EU top court rules on how banks and Swiss-franc borrowers must settle up. Here's what actually changes
On 10 September 2026, the Court of Justice of the European Union (CJEU) issued a long-awaited ruling in case C-510/25 (Adazik), addressing how a court should settle accounts between a bank and a borrower once a Swiss-franc mortgage agreement has been declared invalid. The question was referred by the Regional Court in Warsaw, and hundreds of thousands of people who are still repaying – or have already repaid – franc-denominated mortgages were watching for the answer. The ruling doesn't settle the dispute as cleanly as many expected, but it does introduce one change that genuinely improves borrowers' position. Here's what it means, including for readers who have never had anything to do with a franc mortgage.
What the dispute was actually about: balance theory versus two-claims theory
When a court invalidates a franc mortgage agreement, it has to decide how the two sides settle up – the bank once paid out the loan capital, and the borrower spent years repaying instalments. Polish courts have long been split between two approaches, and which one gets used determines how much the borrower ultimately recovers, and when.
The two-claims theory – better for the borrower
Under this model, the bank's and the consumer's claims are treated as two entirely separate obligations. The court awards the borrower a full refund of every instalment paid, and if the bank wants its capital back, it has to file a separate claim or raise a formal set-off objection. In practice, this approach works in the borrower's favour – they receive the full awarded amount right away, while settling accounts with the bank happens on a separate, often later, track.
The balance theory – better for the bank
Here, the court automatically offsets the capital the bank paid out against the amount it owes the borrower, and awards the borrower only the difference (the surplus above the capital). For the consumer, this usually means a smaller amount recovered upfront and – crucially – a different way of calculating default interest, since interest is charged only on that smaller surplus rather than on the full sum of instalments paid.
What the Court actually decided
The CJEU did not ban the use of balance theory – it found that Directive 93/13 on unfair terms in consumer contracts does not, as a rule, prevent a court from settling accounts through an automatic set-off. That said, it isn't a mandate to use that model either – the Court left the choice between balance theory and two-claims theory to national courts, meaning in practice to individual Polish judges hearing each case. In other words, there will be no unification of case law on this point for now, and how any given case turns out may still depend on which panel of judges hears it.
There is, however, one point the Court stated clearly and without loopholes: default interest on the surplus above the capital is untouchable and starts running from the day the bank was formally sent a demand for payment – not from a later date, such as the date of the judgment or when it becomes final, which some banks had previously tried to argue for in court. A national court, even when applying balance theory, cannot strip the consumer of that right, nor can it apply a set-off without regard for the consumer's interests – it must inform them of the intended set-off and give them a chance to respond.
What this means if you have a case pending in court
If you're in the middle of litigation to have your franc mortgage agreement declared invalid, this ruling won't hand you a ready-made answer about how much you'll recover – that still depends on which court is hearing your case and which approach that particular panel decides to take. What you do gain is something concrete: certainty that interest on the amount ultimately awarded to you above the returned capital will start running from when you formally demanded payment from the bank, not only from the date of the judgment. In cases that drag on for years, that difference can amount to tens of thousands of zloty.
It's also worth remembering that this CJEU ruling doesn't automatically change proceedings that are already underway – you need to check with your lawyer how the court handling your case is reacting to it, and whether it's worth amending your claim or filing a relevant evidentiary motion. This is not the moment to make decisions on your own without consulting the lawyer running your case.
What if you've never had a franc loan
Even if the franc-borrower saga has nothing to do with you personally, there's a broader lesson worth taking from it: a loan tied to a foreign currency – whether it's the franc, or financing settled in euros today – can generate legal and exchange-rate risks that only surface years later, sometimes in the form of a court case that drags on for a decade. That's a good argument for favouring transparent, local-currency products when financing property today, and for carefully comparing offers before you commit – a mortgage ranking lets you see current terms from multiple banks side by side, which makes it easier to spot unfavourable clauses before you sign anything.
And if you're a former franc borrower who has just received a payout from the bank after winning your case, before deciding what to do with it – pay down other debts, or set it aside – it's worth comparing current personal loan offers if you're planning to consolidate other obligations, and checking the current deposit rankings and personal account rankings before that awarded sum lands in a low-interest current account and quietly loses real value to inflation.
Summary: what you should do
First, if you have an open franc-mortgage case, contact your lawyer and ask how the C-510/25 ruling affects your proceedings – especially how interest will be calculated. Second, don't expect Polish case law to suddenly become uniform – in practice, two similar cases can still end up settled in different ways. Third, if you're planning a mortgage or have just recovered money after winning your case, treat this as an opportunity for a deliberate market review, rather than acting under time pressure or out of loyalty to a single bank. The lending market moves faster than it seems, and comparing a handful of offers takes just a few minutes – and it might spare you a repeat of the situation franc borrowers find themselves in today.