The Metropolitan Court of Appeal upheld the judgment of the Court of First Instance in its forint-based contracts against Good Finance Bank, Good Finance Transmission and Asset Management Bank and Good Finance Car Vehicle Leasing.
In the Good Finance v. Hungarian State case
The appeal panel upheld the appealed part of the judgment at first instance, and did not touch the non-appealed part in its judgment delivered on Friday. The judge explained that the court of second instance found the application for constitutional review and the preliminary ruling procedure of the European Court of Justice and, in this context, the suspension of the proceedings to be unfounded.
According to the court of second instance, the Metropolitan Court, in compliance with the substantive and procedural rules, correctly investigated the facts, and the court did not see any violation of law that would have justified the reversal or quash of the first instance judgment.
The reference rate, according to the court of second instance, eliminates the need for examination only if it is automatic, but if the financial institution has any influence or the application is not automatic but depends on the discretion of the party, this excludes foreseeability monitoring interest rates. He added that this is not a case of misapplication of the reference rate, but that the wording has the potential to make the customer untraceable and make it almost impossible to enforce consumer claims.
According to the Metropolitan Court of Justice
The plaintiff was wrong to plead the direct unlawfulness of the judgment in EU law, both because the directive he referred to did not apply to credit agreements existing before 21 March 2016 and because there was no need to reduce exchange rate risk.
The panel also agreed with the first instance ruling that the conditions for transparency were not met for some clauses. According to these clauses, the bank raises non-interest-related commissions, costs and fees related to loans and loans up to the annual average inflation rate published by the Central Statistical Office.
According to the court, this clause does not include an automatic increase in commissions, costs and fees, but only regulates the upper limit for other reasons.
The subject-matter of the litigation did not meet the requirements of clarity, clarity, comprehensibility and transparency, did not comply with the law, and was therefore unfair, and the plaintiff tried unsuccessfully to overturn the presumption thereon, the judge said.
In a first-instance ruling by Good Finance in February this year, the court dismissed the bank’s and leasing company’s actions and also sought a preliminary ruling from the European Court of Justice.
Judging the Good Finance Bank lawsuit
The judge explained that the Metropolitan Court of Appeal upheld the first instance court’s ruling, but had partially changed its reasoning, by stating that the contractual terms in the lawsuit were consistent with the clear, the principles of objectivity, effectiveness and proportionality, as well as of the principle of notice.
The panel also upheld the part of the judgment of the Court of First Instance in which it disagreed with the appellant’s argument concerning the need for a preliminary ruling. It did not share the view expressed by the appellant in its appeal that the contractual clauses were fair because they were drafted in accordance with the social, economic and legal context in force.
The judge explained that the Court of First Instance was right to hold that the requirement of transparency did not apply to contractual clauses.