Back to the past part 2 – What is a commercial case?

Cases on civil relations (e.g. contracts) between entrepreneurs regarding their business activities are commercial cases.

Additionally, commercial cases will continue to include cases:

• on civil relations between entrepreneurs regarding their business, even though either of the parties has stopped doing business;
• regarding the company, as well as claims related to the civil liability of the members of a company’s authorities;
• between authorities of a state-owned enterprise;
• between a state-owned enterprise and its founding body or supervisory body;
• on bankruptcy and restructuring law;
• on the award of a fieri facias clause, which is a commercial court’s judgment that is final or subject to immediate enforcement, or a settlement concluded before that court;
• on the deprival of enforceability of a fieri facias clause based on a final or immediately enforceable commercial court judgment or settlement concluded before that court.

The novelty is the proposal that the following matters are also commercial cases:

• works contracts and contracts related to the construction process for the performance of construction works;
• from lease contracts;
• against people responsible for an entrepreneur’s debt, even as: an alternative (e.g. a guarantor) or jointly and severally (a partner of a civil partnership), by law (e.g. in the case of imports performed by several carriers) or a legal transaction (e.g. a contract).

According to the Ministry of Justice, the legal relations mentioned above are usually related to business trading. Consequently, it is reasonable to ensure that they are settled by qualified divisions of courts, i.e. commercial courts.

According to the Bill the following cases will not be commercial cases:

• the split of joint assets of partners of a civil partnership after it ends;
• a claim acquired from a person who is not an entrepreneur, unless this claim arose from a legal relationship regarding the business conducted by all of its parties;
• the establishment of whether a court judgment or settlement of another state body of a foreign state issued in a commercial case is to be recognized or not.

Commercial proceedings not for every case

Entrepreneurs who are natural persons (e.g. sole proprietors or partners of a civil partnership) are exempt from the requirement for their case to be heard in commercial proceedings. They may request a case to be heard with the avoidance of the regulations on commercial proceedings.

This request will be binding on the court on condition that the entrepreneur files it within a week of the receipt of appropriate instructions from the court or in the statement of claim, or in the defendant’s first pleading.

The failure to observe the deadline of a week will lead to the case being heard in the procedure of commercial proceedings. Similarly, entrepreneurs not benefiting from professional legal support should, in particular, remember the wording of the planned Article 458⁵.

It is planned that the court will impose the obligation to instruct the entrepreneur, who is a natural person, of the right to file such a request. The instructions are to be made in writing and will be sent to the party’s e-mail address. The obligation to provide the instructions is to only apply to entrepreneurs who are natural persons, who are not represented by an attorney-at-law, legal counsel or patent attorney. As a result, they are to be aware of their rights and the deadline in which they are to file the request.

The court will be required to provide the instructions twice:

• the first time immediately after the entrepreneur submits the first pleading (possibly after submitting the elements that were missing from that pleading);
• the second time upon the court’s first activity at which the entrepreneur appears (e.g. at the first preparatory hearing).

Note! The lack of the first written instructions shall be considered as the deprival of the party of the ability to defend its rights. This sanction has not been applied to the lack of instructions upon the first court activity which the party attended (i.e. the lack of the second instructions).

The acknowledgement that the party was deprived of the ability to defend its rights means that the proceedings will be invalid from the moment that the party should have been instructed of his/her rights.

This means that, in the event of losing the case, the party that is not instructed will be able to contest the judgment, referring precisely to the lack of instructions. In such a situation, the appeal court will be required to overrule the contested judgment and refer the case back for a repeat hearing to the court of the first instance. The exception will be the situation in which the failure to provide the instructions will not have any influence on the party’s conduct in the course of the proceedings.

The remaining entrepreneurs can avoid a case being heard in the commercial proceedings procedure if the counter-party, who is a consumer, submits the request. In particular, this applies to disputes from works contracts or contracts used for their performance, or disputes from lease contracts.

According to the Bill, a party that is not an entrepreneur may request that a case is heard with the avoidance of the provisions on commercial proceedings on the same principles as an entrepreneur who is a natural person. Regardless of whether the case is heard in ‘ordinary’ or commercial proceedings, the case will be considered by the commercial court with which the statement of claim was filed.

Enabling entrepreneurs who are natural persons to submit the request should be considered reasonable. In practice, such entrepreneurs very frequently (not always) do not have extensive legal knowledge do not use an attorney’s services and their legal awareness is not very high.

In the third part of ‘Back to the past’, I shall describe the planned differences in commercial proceedings with respect to ‘ordinary’ proceedings. Please continue reading.