PG filed an extraordinary complaint regarding the dispute between shareholders. The Supreme Court dismissed the case
Małgorzata Kryszkiewicz, website Forsal.pl, 6 July 2020
For the first time in history, the Prosecutor General tried to set aside a final judgment regarding a dispute between shareholders. His enthusiasm was cooled by the Supreme Court.
The extraordinary complaint filed by the Prosecutor General was dismissed by the Chamber of Extraordinary Audit and Public Affairs of the Supreme Court on 25 June of this year (case reference I NSNc 48/19). The justification of the judgment is not yet known, while the case itself is raising many doubts and can adversely affect Poland’s image as an investor-friendly country.
The case in which the prosecutor general decided to file an extraordinary complaint is strictly corporate – it is about the validity of resolutions of the general meeting of shareholders of Perła Browary Lubelskie S.A. (see graphics). The Danish minority shareholder, Royal Unibrew, appealed to the court and obtained a favourable final judgment of the Court of Appeal in Lublin in 2016. The defendants in this dispute were Marconia Enterprises, a company registered in Cyprus holding a majority stake. And it was in its favour that the prosecutor general decided to file an extraordinary complaint with the Supreme Court.
“The Prosecutor General has to file the extraordinary complaint in this case to ensure compliance of the ruling with the principle of a democratic state implementing the principles of social justice,” we read in the justification of the complaint signed by Bogdan Święczkowski, the PG’s first deputy.
In turn, in response to our questions the press office of the National Prosecutor’s Office explains that the grounds for the extraordinary complaint were the findings indicating that the Court of Appeal reviewing the decisions of the regional court grossly breached the provisions of procedural law. According to the National Prosecutor’s Office, the infringement was based on the refusal to recognize foreign official documents.
“This resulted in the Court’s refusal to acknowledge the credibility of foreign official documents constituting a confirmation of postage of consignments containing notifications of the shareholder about the dates of Extraordinary General Meetings and the acknowledgement that the shareholder was not properly notified of them, as a result of which the Court annulled the resolutions of the defendant company’s General Meeting of Shareholders,” emphasized the response.
This content of the complaint gives rise to complete surprise among lawyers.
“In this case, there is absolutely nothing that could constitute the subject of a settlement by the Supreme Court. There is no legal issue here; we are only dealing with a discussion about the factual findings made by an ordinary court,” one of the lawyers tells us.
Meanwhile, the Act on the Supreme Court (consolidated text Journal of Laws of 2019, item 825, as amended) stipulates that an extraordinary complaint may be filed against a final court decision, if it is necessary to ensure the rule of law and social justice and:
■ the judgment breaches the rules or human and civil rights and freedoms set out in the constitution,
■ the judgment grossly breaches the law by misinterpreting or misapplying it,
■ there is an obvious contradiction between the court’s significant findings and the content of the evidence gathered in the case.
“An extraordinary complaint, as its name implies, should only be used in truly exceptional cases. I see no such need here. After all, in this case, we have a dispute between two shareholders, and such disputes are not uncommon,” says Michał Romanowski, lawyer, partner at Romanowski & Partners, professor at the Civil Law Institute of the Faculty of Law and Administration of the University of Warsaw.
In his opinion, if the activities of the PG proved to be effective, this would lead to the creation of a fourth instance.
“It should not be like that. The ability to challenge court decisions must end at some point, regardless of whether or not one of the parties is dissatisfied with the decision. Otherwise, there cannot be talk of legal certainty and stability of adjudication,” he emphasizes.
Uncertainty of investors
And this has to affect how Poland is perceived by foreign investors.
“When the extraordinary complaint was being introduced, we criticized the fact that it would also work in the context of business trading. Having talked to Polish and foreign investors, we know they are concerned about this mechanism. Even someone who has received a final court verdict cannot be sure that, after many years, the legal situation will not reverse completely. This could discourage new investments,” warns Łukasz Bernatowicz, vice president of Business Centre Club.
He emphasizes that, in the case of ownership disputes, an additional controversy arises – for example, whether a partner who lost in court will take advantage of his informal influence.
“Furthermore, there is also a problem with how to restore the previous legal situation when the party that won in court managed to sell their shares or stocks to someone else. This can lead to dangerous and absurd situations of restoring the situation from many years earlier,” believes the vice president of BCC.
In turn, Jakub Bińkowski, director of the Department of Law and Legislation of the Union of Entrepreneurs and Employers, reiterates that the extraordinary complaint is a relatively new institution, so it is currently difficult to say that it is a particularly important instrument in the context of doing business. He adds, however, that the mere prospect of the ability to challenge a final court judgment after such a long time (within five years of the judgment becoming final – ed.) does not create a positive effect on certainty of trading, which in turn can affect the willingness of investors to commit to enterprises located in Poland.
Abuse of the institution
Lawyers recall that the complaint was introduced under the slogan of the need to restore justice and rebuild public confidence in the judiciary.
“Meanwhile, a mechanism was created that very quickly started to be abused and was used for completely different, really obscure purposes,” says one of the lawyers.
In turn, Michał Romanowski wonders why the PG filed an extraordinary complaint, since the Cypriot company itself did not decide to file a cassation appeal against the unfavourable judgment.
“In this situation, the state should not interfere in the company’s autonomous decisions,” says the professor.
Interestingly, the first president of the Supreme Court (Małgorzata Gersdorf at that time) appointed a public interest representative in this matter. According to the order, she did so at the request of a Danish company. As stated in the justification, it was “desirable because of the need to ensure the protection of the rule of law and social justice.” The renowned legal counsel, Marek Chmaj, was appointed the public interest representative. He learned from us that the Chamber of Extraordinary Audit and Public Affairs had already examined the PG’s complaint.
“I had not received any notice. Had I received such notice, of course, I would have requested the exclusion of the entire adjudication panel,” Chmaj tells DGP. As for all the people in the Chamber of Extraordinary Audit and Public Affairs, there are doubts about their status as Supreme Court judges.
Marek Chmaj adds that the case in question is proof that the idea of an extraordinary complaint was erroneous.
“This case is also proof that the PG’s competence for filing an extraordinary complaint is too broad,” says the lawyer.
Cooperation Grzegorz Kowalczyk
Link to the original publication in Polish: