infrastructure | In Principle

Rail infrastructure and the land on which it is located are exempt from property tax in Poland. Is that unauthorised state aid? The answer from the Court of Justice could have far-reaching consequences.

Under a proposed amendment to Poland’s Rail Transport Act, it will be easier to obtain siting decisions for rail projects and expand logistics centres and railroad sidings on rail land, and train travel should be safer.

For many years, the consortium has been a familiar form of cooperation between businesses pursuing public contracts. But this construction still raises legal questions, especially when a dispute arises and goes to court. Because this structure is deceptively similar to an ordinary partnership, sometimes it is unclear which members of a consortium may participate in court proceedings. The Supreme Court of Poland examined this issue in its judgment of 30 June 2021 (case no. III CSKP 75/21).

This time Mirella Lechna-Marchewka heading the firm’s Infrastructure and Public Procurement practices, discusses war as force majeure in the context of Russian aggression on Ukraine.

The amended regulations on joint and several liability of the investor to subcontractors of construction works have been in force for four years. With the stated aim of facilitating the payment of debts, they tightened the formal requirements for subcontractors seeking payment directly from the investor. Unfortunately, this has not been followed by a change in industry practice, as for various reasons formal notification of subcontractors often does not take place. Is the situation of undeclared subcontractors hopeless?

The rapid price increases for construction materials observed since the beginning of 2021 raises the question whether the indexation clause used in contracts for construction of roads and upgrading of rail lines in Poland will prove effective in practice. To make an assessment, we must understand the substance of the clause.

In the course of a construction dispute, to prove certain facts the parties most often request the examination of evidence not only from documents, but also submit numerous requests to hear witness testimony. However, according to parliamentary findings, witness testimony tends to increase the length and cost of court proceedings, and also allows for procedural manipulations. Therefore, the parliament restricted the admissibility of witness testimony in commercial proceedings. This has had an impact on the day-to-day operations of companies.

The investor and the general contractor are jointly and severally liable for the subcontractors’ fees. However, this does not automatically mean that the provisions of the agreement between the subcontractor and the general contractor will apply directly to the investor. A particular provision is an arbitration clause determining the method for pursuing claims. If the general contractor and the subcontractor have agreed to arbitration, can the subcontractor pursue the investor in arbitration as well, or must the subcontractor file suit in state court?

Art. 647¹ of the Civil Code, providing for the investor’s secondary liability for the contractor’s debts to subcontractors, was introduced into the Polish legal system in 2003. In April 2017, the parliament amended it thoroughly in adopting the Act Amending Certain Acts to Facilitate Debt Recovery. Two years after implementation, we try to answer the question whether the title of the amending act corresponds to reality and subcontractors really have a better chance of receiving payment for their work.

Od czasu wprowadzenia do Kodeksu cywilnego, a później również do Prawa zamówień publicznych, przepisów o solidarnej odpowiedzialności inwestora za zapłatę należną podwykonawcom robót budowlanych, generalni wykonawcy znajdują się w swoistym potrzasku – między koniecznością nadzoru i dyscyplinowania podwykonawców a presją inwestora, by ich rozliczać.

A lot has been published on the harmful effects on the construction industry of the legal solutions proposed in the draft Act on Prevention of Abuses in Road Projects. A disadvantage of the concept of protection of local subcontractors presented by the Ministry of Justice may be to severely limit the General Directorate for National Roads and Motorways’ external financing of projects.

The definition of “use of private railway sidings solely for one’s own purposes” requires pro-EU interpretation.