Monday, November 28, 2011

Foreign currency loans outside of the law: banks, borrowers no longer need?

The decision of the Supreme Court of Ukraine is specialized in civil and criminal cases (VSSUGUD) recognized the illegal issuance of OTP Bank currency credit, has created a very dangerous precedent in the financial system. Recognition at the level of appeal invalid credit contracts in the currency of one bank threatens mass use of this jurisprudence others (lawyers, lenders, guarantors, etc.). Bankers suggest: after the decision VSSUGUD they encountered repeatedly increased flurry of lawsuits by borrowers who try to evade repayment of their debts. If the courts will stand to the side of unscrupulous borrowers might happen collapse the state of the monetary system. Seriousness of the problem is confirmed by the fact that today in the foreign currency denominated almost half of bank loans. Currency misunderstanding attempts of debtors to challenge the legality of lending in foreign currency being taken for the past two years. The process has put the sensational trial between VTB Bank and Donetsk Ltd. "Central", which resulted in local economic and appellate courts to invalidate credit agreement (and with them - and the contract of mortgage) on the grounds that the loan was issued not in UAH and foreign currencies. The Court considered that at the conclusion of the exchange agreement, both parties were required to obtain a so-called individual foreign exchange NBU license. Achieve cancellation of the decision of Donetsk appeal economic court bank failed. And only by a decision of the Supreme Economic Court, with subsequent confirmation of its judges of the Supreme Court, had proved the truth of the bank. However, the judicial decision in favor of vertical banks failed to stem the flow of similar lawsuits in the courts. The origins of these problems can be found in the National Bank. Permanent dislike of leaders NBU in the currency and the concomitant reluctance to engage in the regulation of commercial foreign exchange transactions (for the well-known principle of the former head of NBU Volodymyr Stelmakh - better regulation - to restrict ") led to a series of nonsense in the foreign exchange legislation. Acting on a "system of nipple, in which the largest possible amount of currency was supposed to come into the country and as little as possible - out of it (in this case, of course, influence is growing permitting officials), National Bank has created a list of licenses required to conduct foreign exchange operations. If you explain to your fingers, then the foreign exchange market implies the existence of two types of licenses. General - for banks, resolving all types of foreign currency operations, and individual - for nonbanks, permitting single operation. Originally it was understood that an individual license will get businesses and individuals who want to make payments in foreign currency on the territory of Ukraine (the fight against dollarization) or withdraw currency abroad (control of capital outflow). Description and interpretation of these licenses held and contained in several laws: the Cabinet of Ministers Decree "On Currency Regulation and the Law" On National Bank, as well as a number of regulations (regulations, letters and explanations of NBU and STA). At the same time - either inadvertently, or evil intent - the law was originally laid bomb is ticking: the presence of a general license banks do not preclude the need to obtain individual licenses from the borrower. In addition, the NBU officials could not decide whether or not it needs an individual license to the bank and the customer when you make a foreign currency loan. In already distant 2000 the National Bank, wrote in his letters that the Bank has a general license (written permission) does not give him the right to perform currency operations, which according to Art. 5 of the Decree of Cabinet of Ministers should be held solely on the basis of an individual license of NBU. In 2009, the lights in his letter states that banks can lend to, and without an individual license. Inconsistency of the positions, even within one agency creates a conflict which did not fail to take advantage of clever lawyers. "I want to draw attention to that before the financial crisis of 2008-2009. Ukrainian courts (including the Supreme Court of Ukraine) collect from the debtors' debts in foreign currency. But it was in the past two years, borrowers have begun to challenge in courts the legality of credit agreements with banks , referring to their conflict Decree of CMU, "- says Oleg Dmitrash, head of the analytical sector, the legal department of Finance and Credit". Currency proceedings main argument claims, which were massively to sue borrowers who wish to evade repayment of its debt since 2009 was the lack of borrower's individual license that is required, including for operations on the use of foreign currency on the territory