Month: November 2021

A surrender of a foreign citizen by Poland is possible only in strictly defined cases. Moreover, in order for a citizen to be extradited, the so-called negative premises, i.e., excluding legal admissibility of the extradition, must not occur.

Negative premises for extradition are established in Article 604 of the Code of Criminal Procedure, which provides that surrender is inadmissible if:

1. the person to whom the application relates is a Polish citizen or has the right of asylum in the Republic of Poland;
2. the act does not contain the qualities of a prohibited act or the act does not constitute an offense or the perpetrator has not committed an offense or is not liable to punishment;
3. the statute of limitations has passed;
4. criminal proceedings concerning the same act committed by the same person have been finally terminated;
5. it would be contrary to Polish law;
6. there is a justified fear that in the country demanding surrender the person surrendered may be sentenced or executed under the death penalty;
7. there is a justified fear that in a state demanding surrender, the freedom and rights of the person surrendered may be violated;
8. concerns a person who is being prosecuted for the commission of a non-violent politically motivated crime.

Moreover, detailed provisions of a legal assistance agreement concluded between Poland and another country may specify additional negative premises.

Extradition takes place on the basis of an agreement between Poland and another country. Only the existence of an international agreement on mutual legal assistance entitles the foreign country to request Poland to surrender its citizen who is currently staying in Poland. Lack of such an agreement between Poland and a foreign state makes it impossible to surrender a citizen at the request of such a state.

Firstly, if the requested person is a suspect, the application of the foreign state is sent to the locally competent prosecutor’s office. Upon the order of the prosecutor’s office, the foreign citizen is usually brought to the prosecutor’s office to be charged and questioned. Then, the application of the foreign state is sent to the locally competent Regional Court, which decides whether the transfer of the person is legally admissible or not. The court may then also decide to remand the person in custody. If the transfer is found to be legally permissible and the decision becomes final, the application of the foreign state is sent to the Minister of Justice, who gives or withholds his consent to the transfer of the citizen. Only if the Minister of Justice consents to the transfer, the foreign national may be transferred.

It should be noted that the District Court’s finding that the surrender of a foreign citizen is legally permissible does not automatically result in the Minister of Justice’s consent to the surrender.

In one of our cases, we were appointed at the stage after the Court of Appeal issued a decision, upholding the District Court’s decision, stating the legal admissibility of the surrender of the Belarusian citizen. As it turned out, this citizen was prosecuted in Belarus as a result of refusing to provide Belarusian law enforcement agencies with information about persons cooperating with a candidate for the office of President of Belarus, posting in social media slogans and posts condemning the actions of the government of Belarus and organizing various anti-government rallies. As a result of his refusal to cooperate with the Belarusian law enforcement agencies, the citizen was warned that criminal proceedings would be initiated against him for alleged actions from several years ago. Due to the fear of being charged in retaliation for his refusal to cooperate and the fear of unfair trial, the citizen decided to leave for Poland. After several months, he was apprehended here and was charged with crimes committed between 2014 and 2018, as well as being placed under temporary arrest.

While awaiting the decision of the Ministry of Justice, we applied to the Office for Foreigners to grant the aforementioned citizen refugee status, in connection with his flight from Belarus for fear of being persecuted for political reasons. In the course of the proceedings, evidence was provided to confirm the reason for the Belarusian citizen’s departure to Poland. Ultimately, the Office for Foreigners granted him refugee status. As a result of the above-mentioned circumstance, despite the legally valid decision stating the admissibility of the Belarusian citizen’s surrender, the Minister of Justice issued a decision refusing to consent to the surrender of the aforementioned citizen, citing the negative reason for granting the refugee status. Based on the decision of the Office for Foreigners, the District Court revoked the detention of the aforementioned citizen.

According to our experience, there are more and more applications from Belarus for the surrender of their citizens.

