Swiss Franc Mortgages – The First Cypriot (Interim) Decision
By: Savvas Savvides, Partner of Michael Kyprianou & Co LLC
Swiss Franc loan contracts involved thousands of borrowers in default both in Cyprus and other Balkan and European countries. This particular banking product that had been promoted especially in the early 2000’s resulted in a severe socio-economic problem due to its adverse effects suffered by borrowers due to the depreciation of the exchange rates. The indignation of borrowers that observed a substantial increase in their balances on their loans and payments forced them to resort to legal measures to defend their legal rights and entitlements.
The start of the judicial processes in various other European Courts and their decisions in favour of the borrowers have played a prominent role in the protection of creditors legal rights and the treatment of lending contracts that demonstrated the controversial and damaging clauses contained within the contracts against their clients. Consequently, the National European Court tended to adopt decisions that were in favour of the borrowers.
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