The European Court of Justice Ruled in Favour of Banks in a Fee Dispute

Category: News 25 February 2020

European Court of Justice, through their ruling in case C-621/17 as of 03.10.2019, resolved a legal question raised by the Hungarian Supreme Court regarding the charging of loan processing fees. The European Court of Justice has held that the European Directive 93/13/EEC, although it states that a contractual provision on loan processing fees should be clearly and intelligibly drawn up, does not in fact require that provision to specify all the services provided in return for the consideration in question.

Moreover, the contractual provision for loan processing fees, which does not enable to unequivocally determine what specific services are provided in exchange for those fees, does not create an imbalance in the rights and obligations of the parties arising from the loan agreement.

The ruling of the European Court of Justice, can be found at the following link:

The ruling of the European Court of Justice, in terms of the provision of Paragraph 2, Article 16 of the Constitution of the Republic of Serbia, is considered to be a generally accepted international legal rule that is directly applicable in the Republic of Serbia, unless it is contrary to the Constitution, and, as such, forms an integral part of the legal order of the Republic of Serbia.

The aforementioned judgment, by the authority of the law, specifies the legal meaning of the term "clear and unambiguous loan processing fees", which is the subject of different interpretations and topic of litigations between clients and banks in our country, thus complementing the Legal Position on the Admissibility of Contracting Loan Processing Fees of the Supreme Court of Cassation as of 22.05.2018.

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