The Act of 9 October 2015 Amending the Act on Payment Terms in Commercial Transactions, the Civil Code and Certain Other Acts entered into force on 1 January 2016. Following the changes made by the amending act in Art. 359 and 481 of the Civil Code and Art. 4, 6 and 7 of the Act on Payment Terms in Commercial Transactions of 8 March 2013, there are now three types of statutory interest functioning in Poland, in different amounts. This means that the approach followed in Polish arbitration practice for framing the relief demanded in the claim, as well as the wording of awards of statutory interest, needs to be modified in line with the new regulations. Wording commonly used before, such as “I seek an award against A in favour of B in the amount of D together with statutory interest from date E,” or “An award is entered against X in favour of Y in the amount of W with statutory interest from date Z,” does not specify which statutory interest is involved.
Under the law in force prior to 1 January 2016, the level of statutory interest was set by the Council of Ministers in an executive regulation issued pursuant to Civil Code Art. 359 §3. The uniform level of statutory interest established in this way applied to every situation where the regulations referred to statutory interest, therefore including, for example, capital interest where the parties did not specify the amount of interest in their legal act, interest on delay in performing a monetary obligation (Civil Code Art. 481), interest not for delay but required to be paid pursuant to statute (e.g. Civil Code Art. 742, 735 §2 and 842), and interest on delay in payment between parties to a commercial transaction within the meaning of the Act on Payment Terms in Commercial Transactions (Art. 5 and 6 §1).
Under current law there is no one uniform level of statutory interest. Under Civil Code Art. 359 §2, the rate of “statutory interest” is equal to the reference rate of the National Bank of Poland plus 3.5 percentage points. Under Civil Code Art. 481 §2, the rate of “statutory interest on delay” is equal to the NBP reference rate plus 5.5 p.p. Under Art. 4(3) of the Act on Payment Terms in Commercial Transactions, the rate of “statutory interest on delay in commercial transactions” is equal to the NBP reference rate plus 8 p.p. The level of all three types of statutory interest is announced by the Minister of Justice in the official journal Monitor Polski.
Consequently, when formulating a demand for payment of interest, the type of interest must be clearly identified.
And when awarding interest, the arbitral tribunal should also identify the interest in a way that eliminates any doubt. If the ruling does not indicate a specific interest rate (which is possible, and necessary if the rate of interest arises out of a legal act), but only refers to the statutory rate, the ruling should expressly indicate which type of statutory interest is intended: statutory interest (as such), statutory interest on delay (in general), or statutory interest on delay in commercial transactions.
It appears that under the amended law, the least doubts would be raised by an award which contains (1) an indication of the type of statutory interest in the operative wording of the award, e.g. “award against X in favour of Y amount W with statutory interest on delay from date Z,” and (2) a more extensive explanation than before in the justification concerning the interest portion of the award.
Under the intertemporal provisions (Art. 56–57 of the amending act), the amendment applies to interest due from 1 January 2016. Thus if interest is due from an earlier date, such as 1 June 2013, the period for which statutory interest of the particular type is due should be clearly distinguished. For example, when the claimant seeks interest on delay in performance of a monetary obligation pursuant to Civil Code Art. 481, the ruling could refer to “award against X in favour of Y amount W with statutory interest for the period from 1 June 2013 through 31 December 2015 and statutory interest on delay for the period from 1 January 2016 forward.”
This does not exhaust all of the material issues related to award of interest in arbitration, but is only intended to alert arbitrators and counsel to the ramifications of the new provisions.