Victims and Winners of the Swiss Franc Loan Saga

Two years ago, the Supreme Court of the Republic of Slovenia completely changed its position on loans denominated in Swiss francs—a total reversal of the case law that the court had unanimously upheld five years earlier. Although no significant changes have occurred in the intervening case law, doubts have meanwhile arisen regarding the impartiality of some judges. It emerged that one of them is a judge whose appearance of impartiality can legitimately be challenged. At first sight, it may seem odd that such a revelation can so se riously undermine public expectations of the judiciary and the authority of its decision-making, yet trust is an exceedingly fragile commodity. Above all, this episode compels us to re-examine the arguments for the previously de scribed—and, to the author, still incomprehensible—reversal of case law. The author is convinced that the case law as formulated by the Supreme Court of the Republic of Slovenia carries a price: not only in the form of uncertainty and the erosion in confidence in contract law or the principle of the rule of law— principally threatened by retroactive legal regulation—but also in the form of demonstrably higher credit costs for future borrowers.

Key words: bank, credit, Swiss franc, CHF, legal certainty, retroactivity, Supreme Court of the Republic of Slovenia.