most interesting rulings | In Principle

Flawless performance of a public contract is very rare. Therefore, the case law has adopted the principle that contracting authorities may refuse the final handover only if there are material defects. But what is the nature of material defects, and how can the procedure for handover of works be properly defined in a public contract? These issues were recently considered by the National Appeal Chamber (KIO) in its ruling of 1 December 2020 (KIO 2965/20), which additionally took a stand on the issue of allegedly grossly excessive contractual penalties and limits on such penalties.

Municipal waste collection and transport is the subject of many in-house procurements in Poland. Art. 67(1)(12) of the Public Procurement Law provides one of the possible grounds for awarding such contracts, requiring the contracting authority to meet three conditions. But are there really only three? This issue arose in a case in which the National Appeal Chamber had to decide whether the contracting authority must also meet other, non-statutory conditions to properly award a sole-source contract.

Recently, the Supreme Court of Poland adopted an important resolution specifying the rules for running of the statute of limitations after a postponement of payment (creditor’s extension of the payment deadline). Under the resolution, if payment is postponed, the statute of limitations begins to run again from the new payment deadline. Thus, the view expressed by the Supreme Court allows the repayment of the debt to be divided into instalments along with postponement of the due date, and thus postponement of the beginning of the limitation period.

When valuing bids in a public procurement procedure as a lump sum, contractors may freely determine the value of individual parts of the contract. For the contracting authority, only the total value of the contract is relevant, and not the valuations of individual parts. But in every case the contractor should examine the documentation to determine whether the contracting authority has included any limitations in this respect. This is the guidance that can be drawn from the ruling by the National Appeal Chamber of 20 October 2020 (KIO 2101/20).

In December 2020, the European Court of Human Rights issued its judgment in Papageorgiou v Greece (application No. 44101/13), holding that despite his prior acquittal, the imposition of civil liability on a driver for causing an accident under the influence of alcohol did not violate the presumption of innocence. The case provides an opportunity to discuss how the outcome of criminal proceedings impacts drunk drivers’ liability for damages.

Fair competition and equal treatment of contractors are the main principles of awarding public contracts, and all actions taken by the contracting authority in preparing and conducting the procedure must comply with these principles. Nonetheless, procurement procedures often raise questions about how these principles should be applied in practice. Some doubts were recently dispelled by the National Appeal Chamber in its ruling of 15 October 2020 (case no. KIO 2104/20).

Does the sale of replacement parts and accessories for Testarossa cars and used Testarossas qualify as genuine use of the Testarossa trademark? If so, is the mark used only for high-priced luxury sports cars, or for the whole category of cars?

On 23 July 2020, the ten-year dispute over the square packaging of Ritter Sport chocolate ended. The proceedings were held in Germany, but the decision may provide guidance to courts of other states on how to interpret the notion that shape can add significant value to a product.

An optional ground for exclusion from procurement proceedings, breach of an earlier public contract, is limited to three years after occurrence of the event that is basis for the exclusion. But a problem arising in practice is which event should be considered when calculating the three-year period. Termination of the contract by the contractor? Repudiation of the contract by the contracting authority? Or perhaps entry of a judgment for damages for breach of the earlier contract? The answer can be found in the ruling by the National Appeal Chamber of 26 August 2020 (case no. KIO 1781/20).

A contractor filing an appeal must duly demonstrate that it has standing to appeal under Art. 179(1) of the Polish Public Procurement Law. There is an endless debate in the case law and the legal literature over which entities are entitled to file an appeal in a procedure for award of a public contract. The National Appeal Chamber spoke out in this dispute in its ruling of 23 October 2019 (case no. KIO 2031/19), responding to the question whether a contractor whose bid has been rejected still has a legal interest in filing an appeal.

The Supreme Court of Poland has presented to an expanded panel legal questions concerning a summons to attempt a settlement as an action interrupting the limitations period on a claim.

In the judgment of 26 April 2019 (case no. V CSK 80/18), the Supreme Court of Poland held that it is not contrary to the nature of a construction contract to condition the payment of fees on the absence of defects in the structure. Therefore, the parties’ terms requiring payment only after a faultless handover protocol has been obtained are permissible. However, in the Supreme Court’s opinion, such objections may also be included in the terms of the handover protocol. The court approved the possibility for the parties to invoke reservations made in the handover protocol, which constitute additional provisions in relation to the contract.