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What's up now with commercial cases?

A fundamental change that went into effect on 3 May 2012 was elimination of separate procedures in commercial cases. Does this mean that there are no more commercial courts in Poland, and no procedural differences from “ordinary” civil litigation?

This issue was the subject of extensive debate and has been broadly commented on in the legal literature, including here on the Litigation Portal (see “Farewell to separate procedure in commercial cases”).

As we wrote, the Parliament found that there is no longer any justification for maintaining separate procedures for business-to-business litigation. Nonetheless, it was decided to introduce this major change gradually.

Effective 3 May 2012, the Act of 16 September 2011 Amending the Civil Procedure Code and Certain Other Acts (Journal of Laws Dz.U. 2011 No. 233 item 1381) repealed Chapter 1, “General Provisions,” of Chapter 4a, “Procedure in Commercial Cases.” It was not decided to repeal provisions concerning special commercial proceedings, i.e. concerning competition, regulatory matters in the area of utilities, telecommunications, postal services, and rail transport, or regulations governing proceedings for determining that provisions of form contracts are prohibited.

Significantly, the repealed general provisions on procedure in commercial cases will cease to apply only in new cases, i.e. cases commenced on or after 3 May 2012. However, in the special proceedings mentioned, in some instances a portion of the general provisions on procedure in commercial cases will apply even to cases commenced on or after 3 May 2012.

This is a departure from the rule that new procedural regulations apply to all pending cases as soon as the change goes into effect. The legislative intent here was that proceedings commenced under the old regime should continue to the end under the old rules.

It was also indicated in the justification for the amendments that went into effect on 3 May 2012 that this change will simplify many legal problems in commercial cases: “This solution not only reflects that there are no justified grounds for maintaining separate procedures for resolving commercial cases, but will also simplify the structure of a trial as a fact-finding process. It should be borne in mind that it was the existence of the separate procedure in commercial cases that to the greatest degree generated the phenomenon of the overlapping subject matter of separate procedures, making it necessary to apply several sets of regulations in a single proceeding and to resolve the resulting conflicts, including on a normative level.” (Point II(3) of the justification for the bill, Sejm Document VI/4332).

Have commercial courts disappeared?

The repeal of the general provisions on procedure in commercial cases will not result in elimination of the commercial courts (i.e. commercial divisions of the district courts and regional courts). These courts will continue to hear cases between businesses. Moreover, under the amending act, the list of cases heard by these courts will even be expanded to a certain extent. The Parliament apparently found that the specific nature of the cases heard by commercial courts is important enough to entrust consideration of such cases to judges with years of practice in this area.

Moreover, the National Court Register also operates at many of the commercial courts, and some commercial divisions have a separate specialisation in bankruptcy and rehabilitation cases. Transferring these cases to the commercial divisions could result in a loss of specialisation of judges, which could in turn slow down the case resolution times.

What changes will follow from repeal of the general provisions on procedure in commercial cases?

First and foremost, significant restrictions will be lifted in B2B cases commenced on or after 3 May 2012. This means, for example, that it will be permissible to amend the parties or the claims during the course of the proceeding.

It will now be permissible to assert counterclaims in such cases and to present claims for setoff, even if they are not established by a document.

Significantly, the rules for evidentiary preclusion will no longer apply in commercial cases. These rules imposed time limits on assertion of new allegations or evidence.

Evidentiary preclusion was highly controversial, and it was argued that the sanctions imposed in this respect were too onerous. For example, the former Art. 47912 §1 of the Civil Procedure Code was challenged on constitutional grounds. It provided: “In the statement of claim, the plaintiff is required to state all allegations and evidence in support thereof, under sanction of loss of the right to rely on them in the course of the proceeding, unless it demonstrates that it was not possible to assert them in the statement of claim or the need to assert them arose later. In such case, further allegations and evidence in support thereof must be asserted within two weeks from the date on which assertion thereof became possible or the need to assert them arose.” This provision was nonetheless upheld by the Constitutional Tribunal (judgment of 26 February 2008, Case No. SK 89/06, published at Journal of Laws Dz.U. 2008 No. 39 item 234).

This does not mean that the proceedings in commercial cases, including admission of evidence, will be conducted under the old rules for “ordinary” civil cases. Starting 3 May 2012, commercial cases—like other cases filed from that date on—will be governed by the new system for focusing the evidentiary material, based on the discretionary authority of the judge.

Anna Maleszka and Maciej Kiełbowski, Dispute Resolution & Arbitration Practice, Wardyński & Partners