Court upholds firm’s appeal against injunction

The ruling by the court of appeal was issued in the case of a PLN 70 million construction project that was completed behind schedule. The investor charged the contractor with a contractual penalty for delay, demanded payment under a bank guarantee to apply against the penalty, and declared that it would set off the penalty against the contractor’s fee. The contractor applied to the regional court for interim relief, which was granted in the form of an injunction against drawing on the bank guarantee or making any setoff until a legally final ruling was issued in the contractor’s action seeking a declaratory judgment finding that there was no obligation to pay a contractual penalty.

The main allegation in the appeal was that the injunction violated Art. 328 §2 of the Polish Civil Procedure Code, and this allegation was upheld in the appeal. This provision sets forth the elements that must be included in the justification of a judicial ruling, and is increasingly often used as the basis for effective appeals. Here the court of appeal agreed with the appellant that the ruling failed to explain why the court found the contractor’s claim to be substantiated.

The court of appeal also found that the right to draw on the bank guarantee is not dependent on proof of additional circumstances related to the underlying relationship for which the bank guarantee was issued as security.

The team of lawyers at Wardyński & Partners involved in the appeal included Monika Hartung, Marcin Lemkowski and Agata Jóźwiak.