The Arrecife City Council has won a second legal battle against Banco de Santander for the claim of more than 7 million euros of patrimonial responsibility for the municipal decision to annul the contracts of some financial products, the so-called swaps, which have been judicially classified as toxic for municipal interests.
In a ruling dated January 10, the Contentious-Administrative Court number 5 of Arrecife dismisses the appeal filed by Banco de Santander, in which it claimed 7,249,182 euros from the City Council for patrimonial responsibility after the decision of the City Council to declare null all swap contracts signed with that financial institution and reject any extra-contractual patrimonial responsibility.
This is the second ruling that the Arrecife City Council wins in relation to the annulment of the swap contract with Banco de Santander, an entity that at the end of October 2019 already deposited in the municipal coffers, by final judgment, more than 4 million euros.
“This is the second ruling we have won against Santander. The legal strategy of the City Council is working, which allows us to save money for the citizens of Arrecife, as we have also done with the Ginory plot or with the cancellation of debts with companies such as Inalsa and Urbaser, always for millionaire defaults of previous mandates”, defended the mayor, Astrid Pérez.
Arrecife rejected the bank's claim last August
Santander's appeal was directed against the resolution of the Arrecife plenary session of August 5, 2020, already chaired by Astrid Pérez, in which the bank's millionaire claim was dismissed, which led the private entity to file an appeal in the contentious-administrative channel that has just been lost. The bank has the possibility of appealing to the Superior Court of Justice of the Canary Islands, which already ruled in February 2018 against another appeal by Banco de Santander confirming the nullity of the swap contracts.
Since 2016 there has been a ruling of the Contentious-Administrative Court that declared in accordance with the law the nullity of the Framework Agreement on Financial Operations, signed in 2004, which regulated the operations of financial swaps of interest rates (swap), as well as the successive contracts.
In April 2019, the City Council took a further step in plenary and approved a resolution to liquidate all swap contracts, with a millionaire claim included and excluding any compensation to the bank for the annulment of the main contract. Faced with this agreement, according to the ruling, the Bank did not file a contentious-administrative appeal against the plenary agreement, but filed an appeal for reconsideration, so now there is no room for compensation for extra-contractual liability.
The ruling of the Contentious-Administrative Court number 5 of Arrecife now recalls that the contract is annulled, and especially that no compensation is possible, while evidencing, as defended by the Arrecife City Council and also reported by the Advisory Council, that “the practices contrary to the good faith of the financial institution, expert in the matter and, above all, in speculative financial products, cannot be hidden”.
Similarly, the ruling considers that it is a fact with the force of res judicata that the nullity of the contracts was attributable to Banco de Santander itself, as a consequence of the breach of its duties of information and its lack of good faith.
