most interesting rulings | In Principle

The last two years in the public procurement market have been stormy. The Covid-19 pandemic and the war in Ukraine have caused a steady and dynamic increase in the prices of materials and services, and disrupted supply chains, translating into record inflation rates and unprecedented fee increases. With this tough economic situation directly affecting the market, contractors have faced the difficult task of indexing their fees in public contracts. The National Appeal Chamber, which hears challenges in public procurement matters in Poland, gave essential guidance on this issue in its ruling of 28 November 2023 (case no. KIO 3389/23).

Sometimes, before opening the bids, the contracting authority already knows the amount it will allocate for both the basic contract and the optional contract. How should it indicate these amounts for finalising the procedure? When can the procedure be cancelled under Art. 255(3) of the Public Procurement Law if the contract provides for the right of an option? In a recent ruling, the National Appeal Chamber answered these and other questions.

Disputes over access to public information are increasingly finding their way onto the court docket in Poland. Higher public awareness and a desire for citizen oversight of issues of particular public interest may be the reason. But administrative authorities or other entities obliged to provide information, whose decisions are subject to further review, often refuse to provide the requested information. What is public information, how to obtain it, and what to do when access is denied?

Public procurement is subject to the general principle of openness. Sometimes, this conflicts with the interests of contractors, who can protect their companies’ valuable information and knowhow by designating it as a trade secret. But this is not an automatic process, as it requires contractors to make a credible showing of the rationale for protecting the information. In a recent ruling, the National Appeal Chamber clarified the conditions for correctly reserving trade secrets.

The Polish Public Procurement Law does not specify an upper limit for contractual penalties. However, if the penalties are out of line with the realities of the contract, the contractor can seek review by the National Appeal Chamber. In a recent ruling, the chamber cut the penalties to 30% of the contractor’s gross fee.

The judgment of the Supreme Administrative Court of 8 September 2022 has broken a relatively uniform line of decisions banning online alcohol sales.

Can a judge impartially rule in the case of a bank from which the judge has taken out a mortgage loan? Is the mere fact of holding a mortgage in Swiss francs a basis for disqualifying a judge from hearing cases seeking invalidation of mortgage loans indexed or denominated in that currency? And why is it easier to disqualify a Supreme Court judge than a lower-court judge?

Issuing a permit to demolish a building, then blocking the demolition and demanding payment of tax on the undemolished building, while ignoring a request for an individual interpretation on the matter, hardly fosters citizens’ trust in the public authorities. It is also unlawful.

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.

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.

As economic activity in the Baltic Sea increases, there will be more situations where multiple undertakings are planned in the same area. Deciding on these cases can be challenging for the authorities and the administrative courts.

For many years, the consortium has been a familiar form of cooperation between businesses pursuing public contracts. But this construction still raises legal questions, especially when a dispute arises and goes to court. Because this structure is deceptively similar to an ordinary partnership, sometimes it is unclear which members of a consortium may participate in court proceedings. The Supreme Court of Poland examined this issue in its judgment of 30 June 2021 (case no. III CSKP 75/21).