CEE Legal Matters

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  • The Hungarian ESG Act is Amended Once Again

    The amendment package includes several minor amendments to help interpreting the text of the Hungarian ESG Act, and the provisions of the ESG Act have been brought into line with the content of the regulations supplementing the provisions of the ESG Act in several places. The amendments entered into force on 19 January 2025.

    The most significant amendment to the ESG Act is that previously the regulated financial service providers were not subject to the ESG Act. This has been clarified by the amendment, so that if a regulated financial service provider is carrying out ESG contributory activities, it shall be subject to the ESG Act in relation to those activities. Accordingly, a new definition of “regulated financial service provider” has been added to the ESG Act, which covers, inter alia, credit institutions, investment firms, insurance companies and even crypto asset providers.

    Another significant amendment is that the “double materiality” principle of the ESG Act has been amended, which is now referred to in the Act as the principle of “materiality” from the date of entry into force of the amendments. The substance of the principle has not changed significantly. Rather, the change may be because the principle of double materiality is also an important principle for sustainability reporting under the CSRD, but the meaning of the principle in the CSRD differs significantly from the meaning of the principle in the ESG Act. It was therefore necessary to amend the name of the principal in order to clarify any potential misunderstandings.

    As Hungarian ESG regulation continues to evolve, the ESG Act may be amended at any time, so it is recommended to keep an eye on developments. 2025 will certainly be a significant year for ESG, as it will be the first year of publication of the ESRS-based sustainability reports, which are also worth monitoring.

    By Eszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm

  • Proposed Amendments to the Albanian Civil Procedure Code

    A draft law proposing changes to Law No. 8116, dated March 29, 1996, “The Civil Procedure Code of the Republic of Albania,” has been submitted for approval to the Albanian Assembly. These amendments are part of a comprehensive initiative to enhance the efficiency of the judicial system and improve the overall quality of judicial proceedings in the country.

    Key highlights of the proposed changes include:

    Additional cases when the Court of Appeal can adjudicate with a single judge

    The Court of Appeal will hear cases with a single judge, including appeals against the decisions of the First Instance Court for requests for withdrawal from judgment and waiver of the right to file a lawsuit, as well as requests for withdrawal from the trial or appeal, or special appeals presented to the Court of Appeal, and special appeals against decisions rejecting requests for secondary legal assistance.

    Additions to the acts that constitute enforcement titles

    The proposed amendments expand the acts that constitute enforcement titles, which include:

    1. Agreements upon which spouses give mutual consent for the dissolution of their marriage, confirmed by their lawyers and officially notarized in accordance with the provisions of the Family Code;
    2. Enforcement titles issued by public officers or legal entities of public law designated as such by law, or decisions that are legally granted the effect of a ruling;
    3. Mediation agreements;
    4. In the notarial acts, in addition to the notarial acts related to loans from banks or non-bank financial institutions, including notarial acts that have an enforceable form.

    Innovations in the competence to issue the enforcement order

    The proposed changes to the Civil Procedure Code clearly define the bodies responsible for issuing enforcement orders to expedite and simplify procedures:

    1. The Court that recognizes the decision issues the enforcement order for foreign court decisions and foreign arbitration court rulings, including them in the mandatory part of the decision.
    2. The judge in the advisory chamber issues the enforcement order for all other enforcement titles not included in specific categories.
    3. The notary issues the enforcement order for notarial acts with an enforceable form and acts related to loans from banks or non-bank financial institutions.
    4. Public officers, bodies, or legal entities of public law issue the enforcement order for enforcement titles issued by them, when these are defined by law as such.
    5. The Court that issued the decision issues the enforcement order for final civil and criminal decisions, including decisions on obligations, securing claims, provisional enforcement, and property matters.

    Another innovation is that no enforcement order will be issued for unpaid tax invoices issued by public or private legal entities to each other when they are issued in accordance with the applicable legislation, accepted by the other party, or not rejected within the statutory deadline. Additionally, no enforcement order will be issued for unpaid tax invoices issued to consumers by public or private legal entities. These invoices will be enforced directly by the enforcement service, after notifying the enforcement title.

