4441364482_bf04636e2d_nBy the judgment of 14th April 2015 delivered by The Constitutional Tribunal provisions relating to bank enforcement order (art. 96 point 1 and art. 97 point 1 of the Act Bank Law of 29th August 1997) have been found to be in conflict with art. 32 point 1 of The Polish Constitution conveying the principle of rights equality.

According to the Tribunal’s press release – the right to issue bank enforcement order (BTE) is a privilege of banks which violates the principle of equal treatment in three aspects. That is in relation between banks and its clients, in relation between banks being creditors and other entities being debtors and in relation between banks’ debtors and other entities’ debtors. The Constitutional Tribunal has found that a bank and its client have a feature in common – they are parties to a private obligation-law relation, which is based on the principle of legal (formal) equality and autonomy of parties’ will. Thus, the parties should in principio have equal possibilities to defend their rights and interests stemming from a contract. However, a bank itself issues BTE in lieu of court judgement, with omission of a court hearing during which a client could raise defences based on the merits.

At the same time The Constitutional Tribunal ordered that the provisions in question remain in force until 1st August 2016.

Postponement of repealing the said provisions may arise a number of doubts with regard to further BTE practice until their formal elimination form legal system.

It is therefore necessary to answer a basic question – are courts of law entitled to award enforcement order to BTE until 1st August 2016 ?

In our view, courts should not allow banks’ requests to award enforcement orders to BTE. Since a court is obliged to apply provisions of The Constitution in the first place, while BTE provisions have been found unconstitutional, which means they are, in fact, unconstitutional from the very beginning – not from the moment of their formal derogation, it must be concluded that a court awarding enforcement order to BTE would act against the law i.e. against The Constitution. It is to be emphasised that while examining a case a court is obliged not to apply any unconstitutional provisions – the same applies to BTE provisions. Accordingly, further application of BTE until 1st August 2016 appears to be unlawful.

As a consequence of the said Constitutional Tribunal judgment, a bank in order to pursue its claim must file a lawsuit and initiate standard court proceedings in which a debtor is entitled to undertake defence based on the merits – the burden of proof to substantiate validity of a claim is now on a bank.