Author: admin

As a partner, we would like to invite you to the 11th edition of the Conference organized by Association of Consulting Engineers and Surveyors (SIDIR) and the Arbitration Court of Construction at SIDiR: “Good practices in the preparation of public procurement contracts for construction works and intellectual services – selected aspects”.

Ahead of us are 2 days of valuable and interesting lectures, panel discussions, knowledge sharing, exchange of experience and opinions – as usual at the highest professional level.

🔶 When❓ 27-28 September 2023
🔶 Where❓ Hotel Bellotto in Warsaw
🔶 Registration and detailed information 👉https://konferencja.sidir.pl/

The number of places is limited, the order of application is decisive.

Among the Speakers:

Jacek Bendykowski Marcin Bisikiewicz Marek Borkowski Tomasz Darowski Tomasz Domaradzki Łukasz Gembiś Izabela Gubała Andrzej Grabiec mariusz haładyj Maciej Jamka Jaroslaw Jerzykowski Tomasz Latawiec Piotr Mazuro Tamara Małasiewicz Rafal Morek Anna Oleksiewicz Piotr Pazdan Kamil Pociecha Andrzej Rogiński Marek Rytlewski Tomasz Skoczyński Michał Skorupski Piotr Skrzypczak Piotr Stenko Agnieszka Suchecka Patrycja Treder Elzbieta Viroux Jarosław Wielopolski Artur Woźnicki

Conference Partners:

BIKTL Latawiec Konsulting sp. z o.o. CMS Cameron McKenna DWF (Poland) Domanski Zakrzewski Palinka (DZP) Jerzykowski i Wspólnicy spółka komandytowa Kancelaria Radcy Prawnego Piotr Skrzypczak Mazurkiewicz Cieszyński Mazuro i Wspólnicy Adwokaci i Radcowie Prawni Sp.k. Misiewicz, Mosek & Partners Counsellors at Law skars.pl Skoczyński Kolańczyk Rudnicka Kancelaria Prawna SKA Viroux & Partners ZBM S.A.

#SIDiR  #FIDIC  #consultantengineer  #constructioncontracts #constructionlaw #investmentprocess #construction #publicprocurement #constructionworks #intellectualservices

We are thrilled to announce that Viroux & Partners has been ranked by The Legal 500 in two categories, being recognized for the second year in a row for “steadily developing [our] capabilities, focusing particularly on corporate disputes and contractual issues across an array of sectors, including energy, infrastructure, real estate and healthcare.”

Dispute Resolution → Band 5

Commercial, Corporate and M&A → Firm-To-Watch

We couldn’t have achieved this without our clients’ trust and support, and we’re incredibly honored by the feedback and testimonials they have given us. Clients praised us for “treating every case, whether it’s a big arbitration with a sector leader or a smaller case, with the same level of proficiency and efficiency.” Thank you for entrusting us with your legal needs and for recognizing the high level of service we provide.
To our team of lawyers and staff, thank you for your tireless efforts and unwavering commitment to excellence. Your expertise and dedication are the driving force behind this recognition, and we’re proud to work with such an outstanding group of professionals.

On November 16-17, 2022, another SIDIR conference will take place, the subject of which will be “Implementation of construction contracts in times of extraordinary changes in relations, including those caused by the action of Force Majeure”. Our Managing Partner Elżbieta Viroux will be a speaker again, and Viroux & Partners also joined the conference as a partner. We invite everybody to join the conference!

https://konferencja.sidir.pl/

We are pleased to share that we have been recognized by The Legal 500 as a Firm to Watch in the area of Dispute Resolution, Poland. We want to share in this celebration with our clients, who entrusted us to advise them, and that spoke so warmly of us when acting as references.

Having been recognized so soon after the formation of our firm is a great honor, and speaks to the type of work we are able to carry out for companies, entrepreneurs, and individuals in Poland and internationally.

And lastly, we want to thank the team members at Viroux & Partners for their exceptional work.

We had the honour to participate in a panel discussion organised by SIDIR entitled “Mediation from the perspective of mediation participants. Costs, duration, preparation of positions and opinions, the role of the mediator”.

