Judgment;Summary — ECLI:EU:C:2020:548
Date: 2020-07-09
Language of the case: Polish
Court formation: Ninth Chamber
Subject matter: Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Poland

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
27 February 2019 
Referring court: 
Sąd Rejonowy dla Łodzi-Śródmieścia w Łodzi (District Court for 
Łódź-Śródmieście in Łódź, Poland) 
Date of the decision to refer: 
24 January 2019 
Applicant in the main action and defendant in the counterclaim: 
RL sp. z o.o.  
Defendant in the main action and applicant in the counterclaim: 
J.M. 
  
Subject matter of the case in the main proceedings 
In essence, the parties are in dispute as to whether the lease agreement between 
them can be regarded as a commercial transaction within the meaning of Directive 
2011/7/EU of the European Parliament and of the Council of 16 February 2011 on 
combating late payment in commercial transactions and the Ustawa z dnia 
8 marca 2013 r. o terminach zapłaty w transakcjach handlowych (Law of 8 March 
2013 on Payment Terms in Commercial Transactions; ‘the 2013 Law’). This is 
because the recognition of a lease agreement as a commercial transaction within 
the meaning of the aforementioned directive and law is a condition for applying 
the aforementioned law to the said agreement and for granting the creditor, in 
accordance with the applicant’s demand, the right to interest and the right to 
compensation for recovery costs in an amount and on the terms laid down in the 
aforementioned directive as transposed into Polish law by the provisions of the 
aforementioned law. Otherwise, the seeking of such interest and compensation by 
the creditor must be regarded, in line with the defendant’s demand, as an abuse of 
a subjective right within the meaning of Article 5 of the Kodeks Cywilny (Civil 
Code). 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-199/19 
 
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Subject matter and legal basis of the reference 
For the purposes of interpreting the national provisions contained in the 2013 Law 
in accordance with Directive 2011/7, the referring court seeks, in essence, to 
determine the meaning of the terms ‘commercial transaction’ and ‘payment 
schedules providing for instalments’ under Directive 2011/7. In regard to the first 
term, the referring court wishes to determine whether that directive and the Polish 
2013 Law include within their scope contracts the characteristic performance of 
which consists in providing a temporary right to use goods in exchange for rent 
(for instance, lease or rental agreements), that is, whether these contracts 
constitute commercial transactions within the meaning of Article 2(1) of Directive 
2011/7 and Article 4(1) of the 2013 Law. In regard to the second term, and only if 
the first question is answered in the affirmative, it is a question of clarifying 
whether an agreement that the debtor is to make periodic payments, also where the 
contract is concluded for an indefinite term, is tantamount to parties to a 
commercial transaction agreeing on a payment schedule providing for instalments 
within the meaning of Article 5 of the directive and Article 11(1) of the 2013 Law. 
Questions referred 
1.  Should Article 2(1) of Directive 2011/7/EU of the European 
Parliament and of the Council of 16 February 2011 on combating late 
payment in commercial transactions (OJ 2011 L 48, p. 1), as 
transposed into the Polish legal order by Article 4(1) of the Ustawa z 
dnia 8 marca 2013 r. o terminach zapłaty w transakcjach handlowych 
(Law of 8 March 2013 on Payment Terms in Commercial 
Transactions) (consolidated text: Journal of Laws [Dz. U.] of 2019, 
item 118), be interpreted as meaning that contracts the characteristic 
performance of which consists in providing a temporary right to use 
goods in exchange for rent (for instance, lease or rental agreements) 
must also be regarded as transactions which lead to the delivery of 
goods or the provision of services for remuneration (commercial 
transactions)? 
2. If the answer to the first question is in the affirmative, should Article 5 
of Directive 2011/7/EU, as transposed into the Polish legal order by 
Article 11(1) of the Law of 8 March 2013 on Payment Terms in 
Commercial Transactions, be interpreted as meaning that an agreement 
that the debtor is to make periodic payments, also in the case where the 
contract is concluded for an indefinite term, is tantamount to the 
parties to a commercial transaction agreeing on a payment schedule 
providing for instalments? 
RL 
 
