(Bloomberg) -- Poland's Supreme Court again failed to provide guidance over how to resolve a flood of lawsuits over foreign-currency mortgages, offering no relief to banks struggling with growing legal risks.
Instead, the tribunal asked the European Union's top court to help it resolve procedural issues blocking its ability to address the legal status of $26 billion of non-zloty home loans. The mortgages ballooned, and became a political issue, as the Polish currency lost half its value against the Swiss franc since 2008.
The Warsaw-based court has for months been paralyzed by internal divisions triggered by the government's controversial judicial reforms. It's the fourth time this year that justices effectively delayed answering legal questions meant to help unify lower court verdicts in more than 58,000 cases.
Nearly all Warsaw-listed banks are awaiting instructions from the court before deciding whether to offer large-scale out-of-court settlements to disgruntled clients. So far, the industry has written off 14.3 billion zloty ($3.8 billion) -- the equivalent of about a year of profits.
In July, Supreme Court President Malgorzata Manowska said the delays were caused by the lack of cooperation between judges appointed before and after Poland revamped the judicial system. Veteran justices don't want to rule with peers whose mandate has been questioned by the EU Court of Justice.
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“Some long-serving judges are torpedoing the issuance of verdicts,” she told portal Wp.pl. “I don't have tools to force justices to forget about the internal disputes for a moment and focus on helping citizens.”
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