• case brought by a customer (limited company) for the payment of 109,967,000 zloty for damages incurred in connection with entering into and settlement of Treasury deals. The lawsuit of 27 April 2017 was brought against Alior Bank S.A. and Bank BPH S.A. In the view of the Bank, the action is devoid of reasonable factual or legal basis. 
• case brought by a customer (limited company) for the payment of 17,843,000 zloty for damages incurred in connection with settlement of currency options. The lawsuit of 10 February 2015 was brought initially against Bank BPH S.A. In the view of the Bank, the action is devoid of reasonable factual or legal basis. The lawsuit was dismissed in whole, but can be appealed against.  
• case brought by a customer – natural person – representative of a group of 84 physical and legal persons for the determination of the Bank’s liability for damages. The class action was brought on 5 March 2018 against Alior Bank for the determination of the Bank’s liability for damages caused by deficient compliance with the information duty by the Bank towards customers, and deficient performance of contracts for services of receiving and transmission of orders of purchase or sale of investment certificates of investment funds previously managed by Fincrea TFI S.A., and currently by Raiffeisen Bank International AG (Joint-stock company) Branch in Poland. In the view of the claimants, the Bank failed to provide the customers with information on the actual risk of investing in the investment products, by which it has exposed the customers to damages resulting from the loss in value of the investment certificates and the loss of guaranteed profits. In the view of the Bank, the class action is devoid of reasonable factual or legal basis, and should not be resolved to the benefit of the customers. However, the Court in which the class action was brought, by order of 27 September 2019, decided to examine the case as a class action. On 12 November 2019, the Bank filed a complaint against that order. Alior Bank determines that the probability of funds outflow due to this lawsuit is estimated as less than 50%, therefore the Bank did not create any provision for the lawsuit as at 31 December 2019. Currently, estimation of potential financial consequences for the Bank of the Court resolving otherwise than anticipated by the Bank is impossible. 

By decision of 6 August 2019 issued pursuant to Article 167(2)(1) in conjunction with Article 167(1)(1) of the Trading in Financial Instruments Act, the Polish Financial Supervision Authority imposed a fine on the Bank at PLN 10,000,000. The proceeding was related to the compliance of operation of Alior Bank and the Brokerage House of the Bank for the distribution of investment certificates of funds previously managed by Fincrea TFI S.A., now Raiffeisen Bank International AG (Joint-stock company) Branch in Poland. The Bank moved to the KNF for reconsideration of the case. Upon reconsideration, the Polish Financial Supervision Authority, by decision of 3 December 2019, sustained its original decision. On 3 January 2020, the Bank appealed against that decision to the Regional Administrative Court in Warsaw. 

Judgment of the Court of Justice of the European Union (CJEU) of 3 October 2019 

On 3 October 2019, the Court of Justice of the European Union (CJEU) issued its judgement in the case C260/18. The judgement contains answers (legal interpretations) to questions asked by a Polish court. These questions were posed in connection with the analysis by the Polish court of a case brought by a customer against Raiffeisen Bank concerning a loan contract indexed to CHF concluded by the customer. 

In line with applicable rules, the interpretative guidance of the CJEU should be taken into account by national courts when deciding cases. These interpretations, while leaving relevant issues to be assessed by national courts, focus on matters related to the effects that may apply to contracts if the court determining a case decides that some abusive clauses are present in the contract in question. Having analysed the theses included in the CJEU judgement and having reviewed its portfolio of loans indexed to a foreign currency, Alior Bank does not see any significant risk of a negative impact of this judgement on the Bank’s result. 

In cases in which the Bank was the defendant, the value in controversy as at 31 December 2019 was PLN 332,526,000, and as at 31 December 2018 it was PLN 258,700,000. The amount of provisions for pending contentious cases as at December 2019 was PLN 49,822,000, and PLN 35,064,000 as at the end of 2018. 

Cases related to the activity of Alior Bank’s subsidiaries  

On 26 June 2019, Alior Leasing Sp. z o.o. received a class suit for the payment of severance pay brought by four former members of the Management Board of the company who were dismissed by the Supervisory Board on 20 December 2018. They claim PLN 600,000. 

The Management Board of Alior Leasing Sp. z o.o. is of opinion that the claim brought under the class suit is groundless and the risk of these claims being accepted by the Court is low. 

Since the beginning of 2019, Alior Leasing Sp. z o.o. received several letters from the four dismissed members of the Management Board of the Company, which contained proposals addressed to the Company for amicable settlement of the dispute with the Company concerning the grounds for termination of contracts for the provision of management services and payment of some part of the benefits under the executive programme. The executive programme encompassed the dismissed members of the Management Board and some staff of the Company.  

In the view of the Company and of the Bank, the likelihood of effective award by the Court to the dismissed members of the Management Board of the benefits under the Executive Programme is low. The Company has based its position on legal consultancy obtained by the Management Board of the Company. These circumstances justify the absence of provisions on this account in the Group Financial Statements. 

Alior Leasing Sp. z o.o. has identified a risk of potential claims against the Company from third parties, which can result from the activities of certain employees and associates of the Company. As at the date of the Financial Statements, no claims on this account were brought. In the opinion of the Group, there are no circumstances that would justify the establishment of a provision due to that. 

The Group refrains from disclosing further information on the above-mentioned potential claims from third parties to prevent any prejudice to its status and courtroom position in the event of potential proceeding