    Introduction of a solemn formula

    As part of the proposed changes to the Civil Procedure Code, the legislator has introduced a solemn formula that will be used for issuing the enforcement order, which is included in the new article 511/1:

    “For other enforcement titles, the enforcement order is issued by placing the following statement in an original or certified copy of the enforcement title:

    ‘IN THE NAME OF THE REPUBLIC’

    “We order all judicial bailiffs who will be requested, as well as anyone who is legally required to enforce this enforcement title, to provide assistance, and all public order officers to assist when legally requested.

    Subsequently, the name, surname, and signature of the person authorized to issue the enforcement title are placed, as well as the seal of the institution or public legal entity that issued it.”

    Requests for issuing a duplicate Enforcement Order, according to this draft law, will be reviewed in the advisory chamber.

    In conclusion, the transitional provisions proposed in the draft law amending the Civil Procedure Code establish specific rules for handling civil matters in progress at the time the changes take effect. In particular:

    • Cases currently under review by a panel of three judges, which under the new law could be adjudicated by a single judge, will continue to be handled by the same judicial panel.
    • Cases awaiting review in the Court of Appeal that have not yet been heard, and for which the new law mandates adjudication by a single judge, will be handled according to the new provisions.
    • Cases in process at the First Instance Court on the date the changes come into force will continue to be adjudicated under the provisions of the law in effect at the time the lawsuit was filed.

    These provisions aim to ensure a smooth transition from the previous rules to the implementation of the new provisions, avoiding interruptions and uncertainties in existing judicial processes.

    By Bora Bregu, Legal Associate, Lalaj & Partners

  • Acquisition of Real Property in Poland by a Foreigner

    Poland is becoming more and more interesting for foreigners looking to invest. This is due to Poland’s central location in Central and Eastern Europe and the country’s continuous economic development, making it a place with potential for becoming a focal point for Central European business on the Old Continent.

    Introduction: the attractiveness of investing in Poland for foreigners

    In such a reality, foreigners, having a prospect of generating profit in Poland, are often inclined to put a substantial amount of capital into investments. This capital is used in particular to finance the acquisition of rights to real property and to carry out a development project on the acquired property, often in the form of construction of state-of-the-art production facilities or office buildings.

    However, irrespective of the need to take into account the attractiveness of doing business in Poland, a foreign investor should also consider Polish legal regulations. Apart from creating business opportunities for external capital, the Polish legal system also sets up certain restrictions. These concern in particular the rules according to which foreigners can acquire real property in Poland, including the rules and the options in terms of carrying out a development project on a specific property, regardless of the investor’s nationality.

    At the same time, there are a number of exceptions to the legal restrictions in force, which a foreign investor interested in carrying out an investment project in Poland should be familiar with.

    Permission for a foreigner to acquire real property

    The first thing to point out is the fact that under the still applicable Polish Law of 24 March 1920 on the Acquisition of Real Property by Foreigners (the “LARPF”), the acquisition of real property by a foreigner requires a permission. The permission is granted, in the form of an administrative decision, by the minister competent for internal affairs, if there are no objections from the minister of national defense, and in the case of agricultural property—from the minister competent for the development of rural areas.

    Within the meaning of the LARPF, a foreigner is in particular a natural person who is not a Polish citizen, a legal person that has its registered office abroad, or a legal person or a company or partnership that does not have legal personality, is based in Poland, and is controlled by any of the entities listed above.

    In the case of a commercial company or partnership, the LARPF defines a controlled company or partnership as one in which foreigners hold directly or indirectly more than 50% of the votes at the general meeting and therefore have real influence over its operations.

    The issue of what should be considered direct or indirect control over entities other than commercial companies and partnerships is not regulated in the LARPF. This concerns legal persons based in Poland in which foreigners participate, such as foundations and associations that carry out business activities. By analogy, it could be assumed that an association in which foreigners hold more than 50% of the votes at the general meeting or have influence over the appointment of most of the members of the management board, is a foreigner. By the same token, a foundation based in Poland whose management board is composed, in more than 50%, of foreigners, is also a foreigner. However, in the case of legal persons other than commercial companies and partnerships, direct or indirect control may be a result of circumstances other than the rights to vote or the composition of the management board. These may include for instance the financing of the operations of the entity or be a result of the provisions of the entity’s act of incorporation.

