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A woman is suing PrivatBank over a $92,480 loan. What was the outcome of the case?

Женщина подала иск против ПриватБанка из-за кредита на 92 480 долларов. Каково было вынесенное решение?

A woman entered into a loan agreement with PrivatBank for a consumer loan amounting to $92,480. She was provided with $72,760 for her use. She is seeking to terminate her obligations and apply legal consequences for the nullity of certain terms of the consumer loan agreement. This is stated in the ruling of the Pechersk District Court of Kyiv, published on January 9, 2025.

On November 26, 2007, a loan agreement was made between the woman and PJSC CB "PrivatBank" for a consumer loan of $92,480, with the borrower's obligation to repay it in installments until November 26, 2027, at an annual interest rate of 9.96%. According to the payment schedule, she was actually issued $72,760. On November 26, 2007, a mortgage agreement was concluded on an apartment owned by her based on a purchase agreement dated November 26, 2007, to secure the loan obligation.

On August 30, 2010, due to non-fulfillment of the loan obligation, PJSC CB "PrivatBank" filed a lawsuit in the Central District Court of Mykolaiv to seize property by selling the mortgaged item, concluding a sales agreement on behalf of the woman with another buyer. On July 9, 2012, PJSC CB "PrivatBank" petitioned the Central District Court of Mykolaiv to seize the apartment through public auctions, starting at a price no lower than 343,400 UAH, and for eviction.

On March 27, 2013, the Central District Court of Mykolaiv issued a default judgment in case No. 2-2062/11, denying the lawsuit on the grounds of the creditor's failure to comply with the requirements of part 1 of Article 25 of the Law of Ukraine "On Securing Creditors' Claims and Registering Encumbrances." On July 8, 2013, the Appellate Court of Mykolaiv Oblast overturned the default judgment of the Central District Court of Mykolaiv dated March 27, 2013, regarding the claim for property seizure, and issued a new ruling partially satisfying the following: “To recover the debt owed to PJSC CB ‘PrivatBank’ under the loan agreement dated November 26, 2007, as of July 1, 2010, in the amount of $94,551, equivalent to 747,458 UAH; to seize the apartment owned by her in private ownership based on the purchase agreement dated November 26, 2007, granting PJSC CB ‘PrivatBank’ the right to sell the mentioned apartment on its behalf by concluding a sales agreement with another buyer at a starting sale price of 343,400 UAH. The remaining claims were denied.”

On November 11, 2013, a default judgment by the Central District Court of Mykolaiv (case No. 1423/14351/12), modified by the ruling of the Appellate Court of Mykolaiv Oblast on November 10, 2014, partially satisfied the claims, specifically ordering the seizure of 861,430 UAH on the mortgaged property belonging to the woman in favor of PJSC CB "PrivatBank" through public auctions at a starting price no lower than 343,400 UAH. The claim for eviction from the apartment was denied. On March 1, 2018, she filed a lawsuit against PJSC CB "PrivatBank" in the Central District Court of Mykolaiv, requesting, among other things, to determine the debt amount under the loan agreement at 551,251 UAH, arguing that the loan agreement was concluded in violation of the Law of Ukraine "On Consumer Rights Protection," specifically that the loan was provided in foreign currency. The court ruled against her claim on February 23, 2021.

On May 21, 2019, the woman filed a lawsuit against the bank in the Central District Court of Mykolaiv, seeking to declare the loan agreement invalid regarding clause 7.1 concerning the payment of a fee for the provision of a financial instrument amounting to $4,760 from the loan amount at the time of the loan provision and a fee for the provision of a financial instrument of 0.32% of the loan amount monthly during the repayment period from the conclusion of the agreement until its expiration. The court denied her claim due to the influence of the statute of limitations.

From the calculation of the loan debt provided by the creditor in case No. 1423/14351/12 regarding the claim for the seizure of the mortgaged property through public auctions, it is evident that the borrower violated the loan obligation to pay monthly amounts of $939 on February 11, 2009, which was not rectified by the borrower in subsequent payment periods. Based on the payment period specified in the agreement, namely from the 3rd to the 10th of each month (clause 7.1 of the agreement), the fact of violating the loan obligation begins on February 11, 2009, with the obligation to repay the loan in full according to the terms of clause 2.2.10 of the agreement arising the day after the payment period ends, i.e., on February 11, 2009. Referring to the provisions of paragraph 2 of part 1 of Article 1048 of the Civil Code of Ukraine regarding the monthly payment of interest until the loan is repaid in the absence of other agreements between the parties, this can only be applied within the agreed loan term. She argues that since the loan term has been changed according to clause 2.2.10 of the agreement: from November 26, 2027, to February 11, 2009, the bank's right to receive interest according to Article 1048 of the Civil Code of Ukraine ceased starting from February 11, 2009.

As of November 26, 2007, the borrower was actually provided with a loan of $72,760, as well as the basis for calculating interest on each calendar day over 360 days a year (clause 3.3 of the agreement), and the amounts actually paid by the borrower. The latter has the right to request a recalculation of the debt, specifically: the fee for providing the financial instrument in the amount of $4,760, and 0.32% of the loan amount monthly should be attributed to the principal amount of the loan on the relevant date, which in turn affects the changes in the amounts of the initial monthly payments, as a significant condition of the agreement, which became the basis for her lawsuit.

What did the court decide?

The court denied the woman's claim. There is already a court decision that has fixed the amount of debt under the loan agreement, and these circumstances have already been the subject of judicial review.

"Given the circumstances, it appears that the method of protection chosen by the plaintiff is inappropriate and ineffective, as the court dispute, including issues of determining the amount of debt, has already been the subject of consideration in the bank's claim in 2010, including defining the amount of interest for using the loan and other fees (the decision of the Appellate Court of Mykolaiv Oblast dated July 8, 2013. Case No. 2-2062/11 or No. 784/2705/13). In the consideration of this case, she did not raise the issue of recognizing her obligations regarding the payment of interest and penalties, accrued by the creditor after that date, as terminated starting from February 11, 2009," the court emphasized.