of Ukraine as a means of payment or as collateral. Conditions contracts require borrowers who do not have foreign exchange earnings, to pay in foreign currency and interest rates. Moreover, by acting today, credit agreements and bank and the borrower has an individual license is missing. Until recently, initiating claims for recognition of foreign currency loan agreement null and void, the plaintiffs in most cases did not expect a final court decision in its favor. They are quite satisfied with the intermediate, which in Ukraine is most often purchased. Moreover, for relatively little money. The fact that the Civil Code of Ukraine contains a rule that when invalidating the basic contract will automatically become null and void and all accompanying agreements, in particular, the pledge agreement. "The main purpose of borrowers who file lawsuits in the courts of foreign currency loans - get your hands on an interim decision annulling a credit agreement. With this solution in their hands they are trying to remove an encumbrance on their mortgages in the appropriate register in order to then resell them", - chairman Board Ukrsotsbank Boris Tymonkin. The purpose of such actions is obvious: by depriving the bank mortgage, the borrower can put their conditions of loan repayment - on terms, rates, and even the size of the debt. However, since the filing of the first claims for the recognition of foreign credit contracts invalid banks have already gone a good school. "Now I'm not aware of any case where the borrower could be unfair to deduce from a pledge of its assets in such a court decision - the chairman of the board of Raiffeisen Bank Aval Vladimir Lavrenchuk. - So the opportunity to recognize the contract as invalid currency credit was a way of earning ushlyh Lawyers which are bred for their clients' money. " The situation may be reversed after a Supreme Court specialist in civil and criminal cases decided in favor of one client (or rather, its guarantor) OTP Bank. In fact, this is the first solution to the highest court outlawing the foreign currency loans. And paves the way shaft lawsuits against banks. This decision was contrary to the High Court of Ukraine "Generalization of court practice civil proceedings that arise from credit relations (2009 - 2010's)" (from 07.10.2010 was). The document, which is brought before the courts of all levels in Ukraine, expressly states that "the absence of the bank and the borrower's individual licenses for foreign exchange transactions is not grounds for invalidation of loan contracts in the currency." However, the practice of MAT to the Supreme Court specialist is no longer the decree. The fact that VSSUGUD, which was established in the framework of judicial reform, ostensibly to expedite the consideration of criminal and civil cases in the High Court, in fact, created as a counterweight to the Supreme Court, who heads the opposition to the current government Vasili Onopenko. Bankers today is difficult to achieve even a consideration of the case in the Supreme Court, if so have decided VSSUGUD. According to a member of the parliamentary committee on justice Valery Pisarenko, according to Art. 38 of the Law on the Judicial System and Status of Judges ", MAT may review a decision VSSUGUD only if different judge of the court will take the opposite action on the same subject. In this case, must accumulate a critical mass of contradictions and self VSSUGUD must allow access to the MAT review cases. As explained ZN.UA chairman of the board of OTP Bank, Dmitry Zinkov, this requires that the Supreme spetssud himself voted to refer the case to the Supreme Court. Moreover, a different set of judges than the one that took the previous decision. Legal casuistry, in this case does VSSUGUD review of decisions by the Supreme Court virtually impossible. What, in fact, the reformers sought judicial system from the presidential administration. "Currency" judges and prosecutors the way, a few words about the staff office head of state. According to ZN.UA, the notorious trial of OTP Bank, which ended with precedent decisions of the Supreme spetssuda, initiated a backer for housing loan (of course, penyaya the absence of a borrower of an individual license, without which the loan contract should be invalidated). They say that a not insignificant role in the losing bank litigation father played the guarantor. In the past, a general, but now - now former assistant deputy chief of the presidential administration Gennadiy Vasilyev, who oversaw until recently in the AP issues of corruption and collaboration with security agencies. They say that Vasiliev resigned voluntarily from the presidential administration is due to the success of his judicial assistant in the struggle with the banking system. ZN.UA sources claim that the decision of the Supreme spetssuda against OTP Bank has done a so much noise in the banking environment that led NBU Arbuzov Sergei had to seek a personal