Electronic rulings in restructuring and bankruptcy
Restructuring and bankruptcy proceedings conducted electronically are quite a challenge.
Regulatory changes that came into effect on December 1, 2021, have significantly impacted the manner in which restructuring and bankruptcy proceedings are conducted. One of the most visible elements of the new reality is electronic case files. Electronic procedural steps are taken in them. This mode of procedure, despite some experience from other proceedings, will certainly be challenging.
Pursuant to Article 197(1a) of the Civil Procedure Code and Article 219(1a) of the Civil Procedure Code, judgments and their justifications are recorded at the time they are issued, exclusively in an ICT system. It handles court proceedings using the templates provided therein. Such proceedings shall be affixed with a qualified electronic signature. The regulation in question applies, in accordance with the reference in Article 362 of Kodeks Postępowania Cywilnego (the Code of Civil Procedure), also to the chairman’s orders. In this approach, the correctness and existence of a ruling should be assessed taking into account its digital nature. A judgment may be considered non-existent if it has a material defect that deprives it of its legal existence. An example is a situation where the electronic signature of the adjudicator is missing or defective.
The introduction of templates available in the system allows to assume that as a rule judgments will contain all the elements required by law. For the same reason, it may happen that it is technically impossible to issue a judgment with a specific content. This is particularly possible if an attempt is made to include data not covered by the model. However, the adjudicator cannot treat the contents of the provided specimen as an obstacle to issuing a judgment that will be consistent with the provisions of law and his intentions. The described problem is of a technical nature, not a legal one.
A similar problem was resolved by the Supreme Court against the backdrop of regulations concerning the National Court Register. In a resolution dated 4 June 2009 III CZP 33/09, the Supreme Court indicated that the registry court is required to make a specific entry. This is necessary even if the data is inconsistent with the IT system of the National Court Register. It may be that in the reasons for the decision the court refers to technical obstacles to a particular decision. Then a party may successfully raise an objection to that effect in an appeal.
Establishment of Finality
The provisions of Section 197(6) of the Civil Procedure Code and Section 219(4) of the Civil Procedure Code provide that clerks of the registry may disclose information about the finality of judgments. As a result, court officials have been empowered to independently assess whether a judgment is formally final. This is stated in Article 363.1 of the Code of Civil Procedure. They may also enter a note to that effect into the system. Disclosure of information about the final validity of a judgment is the equivalent of a note issued ex officio or at the request of a party on the basis of clerical regulations. This is stated in § 30(3) of the Order of the Minister of Justice of 19 June 2019 on the organisation and scope of activities of court secretariats and other divisions of court administration. The introduced regulation does not exclude the application of Article 364 of the Code of Civil Procedure. It provides that the court or legal secretary shall issue a decision on recognition of a decision as final. If the validity of a given decision is subject to announcement, actions in this respect are undertaken by the court, judge-commissioner, court referee or presiding judge.
Rectification of judgments and issuance of copies
A ruling issued in electronic form may be rectified pursuant to the provisions of Article 350 of the Code of Civil Procedure. In such a case, in addition to the rectification order, a note about the rectification is placed in the system. It takes the form of another electronic document, which is electronically signed by the head of the registry. The system will also contain the rectified text of the decision, which will be used as the basis for issuing extracts and copies. A party to the proceedings may also request to receive the rectification note or its copy in paper form. This possibility is expressly provided for in the office regulations.
A printout of the decision, downloaded independently, has the force of an officially certified copy. For this to happen, however, it must have features that enable its verification with data contained in an ICT system (Art. 206(2) BC, Art. 228(2) BC). The introduced regulation does not specify whether a party may, irrespective of the right discussed above, demand from the court a copy of a decision in paper form pursuant to Article 9 § 1 of Kodeks Postępowania Cywilnego (the Code of Civil Procedure). It is explicitly provided only for corrected judgments. In light of the regulations in force and taking into account the needs of the market, it should be stated that each party to the proceedings has the right to obtain a copy of a judgment also in a traditional form, i.e. on paper. No provision explicitly precludes such a possibility. The regulation provided for in Art. 206 (2) of the Polish Civil Code and Art. 228 (2) of the Polish Civil Code can be treated only as an additional entitlement of a party to the proceedings. A copy of the decision shall be made by making a copy of it and affixing the appropriate stamp and signature of the person certifying it. A registry fee as stipulated in Article 77 of the Civil Procedure Code is payable for the application.
Enforcement on the basis of an electronic executive title
Some final decisions issued in bankruptcy and restructuring proceedings constitute an enforcement title subject to an enforcement clause. They may also constitute an enforcement title. Because they are recorded only in electronic form, the enforcement clause is issued in the computer system. The exceptions are the situations described in art. 7781, art. 7782, art. 787, art. 7871, art. 788 and art. 789 of the Civil Code.
A document obtained from the data communications system shall be an appendix to the motion to initiate execution proceedings on the basis of the enforceable title recorded in the electronic form. It allows the enforcement authority to verify the existence and contents of the title (Article 797 § 3 of the Code of Civil Proceedings). It is true that the regulations allow filing an application based on an electronic enforcement title in the ICT system (Article 797 § 2 of the Code of Civil Procedure). However, as of the effective date of the amendment, no platform has been created for conducting such proceedings on the basis of titles created in bankruptcy and restructuring proceedings. Only enforcement of payment orders issued in the electronic writ of payment proceedings is possible.
The introduced changes will undoubtedly constitute a challenge for the participants of trading. The experience gained so far with other proceedings conducted in the electronic mode will certainly not solve all the problems that will arise against the background of the new mode of insolvency proceedings.
This text is an extract from a practical commentary prepared by the author for Wolters Kluwer publishing house. The full version of the commentary is available for LEX system users at: