Commercial Law Revolution in Poland – New Holding Law and Enhanced Corporate Oversight Mechanisms

Dictionary Series : LegislationThe need to regulate the so-called “holding law” within the commercial law has raised much controversy for some time now. Unlike certain foreign legal frameworks, the Polish law had been functioning with merely fragmentary regulations in that regard – legal scholars had been debating the purpose of introducing such solutions to the Polish Commercial Companies Code.

On 5 August 2020, the Government Legislation Centre published the detailed assumptions of the draft amendment to the Commercial Companies Code developed by the Commission for Owner Oversight Reform with the Ministry of State Assets (the “Draft”). The Draft’s primary assumption is to enact the so-called “holding law” laying down the principles of how a parent company may instruct its subsidiaries, as well as stipulating the parent company liability and the principles of creditor, officer and minority shareholder protection. Continue Reading

Construction law reform in the Czech Republic?

On 5 November 2020, the first reading of the bill of the new Construction Act took place in the Chamber of Deputies of the Czech Parliament. It was assigned to committees with a hundred-day deadline to provide views on the new bill. The original draft was prepared in cooperation with the Czech Chamber of Commerce and in the autumn of 2019 was sent out for a general consultation. The new revised proposal from the Ministry was presented in May 2020 and is a fundamentally different document that was only slightly modified after discussion with the Legislative Council of the Government before it was submitted to the Parliament. The basic aim is to speed up and streamline permitting processes as the Czech Republic currently stands on the 157th place out of 190 countries evaluated. The new Construction Act is scheduled to take effect on 1 July 2023, with the exception of some provisions that are to take effect earlier. Continue Reading

Poland: Supreme Court Ruling on Blank Promissory Note Order for Payment Issued Against Consumer

On 28 October 2020, the Supreme Court’s Emergency Control and Public Matters Chamber acknowledged an emergency complaint lodged by the Prosecutor General and revoked an order for payment issued against a consumer under a blank promissory note securing repayment of a bank loan. The Supreme Court ruled that the order for payment, issued by the District Court in the payment order proceedings, violates constitutional consumer protection (Article 76 of the Constitution) and fails to protect the consumer from unfair market practices listed in Directive 93/13/EEC. Continue Reading

Amendment to the Polish Building Act: Simplification and Expedition of Procedures

construction project

On September 19, 2020, most provisions of an extensive amendment to the Construction Law took effect. The amendment introduces very important changes from the investors’ point of view, both those considering and already pursuing their investments, and those whose projects have long been completed. The new regulations were introduced via the Act of February 2020 amending the Construction Law Act.

Primarily, the amendment is meant to simplify and expedite the investment and construction process, as well as to ensure greater stability of the law and administrative authorities’ decisions. The most significant changes are discussed below. Continue Reading

Poland’s Simplified Restructuring Proceeding Takes Effect

Dictionary Series : Legislation

As previewed in our prior post, Poland’s simplified restructuring proceeding (uproszczone postępowanie restrukturyzacyjne) is now in effect. The enabling legislation – with only minor changes from the description in our prior post affecting such restructurings – was finally adopted on 19 June 2020, signed into law on 23 June 2020 and took effect the same day. Debtors have until 30 June 2021 to retain a restructuring advisor and commence the new proceeding, which operates almost entirely out-of-court.

All details available in our previous article.

Polish Government Adopts Stricter Control over Private Investments

Updated on June 23, 2020

Like various other EU member states (e.g. Hungary, Czechia), Poland has finally adopted a new act intended to screen foreign direct investments in Polish companies. The new law (the “Amendment”) amends the Act on Control of Certain Investments of 2015 (more on this available here), but it will also materially extend control over mergers and acquisitions.

The Amendment was finally adopted on 19 June 2020 and signed into law on 23 June 2020, with the new provisions entering into force as of 23 July 2020 and expiring 24 months thereafter.

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COVID-19: Poland’s Parliament Nears Passage of Extraordinary Debtor Restructuring Relief

Dictionary Series : LegislationPoland’s Parliament (the Sejm, the lower House of Parliament) is close to passage of an extraordinary debtor restructuring relief law as part of its fourth COVID-19 crisis legislation.

The measure, referred to as Shield Law 4.0 (Tarcza 4.0) would:

  • Create a “simplified restructuring proceeding” that would permit any debtor to commence this proceeding if faced with the risk of insolvency, understood as a 3-month delay in meeting payment obligations, even if this has nothing to do with the effect of the pandemic;
  • Create an automatic 4-month moratorium (in U.S. parlance, an “automatic stay”) on enforcement actions and executions, simply upon the debtor’s announcement, without any judicial action – the current restructuring law has no such automatic provision;
  • Permit restructuring of all secured debt, so long as the new payment terms provided that such creditors would receive 100% of their obligations at some (later) future date, with a potential cram down if they object to the revised payment terms;
  • Limit the role of the court to hearing motions to lift the automatic moratorium for cause, to approve the arrangement plan following creditors’ voting, or to dismiss the proceeding if 4 months have elapsed without a motion to approve the arrangement;
  • Have the proceeding run by a licensed restructuring advisor (of which there are approximately 1400 in Poland) who has been contracted by the debtor. This advisor formally acts as an arrangement supervisor, who works with the debtor to prepare a list of creditors, collects and counts votes in favor of a plan, and determines whether it has been accepted;
  • Limit the debtor to managing its ordinary business affairs; any decisions out of the ordinary could only be taken with the supervisor’s consent. The role of any creditors’ committee is effectively eliminated;
  • Set a deadline for commencing simplified restructuring proceedings of 30th June 2021.

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Poland: Signing Documents amid the Pandemic

The COVID-19 pandemic and the subsequent restrictions of face-to-face contacts have caused quite a stir among entrepreneurs, for instance when signing agreements and official documents. This has prompted many of them to seek all sorts of digital solutions in lieu of physical presence. Continue Reading

Covid-19 Prevention at the Workplace: Is Temperature Measuring Permissible?

Ensuring occupational safety and protecting employees’ health have been of the utmost importance for many employers over the past few weeks.  With the rapid spread of Covid-19, employers were forced to adopt strict preventive measures to ensure a safer working environment within their workplaces. While the most obvious solution was the adoption of home office schemes, not all jobs can be performed remotely. Continue Reading

Czech FDI Screening Bill – Get Ready For New Regulatory Challenges

As we recently observed in many states across the EU, national lawmakers have been coming up with bills that put in place mandatory non-EU FDI (foreign direct investment) approval requirements. The purpose of this legislation is to give state authorities competence to assess risks to national interests arising from such FDI and, if necessary, take protective measures. As of October 2020, national regimes will be further supplemented by a new EU-wide FDI framework represented by the FDI Screening Regulation (EU 2019/452). The FDI Screening Regulation lays down rules for cooperation and sharing of information between EU member states and the Commission and confers new powers to the Commission to issue non-binding advisory opinions. To keep up the pace with Germany, France, Italy and others, on 21 April 2020 the Czech Government submitted to the Chamber of Deputies its bill for the new FDI Screening Act. Continue Reading

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