Gross violation of the bank’s rights of defence

Superficial and common judicial views on the so-called ‘CHF loan cases’ do not justify the conduct of civil proceedings in violation of the bank’s rights of defence, as the court of second instance has ruled.

In a case in which we are assisting our client, a major financial institution, the court of first instance conducted the proceedings, including the taking of evidence, despite the defendant’s express objections and requests, inter alia on the basis of a method of taking evidence unknown in civil procedure – the examination of the parties in writing, and despite the defendant’s express request for a trial.

As a result of our appeal, the court of second instance set aside the appealed judgment and remanded the case in its entirety, stating, inter alia, that the right of defence had clearly been violated.

The decision was based on evidence that does not exist in the Code of Civil Procedure, namely the examination of the parties in writing. Moreover, the public hearing of the case is one of the principles of civil law guaranteed to the Parties and, at the same time, the Court of first instance could not fail to see that the defendant could raise possible objections or arguments not expressed in the pleadings.

Courts must hold a trial if requested

Recent case law clearly indicates that courts cannot rule in closed session if one of the parties requests a trial (LEX No. 3174835). Moreover, the mere inclusion in the claim of motions as to evidence, which can only be dealt with at a trial, is tantamount to a request for a trial (within the meaning of Article 1481 § 3 of the Code of Civil Procedure). In such a situation, only the admission of the claim allows the judgment to be rendered in closed session (LEX No. 3217575).

Thus, according to the views of legal scholars and case law, a request for a trial obliges the court to hold the trial unless the defendant has admitted the claim.

The Code of Civil Procedure provides for exceptions that limit the public hearing of a case at a trial. However, these cannot be interpreted expansively, in particular by arbitrarily selecting the grounds that allow the case to be heard in closed session (Supreme Court in Case III UK 380/19, LEX No. 3150231). However – and this is crucial – a party’s request for a trial is absolutely binding on the adjudicating court, even if the request is manifestly unfounded (LEX No. 3030041).

Banks have the right to a trial and to defend themselves

In the case in question, the defendant, who did not admit any part of the claim, clearly requested a trial. Importantly, not only did the court commit a gross violation of the law by failing to set a deadline, but it also conducted the taking of evidence by examination of the parties in a manner that was thoroughly inconsistent with the rules of the Code of Civil Procedure. The delivery of a judgment in closed session, when the parties have not waived their right to a public trial, undoubtedly constitutes a deprivation of their ability to act and defend their rights in the trial.

The oral reasons for the judgment of the court of second instance, which are in line with the interpretation of the provisions expressed in the grounds of appeal, are a clear signal that none of the cases against the banks allows for arbitrary and discretionary procedural decisions to the detriment of civil procedure and, above all, the right of defence.

The usual and, as it sometimes turns out, not very insightful approach of the courts to CHF loan proceedings should change. The courts cannot treat such cases in an automatic and condescending manner, simply because ‘de facto everything has already been said’.

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Artur Kluge

Weronika Magdziak-Śliwa

Andrzej Pałys