Hypo Alpe Adria Bank in Bosnia and Herzegovina has offered arbitration proceedings to its clients who have loans pegged to the Swiss franc and local media reported on Friday that the bank decided on this as a direct result of a recent ruling by the Commercial Court in Zagreb which ruled in favour of clients in a similar situation in Croatia.
The bank has offered arbitration to be conducted by a seven-member commission selected from both interested parties to the dispute. The decision by the commission would be final and binding on the bank and the civil society organisation dubbed Swiss Franc which represents clients with loans pegged to the franc, and all courts in the country would have to abide by the commission's ruling.
The NGO's counsel Vesna Pehar told the Dnevni Avaz daily that the NGO would consider the bank's offer. She recalled that they had proposed this action to the banks before but the banks were unwilling to agree.
The NGO's president Kemal Durakovic said that the bank's offer for arbitration was no doubt the direct result of the Croatian court ruling. "It's obvious that the events in Croatia have shaken up Hypo Bank's people because they just would not listen to us before", he said.
The country's consumer protection ombudsman Dragan Doko said that it was Hypo Bank's former management that refused to accept the proposal of arbitration.
From a legislative aspect, according to Doko, it was definitely unacceptable for the bank to shift the risk of foreign currency differences onto borrowers. "Every court will pass the same ruling," he said, and urged borrowers to stick to their claims.
