Jedwabny & Brzozowska Legal has advised Wirtualna Polska Media on obtaining financing in the amount of PLN 500 million in the form of loans granted by a consortium of banks.
Funding was provided by mBank, PKO BP, and ING Bank Slaski.
According to Jedwabny & Brozozowska, “the funds are going to be spent on refinancing current debt, current operations and acquisitions in the e-commerce segment.”
The firm’s team was led by Partners Beata Barwinska-Piotrowska and Magdalena Brzozowska.
Watson Farley & Williams and Solivan Pontes have advised Sequoia Investment Management on the project financing of a 55 MW solar portfolio located in Poland. Janyszek Legal advised the borrowers.
The transaction is the first large project financing under the newly implemented auction support systems in Central-Eastern Europe.
Sequoia, based in London, is a specialist infrastructure debt asset management company. According to Solivan Pontes, “the project consists of 55 x 1MW solar plants, all of which will benefit from a 15-year guaranteed off-take via Poland’s new Contracts for Difference (CfD) subsidy, which has been tendered in two auction rounds end of 2016 and mid of 2017. It will be completed in three phases, the first 15 MW of which is expected to reach commercial operation in February 2018. Construction of the entire portfolio is expected to be complete at the end of August 2018. The solar portfolio is owned by ReneSola, NYSE listed solar project developer and BNEF tier 1 solar module manufacturer with its headquarters in China.”
The WFW London team advising Sequoia was led by Finance Partner Daisy East, assisted by Associates Jessica Greenwood, Suki Rees, and Adam Blythe. The Solivan Pontes team advising on Polish legal matters was led by Christian Schnell, head of the firm’s Energy M&A team, and Banking & Finance Partner Justyna Chabocka, joined by Associates Piotr Dziwniel and Olga Wasilewska.
On December 15, 2017, over 330 partners from leading domestic, regional, and international law firms in Poland signed an open letter to Polish President Andrzej Duda asking him not to sign the two acts sent him earlier that day by the Polish senate.
The proposed legislation has been characterized by many both within Poland and outside the country as an overt attempt by the ruling right-wing Law and Justice party to seize control of the judiciary and as a threat to judicial independence in the country.
The December 15 open letter is unusual — but not unprecedented. It follows in the footsteps of a similar letter sent to President Duda this past July asking him to veto three similar proposals. At the time, strong reaction to those controversial draft laws across many sectors of Polish society, including the legal community, led to protests on the streets of Warsaw and other major Polish cities. Eventually, in the face of significant opposition to the proposals, President Duda vetoed two of the three acts, while signing the third into law.
Five months later, those two previously-vetoed acts — the National Judiciary Council Act and the Supreme Court Act — were redrafted by the Polish parliament and returned to President Duda for his approval. Like their predecessors in July, the bills, if enacted, would result in the retirement of almost half of all current Polish Supreme Court judges and the removal of current judges from the country’s judicial council, tasked with — among other things — vetting, appointing, and promoting judges.
Reaction to the second attempt has been more muted than the first time around. Nonetheless, lawyers and members of civil society both in Poland and abroad oppose the bills, and three days after the lawyers in Poland published their open letter a statement on the American Bar Association website from President Hilarie Bass expressed her concern that the proposed laws would “violate the constitution of Poland, in addition to failing to meet international standards regarding the independence of the judiciary.”
President Duda has thirty days to act on the matter. Because the situation in Poland is being closely monitored both by the EU and by other right-wing governments in neighboring countries, and because the lawyers’ open letter represents a dramatic entrance into the political arena by a cross-section of the Polish legal community, the significance of the decision transcends the purely topical.
Monika Sitowicz, Partner at Dentons in Poland, coordinated the effort to prepare and publish the December 15 open letter. She acted, she says, because “I believe — and I believe this is not only my view, but the view of most lawyers practicing law in this country — that the recently proposed changes are moving us in a really bad direction; we are losing an independent court system, and I felt I needed to do something about it.”
Sitowicz says that, in preparing the letter, she and her peers were forced to move quickly. “The Senate voted on Friday evening, and 15 minutes later we sent the letter to make sure it reached the President before he signed the laws. It was done overnight really, because the speed of the legislation process means we didn’t have as much time to discuss it as we would want.” As a result, she says, even though the December letter has more signatories than the July letter — 330 compared to 280 — it still does not represent the full extent of opposition to the proposed laws in the legal industry. “Just partners from major law firms signed,” she says. “But the number would be even greater if we had more time.” She’s quick to point out that “we have support from Bar Association and a long list of academics as well.”
