New Supreme Court Practice on Temporary Injunctions in Swiss Franc Loans

Introduction: Significance of Supreme Court Decision II Ips 10/2025 from April 16, 2025

The Supreme Court of the Republic of Slovenia recently issued a landmark ruling (II Ips 10/2025) clarifying the legal position of debtors who have entered into Swiss Franc loans (CHF), especially regarding the possibility of obtaining temporary injunctions that temporarily suspend the effectiveness of the loan agreement. This protects consumers from financial harm during litigation. The decision provides clear guidance on how to effectively safeguard debtors’ rights when there are justified suspicions of unfair contractual terms.

Background: Swiss Franc Loans and Legal Challenges

Swiss franc loans were popular in Slovenia due to lower interest rates compared to euro loans. However, currency fluctuations caused many debtors to face financial difficulties, as they had to repay significantly higher amounts than originally borrowed. Consequently, many borrowers began challenging the validity of their loan agreements, mainly due to unfair terms and inadequate disclosure of currency risk.

Legal issues raised by Swiss franc loans:

  • Are contractual terms transferring currency risk solely to the debtor unfair and thus void?
  • How can debtors effectively protect their rights during proceedings to avoid paying amounts based on disputed exchange rates?
  • Is it possible to obtain a temporary injunction that suspends the loan agreement and prevents enforcement actions?

Core of the Supreme Court Decision: Temporary Injunction as Effective Protection

1. Possibility of Issuing a Temporary Injunction

The Supreme Court confirmed the lower courts’ view that a temporary injunction suspending the effectiveness of the loan agreement and the notarial deed (enforcement title) is sufficient to effectively protect the debtor. This means that during litigation, the loan agreement temporarily does not operate, preventing maturity of claims and enforcement.

2. Rejection of Additional Prohibitions and Financial Penalties

The Court rejected proposals to extend the injunction to prohibit the creditor from disposing of claims, enforcing them in enforcement proceedings, or any other collection under threat of financial penalties, reasoning that:

  • The debtor already has legal remedies (objections in enforcement proceedings) that effectively prevent abuse.
  • Prohibiting disposal of claims could unjustifiably infringe on the creditor’s right to judicial protection.
  • Financial penalties are unnecessary because the injunction itself suspends the loan’s effectiveness.

3. EU Law Basis

The decision aligns with the Court of Justice of the European Union’s ruling (Case C-287/22, Gettin Noble Bank), which requires national courts to provide effective consumer protection, including temporary measures preventing consumers from paying amounts exceeding those justified by a final ruling on unfair terms.

Detailed Analysis of the Decision

Conditions for Granting a Temporary Injunction in Swiss Franc Loans dispute

The Supreme Court confirmed that the following must be met:

  • Likelihood of contract nullity: The debtor must likely prove that the loan contains unfair terms making it void (e.g., insufficient disclosure, unfair currency risk transfer).
  • Irreparable harm: The debtor must demonstrate that continuing repayments under disputed terms would cause serious financial harm.
  • Proportionality: The injunction must be proportionate and not unjustifiably restrict the creditor’s rights.

Protection of the Debtor During Proceedings

By issuing the injunction:

  • The loan agreement and enforcement title are temporarily suspended.
  • Claims do not mature, preventing enforcement.
  • The debtor avoids paying amounts that might later be refunded due to unfair terms.

Swiss Franc Loans Creditor’s Rights

  • The creditor retains the right to file enforcement requests.
  • The debtor can raise objections, which, although not suspensive, are effective due to the injunction.
  • Prohibition on claim disposal is unnecessary and could infringe on economic freedoms.

Practical Impact for Consumers and Creditors

For Consumers (Borrowers)

  • The ruling strengthens legal certainty and effective protection against unfair loan terms.
  • It allows temporary suspension of payments under disputed loans, reducing financial pressure during litigation.
  • It confirms the availability of judicial remedies to protect consumer rights.

For Banks and Creditors

  • The ruling emphasizes the need for transparent and fair loan terms.
  • It requires proper disclosure of currency risk to borrowers.
  • It limits enforcement options during ongoing disputes over unfair terms.

Practical Advice for Borrowers with Swiss Franc Loans

  1. Review Your Loan Agreement
    Seek legal advice to assess whether your contract contains unfair terms, especially regarding currency risk.
  2. Consider Filing a Lawsuit and Requesting a Temporary Injunction
    If justified, request a temporary suspension of loan effectiveness to halt payments during litigation.
  3. Gather Evidence
    Document all payments, communications with the bank, and any irregularities in disclosure.
  4. Consult Experienced Legal Counsel
    A lawyer can help prepare legal strategies and applications for temporary measures.

Conclusion

The Supreme Court’s decision II Ips 10/2025 marks a significant milestone in protecting debtors with loans in Swiss francs. It confirms that a temporary injunction suspending the loan agreement and enforcement title provides effective legal protection, preventing financial harm during litigation. At the same time, it balances the rights of creditors, ensuring fair treatment on both sides. If you face challenges related to Swiss franc loans, timely legal consultation is crucial to safeguard your rights and take advantage of the protections affirmed by this ruling.

* Finding yourself in need of legal services in Slovenia and looking for a law firm in Ljubljana, consider contacting us using our contact details as published on our web page. A qualified law firm can provide you with legal advice and representation – helping you navigate the complexities of Slovenian law and ensuring that your rights are protected. You can find more information on legal acts in Slovenia on the official pages of the Slovenian government. More legal topics can be found on our law firm publications page.

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