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Applicable provisions of EU law 
Directive 2011/7/EU of the European Parliament and of the Council of 
16 February 2011 on combating late payment in commercial transactions (OJ 
2011 L 48, p. 1) — recitals: 2, 3, 11, 22; Article 2(1) and Article 5 (‘Directive 
2011/7’ or ‘the directive’) 
Applicable provisions of national law 
Ustawa z dnia 8 marca 2013 r. o terminach zapłaty w transakcjach handlowych 
(Law of 8 March 2013 on Payment Terms in Commercial Transactions) 
(consolidated text: Journal of Laws [Dz. U.] of 2019, item 118) — Article 4(1) 
[transposition of Article 2(1) of the directive], Article 7(1)(1) and (2), 
Article 10(1) and (3), Article 11(1) [transposition of the first sentence of Article 5 
of the directive], Article 11(2)(1) and (2) 
Ustawa z dnia 23 kwietnia 1964 r. — Kodeks cywilny (Law of 23 April 1964 — 
Civil Code) (consolidated text: Journal of Laws [Dz. U.] of 2018, item 1025) — 
Article 5 
Brief outline of the facts and procedure 
1 On 10 April 2018, the applicant, RL spółka z ograniczoną odpowiedzialnością 
(RL limited liability company) with its registered office in Ł. (a company 
incorporated under Polish law), filed a claim (in the main proceedings) with the 
District Court for Łódź-Śródmieście in Łódź against the defendant J.M., who 
resides in Poland, for payment of PLN 1 767.30 plus statutory interest for late 
payment in commercial transactions from the date of the claim until the payment 
date. 
2 In the statement of claim, it is stated that the parties had concluded a lease 
agreement under which the applicant, as the lessor, made available for use by the 
defendant, as the lessee, commercial premises located in Łódź, and that the 
defendant was obliged to pay rent plus service charges equivalent to the building 
maintenance costs incurred by the applicant.  
3 The agreement was concluded on 15 January 2015 for an indefinite term. The 
defendant was required to pay monthly rent in advance, by the 10th day of each 
month, in the amount determined in the agreement. Invoices for the lease were 
also to include the flat-rate service charges stipulated in the lease agreement. In 
accordance with its obligation under the lease agreement, the defendant paid a 
security deposit amounting to PLN 984 to the applicant.  
4 The applicant indicated that, in the period from September 2015 to December 
2017, the defendant was late in paying 16 VAT invoices raised by the applicant 
for the rent and service charges due for 16 billing periods. Therefore, the applicant 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-199/19 
 
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issued to the defendant — as compensation for recovery costs provided for in 
Article 10 of the 2013 Law — an accounting note for the total amount of PLN 
2 751.30, which corresponded to 16 times the PLN equivalent of EUR 40. The 
applicant also deducted the amount of its claim (PLN 2 751.30) from the 
defendant’s claim for the return of the deposit in the amount of PLN 984. As a 
result of that deduction, claims amounting to PLN 984 were mutually offset; this, 
if justified, would mean that the defendant is no longer entitled to claim the return 
of the deposit. On the basis of this assumption, the applicant seeks payment of 
PLN 1 767.30 — the sum which remains after the deposit has been deducted from 
the original claim. 
5 The order for payment issued in writ-of-payment proceedings was for the entire 
amount claimed in the main proceedings. 
6 The defendant lodged an objection to that order for payment, challenging the 
order in its entirety, with the result that the order ceased to have effect. The 
defendant moved for the claim to be dismissed in its entirety. At the same time as 
the objection, the defendant lodged a counterclaim against the applicant 
(defendant in the counterclaim) for refund of the deposit paid as security for the 
lease agreement between the parties and for the payment of PLN 984 plus 
statutory interest for late payment from 16 February 2018 until the payment date.  
7 The referring court, which has been requested to rule on the objection and on the 
counterclaim, has referred questions connected with the case for a preliminary 
ruling. 
Principal arguments of the parties in the main proceedings 
8 The applicant believes that the lease agreement which it concluded with the 
defendant constitutes a commercial transaction within the meaning of the directive 
and the provisions of Polish law which transpose it, since the agreement must be 
regarded as the provision of services for remuneration (which is one of the two 
possibilities provided for in the definition of commercial transaction in the 
directive and the law transposing it). From this fact, the applicant submits, it 
derives its right to add to the outstanding receivables under the lease agreement 
the statutory interest referred to in Article 7(1) and Article 11(2)(1) of the 2013 
Law and also its right to claim compensation for recovery costs referred to in 
Article 10 of the 2013 Law. 
9 The defendant claims, inter alia, that there was no delay in the payment of several 
VAT invoices listed by the applicant in the statement of claim. It also claims that 
the applicant abused its subjective right in connection with the applicant’s claim 
for compensation for recovery costs which related to delays of a few days in the 
payment of the other VAT invoices. In its most far-reaching objection concerning 
the merits of the applicant’s case (the purpose of which was to provide grounds 
for the dismissal of the main claim in its entirety and for the granting of the 
counterclaim, also in its entirety), the defendant stated that the 2013 Law could 
RL 
 
