Invalidity dolo in a swap of Banco Santander

Swap Santander

The Provincial Court of Salamanca has confirmed the invalidity of a swap contract with Banco Santander in Case 25 June 2014, appreciating both error consent as existence of fraud.

The swap was hired by the company "Breeders Iberian SL" in May 2008, in time with the Spanish Bank Credit. Se firma un swap agreement (swap) to be submitted to financial transaction framework agreement prepared by the Spanish Association of Private Banking 1997.

In view of the negative assessments, demand the company to the bank, claiming contractual intent and Error lack of consent.

On Court of First Instance declares nullity of the financial operations subscribed, error on the consent.

The bank appealed to the Provincial Court, basically saying that there was no error in the consent. He says the company managers had experience as entrepreneurs and were used to negotiate financial products that were properly informed.

The Court refers intensively (reproduce casi 5 it leaves) a la Judgment of the Supreme Court 20 January 2014, to confirm that there was an error that vitiated consent, based on the following:

1.- There was a relationship of trust with the bank manager.

2.- Being an entrepreneur means having no knowledge specific about complex financial products.

3.- None provided the suitability test.

4.- The bank you have not tried training or studies of the representatives of the plaintiff.

5.- The director stated that the operation was to change a variable rate for a fixed "set by client security to raise rates, offering coverage ". The term coverage can be equated to a safe.

6.- The generic warnings does not exempt the bank from the obligation to inform not recorded properly and the general conditions or financial transactions under contract, that were not provided to the client for consideration.

7.- It was a limited company newly incorporated.

8.- The manager offered customers the product even if not suitable.

9.- The Department of Analysis and Research Department had warned the imminent rate cut, so it can hardly be thought that the Spanish Credit Bank was unaware of this situation.

10.- The cancellation costs were not explained Customer.

The Court indicates that "When this contract is performed, banks have sufficient information at any time moved to its customers, about the imminent fall of interest rates, so that contracts made in conditions like that concerns us, are grossly misleading, since without prejudice to specific positive settlement for the client, mostly, were to produce negative settlement for the same, and therefore, beneficial to the Bank, especially if a long duration is agreed and if the cancellation is in the hands of the Bank. "

In support of the thesis that the bank knew the forward-looking, cites ECB report "Monthly Bulletin October núm.63 2010, where the financial events are reported from mid- 2007. It indicates literalmente "Is offering customers a product to ensure the steady rise in interest rates, when he is aware that in a matter of months, will be a sharp fall in the same ".

Finally add the contract language is extremely complex, so that the customer is prevented from having sufficient knowledge of the actual conditions of operation. And warnings, posed as hypothetical when the next drop in interest rates and borrowing costs was evident would be higher for the customer.

Ultimately, Clearly, there is considered an error by customers, substantial and excusable constitutes a lack of consent which causes the nullity of the whole contract. Also confirms that there is fraud in the terms of Article 1.269 Civil Code: The Banking entity knew ensure client needs financial costs and the bank, without adequately warn of risks, knowing that the guys were going to go down without explaining the possible early termination, puts a speculative product, risk and complex.

It is declared void swap, and impose the costs to the bank.

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