OGH: Determinability of a foreign currency debt only valued in euros

Mar 25, 2022 Benn-Ibler Rechtsanwälte

In the case at hand, the Austrian Supreme Court (Oberster Gerichtshof, OGH) addressed the repayment of a foreign currency loan which, according to the plaintiff, was not based on an exchange rate and thus had a final maturity in euros.

The plaintiff concluded a foreign currency loan in the amount of EUR 50,000 with the defendant - a bank. The plaintiff was entitled to draw the loan amount in euros or in another foreign currency at any time. Repayment was made in the currency in which the loan was used. The plaintiff sought a declaration that he owed EUR 50,000 at the final maturity date. The contract did not specify at which point in time the conversion should take place according to which exchange rate. The defendant argued that due to the existence of Section 907b of the Austrian General Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB), there was no need for a conversion clause in the contract.

While the lower courts upheld the defendant, the OGH upheld the plaintiff's appeal. It was considered:

The findings of the lower courts on the general terms and conditions of the defendant showed that the customer would have to repay the loan in the currency in which he had obtained the loan. In the case at hand, however, a payment in foreign currency had not been made. The amount of the loan could also not be determined by recourse to Sec. 907b ABGB - or its predecessor provision Sec. 905a ABGB as amended by Federal Law Gazette (Bundesgesetzblatt, BGBl) I no. 120/2005. These norms assume that a genuine foreign currency debt exists. They cannot be used for the precision of an unspecified foreign currency debt. Ultimately, the OGH considered the plaintiff's claim to be unfounded due to the violation of the requirement of precision and the resulting failure of the loan agreement. With regard to interest payments made by the plaintiff, the OGH held that no contractual interest could be claimed due to the lack of legal grounds, because it was unclear how high the interest payments should be according to the contractually owed interest rate.

6 Ob 51/21z (02.02.2022)