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not be applied to the assessment of the lease agreement between the parties, under 
which the applicant (the defendant in the counterclaim) originally demanded 
payment of PLN 2 751.30 in total. The defendant claims that a lease agreement is 
not a commercial transaction within the meaning of the aforementioned law since, 
contrary to the applicant’s assertion, it is not a contract for the provision of 
services, but rather a contract providing a temporary right to use goods, which is 
outside the scope of application of the directive and of the 2013 Law. 
Brief statement of and reasons for the reference 
10 As far as the first question referred for a preliminary ruling is concerned, Directive 
2011/7 defines ‘commercial transactions’ as ‘transactions between undertakings 
[…] which lead to the delivery of goods or the provision of services for 
remuneration’. However, those individual concepts are not defined in the 
directive. Nor are they defined in the 2013 Law.  
11 In Polish civil law, there is no dichotomous division into contracts for the delivery 
of goods and contracts for the provision of services. Instead, contracts are divided 
into those governing the transfer of rights, the use of goods, the provision of 
services, and contracts which govern credit relations. For this reason, the scope of 
the term ‘commercial transaction’ is not interpreted uniformly in Polish civil law 
doctrine. 
12 It is generally accepted that delivery of goods as referred to in Article 4(1) of the 
2013 Law should not be taken to include the delivery contracts referred to in 
Article 605 of the Civil Code, which consist in the supplier’s undertaking to 
manufacture generic items and to deliver them in parts or periodically and the 
buyer’s undertaking to accept those items and to pay their price, but it should be 
taken to include any contract which transfers ownership or the right to dispose of 
goods as owner (that is, contracts of sale, exchange, delivery, and agricultural 
production contracts). The emphasis is therefore on the economic aspect rather 
than on terminological alignment between the Civil Code and the 2013 Law. 
Considering that in the Civil Code the term ‘goods’ does not refer exclusively to 
things, some authors claim that the presented interpretation of ‘delivery of goods’ 
makes it possible for this term to cover both contracts which concern things and 
those which concern intellectual property rights. However, lease or rental 
agreements are excluded from the scope of application of the law as understood in 
this manner, since providing a temporary right of use of ‘goods’ does not come 
within the scope of delivery as it is commonly understood. 
13 There is no doubt as to the minimum scope of the term ‘provision of services’ 
because, as mentioned earlier, in Polish civil law there is a distinction related to 
contracts which govern the provision of services; under the 2013 Law, these 
contracts include not only those where due diligence is of particular importance 
(contracts for the provision of services in the narrow sense, such as contracts of 
mandate), but also contracts where results are important (contracts for the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-199/19 
 
