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Tark Grunte Sutkiene has successfully represented the Ukio Bankas in a dispute against Renaissance Insignia Limited on matters related to the recovery of funds by way of non-bankruptcy procedures.

According to the firm, the “Supreme Court of Lithuania proposed significant expositions on the requirements for financial arrangements to ensure the content thereof and upheld the judgements of the lower courts passed in favour of BAB Ukio Bankas.” This, the firm explained, meant that the company registered in Jersey would not be able to circumvent the queue of creditors’ claims to recover a EUR 1.5 million amount.

The firm has been advising the bankrupt bank since 2013 (it had its activities suspended and was put under administration due to liquidity problems in February 2013).

Partner Daiva Usinskaite – Filonoviene and Senior Associate Tomas Bairasauskas were the ones representing the bank from TGS’ side. 

Dentons has advised Fortum OJSC in relation to its sale of a 100 percent interest in its subsidiary Tobolsk CHP to SIBUR Holding, which was assisted by White & Case on the deal.

Listed on Nasdaq Helsinki, Fortum’s vision is to be the forerunner in clean energy. It provides its customers with electricity, heat, and cooling, as well as other energy solutions and already 64 percent of its electricity generation is CO2 free. Its main markets are the Nordic and the Baltic countries, Russia, Poland and India. In 2015, Fortum employed some 8,000 energy sector professionals, and sales were EUR 3.5 billion. Fortum is the main shareholder of OJSC Fortum owing 94.88% per cent of the shares of the company. The target company, Tobolsk CHP, owns and operates a cogeneration power plant in Tobolsk, Tyumen Region.

Evgenia Teterevkova, Dentons St. Petersburg-based Partner who led the team working on the deal commented: “The project has been largely unique for the local legal environment. We took advantage of the latest Russian civil law innovations, and even coped with the changes related to the transfer of title to interest in LLCs introduced in early 2016. We also utilized all of the traditional M&A instruments, while remaining strictly within the bounds of Russian law. What’s more, the deal paves the way for the parties involved to pursue further avenues of cooperation moving forward.”

Aside from Teterevkova, the team included St. Petersburg-based Counsel Anton Poddubny and Senior Associate Ilya Kotov, Moscow-based Counsel Kelly Shutt, and London-based Attorneys Richard Barham, Sophie Palmer, and Grace Man, assisting with English law matters.

The W&C team consisted of Moscow-based Local Partner Nikolay Feoktistov and Associates Ekaterina Logvinova, Elena Kilimnik, and Evgeny Chernyavsky, together with London-based Partner David Crook.

Avellum has advised Hamed Alikhani in obtaining the approval from the National Bank of Ukraine (NBU) for his acquisition of the qualifying shareholding in PJSC “CB “Center.”

This is related to a deal in August 2015 whereby Hamed Alikhani increased his qualifying shareholding in PJSC “CB “Center” to 100% without a prior approval for such an increase by the NBU. Avellum’s assistance in securing the NBU approval resulted in “the legalization of the ownership structure of PJSC “CB “Center”.”

The team working on the matter was led by Avellum Managing Partner, Mykola Stetsenko, with significant support from Associates, Andriy Romanchuk and Dmytro Tkachuk.

Employers often wish to monitor how their employees use work computing facilities during office hours. In a recent judgment (Barbulescu v Romania application 61496/08, 12 January, 2016), the European Court of Human Rights (“ECHR”) illuminates the circumstances that may justify employers monitoring employees’ communication.

This legal insight provides a summary of the ECHR’s decision and an overview of its consequences for the jurisdictions of Austria, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey.

Case background and the ECHR’s decision:

The employee created a Yahoo Messenger account at his employer’s request, for the purpose of responding to client inquiries using this Yahoo Messenger account. The employer’s policies prohibited the use of work accounts for personal purposes. The employer suspected misuse of the employee’s messenger account, and accordingly started monitoring the employee’s messages without the employee’s knowledge, for a period during July 2007. The employer informed the employee that his Yahoo Messenger communications had been monitored and that the records revealed personal use of the messenger, including communication exchanged with his fiancée and brother. On 1 August 2007 the employer terminated the employment agreement for breach of the company’s internal regulations. The employee challenged the termination before the courts arguing that by accessing and using personal messages, his employer had violated his right to private life under Article 8 ECHR, and that this invalidated his termination. The ECHR agreed with the employee that, notwithstanding his employer’s prohibition on private use of company accounts, his rights under Article 8 ECHR had been interfered with when his account and its contents were accessed by the employer. The Court decided, however, that the employer’s actions were justified: inter alia, the Court considered it reasonable for an employer to want to verify that employees are completing their professional tasks during working hours. Further, the Court found that the employer’s monitoring was limited in scope and proportionate considering that other than the Yahoo Messenger communications, no other data and documents were examined. In addition, the Court stated that the employee had not convincingly explained why he had used the Yahoo messenger account for personal purposes.

