Annulled Swiss Franc Loan: No Damages on Top of Restitution, Unless There Is a Separate Loss (Cass. 1re civ., 8 July 2026, No. 24-19.684)

French Supreme Court, First Civil Chamber, 8 July 2026, appeal No. 24-19.684

What were the facts of this Swiss franc bullet loan case?

Following an offer issued on 4 November 2004, a borrower took out from an Alsatian Crédit mutuel branch a home loan denominated in Swiss francs, repayable in fine (as a bullet loan) on 31 October 2019, secured by a pledge over a financial investment. This is a classic arrangement in border regions: the capital is due in a single payment at maturity, interest is paid during the term of the loan, and the final repayment is supposed to be funded by the pledged investment.

On 10 April 2015, before the loan had even matured, the borrower brought proceedings against the bank. She asked for three things: that the terms relating to the repayment arrangements and the exchange rate risk be declared unfair; that the sums paid under the contract be returned to her; and that the bank be ordered to compensate her.

What had the Colmar Court of Appeal decided?

By a judgment of 3 July 2024, the Colmar Court of Appeal largely sided with the borrower. It deemed the terms relating to the repayment of capital and to currency transactions unwritten, annulled the loan contract as a consequence and ordered reciprocal restitution.

The method used to calculate this restitution deserves detailed examination, because it lies at the heart of the quashing. The borrower was ordered to return to the bank the euro equivalent of the capital lent, at the exchange rate in force on the date the funds were made available. The bank was ordered to return to the borrower all the sums received in performance of the loan, that is, the euro equivalent of each sum paid, at the exchange rate applicable at the time of each payment. The two claims were set off against each other.

In practical terms, this means that the borrower repays only what she actually received, converted at the rate on the day she received it, and recovers everything she actually paid, converted at the rate of each payment. The movement of the Swiss franc over the life of the loan is neutralised: neither the bank nor the borrower profits or suffers from it.

The Court of Appeal added one further order: finding that the bank had exposed the borrower to a significant risk because of the exchange rate risk without drawing her attention to it, it ordered the bank to pay her €12,000 in damages as compensation for a financial loss analysed as the loss of the chance not to take out the loan. The borrower had claimed €50,000 under this head, arguing that by taking out this credit she had lost the chance to use her borrowing capacity for a more profitable transaction.

The bank lodged an appeal on four grounds: the first three against the annulment and the restitution, the fourth against the €12,000 in damages.

What does the French Supreme Court rule on 8 July 2026?

Are the annulment and the restitution upheld?

Yes, and this is the first lesson of the judgment, often overlooked. The First Civil Chamber dismisses the first three grounds of appeal under Article 1014, paragraph 2, of the Code of Civil Procedure (code de procédure civile): they are “manifestly not of a nature to lead to quashing”. In other words, the bank did not even obtain a discussion of the unfair nature of the terms, of the annulment of the contract or of the restitution arrangements adopted by the Court of Appeal. This part of the Colmar judgment is final.

For borrowers, this is further confirmation, in line with the judgments of 12 July 2023 (No. 22-17.030) and 9 July 2025 (No. 24-19.647), which we discussed in our dossier on Swiss franc loans: opaque exchange terms are unfair, the contract falls, and restitution is carried out by neutralising the effect of the exchange rate.

Why is the order to pay €12,000 quashed?

The Court rules on the basis of former Article 1147 of the Civil Code (code civil), applicable to the 2004 contract. It notes that, in order to order the bank to pay, the Court of Appeal found a breach of the duty to inform about the exchange rate risk and a financial loss “analysed as a loss of the chance not to take out the loan”.

Then comes the quashing: “In ruling thus, when it had deemed unwritten the terms of the loan contract relating to the repayment of capital and to currency transactions and, as a consequence, ruled on restitution in order to put the parties back in the position they were in before the contract was concluded, from which it followed that the borrower could not have suffered any loss of the chance not to enter into that contract, the Court of Appeal wrongly applied, and thereby violated, the aforementioned provision.”

The reasoning is implacably logical: the loss remedied by the loss of the chance not to contract is the loss of having contracted. Yet annulment and restitution act precisely as if the contract had never been concluded. To compensate in addition the loss of the chance not to contract is to compensate the same thing twice.

