Every word counts …
The SK&S litigation team consisting of Jacek Siński, Jakub Urbanowicz and Karolina Chrószcz has secured a Supreme Court landmark ruling which holds considerable importance for the M&A practice in Poland.
The case revolved around the enforcement of a put option, constituting part of a larger investment agreement. Our client had been sued before a Regional Court in Poznań, when the claimants requested a judgment obliging him to enter into a share purchase agreement at a pre-agreed price, totaling some PLN 40 million, relating to a company listed on the Warsaw Stock Exchange.
The client lost the case in the first instance, but retained SK&S at the appellate level; we have raised several new arguments. One focal point was that the statement of claim, and consequently also the first instance judgment, was deficient, because it only referred to the vital elements (essentialia negotii) of a share purchase agreement, while omitting the expanded draft of such an agreement, which, crucially, constituted an exhibit to the investment contract.
Although we were not successful on appeal, we did subsequently lodge a cassation appeal to the Supreme Court, which resulted in quashing the Court of Appeal’s judgment and remanding the case for re-examination by that court.
The Supreme Court followed our line of reasoning. In an oral justification of the judgment, Judge Władysław Pawlak stressed that it is beyond doubt that the Claimant seeking a judgment substituting the Client’s declaration of will under Art. 64 of the Civil Code must precisely formulate the claim so that it fully reflects the consensus of the parties and that no elements should be omitted or added.
This case is significant for the M&A practice in Poland in that it:
- clarifies legal standards and reinforces the necessity for claimants to precisely formulate their claims in cases involving the substitution of a party’s declaration of will under Art. 64 of the Civil Code.
- enhances protection of investor interests. The judgment underscores the importance of protecting the interests of investors by ensuring that any judicial intervention in contractual agreements is precise and adheres strictly to the terms agreed upon by the parties.
- provides guidance to M&A practitioners to pay more attention to drafting put options provisions.
By obtaining this ruling, our team has once again proven that we are capable of turning the tide even in challenging cases. This success is a proof to the power of creative thinking.
Supreme Court judgment of 21 June 2024, case ref. II CSKP 741/23 (no written justification has been prepared to date).
