By coincidence, the first civil chamber publishes a new judgment on loans denominated in foreign currency the day before an important decision rendered by the Court of Justice of the European Union, the commentary of which will soon appear in Dalloz Actualités (CJEU September 8. 2022, cases C-80/21 to C-82/21). This new judgment is intended for Newsletter and it is a continuation of several decisions that we have commented on in recent months (see e.g., Civ. 1D, April 20, 2022, n° 19-11.599 FS-B, Dalloz news, May 12, 2022, obs. C. Hélaine; D. 2022. 789 ; RDI 2022. 382, ​​obs. J. Bruttin ; and April 20, 2022, n° 20-16.316 FS-B, Dalloz actuality, May 12, 2022, obs. C. Hélaine; D. 2022. 788 ; RDI 2022. 382, ​​obs. J. Bruttin ; RTD com. 2022. 361, obs. D. Legais ). All of this contributes to the growth of a real jurisprudence on these loans whose toxicity is sometimes quickly consumed. In the judgment of September 7, 2022, these are not “Helvet Immo” loans but “Jyske Bank” contracts, the operation of which remains slightly different. Let us recall the facts to better understand the problem. They are classic in this area: following a loan offer accepted on June 20, 2007 and formalized by authentic deed of October 30, 2007, a banking company grants a borrower a so-called “multi-currency” loan in the amount of €500,000 or, depending on said clause, “the equivalent, on the loan drawdown date, in one of the main European currencies, American dollars or Japanese yen”. The loan amount was drawn down for 834,750 Swiss francs and on June 16, 2011, the bank converted it into euros. The borrower sues the banking establishment for cancellation of the conversion, citing an irregularity in this operation (based on the control of unfair clauses) and a failure by the bank to fulfill its information obligations. On appeal, the trial judges rejected the request to have certain contract clauses declared unfair since these stipulations relate to the subject of the agreement and are written in a clear and understandable manner. On the obligation to provide information, the Court of Appeal ruled out any breach in particular due to the sending of a letter informing the future borrower of possible variations in the market before the conclusion of the contract. The borrower appeals to the Court of Cassation.

The judgment rendered by the first civil chamber of the Court of Cassation resulted in a double cassation for lack of legal basis. We will examine why through the question of unfair clauses and that of information for the lender of money.

On the art of controlling the application of the control of unfair clauses

The jurisprudence of the Court of Cassation on loans denominated in foreign currency is fairly regularly based on the rules protecting consumers from unfair clauses. In this respect, it should be noted that the deemed unwritten which sanctions these clauses is imprescriptible, which the first civil chamber had the opportunity to recall recently (Civ. 1D, March 30, 2022, n° 19-17.996 FS-B, Dalloz news, April 4, 2022, obs. C. Hélaine; D. 2022. 974 notes J. Lasserre Capdeville ; RDI 2022. 382, ​​obs. J. Bruttin ; Rev. prat. rec. 2022. 31, chron. K. De La Asuncion Planes ; Civilian RTD 2022. 380, obs. H. Barbier ; RTD com. 2022. 361, obs. D. Legais ) while leaving a door ajar on the transposition of this case law into common law (see e.g. for articulation, Com. Jan. 26, 2022, no. 20-16.782, Dalloz actuality, 1er Feb. 2022, obs. C. Hélaine; D. 2022. 539 notes S. Tisseyre ; ibid. 725, obs. N. Ferrier ; ibid. 1419, chrono. S. Barbot, C. Bellino, C. de Cabarrus and S. Kass-Danno ; Civilian RTD 2022. 124, obs. H. Barbier ). In the dispute which led to the commented appeal, it was in the field of the conditions for examining unfair clauses that the discussion took place. In this respect, it should be remembered that the protection resulting from consumer law in terms of unfair terms cannot relate to stipulations on the subject of the contract, provided that they are written in a clear and understandable manner.

