Declaration of the validity of the ruling to remove the Infant Jesus Clinical Hospital from the National Court Register

On 10 December 2018, the Registry Court for the capital city of Warsaw in Warsaw, 12^th Commercial Division of the National Court Register issued a ruling on the merger of three Warsaw hospitals: The Infant Jesus Clinical Hospital (SKDJ), the Independent Public Children’s Clinical Hospital named after Józef Polikarp Brudziński (SPDSK) and the Independent Public Central Clinical Hospital, currently operating under the name of the University Clinical Centre of the Medical University of Warsaw (UCK WUM), and also on the removal of the SKDJ from the KRS. For all the above-mentioned hospitals involved in the merger process, the founding entity is the Medical University of Warsaw. 

The merging of the hospitals was opposed by the trade unions (including those operating at the SKDJ), which had filed with the Registry Court conducting the proceedings a number of submissions, motions, as well as complaints against the decision of court referendary concerning the merger and removal of the SKDJ from the KRS. As a result of the steps taken by the trade unions, the procedure aimed at declaring the validity of the ruling on the merger of the hospitals issued on 10 December 2018 and on the removal of the SKDJ from the National Court Register was blocked.

The above situation was a precedent on a national scale and was a result of the existing, and in the opinion of the Law Firm defective, legal regulations concerning the hospitals merger procedure effected by way of transferring the assets of one SP ZOZ to another one involved in the merger process. Pursuant to Article 67 section 4 of the Act on Medical Activity, the merger effect takes place only on the date of removal of the entity being acquired from the National Court Register. On the other hand, the entries concerning removal from the National Court Register, as opposed to other entries, are effective only when the decision on removing an entity from the National Court Register becomes final. 

The Law Firm joined the registration proceedings in progress and, acting on behalf of the University Clinical Centre of the Medical University of Warsaw (the acquiring entity in the merger process), took steps to obtain the validity of the entry on the removal of the SKDJ from the National Court Register. The UCK WUM was represented in the registration proceedings by legal adviser Magdalena Sobczak.

On 15 October 2019, a court referendary issued a ruling refusing to declare the decision on removing the SKDJ from the National Court Register (KRS) final in view of the incidental proceedings brought by the trade unions. On 28 October 2019, the Law Firm filed a complaint against the above mentioned ruling of the court referendary. It argued before the Registry Court that not every incidental proceedings, including those initiated by unauthorised parties such as the trade unions in this case, constitutes an obstacle to the declaration of the validity of a ruling, but only the one which opens the way to filing an appeal or a remedy. Furthermore, it was of the opinion that the declaration of validity should take place as of 1 January 2019.

As a result of the complaint lodged by the Law Firm, on 22 January 2020, the Registry Court declared that the ruling of 10 December 2018 on the removal of the SKDJ from the National Court Register was legally valid and final. On 23 January 2020, the National Court Register published a note stating that the ruling had become valid and final as of 1 January 2019. 

The declaration of validity had a decisive effect on the operation of the acquiring entity, including the ability to exercise its rights (e.g. using the financial resources allocated to the SKDJ) and to perform the duties resulting from universal succession related to the merger. After the issuance of the ruling on the removal of the SKDJ from the National Court Register, but prior to it becoming final, it was not possible to resolve definitively the issue of the legal status of the SKDJ. The lack of an entry in the National Court Register in this respect made it impossible to unequivocally state that the merger procedure had been completed, and on the other hand, it was impossible to speak of the SKDJ as an existing entity, because the declaration of validity, as a result of the expiry of the time limit for appealing against the decision on removal of the SKDJ from the National Court Register, should have been made on 1 January 2019. Continuing to operate in such a factual and legal state (no declaration of validity) could lead to unimaginable negative consequences for the acquiring hospital and not achieving the desired and expected synergy effect of the merger.

The above justifies the de lege ferenda conclusion that in the case of merger of SPZOZs by way of taking over one or more SP ZOZs, the provisions of the Act on Medical Activity tied the effect of the merger with the date of the entry of the merger in the National Court Register, and not with the date of the entry on the deletion of the acquired entity becoming final and valid, as is currently the case.