Our conversation reinforced my conviction that, whether in the private or public sector, mediation is an avenue that can and should be used to resolve disputes. Key words that, in our opinion, bring us closer to a settlement are: active mediator, goodwill of the parties and awareness of the risks of litigation.

Foto. sidir.pl

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

Is it possible to come out “on the plus” in the implementation of a construction contract? The question is becoming more and more relevant from month to month: the prices of materials are ever increasing. Prices and flat-rate remuneration in public procurement, which have been growing continuously for 1.5 years, are becoming a serious problem for many contractors. We invite you to read this article by Aleksandra Terc, where you can find some practical guidelines and hints (in Polish)

There is an ongoing boom in the housing market and other investments. It particularly important to ensure the possibility of implementing investments on property you own. This means specifying the premise of your future investments in a local spatial development plan. Without such a plan, it becomes necessary to monitor the operation of the municipality, because local spatial development plans can change to keep up with the pace of development. Jakub Mazur authored an article on the claims that property owners are entitled to in the event of a change in the purpose of a building plot in the local spatial development plan, which you can read here (in Polish)

While evading payment for an invoice when the service has been rendered may constitute the subject of a civil dispute (default) and give rise to a claim for payment, it may also constitute a criminal offense commonly referred to as fraud.

Pursuant to Article 286(1) of the Penal Code, whoever, in order to gain a material profit, leads another person to a disadvantageous disposal of his own or another person’s property by deceiving that person or by exploiting a mistake or an inability to grasp the intended action, shall be subject to the penalty of deprivation of liberty for a term of between 6 months and 8 years.

Failure to pay an invoice, therefore, constitutes an offense when the following conditions are simultaneously met:

1. The perpetrator, i.e., in the above case it will be e.g., the recipient of the service, the buyer, etc., must act with the aim of achieving a pecuniary benefit. This means that this goal must already exist in the perpetrator’s mind at the time of the cooperation or conclusion of the contract. Someone who wants to deceive a business partner intends to enrich themselves at someone else’s expense from the very beginning. What is important – the material benefit may also accrue to an entity other than the perpetrator, i.e., he/she may gain benefit for someone else, e.g., for the company on behalf of which they act or for another entity. A financial benefit has many forms. It may be: obtaining a service for which the perpetrator had not planned to pay from the beginning, or a thing or in any other that leads to enrichment of some entity.
2. The offender must bring another person to a disadvantageous disposition of their own or another person’s property. Undoubtedly, e.g., sending a concert ticket to someone hoping for a payment, which is not made, constitutes an unfavorable disposal of property. In this case, the wronged party voluntarily makes a disposal in such a way, that he decides to send a given product, and thus transfers its ownership to another person. Another example of disposal of property is the provision of a service for which the victim hopes to receive payment. In such a case the victim allocates certain funds, time, pays employees and finally issues an invoice hoping to be paid. If it was not for the lack of awareness of the real intentions of the perpetrator, the service would not have been performed.
3. The perpetrator shall mislead the person making the disposal of property, or exploits the error or inability to comprehend the action. This means that the person making the property disposal, if not for being misled, would not perform a specific action. As an example, we can mention a situation, where an offender using a counterfeited identity card comes to a bank and on the basis of the counterfeited identity document asks the cashier to withdraw cash from the account of a person whose data is contained in the document. The cashier, remaining unaware that the presented identity card is a forgery and the person claiming to be the account holder is in fact not, acts in accordance with the perpetrator’s instructions and gives him the demanded money. If the cashier was aware that the presented document is not genuine – he would not withdraw the money.

Not every failure to pay an invoice will therefore constitute a criminal offense. The only difference between the crime of fraud and simple non-payment, which falls under the jurisdiction of the civil courts, is whether, at the time of entering into the agreement, on the basis of which the invoice is later issued, the perpetrator fulfilled all the elements of the offense under Article 286 § 1 of the Criminal Code. What is important – in criminal proceedings the culpability of the perpetrator must be proven, i.e., it must be proved that already at the moment of concluding the agreement the perpetrator had no intention to pay. Moreover, the perpetrator must undertake a specific activity and cannot remain passive.