As the above example shows, a decision declaring extradition admissible does not always mean that a citizen will be actually extradited. Meanwhile, the proceedings, which may seem to be conducted in a “schematic” way, may eventually turn out to be for the person concerned a complete reversal of his initial procedural situation. In criminal cases, it is particularly important because often such cases have major implications on a person’s life.

A servitude of habitation is a right that encumbers a third party’s property and allows that property to be used by a designated individual for a lifetime. For example, parents who transfer ownership of an apartment or house to their children may reserve the right to use specific rooms or floors. If this legal solution is applied, the said tenants (in this case: parents) gain certainty that regardless of the circumstances, they will be able to continue to live in the property and use the facilities and common rooms, e.g. garage or laundry room.

The legal institution in question is of personal nature, thus it is vested in a person individually specified by name. It is also non-transferable and expires at the latest upon the death of the person entitled. The establishment of a servitude consists of a declaration made by the owner of a real estate, by virtue of which he surrenders part of the rights to his property. The document should be drawn up in the form of a notarial deed and indicate not only the premises to which the easement will apply but also the manner and scope of its use by the servant. However, if one wants to take advantage of the benefits of the discussed institution, it should be taken into account that the servitude needs to be entered in the real estate register as a right in rem. The discussed solution is usually included in life-tenancy or donation contracts, but in recent years more and more often it occurs on its own.

The object on which the right can be established for the benefit of a third party is developed land, real estate (when the building is a separate object of property), or residential premises. The servitude may concern the whole property or a specified part of it. For example, we can designate a selected room or an entire single-family house. When establishing a servitude, the parties may agree that after the death of the beneficiary the easement will be granted to his/her children, parents, and spouse. The duration of this right may then be significantly extended.

It should be emphasized that any real estate encumbered with a servitude may be bought or sold without the consent of the servant. However, the right itself cannot be sold in any way, which means that it is not subject to execution either. In practice, this means that the buyer is obliged to respect the rights of the person with the right of servitude. The establishment of the said right on the real estate effectively discourages potentially interested persons from purchasing it and significantly lowers its value.

Nowadays, real estate is the most important asset of many people, therefore, if there are any financial problems, it is a priority to secure that real estate against possible execution. An alternative to a standard sale or donation agreement, which does not deprive the owner of his/her right to the real estate, is in this case the above described lifetime servitude.

The indicated legal institution in a simple way protects debtors from their creditors by discouraging potentially interested persons from purchasing real estate with an “additional tenant”. Usually, bailiff auctions conducted in such cases end up ineffective, because the potential buyer is aware that he or she will have to respect the rights of the person with the right of servitude.

Author

Oskar Kozikowski

Changes in the field of developer law will come into force in July 2022. The adopted changes in the so-called “developer act” increase the scope of protection for buyers of apartments with regard to removing defects in premises. The amendment strengthens the position of buyers of premises, providing tools for pursuing claims against developers. Read more about it here (in Polish)

Successive lockdowns and broken supply chains began a domino effect. Investors and procurers halted work out of their own caution or in fulfillment of top-down guidelines, then the attendance of workers and subcontractors on-site periodically declined due to quarantines. Work performance and thus billing slipped, disrupting payment flows. Construction material prices have skyrocketed. Material orders are now based on prepayments, while the delivery itself has become significantly longer.

Recently, the trend of smaller suppliers and subcontractors breaking their contracts has become evident, as it has become more profitable to pay contractual penalties and perform services or deliveries at current prices rather than the prices agreed on 6 months ago.

As a result, participants in the construction processes have reached a point where they are unable to determine what the cost and completion date of the contract will be.

The first issue important for contractors will be the extension of time for completion of construction tasks. The second element of getting the contract “on track” will be obtaining additional remuneration compensating for higher costs of contract execution and costs of construction downtime during the lockdown, if there was a work stoppage.

