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Order of the Supreme Court of the Republic of Croatia in the case Franak – 3 October 2017, Revt 575/16-5 – consumer credit agreements denominated in Swiss Francs (CHF)

By Dr. Emilia Mišćenić

In its order of 3 October 2017, the Croatian Supreme Court revoked the ruling of the High Commercial Court of 13 July 2014 with respect to part of the court’s decision concerning CHF currency clauses in credit agreements and ordered a renewed trial in this respect. A background of this recent decision of the Croatian Supreme Court lies in the first collective redress proceeding dealing with protection of consumers from unfair contract terms in credit agreements.[1] In this famous Croatian case called Franak, the Croatian Association of Consumer Protection Associations – “Consumer” representing consumers invoked the fairness of creditors unilaterally imposed variable interest rates and of non-transparent currency clauses in CHF. Despite the conclusion of all courts instances on unfairness of unilaterally imposed variable interest rates, the High Commercial Court and the Supreme Court excluded CHF currency clauses from the unfairness test due to their transparency.[2] This finding was heavily criticised by the Croatian Constitutional Court, which found the decision as being unreasoned and violating consumers fundamental right to a fair trial.[3] By accentuating the courts duty to interpret domestic law in accordance with the EU law and the CJEU case law interpreting the UCT Directive, the Constitutional Court returned the final judgement of the Supreme Court to a renewed trial, the result of which is order of the Supreme Court of 3 October 2017. Later confirms the existing duty of consistent interpretation and request from the lower court instance to evaluate the transparency of the CHF currency clauses by applying criteria such as those developed by the CJEU in case Kásler and Káslerné Rábai.[5]

[1] Mišćenić, E., Croatian Case “Franak”: Effective or “Defective” Protection of Consumer Rights? Harmonius Journal of Legal and Social Studies in South East Europe, Vol. V, 2016, pp. 184–209, available at:

[2] Judgment and order of the High Commercial Court of the Republic of Croatia of 13 June 2014, Pž-7129/13-4, available at: ; Judgment and order of the Supreme Court of the Republic of Croatia of 9 April 2015, Revt-249/14-2, available at:

[3] Decision of the Constitutional Court of the Republic of Croatia of 13 December 2016, U-III – 2521 / 2015 and others, available at:$FILE/U-III-2521-2015%20i%20dr.pdf  .

[5] Judgment of 13 April 2014, C-26/13, Kásler and Káslerné Rábai, EU:C:2014:282.


Full text of the Order of the Croatian Supreme Court – 3 October 2017

Updated: November 29, 2017 — 11:44 am

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