Swap declared void for fraud BBVA















The Provincial Court of Barcelona has confirmed the invalidity of a swap contract with BBVA Case 5 March 2014 for a finding of error in the client and the bank fraud.

The company Lloret 3000 S.L. contract in June and October 2008 two separate contracts swap the swaps. The last one is called “Stockpyme

In view of the disastrous results for the negative assessments demand to the bank.

The Court of First Instance nº 56 Barcelona, in sentence 13 June 2012 estimated demand, declaring the nullity of the two swap contracts and orders the recovery of benefits. It is considered that there was fraud by the bank.

The bank appealed to the Provincial Court.

The Provincial Court notes the following legal reasoning:

1.- The contract is void if consent is provided by violence, Bullying, intent on error. And no fraud when one party is induced by the other to enter into a contract with "insidious words or machinations" without them, I would not have agreed (art. 1.269 C.C.). The error, under Article 1.266 the C.C. and case law which interprets, should be on the substance under the contract, attend at the time of execution and be excusable.

2.- The bargaining in good faith (Arts. 7 and 1.258 the C.C.) and industry regulations impose a strict duty of disclosure to the bank, especially if the client is retail as was the case. The duty to disclose is:

  1. a) Inquire whether the customer will suit the product.
  2. b) Ensure that the client understands positive or negative consequences Product:

You can not highlight the benefits "without also indicate the relevant risks, of fair and prominent"Ni hide any important aspect (art. 60.1.b and d of RD 217/08).

To fulfill this obligation, the bank has to take into account the complexity Product, its new to the market and previous use by the customer and their financial literacy. And though possessed such knowledge, not relieve the company of its legal obligation to inform.

3.- The breach of duty of disclosure (willful negligent manera) can justify the invalidity of contracts.

4.- The error must be tested by the sufferer, but the principle of probation easily, demonstrate that it was for the bank informed adequately fulfilling the Securities Exchange Act as amended by Act 47/07 y RD 217/08.

5.- As for the deceit, Audience says that the business firm "Came not preceded by a blameless BBVA, bank that sells a complex new product to a foreign customer and the financial sector ".:

  • The first year, the swap had a reference 5.75%, purely a matter speculative and outside the coverage function.
  • The loan was linked to the signing of the swap.
  • A contract signing, to an expert like BBVA, the slowdown of the economy allowed to predict a drop in rates.
  • The bank and contemplated at the time the forecast falls in interest rates.

6.- The bank has the burden of demonstrating that the client adequately informed and provided no explanatory examples of the operation of the product. Not informed of the consequences that could have a drastic fall in interest rates.

7.- Client You may not know the cost of cancellation by the bases are not shown for the calculation. Calculation is left in the hands of BBVA.

8.- Bank's claim is not supported the plaintiff acting against their own actions, because the fact of paying settlements, not be inferred that he knew and assumed the risks of the operation. They violated rules of imperative law, resulting in the nullity.

Ultimately, the invalidity of the two confirmed swap contracts to bear the costs of the appeal to the bank.

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