Claim for extension of time for completion of a task under public and private contract regime

The redefinition of the completion date is of fundamental importance for all participants in the construction process. It is, of course, the issue of contractual penalties charged for the delay. In the case of time slippage, caused by reasons related to Covid -19, the causes of delays should be divided into two categories: the closure of construction by the decision of the ordering party (investor) and other circumstances, such as reduced availability of workers, lack of materials, disease, and quarantine. The above division is consistent with the catalog created by the legislator, where COVID – 19 circumstances are divided into: (i) those with the potential to affect the due performance of the contract and (ii) those circumstances affecting the performance of the contract.

In the case of public procurement, the relevant tools are directly provided by the “Covid Special Act” of March 2, 2020, on specific solutions related to the prevention, counteraction and eradication of COVID-19, other infectious diseases and crisis situations caused by them.

The provision of Article 15r. od the above-mentioned Act stipulates that the ordering party, upon determining that the circumstances related to the occurrence of COVID-19, referred to in paragraph 1, affect the due performance of the contract referred to in paragraph 1, in consultation with the contractor, shall amend the contract, in particular by changing the date of performance of the contract or a part thereof. Since the legislator used the phrase “amend the agreement”, the ordering party has no room for maneuver and must conclude an annex to the agreement, provided that the impact of COVID -19 on the performance of the contract is demonstrated by appropriate documents. The contractor’s refusal to conclude the relevant annex should entail an appropriate claim for a declaration of intent to the court. Circumstances evidently affecting the performance of the contract are those relating to the closure of the construction site, quarantine of workers.

With regard to the circumstances related to COVID – 19 and which may affect the performance of the public procurement contract, the public ordering party may decide to conclude an annex changing the term of performance of the contract. In this respect, the legislator left the decision to conclude an annex to the ordering party, depending on its assessment of the impact of COVID – 19 on the performance of the contract. At the same time, the conclusion of an annex extending the contract performance deadline and the related waiver of claiming contractual penalties were explicitly excluded by the legislator from liability for violation of public finance discipline by the ordering parties.

In the case of private contracts, extending the time for task completion will come down to negotiations and an agreement between parties.

Refusal to sign an annex extending the time for completion of a task does not leave contractors defenseless – both those performing public tasks and private investments. It is standard practice that contractual penalties are calculated for so-called “delay”, i.e. culpable delay. Meanwhile, it seems that any circumstances relating more or less directly to Covid-19 and affecting the overall situation in the market should be qualified by the courts as circumstances beyond the control of the contractor and thus exclude liability for delay.

Financial claims of contractors and increase of the lump sum in the public and private contract regime

Irrespective of the postponement of the deadline for completion of the task, the issue of restoring the profitability of the contract seems to be more important, particularly in the case of contracts where remuneration was determined in the form of a lump sum. And this is the prevailing market practice.  Prices of construction materials and labor costs cause that the execution of contracts brings measurable losses. In addition, the prolonged time of the task execution entails costs related to the maintenance of the contract security, construction backup facilities, and insurance.

In the case of public procurement, the “Covid Special Act” is not precise. The provisions state that the contracting authority shall amend the contract “in particular by” “changing the method of settling the contractor’s remuneration”. Each time the phrase “in particular by” appears in the statute, it means an exemplary list and an open catalog of available actions. In turn, a change in the “method of settling the contractor’s remuneration” may itself mean a switch in respect of particular works from a lump-sum system to a cost-based system. Such an understanding of the legislator’s intentions is supported by the further part of the provision, according to which the limitation of the contracting authority’s discretion is that “the increase in remuneration caused by each subsequent change will not exceed 50% of the value of the original agreement”. In practice, this should mean nothing more than giving the ordering party the right to increase the amount of the contractor’s remuneration. While an extension of the contract’s execution undoubtedly affects the costs of its execution in the form of insurance, CAR policy, and security costs, the ordering party, in accordance with the act, enters into an annex to the contract. The link between changes in the prices of materials and services and the occurrence of the Covid – 19 outbreak is less obvious, which qualifies these costs as likely to affect contract performance. Under the cited Act, this means that the ordering party has discretionary authority.

