Maciej Zych | In Principle

In agreements with foreign counterparties, provisions on which courts have jurisdiction to resolve disputes are standard, but they are often drafted by rote, without deeper reflection. If a dispute unexpectedly occurs, this can lead to serious problems. Based on our experience, we suggest how to avoid the worst mistakes.

As of 30 June 2022, a summons to attempt a settlement, or commencement of mediation, will no longer interrupt the limitations period for claims. Instead, the limitations period will be suspended for the duration of these proceedings. Is this the end of an easy method to evade the statute of limitations? And have lawmakers carefully considered the consequences of suspending time limits that now usually expire at the end of the calendar year?

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).

The amended regulations on joint and several liability of the investor to subcontractors of construction works have been in force for four years. With the stated aim of facilitating the payment of debts, they tightened the formal requirements for subcontractors seeking payment directly from the investor. Unfortunately, this has not been followed by a change in industry practice, as for various reasons formal notification of subcontractors often does not take place. Is the situation of undeclared subcontractors hopeless?

Art. 647¹ of the Civil Code, providing for the investor’s secondary liability for the contractor’s debts to subcontractors, was introduced into the Polish legal system in 2003. In April 2017, the parliament amended it thoroughly in adopting the Act Amending Certain Acts to Facilitate Debt Recovery. Two years after implementation, we try to answer the question whether the title of the amending act corresponds to reality and subcontractors really have a better chance of receiving payment for their work.

Od czasu wprowadzenia do Kodeksu cywilnego, a później również do Prawa zamówień publicznych, przepisów o solidarnej odpowiedzialności inwestora za zapłatę należną podwykonawcom robót budowlanych, generalni wykonawcy znajdują się w swoistym potrzasku – między koniecznością nadzoru i dyscyplinowania podwykonawców a presją inwestora, by ich rozliczać.

Demand guarantees are among the most popular methods of securing international commercial transactions. They may be used to secure both the payment of fees and satisfactory performance of particular works. The popularity of these guarantees (sometimes also referred to as payment guarantees) can be attributed to the fact that they are issued by trustworthy and globally recognisable financial institutions (usually banks and insurance companies), and their operation is governed by universal rules well-understood in the business community. Guarantees are also independent of the underlying relationship between the parties, and the payment conditions are based on objective criteria, eliminating the potential for unexpected interpretations and actions by the parties. Given these factors, it is understandable that disputes regarding payment guarantees can usually be avoided. However, when they do occur, they usually involve substantial sums, with the potential to affect the financial liquidity of the companies involved.

The Act on Consideration of Complaints by Financial Market Entities and on the Financial Ombudsman provides that a complaint not resolved within the stated period “is regarded as” resolved in accordance with the customer’s request. In a surprising resolution, the Supreme Court recently ruled that this does not mean that a delay in consideration of a complaint mandates that it is resolved in the customer’s favour, but such a delay merely increases the burden faced by the entity during litigation. If, of course, the matter ever reaches the courts. Was this what the legislature intended?

In common-law jurisdictions, the trust is a popular form for achieving various aims: managing assets, inheritance, building corporate structures, and tax planning. But countries from the Continental legal tradition, like Poland, typically do not have any institution directly corresponding to a trust. Polish doesn’t even have a word for it. This has raised doubts over the years and sometimes even suspicion on the part of courts and lawyers when they need to determine the consequences exerted by a trust in actual or potential disputes in jurisdictions unfamiliar with this form. Are their suspicions well-founded?

During the course of construction projects, issues often arise involving additional work or substitute work. Contractors perceive even minor departures from the original plans as additional work and demand an increased fee, while investors not only expect all their instructions to be followed within the agreed price, but treat any opposition by the contractor as a breach of contract. This dynamic works similarly between the general contractor and subcontractors. But the realities of the real estate development process often require work to be done even when the parties take different views of the work and do not sign a separate contract covering it. Is an additional fee nonetheless owed for performing such work?

The Court of Justice of the European Union has ruled that a commercial agent may retain the right to a commission if the client intentionally refuses to perform the contract because the principal’s attitude has caused the client to lose confidence in the principal. The ruling also clarifies doubts surrounding the effect that partial non-performance of the contract has on the agent’s commission.

The “Creditors’ Package,” an overhaul of numerous acts, entered into force on 1 June 2017. Among other changes, it authorises public finance units to conclude settlements when certain conditions are fulfilled. This creates the hope for a more flexible attitude of public entities, open to dialogue with the private sector. But will this actually be achieved?