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provision of services in the broader sense, such as, for instance, contracts for a 
specific work). However, even the broadest literal interpretation of ‘provision of 
services’ does not cover contracts the characteristic performance of which consists 
in providing a temporary right to use goods in exchange for rent (for instance, 
lease or rental agreements). 
14 However, within doctrine there are also indications that the concepts ‘supply of 
goods against consideration’ and ‘provision of services against consideration’ as 
used in the 2013 Law and in the Ustawa z dnia 11 marca 2004 r. o podatku od 
towarów i usług (Law of 11 March 2004 on Goods and Services Tax) 
(consolidated text: Journal of Laws [Dz. U.] of 2018, item 2174) are similar in 
meaning. Under the Law on Goods and Services Tax, goods are to be understood 
as things and parts thereof as well as all forms of energy (Article 2(6)), supply of 
goods is to be understood as the transfer of the right to dispose of goods as owner 
(Article 7(1)), and provision of services is to be understood as any performance 
for the benefit of a natural person, legal person or unincorporated organisational 
unit which does not constitute a supply of goods within the meaning of Article 7 
of the Law (Article 8(1)). If the concepts used in the two laws are considered to be 
equivalent, a lease agreement could be regarded as a contract for the provision of 
services. 
15 Despite the fact that a broad interpretation of contracts for the supply of goods 
against consideration and contracts for the provision of services against 
consideration, analogously as under the Law on Goods and Services Tax, would 
make it possible to extend the scope of application of the 2013 Law to include the 
majority of contracts concluded by entrepreneurs, including lease or rental 
agreements, and would be in line with the legislative objective indicated in recital 
3 of Directive 2011/7, this postulate is not generally accepted. First of all, it is 
pointed out that the conceptual frameworks of civil law, which is an area of 
private law, and of tax law, which is an area of public law, differ significantly. 
Therefore, trying to draw any equivalence between the concepts used in the two 
separate legal systems could lead to undesirable results, including in particular for 
the uniform understanding of certain legal institutions and, consequently, also for 
the uniform application of law. Furthermore, it is pointed out that tax law is 
autonomous in relation to private law and, consequently, that the concepts of tax 
law are autonomous as well. The differences are so far-reaching that, for instance, 
a legal transaction which is invalid under civil law due to its improper form may 
constitute a supply of goods under tax law, and thus give rise to a tax liability. 
16 Recital 2 of Directive 2011/7 appears to militate against classifying contracts 
providing a temporary right of use of goods in exchange for rent (as interpreted in 
accordance with the intention of the European legislature) as commercial 
transactions within the meaning of Article 4(1) of the 2013 Law. In that recital, it 
is stated that most goods and services are supplied within the internal market by 
economic operators to other economic operators and to public authorities on a 
deferred payment basis whereby the supplier gives its client time to pay the 
invoice, as agreed between parties, as set out in the supplier’s invoice or as laid 
RL 
 