The decision triggered mass media coverage across European countries and raised issues particularly related to personal data protection. Legal perspectives and peculiarities of eleven different jurisdictions are concisely presented below. Most jurisdictions agree that ECHR’s judgment does not imply a general and unconditional right of employers to monitor private online communication of employees, but is rather subject to a case-by-case consideration under national-specific rules and (yet to be established) practices. To avoid any unjustified invasion of privacy, employers are generally advised to define surveillance methods and related procedures in their internal acts and/or individual employment agreements.

Austria: The question of whether an employer may monitor an employee’s communication without the employee’s consent, depends on whether private use of work computing facilities is generally allowed by the employer or not. If private use is prohibited, the employer may legitimately expect only business related content in the employee’s emails or chat protocols. If private use is allowed, monitoring without the employees’ prior consent is only allowed in exceptional cases for duly justified reasons (eg when a criminal act or other severe breach to the detriment of the employer is specifically suspected). Summarizing, the ruling does not have a significant impact on the current legal situation in Austria.

Bulgaria: If the case was brought before the Bulgarian courts, they would most likely adjudicate similarly to the ECHR, ie, that the assessment of the lawfulness of the dismissal should be made based only on relevant employment law, and that claims for breaches of the right to privacy and personal data protection should be referred to the criminal courts and to the Personal Data Protection Commission.

Croatia: The lawfulness of the dismissal would have to be considered (only) based on Croatian employment law, while the alleged violation of the employee’s privacy would have to be referred to in separate proceedings.

Czech Republic: Pursuant to the Czech Labour Code, employees may not use the employer’s business facilities and equipment for personal purposes without the employer’s consent, as a result the employer is entitled to inspect such usage in an appropriate way. In case of breach of the employee’s right to privacy, the employee would be entitled to defend his personal data protection and privacy rights (only) in separate proceedings. 

Hungary: Similar to the Romanian court ruling, if the employee violates the (banned) private use of certain IT equipment at the workplace, such violation may constitute valid grounds for dismissal. With respect to the potential surveillance of employees’ communication, Hungarian labour law allows employers to proportionally monitor their employees. If the employer violates data protection rights and/or the constitutional right to privacy, the employees may initiate separate civil and/or criminal proceedings protect their rights.

Poland: According to views expressed in Polish legal journals/writings, employers may inter alia monitor employees’ business e-mails without their consent if the applied methods of monitoring are adequate and proportionate to the purpose of gathering information (eg protection of trade secrets). However, despite not being entitled to retrieve the content of the employees’ personal e-mails, the employer may still verify the number of private emails sent during work time to supervise the employee’s working time.

Romania: Despite the judgment of ECHR in Barbulescu, the potential infringement of the data privacy of employees’ communications should still be assessed on a case-by-case basis – employers should not disregard their obligations provided under the Romanian data protection act, including informing employees on monitoring of their communication (and notifying the data protection regulator).

Serbia: The lawfulness of the dismissal would be based solely on the provisions of the Labour Act and internal rules of the employer. The issue of possible violation of the right to privacy would be the subject of separate proceedings from a data protection, criminal law and constitutional law aspect. Pursuant to unofficial opinions of the Serbian data protection authority, employers cannot review private correspondence of their employees made on their personal accounts, even if such account is also used for business purposes, unless in exceptional cases where employee have given their consent, in the event of a court order, or for the purposes of criminal proceedings or national security protection.

Slovakia: The Slovakian court would assess the lawfulness and validity of the dismissal in civil proceedings, whereas it remains questionable if the transcript of communication could be used as evidence. Allowed intrusion upon the privacy of an employee in the workplace by monitoring is limited under Slovak law. Provided the monitoring is non-compliant with Slovak law, the employee could protect its rights in separate civil and criminal proceedings, or by making a complaint to the Slovak Data Protection Authority.

Slovenia: While Slovenian courts have not yet dealt with the respective issue, the Slovenian Information Commissioner (“IC”) has already issued numerous opinions referring to the permitted control over the electronic communication of employees. In its opinion, IC sets a clear distinction between (i) the actual content of the e-mails and (ii) the so called e-mail traffic data. As underlined by the IC, the employer lacks the legal basis to access either of the two. Whereas the supervision of employees’ e-mail traffic data should occur only in exceptional instances, and has to be justified by the particular needs arising from the employment relationship, the content of communication may only be lawfully retrieved based on a consent given voluntarily.