Sitowicz sighs when she’s asked whether she believes the December protests will lead to the same result as those in July. “The trouble this time is that the Polish parliament was voting on a Presidential draft. We’re back to square one — back to where we were in July — but because it’s a Presidential draft it’s a bit more difficult this time.” As a result, she says, “to be honest, I don’t think it will cause any miracle or any significant reaction from the president.”
Still, she is not giving up. “We didn’t have much hope in July either,” she reflects, “so we’re keeping fingers crossed, and we’re trying to get as much support as we can. We hope the President will at least consider the views and be open for discussion.”
Marcin Aslanowicz is one of three partners from Wolf Theiss in Warsaw who signed on to the letter, and he says he and his colleagues “came to the conclusion that we have to speak out and make our voice heard.” And he is categorical in his opposition to the proposed laws. “The currently proposed legislation is harmful. It will not improve the system and it will not improve civil procedure in Poland. Importantly, the adoption of the new provisions is contrary to current legislation and relevant provisions of the Constitution.”
And Aslanowicz claims that the decision to sign the letter was not made lightly. “Obviously no reasonable attorney would like to be involved in a political battle — because we’re not politicians. So we only get involved in this way when we think it’s absolutely necessary.” In fact, he says, “this is only the second time in my 20 years in practice I’ve ever done this — and the first was six months ago.”
Like Sitowicz, Aslanowicz draws hope from the success of this past summer — though, like Sitowicz, he doesn’t ultimately expect success. “The movement against the proposed legislation then was not effective just because of our letter, of course, but because of other protests as well. Still, our voice was heard, and the regulation was not adopted. So we very much hope the same thing will happen this time, though we’re not very optimistic.”
Finally, Noerr Partner Arkadiusz Ruminski shares the assumption of fellow signatories Sitowicz and Aslanowicz that the December open letter will be less effective than the one published in July. He remembers that “there were massive protests this past summer — hundreds of thousands of people protesting all over Poland. This time, perhaps because it’s winter, or because people are bored, people aren’t paying so much attention.” He reflects. “The same laws that brought hundreds of thousands of young people to the streets — the Snapchat Revolution — is not generating the same number this time. People are so frustrated and tired that they don’t even follow the news anymore.” As a result, he says, sadly, “I must say that I do not believe it will change anything. I don’t think [Duda] will veto them this time.”
Regardless of the result, Ruminski believes signing the letter is important, calling it “more a moral and ethical thing to do.” He says, “I wanted to feel honorable to wake up in the morning … I don’t want to go on the streets, I’m a peaceful person, but I wanted to feel good about who I am and what I do, and let people know what’s happening.”
Editor’s Note: On December 21, after this article was published, Polish President Andrzej Duda, as expected, signed the two bills reforming the country’s key judicial bodies into law. In doing so he emphasized that the bills before him differed significantly from the drafts he vetoed this past summer. He also stated that he was “disgusted” to hear opponents to the laws, including those from the judicial community, suggest that the new laws infringed upon judicial independence and politicized the justice system — and he claimed that in fact the new solutions democratized the state.
Under one of the new laws, the National Judicial Council’s 15 members will be chosen for a four-year term by the Sejm (the lower house of parliament), and not by the judicial community itself, as was previously the case. Each Sejm caucus will be entitled to name up to nine candidates, and a Sejm committee will draw up a list of 15 names, with each caucus having at least one candidate among them. The lower house will then vote on the list, with a three-fifths’ majority required. If such backing is not garnered, the Sejm will vote again on the same list, but this time an absolute majority will be required.
The second new law reforms the Supreme Court by making every valid ruling of a Polish court — including past verdicts going back 20 years — subject to appeal (“an extraordinary complaint”) to the Supreme Court. In addition, two new chambers will be set up at the Supreme Court to deal with (in the first) extraordinary control and public affairs, and (in the second) disciplinary matters. The new chambers will include lay judges elected by the Senate. The second new chamber will treat disciplinary cases involving judges and other legal professionals. Finally, the retirement age for SN judges will be lowered from 70 to 65, although the president will be empowered to extent that limit.
