National Bank of Serbia May Not Be a Participant in the Lawsuit Initiated by the Consumer Association Efektiva
As an independent republic authority, which is not subordinated to the Government and which derives its independence from the Constitution of the Republic of Serbia, the National Bank of Serbia may not be an intervenor and/or a participant in the lawsuit initiated by the consumer association Efektiva. Pursuant to the prevalent legislation, the NBS, as the banking regulator, does not have the authority under the law to initiate procedures for protection of collective consumer rights and interests, while at the time of approval of CHF-linked loans the NBS, same as all other regulators in the region, did not have the competences and instruments that would allow it to exert an influence on the core obligations between banks and consumers in the course of conducting bank supervision procedure – the NBS pointed out.
Another reason why the NBS cannot respond to the invitation to join the plaintiff side is the fact that the prevalent legislation does not provide a legal basis for the regulator to initiate procedures against supervised entities regarding the unjust contract terms or unfair dealings. Namely, substantive provisions of the Consumer Protection Law do not envisage a body in charge of initiating procedures, but practically refer consumers and their associations to the court in order to exercise their rights. The consumer, as the bank client, has the subjective right deriving from the loan agreement which entitles him/her to seek court protection as the subject of an obligation relationship. However, the Law on Lawsuits and the Law on Consumer Protection also provide for the protection of objective, collective rights, which presents a higher level of consumer protection, via collective lawsuits which may be initiated by consumer associations.
The Law on the National Bank of Serbia vests the central bank with authorities in the area of banking supervision. These authorities are laid down further in the Law on Banks and the supporting regulations which clearly specify the NBS’s role as the bank regulator. However, the Law on the Protection of Financial Services Consumers, in force since 2011 when the negative effects of the CHF exchange rate movements were already evident, does not entitle the NBS to establish or to initiate the procedure for the protection of consumer rights and interests for the purposes of determining unjust contract provisions and unfair dealing.
And even if the NBS were to have any authority over these matters, in our legal system, it would only be through the court that certain relations could be corrected directly, which means that the authority of the court is the absolute authority that not only precedes but also represents the final solution with regard to the obligations of the parties in dispute. This is clearly defined by Article 143 of the Law on Contracts and Torts:
“(1) Provisions of the general terms and conditions shall be null and void if contrary to the very purpose of contract which is concluded, or to fair business usage, even after such general terms and conditions containing them have been approved by the competent agency.
(2) The court may deny application of specific provisions of the general terms and conditions precluding the other party to raise demurrers, or of those on the ground of which such party is left without contractual rights or loses time limits, or those which are otherwise unjust or excessively strict towards such party.”
As an independent institution, the NBS cannot interfere with the work of the judiciary which is an independent branch of the government. In the same way the court cannot interfere with the competences of the regulator.
For all of the above reasons, the NBS cannot takes sides and extend its support to the plaintiff, just as it cannot side with the defendent banks. Should the court decide that an expert opinion of the NBS as the independent regulator is needed to clarify the facts and circumstances in the market prevailing at the time the disputable contracts were concluded, it can send summons to financial professionals and the NBS, but the NBS cannot be the intervenor in the proceedings in that case either.
The NBS is nonetheless interested in the court ruling and the position in this dispute in order to undertake further measures within its scope of authority. Bearing in mind the principle of the separation of powers and the crucial importance of the court, any ruling of the deciding courts, if taken, would not only serve as a guideline to the NBS for adopting measures, but also as a signpost to legislators should there be a need to amend the laws that regulate the competences and powers in both administrative procedures and procedures in court, including the launching of procedures to determine unjust contract provisions and forms of unfair business practices.
Source 4-traders
