Insights

The Banking and Financial Arbitrator (ABF) has recently ruled on the validity of changes made to a facility agreement after its execution, without compliance with the written form requirement. In the case at issue, the beneficiary of a revolving credit line brought an action before the ABF to complain about the lack of written form of the amendment to the agreement, thus invoking its nullity (pursuant to Articles 117(1) and (3) and 124 of the Italian Banking Act (TUB)). In particular, within the framework of the credit relationship, changes (never accompanied by a written agreement) had occurred over time after the signing of the original contract concerning the identification numbers of the credit cards associated with the account, the overdraft limit and the interest rate. The ABF, having ascertained that each amendment agreement was null and void due to a breach as to the (written) form, recognised specific economic benefits in favour of the debtor, who was allowed to pay to the bank only the principal amount and not also the accrued interest nor the costs and fees related to the financing relationship resulting from the amendments declared null and void.