    In such a legal state of affairs, it should be pointed out that the overriding principle in the Polish legal system is that the acquisition of real property in Poland by a foreigner requires a permission from the relevant minister. The permission is granted at the request of the foreigner. The request will be accepted if the acquisition of the real property by the foreigner will not cause a threat to national defense, state security, or public order and if welfare policy and the health of society will not be adversely affected. Furthermore, the request will be granted if it is demonstrated that the foreigner has relations with Poland.

    Consequently, in a case where the foreign investor is in particular a natural person who does not have Polish citizenship or a legal person based abroad, they will be obliged to take into account, in their investment plans, the need to obtain the relevant permission to acquire real property. Failure to do so will prevent the foreigner from acquiring real property. This means that purchasing a property in violation of the LARPF is null and void. Since the said permission is of crucial importance for a foreigner, the legislator has provided in the LARPF for a possibility of applying for a promise of granting a permission. The promise is valid for one year and during the validity period, the permission will be granted provided that the state of affairs determining the decision has not changed. If the foreigner applies for a promise, this allows for eliminating some of the potential risks and costs related to the transaction of acquiring real property.

    Exemption from the obligation to obtain a permission to acquire real property

    It is worth noting that Article 8(2) of the LARPF contains a rule that makes it easier for a foreign investor to initiate the process of acquisition of real property in Poland. According to that rule, a foreigner who is a citizen of or an enterprise based in a country that is signatory of the Agreement on the European Economic Area or the Swiss Confederation does not need a permission.

    As a result, if an investor that is a foreigner acquires a real property in Poland through a newly incorporated company or partnership based in Poland, there will be no need to obtain the permission referred to in the LARPF. This follows from the fact that the entity making the acquisition of the real property will be an enterprise based in a country that is a party to the Agreement on the European Economic Area.

    Consequently, carrying out the transaction of acquisition of real property through a newly incorporated company or partnership based in Poland could be an optimal solution for a foreign investor. Thanks to such a structure, the purchase of real property does not require a permission from the relevant minister. This, in turn, facilitates the starting of an investment in Poland in a situation where the investment requires ownership of real property.

    Carrying out of a construction project by a foreigner

    Irrespective of the above, the subsequent key stages of the property development process, when carried out by a foreign investor, should also be pointed out. This is because in addition to acquiring the rights to the real property, it is necessary to verify if the planned property development project will be possible to carry out on the given plot of land. Furthermore, the requirements that have to be met in order to begin the project should also be taken into account.

    Verification of a local zoning plan by a foreigner

    The first step should be to verify the contents and the map attached to the local zoning plan, if the property in question is covered by one. A local zoning plan has the form of a resolution of a city council or a municipality council; the resolution regulates the use of the given land. The plan is an act of local law and applies in the municipality that has adopted it. Additionally, it specifies the intended purpose and the terms of land development, including in terms of erecting new buildings and structures. As a result, the plan is the fundamental act of spatial development of a municipality.

    This function of a local zoning plan means that it is of primary importance for any potential investor. If a real property is covered with a plan, any development on the property has to be in compliance with the intended purpose of the property specified in the plan. If the building development is not in line with the intended purpose, the investor will be unable to obtain a construction permit, which is a document required to commence construction on a plot of land. Consequently, the investor should exercise due diligence and verify the above circumstances prior to acquiring the rights to the property. In particular, the intended purpose specified for the property in the local zoning plan should be checked and it should be verified whether it corresponds to the property development project planned by the investor.

    Zoning decision for a foreigner

    Another option is that the given real property is not covered with a local zoning plan. In such a case, the investor will have to apply (prior to filing an application for a construction permit) for a zoning decision. A zoning decision specifies in particular the type of building development that is acceptable on the property and the intended purpose of the building (e.g. industrial facilities, buildings for the provision of services). What is more, a zoning decision specifies the maximum size of the building, the maximum floor area, the manner of supplying utilities to the property, and the planned access to a public road. It should be emphasized that in the course of the procedure related to issuing the above decision, the administrative authority investigates and takes into account and intended purpose of and the building development on the neighboring plots. The idea behind this is to make sure that the building development in the local area is cohesive. If the property development project planned by the investor does not correspond with the building development on the neighboring plots, there is a risk that the administrative authority will refuse to issue a zoning decision. The same risk exists if there is no building development in the area. If a zoning decision is not obtained, this precludes obtaining a construction permit, making it impossible to carry out any construction activities on the property.

