WIBOR? Something important happened in the Luxembourg Court

Anna Cudna-Wagner: The hearing before the CJEU took place. That's all there was to it. There were many voices earlier that there would be a judgment. Such suggestions were unjustified, because the CJEU judgment is never issued on the day of the hearing. Especially if the opinion of the Advocate General is to be announced earlier. In this case, we will learn it on September 11. We can therefore expect the judgment in December 2025 or in the first quarter of 2026.

Michał Romanowski: However, something important happened on June 11. Namely, the attorney for the plaintiff borrower changed the fundamental claim he had presented. At the stage of the action – hence the alarming headlines that the editor has read – he demanded recognition that the construction of the mortgage loan, where the so-called interest rate is WIBOR, is inherently unfair. At the hearing, he said that he was not questioning the WIBOR rate as such or its compliance with the BMR, but was questioning the reliability of the information that the bank provided to the client. Therefore, it can be said that after the hearing, it is indisputable that mortgage loan agreements based on WIBOR are legal and the rate itself is a fair rate, while the essence of the current accusation comes down to whether the bank properly or improperly fulfilled its information obligations.

This is a very big change. I will say with some optimism that the financial market can sleep soundly, because the basic structure is no longer questioned. We would therefore be surprised if it were questioned at the level of the CJEU judgment.

ACW: These were four preliminary questions from the District Court in Częstochowa. The court asked them in a cascade, meaning that each subsequent question is only valid if the answer to the previous one is unfavourable to the bank. What are these four questions? First, the court asks whether an interest clause with the structure of WIBOR plus margin can be examined at all under Directive 93/13 on unfair terms in consumer contracts. Because the directive itself states that it does not apply if the contractual clause reflects legal provisions. It is assumed that in such a case the legislator has already taken care of the fairness of the clause.

The second question aims to determine whether the interest clause defines the main benefit, the main subject of the credit agreement. Again, if this is the case, we only examine the clarity of the clause, whether it is clear, understandable. If the interest clause is clear, we do not proceed to examine whether it ensures the balance of the parties, i.e. whether it is fair.

The third question is about fairness: does such a WIBOR plus margin clause guarantee the parties' balance? The fourth one aims to obtain an answer to the possible consequences if such an interest condition were unfair. Does the agreement transform into a loan with a fixed interest rate or, as in the case of Swiss francs, does it fail? However, the CJEU decided that this last question would not be considered during the hearing and we were asked not to present a position on this issue.

ACW: I think a Polish court would be able to handle it. However, such an increased number of questions to the CJEU is not a Polish specificity, but also not typical of Italian or German courts. We are in third place with a result of about 40 questions per year.

MR: We used to complain that Polish courts do not ask questions to the CJEU, perhaps now the pendulum has swung the other way. Let us remember, however, that each case of this type plays an important educational role when it comes to the interpretation of EU law. And this one was classified by the CJEU as a case of critical importance for the law of the entire European Union.

ACW: Usually, cases before the CJEU are heard by a panel of three judges. Here we have five judges. That alone speaks to its rank.

MR: Because in fact we are starting to ask ourselves questions not only about whether national law benefits from the presumption of fairness, and then the directive does not apply, but also whether EU law benefits from such a presumption of fairness. In this case, the point of reference is the so-called BMR regulation. During the hearing, the question was asked whether the European legislator, like Dr Jekyll and Mr Hyde, is sometimes fair and sometimes dishonest. Because we have no doubt that Directive 93/13 is to ensure the fairness of contracts with consumers, and in this case, in the case of the BMR regulation, the purpose of which - explicitly expressed in the regulation - is also to protect consumers, we are considering whether it ensures the fairness of the interest term, which is consistent with this regulation. Therefore, we can talk about a precedent-setting case that has an impact not only on Poland, but on the entire financial market of the European Union. Portugal and the European Commission clearly indicated this in their positions.

MR: We were as one.