Nevertheless, the contracting authority’s decision is not a determinant of the contractors’ strategy: it is still open to claim either an annex increasing remuneration under the “special Covid Law” or invoking the rebus sic stantibus clause, i.e., an extraordinary change in relations.

For private contracts, the change in remuneration is again a matter of negotiating the terms of the contract. With respect to private entrants, contractors have a litigation tool in the form of a motion to secure a claim for increased remuneration. If the court finds the contractor’s claim for an increase in remuneration credible, it may provisionally – by way of security – order, for example, the seizure of the investor’s bank accounts or real estate belonging to him. This does not yet mean final success in the form of increasing the contract value, but it definitely translates into the contractor’s negotiating position.

Author: Aleksandra Terc

Bank liability for theft of funds from a bank account. 

Nowadays it is necessary to own a personal bank account in order to function properly on a daily basis. A bank account is a multifunctional tool to manage finances and its main task is to safely store cash in a non-cash form. Using a bank account, we can also confirm our identity in electronic administration systems or sign a document with a trusted signature. The increase in the popularity of personal accounts, as well as the constantly advancing digitization significantly facilitate our everyday life. 

The development of e-banking not only brings a number of benefits but numerous risks as well. There is a growing number of cyber-attacks leading to, among other things, file destruction, blocking access to devices, data phishing, and theft of funds from accounts. According to the information provided by the Financial Ombudsman, in 2020 there were almost 1200 requests for intervention in a dispute concerning an unauthorized bank transaction, which is almost twice as many as in the previous year.

In case of anunauthorized bank transaction, it is important to remember that, as a customer of a financial institution, we have certain legal tools at our disposal to enable the recovery of lost funds. Based on the provisions of the Banking Law of 29 August 1997 (“Prawo bankowe” Dz.U. z 2020 r. poz. 1896) (hereinafter also referred to as the “Banking Law”) and the Payment Services Act of 19 August 2011 (“Ustawa o usługach płatniczych” Dz.U. z 2020 r. poz. 794) (hereinafter also referred to as the “Payment Services Act”), the bank is obliged to exercise due diligence to secure the funds held in it. It is obliged to take risk mitigation measures and introduce control mechanisms to manage operational and security breach risks in the provision of payment services. 

In addition, banks are also required to take measures to prevent money laundering, the financing of terrorism, and the prevention of crimes using banking instruments. For this purpose, financial institutions have been entrusted with a wide range of powers and instruments, ranging from the ability to verify and identify their beneficiaries, through the implementation of control and security systems, up to the ability to exercise authority. If the safeguards provided by law are not sufficient and an unauthorized transaction occurs, the bank account user will have a claim against the bank for immediate reimbursement of the amount of funds transferred.

It should be noted that if the transaction was made via e-banking, the bank is obliged to restore the account to the state from before the transfer. The liability of the financial institution is waived only if the unauthorized transaction was caused by the customer intentionally or by a willful or grossly negligent breach of duty. The amount transferred from the account must be returned immediately, but no later than by the end of the working day following the day on which the unauthorized transaction was identified or the day on which the relevant notification was received. 

In view of the above, we cannot forget that the bank account user is obliged to use the payment instrument in accordance with the framework contract and to immediately notify the financial institution of any loss, theft, misappropriation, or unauthorized use of or access to the payment instrument discovered by him. The user should also immediately notify the bank of any unauthorized, non-executed or improperly executed payment transactions discovered.

Attention should be drawn to the current judicial practice. The Regional Court in Warsaw in its judgment of 19 December 2016. (case number I C 229/15) indicates that: “The risk of making a withdrawal from a bank account into the hands of an unauthorized person and making a monetary settlement on the basis of an instruction issued by an unauthorized person is borne by the bank, also in a situation where the account agreement is covered by internet banking.” However, according to the thesis of the Judgment of the Court of Appeal in Warsaw of 19 July 2018 (ref. I ACa 348/17) it should be noted that: “A payment transaction is considered authorized only if the payer has consented to its execution, whereby a payment order cannot be revoked from the moment it is received by the bank. The burden of proving that a payment transaction was authorized by the user or that it was executed correctly lies with the provider, i.e., the bank. (…)” Additionally, following the Judgment of the Court of Appeal in Warsaw of 24 May 2018 (ref: VI ACa 217/17) I point out that: “If transactions have been carried out without the payer’s consent and in circumstances for which the payer is not responsible, and the payer has subsequently reported the occurrence of unauthorized transactions, it is the provider’s responsibility to refund the unauthorized amounts.”