    Construction permit for a foreigner

    However, if a zoning decision is obtained, a foreign investor will be able to file an application for a construction permit. This will also be possible if the real property is covered by a local zoning plan and the planned development project is in line with the function of the land specified in the plan. In this case, the administrative authority will not be able to refuse to issue a construction permit if the investor demonstrates that the requirements specified in construction law regulations are met. This follows from the fact that every owner of a real property has the right to build on their land.

    Changing the status of land in the case of a foreigner

    At the same time, it is also important to verify the type of land and its quality class. This allows for checking the designation of the plot, and in particular if its intended to be used as arable land. This issue of crucial importance, as building on arable land of a higher quality class is possible only if the status of the land is first changed to one that excludes agricultural production. For such an exclusion to take place, the relevant administrative procedure has to be carried out and a fee for excluding land from agricultural production has to be paid. The application for excluding land from agricultural production binds the administrative authority only in the case of land of a lower quality class. Consequently, it is necessary to verify if carrying out a development project on the property will require excluding the property from agricultural production.

    Recapitulation: acquisition of real property in Poland by a company or partnership that is a foreigner

    To sum up, the acquisition by a foreigner of a real property located in Poland requires, in principle, a permission from the minister competent for internal affairs. At the same time, the key aspects related to the property development and construction process have to be taken into account. However, considering the provisions of the Polish Law on the Acquisition of Real Property by Foreigners, it should be pointed out that the said permission is not required in the case of enterprises based in the European Economic Area. Consequently, a foreign investor may take advantage of the option of acquiring real property in Poland through a newly incorporated company or partnership having its registered office in Poland. This solution allows for commencing the investments related to acquiring rights to real properties without the need to obtain additional permissions.

    By Mariusz Mielczarek, Lawyer and Senior Associate, KWKR Konieczny Wierzbicki and Partners

  • Merve Oney Barlas Becomes Chief Legal, Compliance, and Regulation Officer at TurkNet

    TurkNet has appointed Merve Oney Barlas as its new Chief Legal, Compliance, and Regulation Officer.

    Barlas has been with TurkNet since 2023, when she joined as the company’s Chief Legal and Compliance Officer (as reported by CEE Legal Matters on March 1, 2023). Earlier, she was the Chief Legal Officer of DgPays between 2021 and 2023 as well as a Director of Legal Affairs and Secretary of the Board of Directors at Mapfre Genel Sigorta. Earlier still, she was an Associate with Herguner, Bilgen, Ozeke between 2014 and 2016 as well as with Dentons’ legacy firm Salans between 2008 and 2012.

    “I am very excited for my new journey at TurkNet not just because I will become more familiar with all regulations but also find out more about the dynamics of our industry and our regulator,” commented Barlas. “Such an exciting challenge! Here we go!”

    Originally reported by CEE In-House Matters.

  • Polona Fink Promoted to Partner at Rojs, Peljhan, Prelesnik & Partners

    Rojs, Peljhan, Prelesnik & Partners has promoted Polona Fink to Partner.

    Fink is part of the Employment Law and Data Privacy Department at Rojs, Peljhan, Prelesnik & Partners.

    She has been with the firm since 2017 when she joined as an Associate. She became a Senior Associate in 2018. Earlier, she worked for the Chamber of Commerce and Industry of Slovenia between 2010 and 2017.

  • Wolf Theiss and Schoenherr Advise on Nokian Tyres’ VPPA with Enery in Romania

    Wolf Theiss has advised Nokian Tyres on a virtual power purchase agreement with Enery. Schoenherr advised Enery.

    Nokian Tyres develops and manufactures premium tires for passenger cars, trucks, and heavy machinery.

    Enery is an independent renewable energy provider.