Image Source: Website of the President of Poland
Greenberg Traurig has represented SOHO Development S.A., a Polish stock exchange-listed company, in the sale of a 53,000 square-meter property in the post-industrial Soho Factory complex in Warsaw to Yareal. Gide Loyrette Nouel advised the buyer.
Greenberg Traurig describes the sale of the Soho Factory as “one of the biggest and most prestigious development deals in Poland in 2017.”
“Due to the high density of the neighboring developments, we had to incorporate some tailor-made solutions in the transaction documentation to ensure the required level of security and at the same time secure a smooth transaction flow,” said Greenberg Traurig Partner Radomil Charzynski, who led the firm’s team on the deal. Charzynski was supported by Associate Kamil Majewski.
Gide’s team included Partner Marcin Muszel, Associate Blazej Czwarnok, and Aleksandra Kobylinska.
SPCG has successfully represented a company from the Tesco group against a claim made by one of its former franchisees, who demanded payment of PLN 30 million as compensation for damage allegedly resulting from the termination of the franchise agreement.
According to SPCG, “the claim asserted in the lawsuit was unfounded because the agreements concluded by the claimant were not violated in any way. In addition, the company cannot effectively be held liable for the liabilities of Geant Polska – the targeted company belonging to the Tesco Group – including any liability for violation or termination of franchise agreements because it is not a legal successor of GP, and thus, it shall not bear any liability for damages against the claimant.”
In addition, SPCG reports, the court of first instance accepted the law firm’s arguments made on behalf of Tesco “and has indicated that the claim pursued in the lawsuit is entirely unfounded.” As a result, the firm reports, “the claim was dismissed in full.”
SPCG Partner Jakub Gorski led the firm’s team, supported by Senior Associate Pawel Wec, and Junior Associate Aleksandra Tabor.
Editor’s Note: On August 8, 2018, SPCG reported that the decision of the court of first instance had been upheld in full by the Court of Appeal in Szczecin, “which dismissed the plaintiff’s appeal against the judgment of the court of first instance.”
SSW Spaczynski, Szczepaniak & Partners is advising the shareholders of WDX S.A. on the company’s acquisition by Abris Capital. Clifford Chance has advised Abris Capital on the deal.
According to SSW, “WOHO Holdings Limited, a subsidiary of Abris CEE Mid-Market Fund III L.P., has invited shareholders to sell 2.336.521 shares of WDX S.A. at the price of PLN 14.88. Under the tender offer, the bidder plans to purchase company shares authorizing them, jointly with the company shares held by persons acting in concert with the bidder, to exercise 100 percent of the total number of votes. As the next step, the withdrawal of the company from the Warsaw Stock Exchange is planned.”
Clifford Chance reports that, “subscriptions for the company’s shares will be accepted from January 8 to February 6, 2018. The anticipated date of the transaction of the purchase of shares on the WSE is February 8, 2018.”
According to Clifford Chance, “this investment by Abris Capital Partners falls within the strategy of the fund which recently procured EUR 500 million for interesting and development-oriented business projects in Poland and Central and Eastern Europe. WDX S.A. fits into this strategy because it offers modern logistics solutions, comprising the designing and installation of integrated warehouse storage and transport systems. This is particularly important in the context of the dynamic growth of e-commerce visible all over the world, which would not be possible without the supporting of logistics services with innovative products that optimize and speed up warehouse processes, for which the company WDX is known.”
The SSW team was led by Partner Szymon Okon, supported by Associate Tomasz Kwasniewski.
The Clifford Chance transaction team was led by Partner Wojciech Polz and Counsel Jarosław Lorenc, supported by Senior Associate Karol Kulhawik and Associates Katarzyna Aleksandrowicz, Aleksandra Wlaszczuk, Zuzanna Potoczna. Counsel Tomasz Derda and Senior Lawyer Grzegorz Nowaczek provided advice on Labor law issues.
DZP has assisted with the structuring and set up of a joint venture between MTU Aero Engines and Lufthansa Technik.
According to DZP, “the contract, which followed up on an agreement on the general principles of the cooperation concluded in February 2017, was finalized by the two companies on December 4. Each of the partners will hold 50% of shares in the new company.”
Lufthansa Technik provides MRO services for aircraft engines and engine components. According to DZP, “it offers a wide range of services tailored to customers’ needs as part of both stand-alone orders and comprehensive maintenance services during the aircraft life cycle. Lufthansa Technik also offers special services such as aircraft lease and aircraft sale assistance, e-services, and emergency AOG services.”
