Agata Jóźwiak | In Principle

In the judgment of 24 July 2024 (case no. II CSKP 968/22), the Supreme Court of Poland ruled on doubts regarding legal standing to assert a demand for either contract modification or payment under Art. 3571 of the Civil Code in the event of an extraordinary change of circumstances (the rebus sic stantibus clause), on the part of a consortium of entities executing a public contract for a contracting authority. The court also commented on whether a claim under Art. 3571 can be made after the contract has been fully performed. This ruling is very important for contractual practice in Poland.

The Polish parliament has reduced the fees on some requests for a statement of the grounds for rulings in civil proceedings. In these cases, the fee has dropped from PLN 100 to PLN 30. This fee will continue to be credited against the fee payable on the appeal.

New rules for payment of court fees on requests for conciliation in Polish civil proceedings have been in effect since 28 September 2023. The parliament has heavily reduced the fees to make the institution more attractive, after it ceased to interrupt the limitations period but only suspends it.

The Polish parliament has voted to amend the Civil Procedure Code, introducing numerous changes primarily intended to speed up proceedings. On this occasion, the parliament decided to reinstate some solutions it had abandoned in recent years. Below we discuss the most important changes.

The statute of limitations for claims arising from a contract for a specific work is regulated differently from the general rules. Pursuant to Civil Code Art. 646, these claims become time-barred two years after the work is delivered, or if the work has not been delivered, two years after it was supposed to be delivered under the contract. This is a short timeframe, and requires great care to avoid forfeiting claims—especially as the way it is counted can raise practical questions, and in some cases a three-year term is used.

Cooperation between the parties is essential to implement many contracts. This is particularly so in the case of a construction contract or a contract to produce a specific work, where the purpose of the contract is achieved over the course of a fairly complex process and comprises many elements. The Polish parliament has recognised this strong dependence and has provided a far-reaching solution applicable when the necessary cooperation is lacking. Such a situation may even lead to rescission of the contract.

Settlement is a popular and safe way of resolving civil disputes. By making concessions to each other, the parties autonomously frame the legal relationship between them and allocate the rights and obligations acceptable to them. The law in Poland also promotes this model, providing advantageous rules for parties to court proceedings allowing for return of the court fee on claims if a settlement is reached. The earlier a settlement is reached, the more of the fee can be recovered. In some cases, even the entire fee may be refunded.

A request for a payment guarantee may appear on an investor’s desk suddenly, causing numerous complications. Sometimes, contractors make such a demand to have an excuse to withdraw from the contract. Then a race against the clock begins, not to give them that excuse. But in advance, the investor can also arrange a commercial solution to the problem, i.e. a bank guarantee facility in the loan agreement.

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.

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.

Contractual penalties are a common instrument for sanctioning failures to perform non-monetary obligations (e.g. completing construction on time). Contractual penalties can be cut by the courts, but generally the Polish Civil Code indicates only the grounds for mitigating a contractual penalty. The details must be sought in the legal literature and the case law. Indeed, the regulations do not even provide guidance on how much contractual penalties can be reduced. Thus each case should be treated individually, guided by the principles discussed below.

Increased court fees for an application for a summons to conciliation have been in effect since August 2019. They were intended to prevent the use of settlement proceedings solely to interrupt the running of the limitations period. Has this effect been achieved?