The case for payment can be taken up only after the creditor’s objection and complaint against the refusal to be included in the list of claims have been examined (Resolution of the Supreme Court of December 9, 2021, reference number Act III CZP 96/20)

The case for payment can be taken up only after the creditor’s objection and complaint against the refusal to be included in the list of claims have been examined (Resolution of the Supreme Court of December 9, 2021, reference number Act III CZP 96/20)

The process for payment, if the defendant is declared bankrupt, is suspended until the “exhaustion of the mode” specified in the Bankruptcy Law Act (Article 145(1) of the PPL). This takes place after using all the means available to the creditor in these proceedings – submitting a claim, objection to the refusal to recognize it on the list and a complaint against the decision of the judge-commissioner. If, after using these funds, the claim is not included in the list of claims, the suspended process should be resumed. However, it is not acceptable to start proceedings earlier.

Circumstances of the case and content of the decision

In the course of the case for payment for advertising services rendered, the defendant company was declared bankrupt. The claimed claim was reported by the claimant in bankruptcy proceedings, but the insolvency practitioner did not recognize it and did not include it in the list. The creditor did not take further steps to include the amount in bankruptcy proceedings. The district court, recognizing that there were no obstacles to continuing the proceedings, resumed the proceedings and allowed the claim.

In the appeal against this judgment, the insolvency practitioner raised the invalidity of the proceedings on the grounds that the proceedings had been initiated incorrectly despite the claimant’s failure to exhaust the procedure provided for in the bankruptcy law.

The Supreme Court, examining the legal issue presented by the appellate court, adopted a resolution according to which, in order to exhaust the procedure provided for by the Act, it is necessary to challenge the refusal to recognize the claim with an objection to the judge-commissioner, and if the objection is not upheld – to lodge an appeal with the bankruptcy court.

The justification refers to linguistic and systemic arguments. The key issue turned out to be the recognition that bankruptcy proceedings are a special mode of collective redress. In the opinion of the Supreme Court, this procedure takes precedence over an individual civil case against the bankrupt, and the condition for returning to the trial is each time it is exhausted in its entirety.


Conclusions and commentary

The judgment in question explains in a broad and clear manner what was the reason for defining the moment when the procedure provided for in the bankruptcy law is exhausted. However, both the decision and the arguments used raise doubts and reservations.

The main disadvantage of the ruling is the complete lack of explanation in whose interest the adopted solution lies and what benefits it brings. It is impossible to deduce the obvious truth from the justification that the resolution worsens the situation of creditors, making it difficult for them to obtain a judgment – in financial, time and organizational terms. It is even less clear what constitutes compensation for these losses. The decision, despite the extensive justification, gives the impression that there are no significant values or reasons behind the opposite solution. The lack of explanation as to how the interests of the participants of the bankruptcy proceedings were balanced is a fundamental defect of the resolution. It is all the more painful because the justification refers to the statements of the literature, but omits several important arguments raised so far in the discussion.

The fundamental thesis of the Supreme Court, according to which bankruptcy proceedings focus on the sole mode of pursuing claims, and all other modes and proceedings should be subordinated to it, is not convincing. Even if such a rule is in force, the initiation of payment proceedings by the creditor before the declaration of bankruptcy may justify a break from it, protecting the interest of the creditor involved in the process and saving unnecessary efforts of the bankruptcy authorities. The explanatory memorandum disregarded the indisputable advantage of civil examination proceedings over opposition proceedings – civil proceedings have better instruments for establishing the facts. The advantages of using the bankruptcy route in a situation where there is already a dispute about the claim have not been presented.

In addition, according to the Supreme Court, a creditor who brought a lawsuit for a claim should expect that the insolvency practitioner will not recognize it and that it will be necessary to continue the appeal process in the course of bankruptcy proceedings. This position ignores the fact that the same creditor has already made an effort to protect its rights by bringing the case to court. Bankruptcy proceedings require him to multiply his efforts without offering any benefits in return.

The financial aspect has also been completely overlooked. The creditor who initiated the proceedings before bankruptcy usually already allocated funds for the claim fee (approximately 5% of the value of the claim). On the other hand, challenging the list with an objection is an additional expense of 1/5 of the relative fee (for example, with the amount of PLN 100,000, the fee will be PLN 1,000), and the complaint requires repeating this expense. Additional costs and effort are also the preparation of pleadings as part of bankruptcy proceedings. These funds are used in order for the judge-commissioner and the court to analyze the presented claim and issue judgments in this regard, which have no procedural value for the creditor. It is worth noting that at this stage incurring additional expenses in connection with the pursuit of claims is more severe, because the creditor – even if he wins in opposition or appeal proceedings – is not entitled to reimbursement of costs in any respect (Article 233 of the APL), and recovery of the principal amount due is subject to high risk due to the insolvency of the debtor.

Summing up, the judgment issued clarifies an important issue around which there have been doubts so far, but the justification is not sufficiently convincing.

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