Croatian Supreme Court limits compensation for converted CHF loans

Croatia’s Supreme Court ruled that borrowers who converted Swiss‑franc (CHF) mortgages to euros are entitled only to late‑interest payments on the overpaid amounts, not to a refund of the principal. The decision was adopted by a 9‑4 vote of the extended panel, with judges Damir Kontrec, Jadranko Jug, Dražen Jakovina and Josip Turkalj issuing dissenting opinions that reject the majority view.

The court’s judgment means that affected consumers will receive roughly 20 % of the total compensation previously estimated. The consumer association Franek, which represents thousands of borrowers, said the total settlement now stands at about €700 million, down from an earlier €1.2 billion estimate. Franek criticised the ruling as illegal, unconstitutional and contrary to EU law, and announced plans to file constitutional‑court lawsuits.

Political parties reacted strongly. SDP leader Siniša Hajdaš Dončić called the decision “a mockery of citizens,” while the centrist party Most described it as “absurd and unfair.” Legal experts warned that the dispute will move to the Constitutional Court and possibly the European Court of Human Rights, extending the litigation for years.

The ruling also sparked commentary from financial analysts who said the decision could force banks to cover at least 30 % of legal costs, though full compensation remains contentious.