Biznes Fakty
The Administrative Court will return to the Idea Bank case
The Voivodship Administrative Court in Warsaw is set to reassess the compulsory restructuring case of Idea Bank. The Supreme Administrative Court has upheld two of the grievances presented in 48 cassation appeals.
– The annulment of the Provincial Administrative Court’s judgment in three instances was due to the invalidity of the initial proceedings, while in five cassation appeals, the objections raised concerning the inadequacy of the judgment’s justification were acknowledged – stated Małgorzata Korycińska, a judge of the Supreme Administrative Court. The delivery of the Supreme Administrative Court’s verdict took nearly 40 minutes, during which the court read aloud the names of several hundred individuals who had lodged complaints on this matter with the administrative court.
The case under review by the Supreme Administrative Court is among the largest in recent history. The Chamber of Commerce of the Supreme Administrative Court received 48 cassation appeals against the ruling of the Provincial Administrative Court in Warsaw, issued on August 25, 2021, submitted by a total of 434 parties.
The Administrative Court rejected 606 complaints against the decision made by the Bank Guarantee Fund on December 30, 2020, concluding that the BFG’s decision did not violate the law. Following Monday’s ruling, the Administrative Court will need to revisit this case concerning entities whose complaints were deemed valid.
The issue of compulsory restructuring
The BFG’s notable ruling pertained to the compulsory restructuring of Idea Bank. The then-president of the BFG, Piotr Tomaszewski, commented that „seeking contexts beyond economic and financial reasons for the compulsory restructuring of Idea Bank is unwarranted.” He noted that „the capital situation of Idea Bank was extremely poor, and according to an estimate provided by the reputable independent firm PwC Advisory, the bank had negative capital amounting to minus PLN 482.8 million, indicating that its assets were insufficient to meet its liabilities.”
The head of Idea Bank, Leszek Czarnecki, remarked at the time in „Gazeta Wyborcza” that the BFG’s decision, made during the PiS administration, „conceals nationalization tinged with revenge.”
The cassation appeals submitted to the Supreme Administrative Court raised concerns regarding the proceedings of the Provincial Administrative Court, including the invalidity of the process due to improper court composition and insufficient justification of the first-instance ruling, as well as issues surrounding access to the case files for the entities involved.
From a substantive standpoint regarding the compulsory restructuring decision itself, accusations were made concerning the proceedings related to appointing an expert, preparing estimates, compensating the expert, and selecting the acquiring entity, along with the BFG’s merging of multiple roles related to the restructured bank.
NSA has decided in the case of Idea Bank
The Supreme Administrative Court disagreed with the majority of the claims made in the cassation appeals on Monday and found them to be without merit. However, it acknowledged as valid one aspect of the claim regarding the BFG’s amalgamation of various roles concerning the restructured bank.
The NSA observed that the body designated for restructuring can also undertake other roles, but must avoid conflicts of interest. European regulations – as Judge Korycińska emphasized on Monday – stipulate that „the agency designated for restructuring (…) may also undertake additional roles, and appropriate structural arrangements should be implemented to ensure operational independence and prevent conflicts of interest between these other roles and the restructuring function.”
As the judge pointed out in her reasoning, there is no general prohibition against the designated restructuring body combining such roles. Thus, in the Supreme Administrative Court’s view, the claims from the cassation appeals that categorically stated the BFG’s combining of these roles was impermissible were found to be unfounded or, as Judge Korycińska put it, „premature.”
However, the NSA noted that the WSA did not sufficiently address this issue. Another objection raised in this context, included in the complaints from the Supervisory Board and Leszek Czarnecki, was deemed valid, specifically regarding the WSA’s failure to examine the accumulation of roles within a single entity, which included maintaining the requirements for independence and the absence of conflicts of interest in performing these diverse functions.
– It is clear that the justification provided by the first-instance court lacks any considerations regarding the accumulation of the restructuring body’s functions with those of the bank deposit guarantor – remarked Judge Korycińska. Regarding the BFG’s merging of the restructuring body functions with those of the bank’s curator, she noted that „the Provincial Administrative Court provided insufficient commentary on this topic.”