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down by law. In the case of lease or rental agreements, the characteristic 
performance is not fulfilled and payment is not deferred, since the characteristic 
performance is of a complex nature (it includes a one-off performance in the form 
of handing over the object of lease to the lessee and, primarily, a continuous 
performance in the form of agreeing to the lessee using the object of lease), while 
the cash benefit is of a periodic nature (as will be discussed below) and is payable 
at the beginning (‘in advance’) or after the end (‘in arrears’) of successive billing 
periods. 
17 Recital 11 of Directive 2011/7 also appears to militate against the classification of 
lease and rental agreements as commercial transactions. In that recital, it is stated 
that the delivery of goods and the provision of services for remuneration to which 
the directive applies should also include the design and execution of public works 
and building and civil engineering works. This means that the European 
legislature recognised that there may be doubts as to whether the design and 
execution of public works and building and civil engineering works constitute a 
supply of goods or a provision of services. At the same time, these performances 
have much more in common with the provision of services than a performance 
which consists in providing a temporary right of use of goods. It can therefore be 
assumed that if contracts providing a temporary right of use of goods in exchange 
for rent were to be covered by Directive 2011/7, this would also be indicated in 
the recitals of the directive in order to prevent any doubts as to its interpretation. 
18 In one case, the problem outlined here was the subject of interpretation by the Sąd 
Najwyższy (Supreme Court, Poland). In the grounds of its judgment of 6 August 
2015, which was delivered under Article 2 of the earlier Ustawa z dnia 12 czerwca 
2003 r. o terminach zapłaty w transakcjach handlowych (Law of 12 June 2003 on 
Payment Terms in Commercial Transactions) (Journal of Laws [Dz. U.] No 139, 
item 1323), wherein a commercial transaction was defined similarly as in 
Article 4(1) of the 2013 Law, the Supreme Court pointed out: ‘If we assume that 
the purpose of the Law is to ensure broad creditor protection, the notion of 
contracts for the provision of services should also cover contracts providing a 
temporary right of use of goods, for instance, lease or rental agreements, which 
are not contracts for the provision of services in the narrow sense’. 
19 Therefore, a linguistic and systemic interpretation of the ‘commercial transaction’ 
concept leads to the conclusion that its scope does not cover lease or rental 
agreements, since these agreements do not lead to the delivery of goods or the 
provision of services for remuneration. On the other hand, a functional 
interpretation militates in favour of including these agreements within the scope of 
Directive 2011/7 and of the 2013 Law, since these agreements account for a large 
part of legal transactions concluded by professionals (business transactions), and 
for lessors or landlords they are often their core business and main source of 
income, and therefore delays in the payment of rent negatively affect their 
financial liquidity and complicate the financial management of their undertakings. 
The need to prevent such effects is indicated in recital 3 of Directive 2011/7. 
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20 As far as the second question referred for a preliminary ruling is concerned, 
Article 5 of Directive 2011/7 has been transposed almost literally into the Polish 
legal order by the provisions of Article 10(3) and of Article 11(1) and (2)(2) of the 
2013 Law. There is a certain terminological difference as the directive uses the 
term ‘agreeing payment schedules providing for instalments’, whereas the Polish 
Law uses the term ‘determining the schedule for providing a cash benefit in parts’. 
However, the terminological differences indicated here do not support the 
argument that the Polish legislature wished to make the scope of the provision of 
Article 11(1) of the Law either broader or narrower than that stipulated by the 
European legislature in the first sentence of Article 5 of the directive. In Polish 
civil law doctrine, one of the most important divisions as regards performances 
under contracts (which give rise to obligations) is between one-off, periodic and 
continuous performances. Since the third group (continuous performances) is 
irrelevant to the present case, it is important to identify the criterion of division 
between one-off and periodic performances. It is generally accepted that, in the 
case of one-off performances, the nature and extent of the debtor’s obligation can 
be determined without invoking the factor of time. Obviously, as with any other 
human undertaking, fulfilling a one-off performance takes a shorter or longer 
time, but this element does not affect the nature and extent of the performance. 
The element of time, in turn, is indispensable if we wish to describe the nature and 
extent of periodic performances, since these recur cyclically, at predetermined 
intervals. As a rule, they involve the periodic provision of cash benefits or 
fungible things. The time factor determines not only the nature of the performance 
but also its global extent: the longer such an obligation relationship lasts, the more 
benefits the creditor should receive from the debtor. This characteristic 
distinguishes periodic performances from one-off performances fulfilled in parts 
(which should be construed as the division of a one-off performance into 
instalments), since in the latter case, the extent of the performance is determined 
in advance and without reference to the element of time. Irrespective of how many 
instalments the performance includes and over what period, its extent (amount) 
does not change. On the other hand, a periodic performance does not cease to be 
such and is not treated as a one-off performance solely because the obligation lasts 
for a definite period of time. Thus, irrespective of whether a lease or rental 
agreement is concluded for a fixed or definite period of time, rent which is 
payable for successive periods is treated as a periodic performance. 
21 For the foregoing reasons, the interpretation of Article 11(1) of the 2013 Law and 
of the first sentence of Article 5 of Directive 2011/7 may lead to the conclusion 
that these provisions apply only to those cases where the performance by the 
supplier or service provider is of a one-off nature, but the parties have agreed that 
it will be fulfilled in parts (instalments). Such an interpretation would, however, 
lead to the conclusion that a creditor cannot have a claim for the payment of 
interest as referred to in Article 7(1), in conjunction with Article 11(2)(1), of the 
2013 Law or for the payment of the PLN equivalent of EUR 40 as referred to in 
Article 10(1) and (3), in conjunction with Article 11(2)(2), of the 2013 Law (and, 
under the directive, in Article 3(1) and Article 6(1), in conjunction with the 
second sentence of Article 5) where the debtor is late in paying lease or rent 
RL 
 
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amounts for successive billing periods. If it is acknowledged that this 
interpretation of the aforementioned provisions of the 2013 Law and of Directive 
2011/7 is correct, this could be an argument in favour of assuming that the 
aforementioned directive and the Polish law do not cover contracts the 
characteristic performance of which consists in providing a temporary right to use 
goods in exchange for rent (for instance, lease or rental agreements), that is, these 
contracts are not commercial transactions within the meaning of both 
aforementioned legal acts. 
22 However, it should be noted that the interpretation presented in the previous 
paragraph may result in effects which would be incompatible with the objectives 
of Directive 2011/7, since accepting it would mean depriving creditors of the right 
to interest in the amount and on the terms set out in the directive as well as of the 
right to compensation for recovery costs also where a transaction, which is clearly 
a commercial transaction, is concluded for a fixed or indefinite period of time (for 
instance, a contract for the provision of accounting services concluded for an 
indefinite term, under which remuneration is paid for monthly billing periods).