Why does the Court rule itself, without remitting the case?

In the interest of the proper administration of justice, the French Supreme Court applies Article L. 411-3, paragraph 2, of the Code of Judicial Organisation (code de l’organisation judiciaire) and Article 627 of the Code of Civil Procedure to decide the merits itself. It dismisses the claim for compensation for two reasons.

First, since the contract was annulled and restitution ordered on the terms described above, “there remains no financial loss linked to the movement in the exchange rate during the performance of the contract, arising from a loss of the chance not to enter into the contract”.

Second, and this is the point that opens up a perspective, the borrower, “whose submissions provide no evidence in support of the alleged loss of a chance, has not established the existence of a loss separate from that remedied by the annulment of the loan and the restitution of the sums paid in performance of it”.

The judgment is therefore quashed solely on the €12,000 head, without remittal, and the claim for compensation is dismissed. The orders against the bank for costs and under Article 700 made by the Court of Appeal are maintained, the Court specifying that they are “justified by other provisions of the judgment that are not challenged”.

Why does restitution wipe out the loss linked to the exchange rate risk?

To measure the full scope of the judgment, one must understand what restitution produces as the Court of Appeal ordered it.

The Court’s reasoning then becomes clear. The duty to inform about the exchange rate risk was intended to enable the borrower to assess the uncertainty she was taking on. The breach of that duty caused her to lose a chance not to contract, that is, not to bear that uncertainty. But if annulment retroactively removes the uncertainty itself, the loss of a chance has no remaining object: the borrower is in exactly the position she would have been in had she not contracted, at least financially.

This logic echoes that applied in the opposite direction, in favour of borrowers, by the Court of Justice of the European Union: in its judgment of 15 June 2023 (C-520/21), it held that, after the annulment of a loan indexed to a foreign currency for unfair terms, the bank cannot claim any compensation going beyond the return of the capital. Restitution is the measure of everything, for the bank as for the borrower.

What is a loss “separate” from that remedied by the annulment?

This is the key to a strategic reading of the judgment. The Court does not say that all compensation is excluded after annulment. It says that the borrower failed to prove a loss separate from the one that restitution already remedies. The question therefore becomes: which losses fall outside restitution?

The borrower argued that she had lost a chance to use her borrowing capacity for a more profitable transaction. In principle, this loss is indeed separate from restitution: it is not the exchange rate uncertainty suffered, but the gain forgone from another investment. The Court does not reject it in law; it rejects it because the submissions “provide no evidence in support of the alleged loss of a chance”. The rejection is evidential, not one of principle.

From there, several categories of loss can be envisaged, provided they are documented:

The gain forgone from an alternative investment, provided it is proved that a specific project was contemplated, that it was feasible and that it would have been profitable: a mere abstract argument about “borrowing capacity” is not enough.

Costs peripheral to the loan, not covered by restitution because they were not paid to the bank in performance of the annulled loan: costs of setting up and managing the pledged investment, insurance premiums taken out with a third party, advisory or expert fees incurred to understand the product.

The cost of refinancing or of a forced sale, where the appreciation of the Swiss franc forced the borrower to sell the property or to renegotiate at a loss before the annulment was pronounced: restitution does not return the property sold, nor the difference between the price obtained under duress and the market value.

Non-pecuniary loss, where it is actually claimed before the courts of first instance and appeal, which was not the case in the matter that gave rise to the judgment of 25 March 2026 (No. 24-12.848), which we discussed under the title unfair terms confirmed but compensation rejected.

Is this solution convincing?

The firm defends Swiss franc borrowers. The judgment is unfavourable to them on the point decided, and that must be said clearly. But the criticism must be constructive.

Is the principle of non-cumulation justified?

As a matter of principle, the solution is hard to challenge. Full compensation forbids compensating the same loss twice. If restitution puts the borrower back in her pre-contract situation, the loss of the chance not to contract is, by definition, without object. One may regret the result, but the reasoning is consistent with former Article 1147 and with the principle of compensation without loss or profit, which the bank invoked in its ground of appeal.

Does restitution really put the borrower back in her prior situation?

