Foreign Currency Loans – Good Finance Bank Makes Appeal to Constitutional Court

The Metropolitan Court of Appeal, acting at second instance, is appealing to the Constitutional Court (Ab) in a foreign currency-denominated lawsuit against Good Finance Bank Európa Zrt. Against the Hungarian state, which is also suspended until Ab’s decision, the judge announced at Thursday’s hearing.

In the reasoning of the order

The judge explained that he appealed to Ab because he considered that the first foreign currency lending law (Act XXXVIII of 2014) violated the fundamental law on several points, such as the rule of law, the constitutional fundamental right to a fair trial and the principle of legal certainty.

The ruling board, similarly to the order in evoBank and Porsche Bank, requested that Ab be declared unconstitutional and annulled by several sections of the First Foreign Currency Credit Act. According to the court, the independent status of the Hungarian state cannot be interpreted in the present litigation: it is unclear which groups of persons it intends to create, nor the extent to which the rights protected or lost by the state affect the rights of other persons.

Procedure and in the legal relationship underlying the enforceable law

In addition, the role of the Hungarian State in the statutory procedure and in the legal relationship underlying the enforceable law is beyond the scope of the oral argument, since the unregulated scope of the judgment does not confer any substantive rights that may result in the consumer becoming final.

According to the Hungarian Court of Legislation, Executive and Judiciary, such as the Budapest Metropolitan Court, the articles of law violate the basic principle that Hungary is an independent, democratic state under the principle of separation of powers and the right of everyone that an accused person or any lawsuit against him or her shall be heard by a lawful, independent and impartial tribunal in a fair and public hearing within a reasonable time.

According to the court, the law also violates the constitutionally enshrined principle of the independence of judges and the judiciary’s judicial function. In his justification, the judge stated that unfair contract terms are an ethical concept, in which the judge’s “logical conclusions based on public experience” are of paramount importance; however, the judge cannot make a professional judgment without the help of logic alone.

The judge also said that due to the tight deadlines set by the law

Conducting the evidentiary proceedings could be limited to the provision of documents, the use of additional means of proof jeopardizes or even makes it impossible to comply with the time limits.

Furthermore, the law does not answer the extent to which the plaintiff and the consumer may exercise their right to pursue a fairness claim, and this omission calls into question the material and personal scope of the court’s substantive decision.