| In Principle

On the In Principle portal we write concisely and approachably, but sometimes the situation requires communication in a nutshell. We invite you to visit the page on COVID-19 FAQs.

Justice systems around the world will soon be exposed to the same pressure as is currently crushing healthcare systems in the wake of the Covid-19 pandemic. What can judges and advocates do to “flatten the curve” and increase the resilience of the justice system as it awaits the post-pandemic wave of disputes?

Even such unusual circumstances as a pandemic do not overthrow the general principle that contracts should be performed (pacta sunt servanda). But this does not mean that the current situation has no impact on the substance or performance of contractual obligations.

In connection with the coronavirus epidemic, restrictions have been introduced on economic activity and personal freedoms which are unprecedented in the history of adoption and application of law in Poland since 1989. Even now it is evident that the coronavirus epidemic will touch on all sectors of the economy. The restrictions introduced so far have resulted in practically halting all activity in gastronomy, tourism, entertainment, and retail and services at shopping malls and large-format stores. [Update of 3 April 2020]

M&A deals are one of the tools for pursuing business. For some they are a method for expanding their scale of operations or generating synergies, and for others allow them to exit investments or raise capital. Thus the turbulence now felt by businesses is impacting their activity in the M&A market.

Since 15 March 2020, Poland has had a ban on civil aircraft landing on international passenger flights. Since 16 March, domestic passenger flights have also been banned, except for flights in the public or state interest. Do passengers whose flights have been cancelled as a result of this ban have the right to compensation from the air carriers that were to operate those flights?

Public procurement is one of the biggest driving forces of the economy. Contract performance during the epidemic may be impeded, but ongoing public procurement proceedings should not be stopped just because people are currently working mainly at home.

In Poland, the National Appeal Chamber upholds the effectiveness of the rules guaranteeing transparent and non-discriminatory access to public procurement contracts within the EU. Member states are required to ensure contractors the consideration of review procedures concerning the award of public contracts, as is clear from the Remedies Directive.

In the new economic reality, businesses that took out loans may be asking themselves many questions. Will existing loans still be paid out? Will an expiring credit line be extended? And will the state of epidemic justify not repaying debt already incurred?

Among many problems facing businesses now is efficient management and decision-making when members of the company’s governing bodies cannot appear in person at headquarters for various reasons. Technology ensures efficient communications, but the possibility for corporate bodies to take resolutions remotely has been debatable in some situations.

The Minister of Health is issuing successive anti-export lists covering an increasingly wide catalogue of products at risk of shortages. This is to ensure access to drugs and medical devices for patients in Poland, especially during the difficult time of the COVID-19 pandemic. However, excessive expansion of the list of products may undermine the economic situation of producers manufacturing such products in Poland, which is probably not in line with the assumptions of the anti-crisis shield.

One of the more serious consequences of the pandemic will be a wave of business litigation. However, strong arguments and credible evidence are not enough to win a dispute. It also takes resources to pursue a lawsuit, and soon that may be particularly difficult to come by.