This is where the shoe pinches. The judgment rests on a fiction: that of a perfect restoration. Yet in the reality of a fifteen-year bullet loan, the borrower has tied up a pledged investment, borne ancillary costs, sometimes lived with the anxiety of a debt swelling in step with the Swiss franc, and made financial decisions (postponing another project, giving up a sale, refinancing) dictated by that situation. Restitution returns none of this. To say that “no loss” can remain is too absolute a statement; it would have been more accurate to say that no loss attributable to the movement of the exchange rate remains, which the Court in fact specifies in paragraph 11 of the judgment, but which the opening of paragraph 7 states far more broadly.

Is the standard of proof realistic?

The Court faults the borrower for providing “no evidence” in support of the loss of a chance of a more profitable investment. This standard is demanding, but it is not new: loss of a chance presupposes a real and serious possibility. What is more debatable is the choice to rule without remittal. By deciding itself, the Court deprives the borrower of the opportunity to complete her demonstration before a court of remittal, when the debate on separate loss had probably not been conducted from this angle before the Court of Appeal, which was still reasoning in terms of cumulation. This is a procedural lesson: separate loss must be pleaded and proved from the first instance, as a precaution, even where annulment is sought as the principal claim.

Is the judgment consistent with recent case law?

Yes. It extends the judgment of 25 March 2026 (No. 24-12.848), which dismissed a claim for more than €422,000 in damages for want of any loss other than non-pecuniary loss, and a judgment of 5 November 2025 in which the First Civil Chamber had already refused cumulation of restitution and compensation, requiring the sum awarded by the criminal court for the financial loss with the same object to be deducted from the bank’s restitution debt. The line is clear: the Court wants to avoid consumer law, which protects the borrower, from enriching him or her.

How should a compensation claim be built after this judgment?

The judgment requires us to rethink the architecture of claims in Swiss franc loan cases.

Secure restitution first

Restitution is the financial heart of the case. One must obtain conversion of each flow at the exchange rate on the day of the flow, as in the Colmar judgment, and a full statement of account produced by the bank, if necessary under a penalty payment (astreinte). On an older bullet loan, this mechanism can represent tens of thousands of euros, and can even result in a net claim by the borrower against the bank. Our article on the new victories for borrowers sets out the details.

Identify and quantify each separate loss

For each item, two questions must be answered: is it covered by restitution? If not, how can it be proved? A table distinguishing the flows paid to the bank (covered) from the costs borne with third parties or the capital losses (not covered) is essential. The evidence must be assembled from the first instance: investment contracts, insurance premiums, sale deeds, refinancing offers, abandoned investment projects.

Combine the principal and alternative claims

It is prudent to seek, as the principal claim, annulment and restitution together with compensation, in addition, of only the proved separate losses; and, in the alternative, in case the terms are not held to be unfair, compensation for the loss of the chance not to contract for breach of the duty to inform. The two approaches are mutually exclusive, and the judgment of 8 July 2026 sanctions precisely their confusion.

Do not neglect the question of limitation periods

A claim seeking to have an unfair term deemed unwritten is not subject to the five-year limitation period, and the restitution claim runs only from the decision finding the term to be unfair (Cass. 1re civ., 12 July 2023, No. 22-17.030). By contrast, a liability claim for breach of the duty to inform is time-barred after five years from the date the loss became known (Cass. 1re civ., 28 June 2023, No. 21-24.720). The ground of compensation is therefore more fragile over time than that of restitution, which is a further reason to build the case on the latter.

Conclusion: restitution first, compensation second and on proof

The judgment of 8 July 2026 confirms what Swiss franc borrowers have already obtained: the unfair nature of opaque exchange terms, the annulment of the contract and restitution that neutralises the movement of the Swiss franc. On this point, the bank did not even obtain examination of its grounds of appeal.

But it closes the route to additional compensation based on the loss of the chance not to contract, where restitution has already erased the contract. It does not, however, rule out all cumulation: a separate loss, proved with documents in hand, remains compensable. The difficulty is not one of principle but of proof, and it is played out from the first instance.

If you are tied to a Swiss franc loan, the question is no longer only whether your terms are unfair. It is to quantify precisely what restitution will return to you, and to identify, with supporting evidence, what it will not.

FAQ: Annulment of a Swiss Franc Loan and Damages