    According to Wolf Theiss, the project involved the establishment of the “world’s first zero CO2 emission tire factory in Oradea, which is set to create over 500 new jobs.”

    According to Schoenherr, “in addition to the energy supply, the 11-year PPA will also enable Enery to build a new solar power plant in Southern Romania, further supporting Europe’s green transition.

    The Wolf Theiss team included Partner Roxana Roman, Counsel Dana Toma, Senior Associate Vladimir Plugarescu, and Associate Ana Maria Mustatea.

    The Schoenherr team included Partner Monica Cojocaru, Managing Attorney at Law Vlad Cordea, and Attorney at Law Cristina Olariu.

  • Bratschi Successful for Mabco Constructions in ICSID Investment Arbitration Against the Republic of Kosovo

    Bratschi has successfully represented Mabco Constructions in an ICSID investment arbitration against the Republic of Kosovo.

    According to Bratschi, Swiss-based construction company Mabco Constructions “has successfully secured a favorable award in an investment arbitration dispute against the Republic of Kosovo. The arbitration was administered by the International Centre for Settlement of Investment Disputes in Washington, DC.”

    The firm explains that “the dispute arose from the failed privatization of the Grand Hotel, a landmark hospitality establishment in the center of Prishtina, Kosovo. Mabco Constructions SA, after financially contributing to the privatization of the Grand Hotel, was subsequently deprived of its stake in the project and the associated investment. In response, the company initiated arbitration proceedings in early 2017 under the bilateral investment treaty (BIT) between Switzerland and Kosovo, seeking compensation along with applicable interest and costs.”

    The Bratschi team included Managing Partner Sandra De Vito and Lawyers Elisa Aliotta and Sami Salihu.

  • Sadik & Capan Advises Cotcast on Investment Round

    Sadik & Capan has advised Cotcast on an investment round that saw the participation of DCT Trading and angel investors.

    Cotcast is a Turkish AI-driven platform providing predictions for cotton contract prices in the futures market a day in advance.

    The Sadik & Capan team included Managing Partners Serra Sadik Hiziroglu and Nazli Tonuk Capan, Associate Seda Koprulu, and Legal Intern Ethem Dogan.

    Sadik & Capan could not provide additional information on the matter. 

  • DTB Advises Cuadrilla Capital on Acquisition of Repsly

    Divjak, Topic, Bahtijarevic & Krka, working with Massumi + Consoli, has advised Cuadrilla Capital on its acquisition of Repsly from Resolve Growth Partners. Goodwin Procter reportedly advised Resolve Growth Partners.

    Cuadrilla Capital is an enterprise software investment firm.

    Repsly is a retail execution software platform.

    The DTB team included Senior Partner Damir Topic, Senior Attorneys at Law Dina Salapic and Andrej Zmikic, and Attorneys at Law Barbara Simic, Anella Bukovic, Ana-Maria Sunko Peric, and Ivo Mikulic.

  • Serbian Competition Authority Launches Sector Inquiry in the Pharmaceutical Industry

    The Serbian Commission for Protection of Commission (“Commission“) has announced that it will conduct a sector inquiry of the state and conditions of competition in the pharmaceutical industry. This move by the Commission was expected, given the announcements made by the Government of the Republic of Serbia last year.

    Sector inquiries are conducted if certain circumstances indicate potential antitrust violations, or the possibility of restricting, distorting, or preventing competition, in order for the Commission to further examine the state of competition in a particular industry.

    The subject of the abovementioned inquiry is the market for medicines used in human medicine, with a special focus on medicines that are issued at the expense of the mandatory health insurance fund. The subject of the analysis includes price formation, market shares, competition conditions, market entry barriers, vertical relationships, and other relevant factors on this market.

    Currently, questionnaires are being sent to pharmacy establishments with a larger number of retail outlets in order to collect data necessary for the analysis.

    It is important to note that, as a result of the sector inquiry, the Commission may initiate an antitrust violation investigation if the analysis reveals indications of a potential antitrust violation. For example, this may occur if the Commission identifies the existence of restrictive agreements, after which it will initiate antitrust investigation ex officio.

    By Nikola Poznanovic, Partner, and Katarina Rosic, Senior Associate, JPM & Partners