Loan Agreements with Currency Clause in Light of Their Application in Case Law

Abstract

The borrowers with foreign currency clause in Bosnia and Herzegovina, as well as other users of these loans in the region, and generally in countries where these loans are applicable, have been meeting with great difficulties in their repayment for several years.
Despite the fact that the Swiss franc is growing almost enormously, the Libor reference interest rate has been continuously falling since 2010, while the bank aware of these facts does not adjust the interest rate to the actual movement of Libor, but on the contrary, in order to compensate the fall of interest rate the bank rises interest margin which is a fixed element of interest rates, regulating it by virtue of its own internal decisions and adapting it to its needs.
Basic courts in Bosnia and Herzegovina, in both entities, have so far adopted the claims seeking the establishment of balance between the rights and obligations of the parties, in a way to link the CHF exchange rate to the value of this currency at the beginning of the contractual relationship, and the bank is ordered not to arbitrarily change the interest rate, but to follow the actual movement of Libor.
Two rulings of the District Court in Banja Luka adopted a part of the claim by borrowers for payment of the paid excess the loan amount for illegal calculation of interest rates due to non-compliance of the same with the movement of the Libor reference interest rate, while the second part of the claim for payment relating to the application of currency clause and imbalances due to the application of the same was rejected as unfounded.