Abstract

The gloss to the Supreme Court judgments of 4 April 2019, III CSK 159/17, Legalis, and of 9 May 2019, I CSK 242/18, Legalis, in which the Court took a uniform position as regards the characteristics of the legal construction of a foreign currency exchange rate indexed credit agreement, the prerequisites justifying for recognizing the indexation clause included in such an agreement as impermissible within the meaning of Art. 385¹ § 1 of the Civil Code and the consequences of eliminating such provisions from the agreement. In both of the abovementioned judgements the Court rightly found that a foreign currency exchange rate indexed credit agreement is in fact a credit granted in the Polish currency to which a provision relating the amount of payment made by the borrower in the Polish currency to the foreign currency rate of exchange. In this case, the indexation clause is an element of the agreement which affects the amount to be paid by the borrower. One should also approve of the Court’s position that the indexation clause which does not specify the manner in which the indexation currency rate is to be determined and leaves this matter to the discretion of the bank is in fact an impermissible clause within the meaning of Art. 385¹ § 1. The Court also convincingly explained why elimination of the abusive indexation clause from a credit agreement does not invalidate the entire agreement, which continues to be binding with unchanged interest rate, though without the indexation mechanism. Doubts are only aroused by the Supreme Court’s view that so defined indexation clause specifies main performances of the parties though within the legal construction of an indexed credit agreement that clause merely modifies the amount to be paid by the borrower, which may be determined also when the indexation clause turns out to be abusive and therefore ineffective. Despite that doubt, the commented judgments provide a valuable recommendation as to how the problem of abusive indexation clauses in credit agreements is to be resolved.