Daniel Smarduch | In Principle

To complement our previous considerations about the civil-law status of data, we should analyse the possibility of using data to create security interests in business transactions. The increasing economic value of data inspires a search for effective ways to collateralise these assets.

The pandemic has made it hard to organise traditional deal closings. Earlier, in typical financing transactions, it was no problem to arrange a physical meeting of the parties to sign the complete set of financing documentation, including security instruments (e.g. a pledge agreement or agreement to establish a mortgage). Indeed, some clients insisted on holding a traditional closing. The pandemic has changed this perspective, focusing the parties’ attention on the possibilities for remote signing of agreements.

One of the most critical issues captivating banks and their retail borrowers in recent years in Poland has been the future of foreign currency loans, especially those denominated in or indexed to Swiss francs. After the political battle around such loans has settled, the issue is now mainly addressed in court proceedings between borrowers and creditors. A long-awaited judgment was issued by the European Court of Justice on 3 October 2019 and has already been followed by judgments of local Polish courts. Putting aside myths and hopes, we look closer at what may be the actual consequences of the ECJ ruling for all interested parties: borrowers and both primary and secondary creditors.

In various types of financing transactions, one of the borrower’s main assets is a portfolio of receivables, e.g. under leases (when financing commercial property) or under loans (when the borrower is in the business of granting loans). In such cases, the lender seeking effective security will often require such a portfolio to serve as collateral.

Can receivables governed by Polish law be effectively encumbered by a pledge governed by foreign law?