most interesting rulings | In Principle

In its judgment of 2 June 2021 (case no. II CSKP 7/21), the Supreme Court of Poland ruled on whether payment of the fee to a contractor for construction works can be conditional. This ruling is of great practical importance, as it comments on which contractual provisions regarding the fee are permissible and which are prohibited and thus invalid. This is essential reading for contractors and investors alike, providing valuable tips on how to frame construction contracts to ensure compliance with the regulations while affording proper legal protection.

Recently, the Supreme Court of Poland commented on the subject of acknowledgement of debt, and at the same time gave some general guidance on how to interpret a debtor’s statements and behaviour. This is a key practical issue, as action by the debtor can cause interruption of running of the statute of limitations on the claim. Therefore, debtors should be cautious about what they state to creditors. Conversely, in many cases, creditors can take advantage of the debtor’s behaviour to improve their legal position.

As economic activity in the Baltic Sea increases, there will be more situations where multiple undertakings are planned in the same area. Deciding on these cases can be challenging for the authorities and the administrative courts.

For many years, the consortium has been a familiar form of cooperation between businesses pursuing public contracts. But this construction still raises legal questions, especially when a dispute arises and goes to court. Because this structure is deceptively similar to an ordinary partnership, sometimes it is unclear which members of a consortium may participate in court proceedings. The Supreme Court of Poland examined this issue in its judgment of 30 June 2021 (case no. III CSKP 75/21).

As the host of the procedure, in the contract documentation the contracting authority should specify the formal and technical requirements for a bid bond. In some procurement procedures, the contracting authority requires contractors to submit a bid bond with a validity extending beyond the bid validity period. In a recently issued ruling, the National Appeal Chamber opined on whether such provisions of the terms of reference are permissible, or are invalid by virtue of law (case no. KIO 3482/21).

A contractor is obliged to calculate the bid price fairly and factor in everything that follows from the terms of reference, including typical risks associated with contract performance, so that the bid is realistic and allows for proper performance of the contract. If the bid price appears abnormally low or is otherwise questionable, the contractor must explain it in detail.

The purpose for stating the projected execution costs in the rules for a contest is for contestants to be aware of the contracting authority’s financial capabilities. Contestants should take this value into account when preparing their entries, or their entry will not be considered by the contest jury, the National Appeal Chamber held in its ruling of 10 January 2022 (KIO 3624/21).

In its judgment of 10 February 2021 (case no. I CSKP 33/21), the Supreme Court of Poland considered a cassation appeal by a claimant seeking to prove that it was wronged as a creditor in a fraudulent transfer claim against a third party (governed by Art. 527 and following of the Civil Code). The Supreme Court raised important issues in this debatable decision from the point of view of the safety of participants in commerce, including creditors. Among other things, the court pointed out that the assessment of whether a creditor was harmed within the meaning of Art. 527 §2 is affected by whether the consideration obtained by the debtor was used to satisfy other creditors.

A claim to set aside fraudulent transfers to a third party (Art. 527 et seq. of the Civil Code) must precisely identify both the parties and the subject matter in the demand for relief set forth in the statement of claim. It is a mistake to assume that the trial court will seek out the missing elements in the justification for the statement of claim.

When is the investor required to pay for the performance of work? How do identified defects relate to this obligation, and when can handover be refused? These questions cause many difficulties in practice and are the basis for numerous, often very complex and long-running disputes. Recently, this issue was addressed by the Supreme Court of Poland. The interpretive direction it affirmed may help market players, including construction contractors, to whom these findings may apply by analogy.

On 21 December 2021, the Court of Justice of the European Union issued a long-awaited judgment on the interpretation of the EU Blocking Statute in C-124/20, Bank Melli. Although the ruling does not dispel all doubts, it does set the direction for interpretation and shows that even imperfect regulations must be applied.

On 21 December 2021, the European Court of Human Rights issued a judgment in Stołkowski v Poland (application no. 58795/15) holding that Poland had violated the applicant’s property rights. The case involved the long impoundment of the applicant’s car as security in a criminal case pending against him, which resulted in decimation of the vehicle’s value. Relying on principles of property rights, the court decided when impoundment of a car may be disproportionate, despite the existing public interest and legal basis for application of such a measure.