The loan guarantors are not covered by the bill on the Court, which will establish special jurisdiction at the level of the District Courts, through which cases of financial disputes and sales will be adjudicated in a short period of time.
This is the conclusion reached by the Association of Banks, which in a letter to Parliament, indicates that the bill covers disputes only between borrower and creditor and does not include guarantors, collateral providers and mortgage borrowers. As the banks point out, the dispute between the guarantor and the creditor for the same credit facility will not fall under the new special jurisdiction and will have to be tried by another court, in a separate procedure.
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At the same time, it is noted that “the bill limits the jurisdiction of the new court to award only disputes regarding the amount of the credit facility that is in arrears and which has been terminated.” According to the link, the provisions of the bill should be more general and provide that the special jurisdiction will deal with disputes arising between the borrower (and other stakeholders) and the creditor, regarding credit facility, including disputes over guarantee contracts. and / or collateral related to the credit facility. In fact, the banks stress the need to clarify that the powers of the new court are not limited to facilities secured by a mortgage or a security assignment agreement. As it is pointed out, in most cases when a bank files a lawsuit against a borrower, it includes all its credit facilities, whether secured by a mortgage or not.
The banks also suggest that the new court should have jurisdiction to adjudicate cases involving all credit facilities and between all possible parties involved. In fact, they warn that “if this is not regulated, there will be an increased risk of parallel trials of the same cases by different courts and wastage of court time.” The Banking Association also calls for the revision of the definition of “borrower”, so as not to exclude persons who have been declared bankrupt or are in the process of liquidation. In addition, they require the bill to specify the period within which judges will rule on financial disputes.