ACW: As for the first question, we presented the position that the provisions of both Polish and European law provide for a broader standard, according to which a bank offering variable interest must apply the model: reference index plus margin. And so it did. The contractual provision that says: WIBOR plus margin, falls within this broader standard. Therefore, we believe that an exemption from assessment under Directive 93/13 applies here. In this respect, we received support from Poland, Portugal, and the European Commission. The EC emphasized that the BMR regulation, which in its content indicates that its purpose is also to protect the consumer, is a regulation that guarantees balance and fairness. And if we use an index within the meaning of the BMR, then the examination of this index under the directive is excluded. This examination had already taken place earlier, it was carried out by the Polish Office of the Polish Financial Supervision Authority, but, importantly, also by the European Securities and Markets Authority (ESMA). As for the second question, we very strongly emphasized that the BMR regulation changed the directive on mortgage credit, the implementation of which is our act on mortgage credit. And there it was indicated that the name of the indicator, the name of the administrator and the consequences of using the indicator should be communicated to the consumer. And consumers got it. The bank provided information on what would happen if WIBOR increased to 3, 5, 10, 15 percent.

ACW: All of us, except for the consumer side, agreed that if the bank used the model required by national and European law, i.e. a reference index plus a margin, then the model compliant with the law cannot be unfair. Moreover, it is the most common model. WIBOR is a key index used in almost 100 percent of variable interest rate agreements. If the interest term is a term commonly used on the market, then this circumstance also proves fairness. These two criteria, i.e. whether the contractual term does not put the consumer in a less favorable situation than the statutory model and the commonness of the contractual term, result from the case law of the CJEU, e.g. in case C-265/22, in which the opinion was prepared by Advocate General Laila Medina. The Advocate will also prepare an opinion in our case.

MR: The BMR regulation appeared as a response to the irregularities that occurred with LIBOR. And it became a kind of certificate of the integrity of reference indicators, which are covered by this regulation and the implementing regulation of the European Commission. And this certification, carried out in the interest of the consumer, is multi-stage, because it is carried out by the KNF and ESMA. The second issue, and this is what the dispute will be about, which was clearly emphasized by the plaintiff's attorney, is whether the consumer should receive all the information about the method of determining WIBOR. Because, for example, if we go to a restaurant and order a dish, the chef is obliged to come out and show us everything that contributed to the creation of the dish, or is it enough for the waiter to tell us what kind of fish we have and where it comes from?

ACW: The legislator has authorized certain national and European bodies to certify these indicators and to control them, removing this burden, or rather taking away such a possibility from other bodies, in particular courts. Here we are talking about a certain division of competences. I would like to point out that the aforementioned control is carried out systematically, in the case of WIBOR every two years. The announcement on the last cyclical assessment of WIBOR, covering the period from December 2022 to December 2024, was published by the KNF on May 29. The announcement contained a positive assessment and confirmed that WIBOR "maintains the ability to measure the market and economic realities for which it was established". This proves the suitability of this indicator for setting interest rates in credit agreements.

MR: I think so. The topic of Swiss franc loans is dying out, this market is ending, some law firms are looking for a new area. It is worth noting, however, that the essence of the problem with Swiss franc loans and WIBOR is incomparable. This is a completely different type of issue. When it comes to the assessment of WIBOR and mortgage loan agreements based on WIBOR, the president of the Office of Competition and Consumer Protection and the chairman of the Polish Financial Supervision Authority gave a positive assessment. So an attempt to present this issue in a similar way to the case of Swiss franc loans is an element, as the editor suggested, of the business strategy.

ACW: We are not aware of any such verdict, in a case similar to the one discussed here, which would already be final. The verdict of the court in Suwałki was issued on the basis of specific evidence and situations. However, to our knowledge, it is not a final verdict, and the views of this court are isolated.

MR: My experience shows that it doesn't. I admit that I was surprised, positively, of course. I think that the plaintiff's attorney changed tactics after realistically assessing the chances. And, using sports language, he gave up the fight where it was doomed to failure.

Anna Cudna-Wagner is a legal adviser and partner in charge of the dispute resolution practice at CMS law firm.

Michał Romanowski is a professor, attorney, and partner at Romanowski and Partners Law Firm.