Turkey: If a similar case was brought before Turkish courts, the court would probably find the dismissal to be unjust and award the employee all the pertaining payments. According to established case law, employers are not entitled to monitor an employee’s work computers and e-mails. However, the content of the e-mails must be assessed to determine the justified grounds for the dismissal. If the content lacks any defamatory language and the like, the dismissal cannot be deemed justifiable.  

By Petra Smolnikar, Local Partner Slovenia, Ivelina Vassileva, Attorney at Law, and Teresa Waidmann, Associate, Schoenherr

Dentons has advised Valad Europe on its acquisition of the Warsaw Corporate Center from German investment manager MEAG, which was advised by Linklaters.

The European multi-let real estate investment manager, Valad Europe, acquired the property for its VCERP fund. The asset itself was developed in 1993 by the Partners of Golub Raczkiewicz Epstein Venture and acquired by MEAG in 2007 from a group of private investors. The building offers approximately 8,700 square meters of lettable office space across nine floors, with retail space on the ground floor.

The Dentons team was led by Partner Piotr Szafarz, supported by Counsel Piotr Staniszewski, Senior Associate Piotr Nerwinski, and Associate Magdalena Kalinksa. 

Advising the seller, Managing Associate Weronika Guerquin-Koryzma was the key player of the Linklaters team advising on the transaction. 

Image Source: warsawcorporatecenter.pl

Wolf Theiss has advised rubber, thermoplastic elastomer, and polymer products manufacturer Hutchinson SA on the construction of a factory in Ruma, Serbia and the commencement of the company’s activities in the country.

According to the firm, Hutchinson has invested about EUR 7.3 million in Serbia and will hire 200 unemployed people from the Ruma municipality, with local operations due to produce rubber pipes for cooling devices for cars. 

The Wolf Theiss team advising Hutchinson was led by Partner Miroslav Stojanovic.

Image Source: hutchinsonworldwide.com

The Labour Law enacted by the Parliament of the Federation of Bosnia and Herzegovina, which entered into force on 20 August 2015, must be returned into the phase of draft proposal, according to a judgment by the Constitutional Court of the Federation of Bosnia and Herzegovina.

According to an unofficial report received on 23 February 2016, the Constitutional Court of the Federation of Bosnia and Herzegovina (hereafter: FBiH) has ruled that the Labour Law of FBiH (hereinafter: Labour Law) was adopted in a procedure contrary to the Rules on Procedures of the House of Peoples of the Parliament of FBiH. It is therefore contrary to the Constitution of the FBiH, and is returned to the phase of draft proposal.

Specifically, during this procedure, the Constitutional Court of FBiH did not evaluate the content of the Labour Law, i.e. its substantive legal nature, but rather the procedure of its enactment. By this judgment, the Labour Law is considered as never having been enacted, and will not any produce legal effect from the date of the publication of the judgment in the Official Gazette of FBiH. 

Since the judgment has not yet been published in the Official Gazette of FBiH, its content cannot be determined with any certainty. Furthermore, it should be underscored that the judgments of the Constitutional Court of FBiH are final and binding from the date of their publication in the Official Gazette of FBiH.    

By Lajla Hastor, Associate, Adnan Sarajlic, Associate, and Samra Hadzovic, Attorney at Law, Wolf Theiss

Drzewiecki Tomaszek (DT) is representing PZL Swidnik (the Polish subsidiary of Finmecanica Helicopters) in a case related to the supply of 70 multi-functional helicopters for the Armed Forces of the Republic of Poland organized by the State Treasury – Armament Inspectorate with the value of approximately EUR 3 billion. The State Treasury is represented by the State Treasury Solicitors’ Office, while Airbus Helicopters – one of the parties involved in the case – is represented by CMS.

The first hearing on the matter, which DT claims involves the largest military contract in the country to date, took place in front of the Regional Court in Warsaw on January 29, 2016. According to DT “PZL Swidnik had a substantially leading position in the procurement, competing with Airbus Helicopters and Sikorsky Aircraft, when former Minister of Defense decided to continue further negotiations only with Airbus Helicopters, producer of the Caracal machines.” While the firm mentioned in a release that “most of the violations cannot be discussed publicly,” it explained that the claim relates to, among other things, “doubtful criteria of selection” and “introducing changes to tender regulations and scope of tender proceedings at the very late stage and violating provisions of offset laws.”

The DT team representing PZL Swidnik is led by Partner Malgorzata Kacperska and Managing Partner Zbigniew Drzewiecki.

