Supreme Court in Resolution dated 11 April 2019 in favour of the possibility to challenge the provision to establish a temporary judicial supervisor.
In the article The possibility to challenge the decision to set up a temporary judicial supervisor in the course of insolvency proceedings, we pointed to the problem of the lack of direct regulation of the matter.
In the Act dated 28 February 2003 Bankruptcy law (Journal of Laws of 2017, item 2344 as amended, hereinafter referred to as ‘Insolvency Law’), and to the diverging existing in judicial practice.
In accordance with the considerations set out in the preceding article, part of the judicature advocated the possibility of challenging the decision to set up a temporary judicial overseer, while second Part of the judicature presents the opposite view.
Supporters first of the above-mentioned positions stressed that the provision Article 37 Act dated 28 February 2003 Bankruptcy law (Journal of Laws of 2017, item 2344 as amended, hereinafter ‘Insolvency Law’), does not directly indicate that Article 741 Act dated 17 November 1964 Code of Civil Procedure (Journal of Laws of 2018, item 1360 as amended, hereafter, ‘k.p.c.’ does not apply in the case of insolvency proceedings, the decision to set up a temporary judicial supervisor should serve as a complaint.
Part of the judicature presenting the opposite view was based primarily on the interpretation already repealed Article 42 Act – Bankruptcy and resolution law (name of the law in force before the day 1 January 2016, hereinafter ‘Insolvency and resolution law’), according to which the parties to the insolvency proceedings could not and could not contest the mere fact of granting the security, i.e.
the establishment of a temporary judicial overseer.
In the opinion of the Supreme Court, Article 39(3) Insolvency law for the complete regulation of the challenge of the provisions on the security of the debtor's assets and therefore considers that other provisions on the security of the debtor's assets are not subject to appeal
Law – Insolvency Law takes precedence over the application of the provisions of the Civil Procedure Code
Supreme Court in Resolution dated 11 April 2019, III CZP 108/18 (Further as the ‘Resolution’, he settled the matter, pointing out that the order of the court first the court of the debtor’s assets in the hedging proceedings following the submission of an application for bankruptcy has a complaint (Article 741 in relation to Article 37 sentence first and Article 33(1) - Bankruptcy law).
The Supreme Court in the Resolution indicated that the regulation of the safeguard procedure in the provisions of the Act – Bankruptcy Law is not complete, so according to Article 37 sentence first Insolvency law, the provisions of the Civil Code of Procedure on Safeguarding Procedure shall apply mutatis mutandis in cases not governed by those provisions, excluding Article 396 KPC whose use has been excluded under Article 37 sentence second Bankruptcy law.
In addition, it was stressed in the resolution that the provisions of the Civil Procedure Code on Safeguarding Procedure only in cases which are not governed by the Act – Insolvency Law apply mutatis mutandis.
This means that priority over the application of the provisions of the Civil Procedure Code is not only Article 36-43 Bankruptcy Law, but also other provisions of the Act – Bankruptcy Law concerning insolvency proceedings.
In the light of such understanding Article 37 sentence first Insolvency rights shall apply to the freezing proceedings in connection with the insolvency proceedings.
Under Article 33(1) Insolvency law the principle that the complaint is entitled to a decision terminating the proceedings and, in the cases specified in the Act, to bankruptcy law.
On this basis, the Supreme Court stated that the order to secure the assets of the debtor, including the order to establish a temporary judicial overseer (Article 38(1) sentence first It does not belong to the category of provisions terminating the procedure.
It must be stated that the answer to the question whether such a decision is to be made depends on whether, in the light of the Article 33(1) in fine Bankruptcy Law and Article 37 sentence first Insolvency law is involved Article 741 k.p.c.
Explanation of the scope Article 39 Insolvency law
The Supreme Court in the Resolution referred in its deliberations to interpretation Article 42 originally contained in the provisions of the Bankruptcy and Resolution Law and to the current law Article 39 Bankruptcy law.
The Supreme Court pointed out that the question of the scope of the dispute Article 42 Bankruptcy and resolution laws replaced a new doubt, referring to the question whether Article 39(3) Insolvency law exhaustive governs the challenge of safeguarding the debtor's assets.
According to the statement of reasons, the resolution is a case of appeal issued In the first the instance of the provisions relating to the security of the debtor’s assets is not a matter for regulated matters, within the meaning of Article 37 Bankruptcy law, which applies to these provisions Article 741 k.p.c., contained under Article 39(3) sentence second Bankruptcy law settlement of the complaint is excisive, since – according to Article 39(3) sentence first Bankruptcy – refers only to positive provisions to suspend enforcement proceedings and to revoke seizure of a bank account) and does not concern negative provisions to dismiss the application for such a security).
Therefore, according to the Supreme Court, the above mentioned above cannot be considered. Article 39(3)) as a complete regulation of the challengeability of the provisions on the security of the debtor's assets and, therefore, consider that other provisions on the security of the debtor's assets are not to be contested.
Author: Hana Żołnierkiewicz
Lawyer in the Legal Department. From 2017 associated with Russell Bedford Dmowski & Partners Law Firm Sp.k. He has experience in legal services to entrepreneurs in terms of merger, division and transformation of companies, bankruptcy, restructuring and capital market law. He runs the day-to-day handling of commercial law companies, including drafting corporate documentation, both in Polish and English. He also represents clients before the general courts in economic and civil law cases.