MTU is a manufacturer of aircraft engines. According to DZP, “it designs and manufactures engines for commercial and military aircraft of a full range of thrust capability and industrial gas turbines. It also provides maintenance services for these products.
The joint venture company — EME Aero — will be based in Poland and is expected to employ more than 800 employees. It will carry out maintenance, repair, and overhaul of aircraft engines produced by the US firm Pratt & Witney and used in Airbus A320 neo aircraft used by Lufthansa and other carriers, Bombardier CS aircraft, and other airplanes. Both parties will invest approximately EUR 150 million by 2020 into the joint venture.
The DZP team was led by Partner Marcin Krakowiak, supported by Senior Associate Krzysztof Fliszkiewicz.
Hogan Lovells has advised the Management Board of mBank S.A. — a unit of Commerzbank — on its conditional November 27, 2017 agreement to sell an organized part of its mFinanse unit to Phoebe IVS. Linklaters advised the buyers on the deal.
The sale, which expected to close in the first quarter of 2018, will be carried out in two stages: The first involves the sale and transfer of mBank unit Latona SA to Phoebe IVS, after which mFinance will sell and transfer an organized part of its business to Latona. According to Hogan Lovells, the expected maximum value of remuneration is approximately PLN 520 million (USD 147 million), “out of which the remuneration, in the amount of approximately PLN 465 million, will be recognized over a period of 15 years.”
The buyer will finance the deal with funding provided by Ireland-registered Purple Star Receivables Funding DAC, with support from a syndicate of institutional investors. Purple Star Receivables Funding and Indigo Agencies Holdings Ltd. will act as guarantors and are parties to the agreement. Both Phoebe IVS and Indigo Agencies Holdings are affiliated with Indigo Group, which includes Indigo Underwriters, a company licensed in the U.K.
The Hogan Lovells team was led by Partner Beata Balas-Noszczyk and included Cuonsels Tomasz Grygorczuk, Piotr Skurzynski, Senior Associates Bartosz Romanowski, Maryla Surowiec, Associates Karol Ruszkowski, Agnieszka Scipio del Campo, and Mateusz Mazurkiewicz, and Lawyers Kamila Mroz and Tomasz Pietrzak. Hogan Lovells Partner Andrzej Debiec and Counsel Dorota Walerjan provided tax advice.
The Linklaters team was led by Warsaw Corporate Partner Daniel Cousens and included Counsel Marcin Schulz, Managing Associates Agnieszka Maj-Zuk and Marta Bleszynska, and Associates Klaudia Owsianka and Lukasz Burakowski, assisted by London-based Partner Olga Petrovic and Managing Associate Sam Mahboubian.
Clifford Chance has advised a syndicate of banks, with PKO BP as its agent, in connection with the signing of a credit facility agreement with PESA Bydgoszcz S.A. concerning the granting of a PLN 200 million credit facility to the company. Linklaters advised PESA Bydgoszcz on the financing.
In addition to PKO BP the syndicate included Pekao (as the security agent), BGK, BZ WBK, mBank, and Raiffeisen.
PESA Bydgoszcz is the largest Polish manufacturer of rail vehicles and is engaged in the modernization, repair, and inspections of rolling stock.
According to Clifford Chance, “the new financing will enable the company to perform its obligations. Thanks to an effective conclusion of time-consuming and complicated negotiations, the agreement signed and granted credit facility will allow the company to perform its already concluded contracts and procure new orders. The next stage will be the recapitalization of the company by investors who will guarantee its stable development.”
The Clifford Chance team advising the syndicate of banks was led by Partner Andrzej Stosio. The work of the team and transaction process was coordinated by Counsel Irena Floras-Goode and the team consisted of Banking and Finance Counsel Milosz Golab, Senior Associate Iwo Klijewicz, Associates Mateusz Chmura, Piotr Weclawowicz, Pawel Dlugoborski, Anna Miernik, and Trainee Krystian Kuropas.
The Linklaters team advising PESA Bydgorszcz was led by Partner Jaroslaw Miller and included Managing Associate Marta Domino and Junior Associates Agata Brzozek and Piotr Hurkala.
According to Tomasz Zalewski, Managing Partner in Poland of Wierzbowski Eversheds Sutherland, the Polish legal market is facing fundamental changes driven by the dramatic increase in the number of professional lawyers in the past couple of years, the implementation of the GDPR, and the digital revolution itself.