I want to share not only the success of @Viroux & Partners, but arbitration as an institution.

I have been a believer in arbitration since my days as a young law student. This is where I first had the opportunity to learn about the advantages of arbitration such as quick resolution and professionalism. Throughout my years of practice as an attorney and arbitrator, these assumptions continue to be fulfilled. The key, however, is to choose the right arbitration panel, know the procedure, understand the business which the dispute relates to and the substantive law at stake. 

Last Friday (16 July 2021) we received an arbitration award in one of the cases pending before the Court of Arbitration at the Polish Chamber of Commerce. The case was heard over a 7-month period. It was a dispute between a Polish company and a German company over the performance of an agreement. The proceedings were conducted extremely efficiently, with great commitment by the arbitrators, and the justification clearly indicates that the case was thoroughly examined. My assessment is driven not by the fact that the award is favourable to our client, but because it is another example that arbitration is a viable alternative to the common courts.

Below you will find what I consider the top three advantages of arbitration:

1. Time and cost savings – a judgment within 7 months, even if nominally it may cost more, in business terms means incomparably more than a judgment in 4 – 5 years. The pace and cost of examining a case before the Arbitration Court is reduced by the single instance character of the proceedings and the qualifications of the arbitral tribunal, allowing for an examination of a dispute without the necessity of appointing experts. 
   1. Confidentiality of the proceedings – the principle of secrecy applies before the Arbitration Court. Information about the pending proceedings and its parties is confidential, as is the proceeding itself.
   1. Influence on the procedure – in arbitration proceedings, the parties have a direct impact on the arbitration panel and the procedure itself by participating in the development of the calendar of proceedings.

When entering into arbitration clause, the choice of the court, language and place of proceedings depends on the will of the parties. It is said to be the court of “Gentlemen” and, being a woman, I fully share this idea in its good traditional sense.

If you are interested in an “arbitration” – please do not hesitate to contact me.

Taking this opportunity, I would like to thank to the arbitral tribunal for the proceedings, and thanks to our team for the joint success and commitment.

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Je veux partager non seulement le succès de @Viroux & Partners, mais l’arbitrage en tant qu’institution.

Je crois à l’arbitrage depuis mes années de jeune étudiante en droit. C’est là que j’ai eu pour la première fois l’occasion de découvrir les avantages de l’arbitrage tels que la rapidité de résolution et le professionnalisme. Tout au long de mes années de pratique en tant qu’avocat et arbitre, ces hypothèses continuent d’être remplies. La clé, cependant, est de choisir le bon groupe spécial d’arbitrage, de connaître la procédure, de comprendre l’entreprise sur laquelle porte le litige et le droit matériel en cause.

Vendredi dernier (16 juillet 2021), nous avons reçu une sentence arbitrale dans l’une des affaires pendantes devant la Cour d’arbitrage de la Chambre de commerce polonaise. L’affaire a été entendue sur une période de 7 mois. Il s’agissait d’un différend entre une société polonaise et une société allemande au sujet de l’exécution d’un contrat. La procédure s’est déroulée de manière extrêmement efficace, avec un grand engagement des arbitres, et la justification indique clairement que l’affaire a fait l’objet d’un examen approfondi. Mon évaluation n’est pas motivée par le fait que la sentence est favorable à notre client, mais parce que c’est un autre exemple que l’arbitrage est une alternative viable aux tribunaux ordinaires.

Vous trouverez ci-dessous ce que je considère comme les trois principaux avantages de l’arbitrage :

1. Économies de temps et de coûts – un jugement dans les 7 mois, même si nominalement cela peut coûter plus cher, en termes commerciaux signifie incomparablement plus qu’un jugement dans 4 à 5 ans. Le rythme et le coût de l’examen d’une affaire devant la Cour d’arbitrage sont réduits par le caractère d’instance unique de la procédure et les qualifications du tribunal arbitral, permettant l’examen d’un litige sans qu’il soit nécessaire de désigner des experts.

