Draft amendments to the Code of Civil Procedure
Civil procedure provides that claimants who bring their claims before a state or arbitration court may demand a preliminary injunction. The law says that three conditions must appear simultaneously so that the court might apply the temporary injunction. First, the claim must be brought before a state or arbitration court. Se-cond, the claim must be credible. And third, the claimant must prove that the lack of an injunction may deprive him of his rights. Although the first and second conditions are rather easy to prove, claimants usually face significant problems with the third one. The need to change the existing system has been noticed. The Commission on Codification of the Civil Law has prepared a draft law to amend the existing Code of Civil Procedure ("the Draft"). While the Draft is awaiting further action in Parliament, the suggested changes aim to facilitate the procedures and make them more effective.
Proposed changes The Draft provides numerous alternations. Generally, the revisions facilitate proceedings and strengthen the positions of creditors. First, the court will no longer have the obligation to establish the so-called "objective truth." In spite of several previous amendments, there were still some provisions obliging the court to establish the objective truth. Now, the obligation has been abolished. Therefore, the parties and their representatives will be more responsible for their trial argumentation. Second, due to the complicated nature of most civil cases, the institution of the obligatory assistance of a qualified representative will be developed. Consequently, the parties must be represented by qualified representatives before appellate courts and the Supreme Court. Third, the competence of the courts to recognize some cases will be changed. For instance, a case will be heard by a circuit court only if its value exceeds zł. 50,000 (the value is now zł. 30,000). Cases of lower value will be handled by district courts. In addition, important changes have been implemented in injunctive proceedings and execution proceedings.
Injunctive proceedings For the investors, the Draft's most important changes, however, will be in the injunctive proceedings. The new Article 730.1, for example, provides only two bases for an injunction: if the claim is credible and if the claimant has a legal interest in obtaining the injunction. Legal inte-rest is defined as a situation in which the lack of an injunction makes satisfaction impossible or makes later execution seriously difficult, or will make achieving the target of the proceedings impossible or seriously difficult. The term for the recognition of a motion for injunction will be no longer than two weeks, and, as a general rule, the court will hear such a motion while sitting in camera. However, motions for injunction based, inter alia, on trademark infringement, patent infringement and the monetary aspects of copyrights will be heard at the hearing. The hearing should take place no later than within one month from the filing of the motion.
Ways of securing a claim The Draft also enlarges the list of receivables that might be satisfied in injunctive proceedings. Article 753.1 of the Draft, for example, presents a list containing claims based on trademark infringement, patent infringement and the mo-netary aspects of copyrights. The ways of securing monetary claims are provided by Article 747 of the Draft, which includes the seizure of movables, bank account assets, receivables or other monetary rights and mandatory mortgages, the interdiction of real estate sales not listed in the land register (these provisions already exist), the prohibition of withdrawing money (up to a certain amount) from bank accounts and mandatory administration over the debtor's entity (both new provisions). As for non-monetary claims, Article 755 of the Draft provides that the injunction may mean the normalization of the rights and duties of the parties for the period of the proceedings, the prohibition of selling the objects or rights that are the subject of the proceedings, the suspension of an execution and the ordering of proper notification or warning in various registers. The larger catalog of the ways of securing claims is intended to strengthen the legal protection of the creditor. It also helps the creditor to choose the best security in specific situations depending on the debtor's financial standing. To facilitate proceedings, courts will issue execution clauses ex officio, and injunctions will be enforceable immediately.
Article 742 of the Draft provides that the injunction takes effect when the debtor deposits the equivalent of the amount sufficient to satisfy the creditor. This procedure is helpful when the injunction refers to seizing production means, which is usually difficult for the creditor. In general, the proposed legal changes should facilitate the injunctive procedure and make court proceedings much more effective. Although from the practical point of view, some detailed provisions could have been constructed differently, it seems that the institution of the injunction will be used more frequently and that the proceedings before Polish courts should improve the creditors' positions. The most important issue, however, is that it has finally been noticed and admitted that the current procedures are ineffective. Hopefully, the new regulations will correct the existing situation, and creditors will be granted a better possibility to protect their receivables.
Bartosz Grohman is an attorney at White & Case's Warsaw office.
