The first president of the Paris Court of Appeal has just rejected BNP Paribas Personal Finance’s (BNP-PF) request not to immediately compensate the victims of Helvet Immo loans in Swiss francs.
No provisional suspension of the obligation to act for BNP Paribas Personal Finance, a subsidiary of BNP. The latter have to pay around 150 million euros in compensation to the individual victims of the Helvet Immo loans, as well as to consumer associations including UFC-Que Choisir, the civil party in the trial. BNP Paribas’ provisional request to suspend this provisional execution was just rejected by the first president of the Paris Court of Appeal in an order dated Friday 25 September 2020.
On February 26, 2020, in a 600-page ruling, the Paris Criminal Court sanctioned BNP Paribas Personal Finance for “Misleading marketing practices” and ordered him to immediately compensate the borrowers of the Helvet Immo loans. These loans, contracted in Swiss francs, were repayable in euros. The judges found that borrowers were misinformed of the risks at the time of underwriting. Indeed, the Helvet Immo loan offers did not mention the exchange rate risk, but rather insisted on the great stability of the Swiss franc against the euro. Some 4,600 borrowers were trapped by the rise in the Swiss franc, which rose 60% against the euro during the 2008 financial crisis.
Absence of excessive risk of compensating victims
The bank immediately challenged the decision and requested, pursuant to Article 515-1 of the Code of Criminal Procedure, to suspend the obligation to compensate individuals immediately. She indicated in particular that she was concerned about the consequences of such compensation if the appeal overturned the first instance decision. “The civil parties will encounter, in the event of revocation of this decision, financial difficulties in dealing with the request for restitution corresponding to the compensation for damage recognized in the first instance”, the bank said.
The first president of the court of appeal was not sensitive to this ” worry “ banking for its customers! He felt the bank did not justify “the manifestly excessive nature of the consequences” provisional execution to compensate the victims pending the appeal. The first president specified that this character must be appreciated “having regard to the situation of each of the parties benefiting from the sentences”. However, BNP, which bears the burden of proof, has not demonstrated any risk of insolvency for each of the parties in the event of an obligation to repay the indemnity.