Property law: Commissioner appeals against new restrictions on sales outlets

This new law and the problems with its interpretation have already been the subject of an article by Linklaters' Janusz Dzianachowski, titled "New restrictions on sales outlets," in the September 10-16 edition of Lokale Immobilia.

Many objections were raised against the provisions of the new law before it even came into force. A number of entities lodged letters of complaint to the Commissioner for Civil Rights Protection, Janusz Kochanowski, questioning the new law's constitutionality. The Commissioner found the objections were justified and therefore appealed against the entire new law to the Polish Constitutional Tribunal.

The Commissioner's argument

According to the Commissioner, "the new law deeply interferes with the freedom of establishment" guaranteed by the Polish Constitution, because, as a consequence of the new law's ruling, the commencement and practice of trade in sales outlets exceeding 400 sqm depends solely on the decision of administrative bodies. Moreover, running a large-sales-area business without the respective permit is penalized by a fine of up to zł.1 million.

Without questioning the fact that the guaranteed freedom of establishment provided by the Polish Constitution is not absolute, it must be emphasized that limitations on the freedom of economic activity may only be imposed by means of an act of law and only for important public purpose. The entities raising objections against the new law with the Commissioner claimed that the reasons for the adoption do not satisfy the constitutional criterion of serving an important public purpose. Thus, according to these entities, the restrictions imposed on entrepreneurs with large sales areas should be found unconstitutional by the Polish Constitutional Tribunal.

Other arguments

The Polish Confederation of Private Employers (PKPP) Lewiatan, the Polish Organization of Commerce and Distribution, as well as the Office of the Committee for European Integration, have all described the new act as breaching legal regulations.

PKPP Lewiatan also contends that the new regulation discriminates against entrepreneurs running outlets with large sales areas. As explained by the authors of the new act, the aim in introducing the new law was to protect small and local entrepreneurs in the retail industry by hampering the establishment of large-sales-areas stores and the operation of existing ones. According to PKPP Lewiatan, the above reason does not constitute an important public purpose which, in view of the Constitution, would allow for a limitation on the freedom of establishment for large sales areas entrepreneurs.

Moreover, in the opinion of the Polish Organization of Commerce and Distribution, the new law deprives entrepreneurs with large sales areas of the right to invest freely and forces them to bear enormous costs in order to prepare an application for a permit for the establishment or the operation of a large-sales-area outlet.

Last but not least, the Office of the Committee for European Integration argues that some of the provisions of the new law violate European law. The Office also states that the required balance between different types of trade constitutes an economic, and not a public purpose. Therefore, it cannot serve as a purpose to limit the freedoms enshrined in the EC Treaty.

The final decision

The Constitutional Tribunal will adjudicate on whether or not the new law on the development and operation of commercial facilities with large sales areas is constitutional. Its judgement, possibly indicating the date of the end of the new law's binding force, shall be of universally binding application and shall be final.

Ewelina Laskowska, Real Estate Department, Linklaters Warsaw