Successful litigation on behalf of a reputable rolling stock manufacturer

Successful litigation on behalf of a reputable rolling stock manufacturer

Attorney-at-law Przemysław Przerywacz, head of the Litigation and Dispute Department, represented a renowned manufacturer of rolling stock based in Poznań in a dispute with Poland’s largest recipient of rolling stock for the payment of PLN 10 million plus statutory interest for default.

On 22 June 2020, the Court of Appeal in Warsaw announced its judgement in the case that has legally settled the dispute in favour of our Client.

The dispute concerned a claim for remuneration for the production by the plaintiff of railway cars for the defendant. The opponent responded by pleading an offset of receivables in the amount of over PLN 10 million on account of interest on the advance payment made. The advance payment was transferred in accordance with the contract for the execution of the object of delivery, but in accordance with the literal content of the contract it was subject to reimbursement in case of delay in delivery.

The recipient of the rolling stock, referring to the contract, first demanded the return of the advance payment, but then demanded the performance of the contract and settled the amount transferred after the conclusion of the contract against remuneration for the railway cars delivered. However, it continued to demand statutory interest on the funds provided, i.e. for the period when the capital was made available.

In the trial, the Law Firm took the position that demanding interest on the advance payment if the recipient of the rolling stock finally did not demand repayment of the advance payment, demanded performance of the contract and settled the amount transferred against the remuneration for the cars delivered, would be contrary to the essence of the advance payment. The Law Firm additionally argued that in the contract the parties provided for a separate and exclusive sanction for delay in delivery in the form of a contractual penalty.

The Court of Appeal in Warsaw in the judgment of 22 June 2020, ref. no.: VII AGa 1774/18 fully shared the legal argumentation presented by attorney-at-law Przemysław Przerywacz and dismissed the defendant’s appeal in its entirety.

The total value of the claim together with interest, which was legally awarded in favour of our Client is approximately PLN 17.4 million.

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