The appellant considered that the said protection should also apply to the concrete scope of the said clauses. The First Civil Chamber therefore recalls the latest case law of the Court of Justice of the European Union on this subject (CJEU June 10, 2021, cases C-776/19 to C-782/19, Dalloz actuality, July 9, 2021, obs. JD. Pellier, judgment cited in paragraph no. 8 of the commented judgment D. 2021. 2288; note C. Aubert de Vincelles ; ibid. 2022. 310, obs. R. Boffa and M. Mekki ; ibid. 574, obs. H. Aubry, E. Poillot and N. Sauphanor-Brouillaud ; RDI 2021. 650, obs. J. Bruttin ; RTD com. 2021. 641, obs. D. Legeais ). According to this decision, it is necessary to verify whether the bank has provided borrowers with sufficient and concrete information to understand the functioning of the financial mechanism of the loan denominated in foreign currency, on the one hand and, on the other hand, if the bank has provided sufficient information on the risk of these contracts, particularly in the event of depreciation of the currency in which the borrower receives his income in relation to the currency of account. The trial judges here noted that the clause was written in a clear and understandable manner while relating to the subject of the contract. But as fair as this reasoning is in classic unfair clause disputes, it does not correspond to the 2021 case law previously cited; the appeal judgment dated February 6, 2020.

There is therefore no error in reasoning on the merits, which explains the quashing for lack of legal basis. In short, it is necessary to check in concreto this double information (operation of the financial mechanism and risks incurred) to be able to reject the request on the ground of a clause relating to the subject of the contract. The referring court could, moreover, render a decision along the same lines but with different reasons, based on the information provided in the file. However, if one of these two pieces of information is missing, the control of unfair clauses will have to take effect. Its result is uncertain because the clauses are not all worded in the same way (see e.g., Civ. 1DApril 20, 2022, No. 19-11.599 FS-B and April 20, 2022, No. 20-16.316 FS-B, above).

On the information provided by the lender of money

The second plea criticized the judgment for having rejected the request based on the failure of the banking establishment to provide information. The argument was based on the insufficiency of the letter sent which had been used by the trial judges to deny any breach of said obligation. The Court of Appeal also noted that a normally informed investor knew the consequences of such a loan, in particular because of the possible rate of variation of the exchange rate. The applicant for the appeal criticized the lack of search by the trial judges for effective information on the risks incurred by this type of loan.

Here again, we find a cassation for lack of legal basis based on the basis of contractual liability, namely article 1147 of the civil code in its wording prior to ordinance no. 2016-131 of February 10, 2016 since contracts were concluded in 2007. The first civil chamber recalls its usual case law: “when it grants a loan denominated in foreign currency, stipulating that this is the currency of account and that the euro is the currency of payment and having as its effect of placing the exchange risk on the borrower, the bank is required to provide the latter with sufficient and accurate information enabling it to understand the concrete functioning of the financial mechanism in question and thus to assess the risk of potentially significant negative economic consequences of such a clause on its obligations financial during the entire duration of this same contract, in particular in the event of a significant depreciation of the currency legal tender in the State where it is domiciled and an increase in the foreign interest rate » (emphasis added). We find, without great surprise, a correspondence between the control of unfair clauses and the obligation to provide information on this theme since the motivations deployed in these two different parts of the judgment overlap. This very thorough control required of trial judges very often means that the bank is accused of insufficient information on the risks of contracts concluded to the detriment of borrowers.

Essentially, the first civil chamber refuses to consider that the letter sent before the signature of the would be a determining element for verifying sufficient and accurate information for understanding the financial mechanism of the loan denominated in foreign currency. To reject any failure in the bank's information obligation, it would have been necessary to motivate the decision by finding factual elements to justify the delivery of this “sufficient and accurate” information. Otherwise, the breach would then be complete and the liability of the lender of money will then be sought.

Here is a nuanced case law which imposes vigilance on all the practitioners concerned. First of all, it is up to banking establishments to protect themselves from written proof of the delivery of this information “sufficient and accurate” on the functioning of the financial mechanism of the loan denominated in foreign currency. It is then up to the lawyers to focus their reasoning before the trial judges on these precise points. justifying significant compensation. Finally, to the magistrates, in the motivation for their decisions since the Court of Cassation, due to that of the Court of Justice of the European Union, is keeping an eye on things. These scales of complexity therefore do not make the task easy for legal professionals. But case law is becoming more and more precise in any case. To be continued.

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