audience with the president on this issue. Following the report of the situation and its possible implications for the financial system, the President was unpleasantly surprised and even angry is therefore possible that the sudden resignation in the near future can expect the judge to take appropriate action. As reported to the president, the judge has already participated in the examination of claims for invalidation currency loan contracts and more recently ruled in favor of banks (which, incidentally, should be grounds for appeal in the Supreme Court). In particular, the predestined victory "VTB Bank in legal proceedings with the Donetsk Ltd." Central ", also did not want to return a multimillion-dollar foreign currency credit. What or rather who forced the judge to change his decision in a dispute between a private client and OTP Bank, perhaps we will never know. However, apparently, the arguments were very powerful, if the judge went on to change opinions on the suit, the amount which slightly exceeds 150 thousand dollars, however, stop a probable human resource output machine for punching custom solutions, which today has become the domestic judicial system? Probably not, because, according to bankers, for such solutions by unscrupulous lenders are willing to pay very well. "It is rumored that the cost award against the bank, with the subsequent withdrawal of a guarantee of the property from under the burdens, could cost up to 30% of the loan amount," - says the president of the Ukrainian think-tank, Alexander Okhrimenko. And in the case with the Supreme spetssudom worth it. "Confessions of a loan agreement null and void shall invalidate all contracts to ensure: liens / mortgages / surety ... Furthermore, in the event that the loan agreement is null and void invalidate all of its provisions, including an unsubstantiated accrual of interest and commissions. In this case, the bank may require the borrower to return the loan, 3% annual inflationary losses ", - says Sergey Polovko, Director of Legal Affairs and to work with distressed assets at Alfa Bank. And once the decision, especially the supreme court - like a virus. It begins to multiply in the courts of different instances. Lawyers recall: the first avalanche of lawsuits went after September 2009 when the Donetsk Economic Court of Appeal invalidated the loan agreement and pledge agreement to suit the hotel "Central" to VTB Bank. The second - not far off. "The solution is immediately brought to the Internet, and even worse - in the National Register of judgments. His no one even tries to comment on - it is simply overwritten by lawyers in claims. Here are lawyers who do not care about their reputation, promise easy gains to borrowers of banks and those, instead of payment of interest due to the bank, the lawyers have the money, "- says Director of Legal Department," Erste Bank "Alexander Yaretsky. Lawyer notes that attempts to challenge the foreign currency loans extended for the second year. And while the cases in the courts consider it in the absence of a specific position of the legislator and the supervisory control structures of the judicial system (APU, the Supreme Qualification Commission of Judges, the Judicial Council, etc.). "It was a long silence of the Supreme Court of Ukraine for 2009 and 2010 led to the creation of such practices. But it could be a Supreme Court ruling to stop. But the Supreme Court today so politicized that it is not up to the problems of the financial system of the country," - says A. Yaretsky. The consequences of inaction of the legislative, judicial and executive powers in respect of the banking system can be very sad for everyone. Especially when you consider that today's currency denominated bank loans by 338 billion USD. (About 47% of all bank loan portfolios). "I think this is obvious: the challenge of foreign currency loans to those who do not want to pay them - a very dangerous precedent. And an even greater danger is that the courts side with the bully. Such action could result in a second wave of mass non-payment and As a result, the instability of the banking system, which again could lead to an outflow of deposits from banks, liquidity problems and general instability in the country ", - said chairman of Pravex Bank, Sergei Naumov. Naumov said that professionals and experts and even politicians have been arguing about the need for a law on protection of creditor rights, which could resolve all existing conflicts and loopholes. "Yes, the law unpopular but necessary. We need political will and the realization that lending based on the principle repayment, otherwise no one will lend to the economy, or will be under enormous interest given the risks," - concludes the banker. The political will to make another unpopular decision - this is the main issue today. Too extensive a list of needed popular solutions. Alexander Dubinsky on materials mirror the Week

No comments:

Post a Comment