Author: Oskar Kozikowski

Pursuant to the COVID-19 Counter-Proliferation Act (hereinafter referred to as the “Special Act”), during the period of the state of epidemic emergency, the time limits in judicial and administrative proceedings shall not commence, and those commenced shall be suspended for that period. 

The following time limits shall be suspended:

• Time limits, when meeting a deadline depends on a legal protection before a court or authority;
• Time limits for a party to perform actions forming its rights and obligations;
• Limitation periods;
• Time limits when not meeting the deadline causes expiration or modification of material rights, claims, and receivables, as well as falling into delay;
• Deadlines, the non-observance of which entails negative consequences for a party;
• Deadlines for entities or organizational units subject to registration in the competent register to perform actions that result in the obligation to report to that register, as well as deadlines for entities to perform their obligations under the provisions on their regime.

Examples of such deadlines are those established in the Code of Administrative Procedure or the Law on Proceedings before Administrative Courts:

1. Applicable to the party of the proceedings:
   1. 7- day time limit for filing a complaint;
   1. 14- day time limit for filing a complaint;
   1. 30- day time limit for filing a complaint to the administrative court;
2. Imposed on public administration bodies for consideration of cases:
   1. For cases that require an administrative investigation – one month from the date of initiation of proceedings; 
   1. In the case of particularly complicated cases requiring an investigation – no later than two months from the date of the initiation of proceedings;
   1. In the case of appeal proceedings – one month from the date of receipt of the appeal;

Non-consideration of cases due to suspension of time limits.

As a result of the suspension of the application of the provisions establishing time-limits, which the parties and authorities are obliged to meet, the parties have lost the ability to assert their rights on account of inaction or procrastination and their right to have cases heard without undue delay

These regulations may halt any action in proceedings conducted by administrative authorities and administrative courts. Letters, motions, complaints, etc. filed by parties or participants in proceedings during the state of emergency or epidemic will not be examined and public administration bodies will not suffer any negative consequences.  

Quicker resolution depends on the will of the office. 

The provisions of the Special Act provide that actions performed in the period of suspension of commencement or suspension of time limits are effective.

A party or participants to the proceedings are obliged to perform actions specified in the request if failure to take such actions could result in danger to life or health, serious damage to the public interest, or threat of irreparable material damage, this also applies to public administration bodies who have been requested to take a stand on a matter which is a subject of the proceedings.

Accordingly, ex officio decisions may be issued:

• Decisions granting in full the request of a party or participant in the proceedings,
• Certificates stating that there are no grounds for filing an objection.

Examples of decisions fully accepting the request of a party or participant to the proceedings are:

• Decision on the permission to use;
• Decision on the transfer of the construction permit;

A party is entitled to file an appeal against an administrative decision. The decision shall not be enforced before the lapse of the time limit for lodging an appeal. However, if it is in accordance with the demand of all parties, it is enforceable before the expiration of this deadline.

Thus, there are no impediments to cases that are in accordance with the demand of the parties to be resolved.

Trading virtual currencies and their use as a means of payment is becoming more and more common. Virtual currencies turned out to be a much faster means of payment than fiat currencies. As a result, the service sector has begun supporting payments via virtual currencies, and the exchange of these currencies is developing intensively. National laws have not kept up with the classification and regulation of this sector, leaving entrepreneurs without answers and guidelines on how to operate legally and safely. Aleksandra Terc has some answers for us, which you can read here (in Polish