“While in the past the bar limited the number of candidates, now that the Ministry for Justice is managing the exams, everyone who can pass the initial exam may attend the trainings, and then may sign up for the final exams. Thus, the number of professional lawyers in Poland has increased dramatically – each year we see around 2000-3000 new legal advisers and advocates,” says Zalewski, adding that while at the beginning the law firms were displeased about the increase, seeing it as a potential threat, in recent years they’ve started to accept it. According to him, “I think that we very often overestimate the power of change on a short-term, and underestimate the consequences in the long-term. This is exactly what happened in Poland.”
In terms of the effect of this increase, Zalewski says that the country has seen “a dramatic increase of in-house lawyers working for different companies.” He adds: “While in the past only the biggest companies hired own representatives, today even the small or mid-sized firms have their own professionals. This means that day-to-day cases are handled internally.” When asked if there could be another reason behind the rise of the number of in-house lawyers — perhaps that companies are trying to decrease the cost of legal advice — Zalewski agrees that it is possible, and that both factors can play an important role in this matter.
Zalewski claims that this has led to an increase of new law firms on the market. “Many of them now are small to mid-sized, working with 10, 20, or even 30 lawyers. They were established completely from scratch, and quite often these firms are managed in a new way. They are able to make quicker decisions, to react faster, to adapt better to the changing conditions of the market. Taking all these in consideration, I think we can say, that in Poland, we are living a quite interesting time from the point of view of market competition,” he says.
Zalewski says that this year was quite good for M&A, even stronger at the end than in the beginning. His firm experienced a greater demand for legal services as well, although for now he says it is difficult to judge the exact cause. According to him, it may result simply from some transactions that took place on the market in the past months – so purely economic reasons – or it may be only true from the point of view of the major cities. “I don’t know exactly if this trend reflects in other regions as well, for we mainly operate in Warsaw and in major economic centers in Poland. This much I can say: that the increased demand for legal services is not only transactional driven, but there are other sources as well feeding the demand. One of them is the GDPR and its implementation, for as we know, all EU countries should implement it before May 2018. In Poland, there is a lot of buzz over this regulation and on its consequences for companies. Some companies have started to implement [the new rules] quite early, some of them are still waiting, and others will probably start to follow up with it early next year.”
Zalewski believes there is a solid awareness on the importance of the regulation in Poland, and that and Polish lawyers are well educated on data protection matters. “On the other hand, I believe that the discussions around the GDPR also reflects on another tendency of the current market: In the past lawyers handled all implementation processes concerning data protection because this kind of compliance was an area dedicated to lawyers. Data protection meant that a lawyer should prepare the procedure, should advise the client on how to obtain the needed documentation and process all personal data. Generally speaking, they were required to make sure that every company is in compliance with the law. But now, the discussions are based on the assessment of risk-probabilities that may occur along the process. It has become an area which requires some technical knowledge about the environment, about the threats, about cyber-security. And I think that now lawyers understand quite well that if they want to advise and support their clients efficiently, they need this technical background as well.” In Zalewski’s opinion this trend, which started a few years ago, has accelerated now, and is reshaping Poland’s legal market.
“Clients don’t just want legal advice, or just information about the law,” he says. “They want the support of lawyers through the entire process. In data protection you cannot help your client just by ensuring legal advice, or interpretation. You must know more, or you must use someone who knows more,” Zalewski says. Asked about what other areas may be reshaping as well, he turns to environmental protection – also a highly technical field — but ultimately, he says, all areas of activity that are connected somehow with digital transformation will sense the changes on the market.
“We can see that because of the digital revolution, all industries, all companies in the world are changing the way they operate,”Zalewski says. “Highly-developed IT systems and tools handling their communications and internal processes. At the beginning it was thought that it would only effect certain areas of business activity, but now it is fair to say that we can talk about the transformation of all business activities.” He believes that this transformation means that all advisors and consultants, including lawyers, must now be informed of the technical details and solutions of their clients’ infrastructures. He concludes: “You cannot advise on electronic communication, on encryption, on cyber-protection, or on virus-related matters, if you don’t know at least from a technical point of view the design of the technology. The source of analytical advice is the knowledge of facts. If you don’t know the facts, you cannot advise. But to know the facts, its not enough to just base on your general world knowledge, you must also base your judgement on an expertise of the digital world. Without this we cannot be good lawyers.”