CMS did not respond to our request to confirm or comment on the dispute. 

Editor’s Note: After this article was published, CMS confirmed that it was representing Airbus Helicopter on the matter, with a team consisting of Malgorzata Surdek, Adam Kempa, Adam Jodkowski, Jacek Liput, Agnieszka Starzynska. Subsequently, CMS reported that, on May 18, 2016 the Regional Court in Warsaw dismissed the statement of claim of Wytwornia Sprzetu Komunikacyjnego “PZL-Swidnik” against the Polish State Treasury and thus upheld the result of the tender indicating the selection of the bid of Airbus Helicopters S.A.S. 

Lawyers from the International Legal Center EUCON successfully defended the interests of Mikogen Ukraine before the Supreme Administrative Court of Ukraine, in a claim filed by the Ukrainian mushroom compost producer in order to cancel a decision of the Kremenets United State Tax Inspectorate in the Ternopil region that excluded Mikogen from the list of fixed agricultural taxpayers.

According to the firm, the Supreme Administrative Court dismissed the cassation appeal of the Tax Inspectorate with the decisions of previous instances courts’  — which satisfied the company’s claim in full — were left unchanged. 

The EUCON team was led by Managing Partner Yaroslav Romanchuk and included the Deputy Head of Litigation, Volodymyr Bevza. 

Scope of regulation and implementation

The Payment Account Directive (“PAD”) sets out common standards that EU Member States must adhere to in order to improve the comparability of fees linked to payment accounts collected by PSPs, to facilitate switching of a payment account from one PSP to another, and to ensure access to a generally free-of-charge payment account with basic features.

PAD regulates a certain part of the payment services market, as this directive was conceived as a regulation complementary to the Payment Services Directive (2007/64/EC), (“PSD”) which established the general framework for payment services within the EU.

PAD should be implemented into national legislation by Member States by not later than September 2016. Poland started the implementation process in August 2015 but it is still in its beginning phase.

Basic account

Firstly, PAD foresees free (or inexpensive, if the fee is reasonable) basic accounts for all consumers. It aims to ensure that all consumers legally residing in the EU have access to basic payment services, regardless of their financial situation or nationality, and thus aims to reduce financial and social exclusion.

To this end, Member States must implement provisions into legislation, committing credit institutions to offer their current and potential customers a fully functional payment account. The basic features of these accounts should comprise making deposits, withdrawing cash and allowing for payment transactions. In practice, the only requirements for consumers to obtain access to a basic account will be filing a request and not having any other payment account within the same country.

Comparability of fees

PAD provides that each PSP shall make a fee information document available to its potential customers to allow them to easily compare the offers of various service providers. This document should reflect fees for the most representative payment services (eg, maintenance of a payment account, transfers of funds, cash withdrawals). The layout of the document and order in which the fees will be presented should be specified by the national legislator.

Furthermore, PSPs will be committed to providing their customers with a free yearly statement of fees. Such document should describe all the fees actually collected over the past year with respect to the payment account (ie, it should cover, in particular, all fees connected with the maintenance of the account, transactions performed, interest accrued or charged). According to the EU legislator, the statement of fees will maximise the understanding of the information provided, and will allow consumers to evaluate the services in terms of pricing.

Switching of accounts

The EU legislator intends to facilitate the “transfer” of a payment account from one PSP to another.

Switching a payment account number will not be possible when transferring a payment account. Under PAD switching means the opening by the acquiring PSP of a new payment account, transferring all the funds kept in the old account, “transferring” to the new account all the services connected with the old account and, only in certain cases, redirecting incoming payments by the “old” PSP to the new account.

PAD envisages that all a consumer will have to do to switch its payment account will be to file a request with the relevant new (acquiring) PSP. After receiving such request, the new PSP will have to carry out and complete the whole process on behalf of a consumer.

Within its duties, the acquiring PSP will have to liaise directly with the “old” one in order to obtain, in particular, information about the consumer’s standing orders, direct debit mandates, recurring incoming credit transfers and credit-driven direct debits relating to the old payment account.

Based on such information, the new PSP will have to set up standing orders and prepare to accept direct debits with respect to the new account. Furthermore, it will have to inform the payers making recurring incoming credit transfers into a consumer’s “old” payment account about the details of the new payment account.

Objectives and anticipated results

As a result of the implementation of PAD, the payment services market may become more competitive. Upcoming implementation will force payment institutions to amend their business plans and adapt to the new conditions. However, the loss incurred as a result of the increased competition and free (or inexpensive) basic accounts most likely will be compensated by adjustment of fees for other services.

By Mateusz Rogozinski, Attorney at Law, Schoenherr