JDP Drapała & Partners Law Firm (JDP), representing Acciona Construccion S.A. with its registered office in Madrid, and Mostostal Warszawa S.A., obtained on 30 April 2021 a (partial) judgment handed down by the Appellate Court in Warsaw amending the judgment of the first instance court. Pursuant to the judgment issued on appeal a public employer (GDDKiA) was ordered to pay to the contractors mentioned above a total of over 23 million zloty (including interest). This amount includes a return of the full liquidated damages for delay in performing works involving construction of a section of one of the Polish motorways. The Appellate Court agreed with the argumentation presented by JDP attorneys that the liquidated damages were groundlessly charged and set off by the employer.
This case dealt with a problem that is important for the entire sector of contractors performing infrastructure projects in Poland, namely a relation between liquidated damages for delay and contractors’ claim for the extension of the Time for Completion in FIDIC contracts subject to Polish law.
In the proceedings the opposing counsels argued for instance that when submitting notifications (during the contract performance) of claims for the extension of the Time for Completion, the contractor did not meet the deadline set out in clause 20.1 FIDIC. According to them, this resulted in the expiry of this claim, and hence made it impossible for the contractor to rely on the right to extend the deadline for works completion to defend against the liquidated damages for delay in meeting this deadline.
“The Appellate Court agreed with our argumentation that a contractor’s claim for extending the deadline for works completion under FIDIC contracts should be legally separated from an assessment of liquidated damages for delay in meeting this deadline by the contractor. Even if it turns out that the contractor did not meet the deadline for notifying this claim (clause 20.1 FIDIC), the contractor may effectively defend against liquidated damages by relying on the factual circumstances underlying the claim. The fact that the Appellate Court accepted this argumentation strengthens the legal position of contractors when it comes to defending against liquidated damages”, said Prof. Przemysław Drapała, partner in JDP, attorney of Mostostal Warszawa S.A. and Acciona Construccion S.A.
This precedent-setting judgment may set the direction for other decisions regarding a defence against liquidated damages for delay by contractors performing FIDIC contracts in Poland.
Mostostal Warszawa S.A. and Acciona Construccion S.A. were represented by Prof. Przemysław Drapała (partner heading the Litigation and Arbitration Team), attorney-at-law Wojciech Bazan (partner in the Team), and attorney-at-law Mateusz Jaworski (associate).