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Kúria used full legal arsenal for FX decision, says chief judge

Issues

The Kúria, Hungary’s supreme court, did everything in its power under the rule of law, using all available legal tools, when it ruled on Monday that foreign currency-denominated loans are valid, the court’s chief, Péter Darák, said in an interview with national news service MTI.

The decision, taken in a legal uniformity procedure, was welcomed by markets but criticized by many politicians and borrowers. Darák said the Kúria had done everything it could in the framework of a legal uniformity procedure and that the judges were very aware of what they did not decide.

He said the decision did not adjudicate the several thousand individual cases forex-based loan borrowers have brought to the courts, even though the question of validity is also brought up in many of them. The cases involve more than a hundred different types of contracts drawn up by dozens of lenders that have different conditions, thus rulings on the question of validity may also differ, he explained.

Asked what direction the legal uniformity decision could give these cases, Darák said courts could only take decisions on these cases based on a review of each disputed contract. Even after the legal uniformity decision, the European Court’s stand on the Kúria’s question regarding unilateral changes to forex-based loan contracts could still affect these cases, he added.

He noted the lack of legislation on forex-based loans as well as judges relative inexperience in the area, adding that judges in other countries have no more experience, considering such loans are little known elsewhere.

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