2. Confidentialité de la procédure – le principe du secret s’applique devant la Cour d’arbitrage. Les informations sur la procédure en cours et ses parties sont confidentielles, tout comme la procédure elle-même.

3. Influence sur la procédure – dans les procédures d’arbitrage, les parties ont un impact direct sur le groupe spécial d’arbitrage et la procédure elle-même en participant à l’élaboration du calendrier des procédures.

Lors de la conclusion d’une clause compromissoire, le choix du tribunal, de la langue et du lieu de la procédure dépend de la volonté des parties. On dit que c’est la cour des « Gentlemen » et, étant une femme, je partage pleinement cette idée dans son bon sens traditionnel.

Si vous êtes intéressé par un “arbitrage”, n’hésitez pas à me contacter.

Profitant de cette occasion, je tiens à remercier le tribunal arbitral pour la procédure, et merci à notre équipe pour le succès et l’engagement communs.

The state of the coronavirus pandemic, the epidemic threat declared by the Polish government and the related restrictions in social and economic life are fundamental for many entrepreneurs.

Below we are looking for an answer to the question whether in this situation entrepreneurs whose premises have been closed or excluded from economic use are absolutely obliged to pay the rent, especially if the activity conducted in the leased premises was the only source of their income and it is not possible to conduct business in any other way.

There are no clear answers in the general rules and, as always in emergency situations, each case should be examined on an individual basis.

However, we have some general principles that need to be taken into account:

• Failure to pay the rent means the tenant’s breach of the agreement. Liability for non-performance of the agreement is based on several principles. Mostly on the basis of fault.

• This liability is excluded if the non-fulfilment of the contract results from circumstances for which the entrepreneur is not responsible and such a state is a state of force majeure;

• Force majeure may also prevent the landlord from performing the agreement – i.e. they will not be able to provide access to premises with specific economic parameters understood as a set of factual and functional circumstances (e.g. premises intended for the purpose of running a publicly accessible restaurant) – especially if this specific purpose was indicated in the lease agreement and the landlord was fully aware of the activity conducted by the tenant and its conditions;

• If the landlord cannot rent the premises that match the purpose and social and economic purpose of the tenancy agreement, the landlord does not provide a service for which they could expect a counter-performance (equivalent), or there is a defect in the leased property that cannot be remedied (at least periodically).

Force majeure excludes liability for non-performance of contract

A pandemic, an epidemic emergency and the associated restrictions on social and economic life should be assessed as force majeure, i.e. external events, independent of the parties to the agreement, which cannot be opposed.

Events considered as force majeure always require individual assessment. It should be examined whether they affect the performance of a specific contract. Indeed, the mere existence of a state of epidemic risk and the associated restrictions will not exclude liability for non-performance of the contract when in fact none of these events affect the contract in question.

By concluding the contract, the tenant assumes the risk of business activity, but that risk is not absolute and unlimited, but concerns ‘normal’, typical situations. It is not possible to equate a situation where the lack of income is the result of customers not being interested in the property (business risk) with the closure of the property being ordered by the authorities due to a pandemic (force majeure). 

Where, due to government constraints, it is objectively impossible to operate, e.g. in the form of a catering establishment due to an order to close such establishments, it would, under certain conditions, make it possible to effectively evade responsibility for not paying the rent during the period of mandatory closure. Prohibitions, which have their origin in the decision of the public authorities, exclude the generation of income from the activity which serves to cover the rent for the premises. To ignore this would lead to the economic risk resulting from the existence of a pandemic being passed on to the tenant’s shoulders only, which would also be contrary to fundamental principles of contract law. 

In conclusion, force majeure exempts from liability for non-performance. However, each case requires an individual assessment, as it will not always be possible to waive all obligations.

The difficulty is that the current situation has not yet occurred on such a large scale and there is no jurisprudence to support its position.

Uncertainty of the legal and factual situation will lead to the search for amicable solutions and, in extreme situations, to seek a court decision. In the latter situation, given the urgency of taking a certain decision, we may also apply for precautionary measures, i.e. court order that would temporarily regulate the rights and obligations of the parties.