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Sevilla Appeal Court (Civil Division) handed out an overwhelming judgment against abusive bank activity. The judgment contains a declaration of nullity of a contract “swap” (called “Clip Bankinter”) and condemn the bank to refund the client in 52.000,00 € and pay all the costs.

The AC judgment includes many interesting pronouncements as we summarize below:

  • Bank must justify client was duly informed on all essential elements of the contract. Bank must be sure that the client has understood all possible risks involved.

  • The contractual clauses referred to risks are very confused and ununderstandable.

  • Whereas the bank had reserved the right to terminate the contract in case of variation of circumstances taken into account to enter into the contract, the client had not similar right, whereupon the relationship was unequal.

  • Whereas the bank hardly assumed any risk, the client assumed serious ones. In fact, so it happened and the client was seriously damaged.

  • Absolute imbalance between bank and client.

  • Judgment describes the contract as “case paradigmatic of abuse of dominant position of the bank in relation to the client”.

  • Contractual good faith is a special requirement that must be always observed in bank activity.

  • Finally, this is one of few judgments in Spain which expressly says the swap was sold as a mere insurance contract by the branch manager. A clear case of negligent or fraudulent misrepresentation.

Antonio Pedro Rodríguez Bernal was the plaintiff’s lawyer in all instances of this civil proceeding. This judgment has already become unappealable.

Read the complete article in Spanish.

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