loan must be annulled.

Consumers, that is, those who did not act for the purposes of a business activity, who did not receive an information notice containing a definition of exchange-rate risk, tables with scenarios of adverse CHF/EUR exchange-rate movements and numerical simulations of potential exchange-rate losses (e.g. attached notice).

For non-consumers, that is, professionals, loans cannot be annulled if they were concluded more than 5 years ago. However, the borrower may seek compensation for financial loss in the absence of adequate information on the risk of exchange-rate loss 

You must bring the case before the competent courts.

In practice : with the exception of BNP Paribas Personal Finance, banks refuse to annul loans through amicable negotiation.

The Swiss franc loan contract and the purchase contract for the property financed in euros

The risk is the cost of the proceedings (agreed flat fee, costs and disbursements) and an order to pay legal costs under Article 700 of the French Code of Civil Procedure (about EUR 3,000)

If the decision is favorable, the borrower will only have to return the euro equivalent of the capital borrowed, and the bank will be ordered to return the euro equivalent of the principal repayments, interest and fees (and possibly borrower insurance premiums) received under the loan since the start of the contract.

The mutual restitution claims are set off against each other up to the lower amount.

If the borrower has paid more than the initial euro equivalent, the bank will have to refund the excess.

Otherwise, in that case, the borrower will have to pay the balance.  Note: if the annulment only reduces the outstanding capital owed to the bank (e.g. from EUR 350,000 to EUR 150,000) and that amount remains significant (e.g. EUR 100,000 or more), you must be able to pay it a few months after the favorable decision, including if it is handed down at first instance within 12 to 18 months.

If the decision is favorable, the bank should be ordered to pay your legal costs under Article 700 of the French Code of Civil Procedure, i.e. about EUR 3,000 per instance. 

Yes

Proceedings begin with a claim before the competent Judicial Court, which is the court of first instance. They last about 12 to 18 months. The losing party may decide to appeal to the Court of Appeal, the higher court. An appeal is a new set of proceedings that may last a further 12 to 18 months or so. The appellate ruling may be challenged before the Cour de cassation by the party that loses on appeal. In that case, the review of the appeal takes about 12 months.

A favorable decision must be enforced immediately, even at first instance, despite any pending appeal (to the Court of Appeal or the Cour de cassation).

A flat fee covering fees, costs and disbursements is set for each set of proceedings

A success fee is added to these flat fees

In practice : you can call on the legal protection cover included in your home insurance. Depending on the scales, the cover is about EUR 1,000 per instance. Several legal protection policies may be taken out, subject to Article L. 121-4, paragraph 4, of the French Insurance Code.