Judgment;Summary — ECLI:EU:C:2019:1028
Date: 2019-11-28
Language of the case: Polish
Court formation: Ninth Chamber
Subject matter: Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Poland

Translation  C-722/18 — 1 
Case C-722/18 
Request for a preliminary ruling 
Date lodged: 
19 November 2018 
Referring court: 
Sąd Okręgowy w Warszawie (Poland) 
Date of the decision to refer: 
29 October 2018 
Appellant: 
KROL — Zakład Robót Wodno-Kanalizacyjnych Sp. z o.o., S.k. 
Respondent: 
Porr SA 
  
[…] 
DECISION 
On 29 October 2018 
the Sąd Okręgowy w Warszawie XXIII Wydział Gospodarczy Odwoławczy 
(Regional Court, Warsaw, Commercial Appeals Division No 23) […] 
having examined on 29 October 2018 in Warsaw 
at an in camera hearing 
the case brought by KRÓL — Zakład Robót Wodno-Kanalizacyjnych spółka z 
ograniczoną odpowiedzialnością sp. k., established in Warsaw, 
against Porr Spółka Akcyjna, established in Warsaw, 
concerning payment 
arising from an appeal lodged by the appellant 
EN 
REQUEST FOR A PRELIMINARY RULING OF 29. 10. 2018 — CASE C-722/18 
 
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against the judgment of the Sąd Rejonowy dla m. st. Warszawy w Warszawie 
(District Court for the Capital, Warsaw) 
of 25 September 2017 […] 
decides: 
to refer the following question to the Court of Justice of the European Union 
for a preliminary ruling pursuant to Article 267 of the Treaty on the 
Functioning of the European Union: 
Does EU law, in particular recitals 13, 20 and 22 of Directive 2000/35/EC of the 
European Parliament and of the Council of 29 June 2000 on combating late 
payment in commercial transactions and Article 18 TFEU laying down the 
principle of non-discrimination, permit the possibility of excluding compensation 
for late payment in respect of transactions financed in whole or in part by the EU 
Structural Funds and the Cohesion Fund, which follows from Article 4(3)(c) of 
the Ustawa o terminach zapłaty w transakcjach handlowych (Law on Payment 
Terms in Commercial Transactions) (Journal of Laws [Dz. U.] of 2003, No 139, 
item 1323)? 
[Or. 2] Grounds 
1. FACTS AND PROCEEDINGS: 
On 9 September 2009, Teerag-Asdag Polska sp. z o.o., established in Warsaw, as 
the contracting party, and Krol — Zakład Robót Wodno-Kanalizacyjnych DT 
sp. k., established in Warsaw, concluded contract No 014/012/09 concerning the 
construction of the Konotopa-Puławska section of the S-2 express road, including 
the construction of the S-79 spur route to the Okęcie International Airport and 
Marynarska Road in Warsaw. 
Under the contract the contracting party commissioned and the contractor 
undertook to perform the construction works described in the technical 
documentation attached as Appendix 4 to the contract with respect to water supply 
and drainage works. The contractor undertook to complete performance of the 
contract by 30 October 2011, with intermediate deadlines for completion of the 
water supply works — by 30 November 2009, and for completion of the drainage 
works — by 30 October 2011. 
The parties determined the amount of remuneration due to the contractor for the 
performance of the contract at PLN 73 815 856.82. Goods and services tax (VAT) 
was to be added to the above amount of remuneration in accordance with the 
provisions in force. The remuneration was to be paid by the contracting party on 
the basis of invoices raised by the contractor in accordance with the progress of 
the work. After the end of the month, the contractor was to submit to the 
contracting party a VAT invoice together with a detailed specification of the 
works performed and billed from the beginning of the contract, including the 
KROL 
 
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works performed in the month in question, together with the amounts of 
remuneration due for the performance of those works in accordance with the 
technical documentation (Appendix 4), the detailed schedule of works and the 
tender quotation (Appendix 5). Remuneration for continuous works, performed 
over a period exceeding one billing month, was to be payable in proportion to the 
progress of such works. The contractor’s remuneration was to be paid within 49 
days of the date of delivery of a correctly issued invoice to the contracting party, 
unless the contracting party had not received remuneration from the project owner 
for work performed by the contractor. 
In such a case, the remuneration was to be paid promptly after the contracting 
party had received remuneration from the project owner, but not later than within 
seven working days from the date of receipt of those funds from the project 
owner. All payments to [Or. 3] the contractor were to be made by the contracting 
party once a week, on Thursdays. Where the payment deadline was on a different 
day of the week, the payment was to be made on the Thursday following the 
payment deadline. All payments were to be made in full until the contractor had 
received 90% of the total remuneration, and the remaining 10% of the 
remuneration was to be released for payment seven working days after the date of 
signature of the final acceptance report by the project owner. 
Contract No 014/012/09 of 9 September 2009 was concluded within the 
framework of the performance by Teerag-Asdag Polska sp. z o.o., established in 
Warsaw, of the investment task stipulated in contract No 137/2009 of 10 August 
2009 concluded with the project owner — the Treasury represented by the 
Generalny Dyrektor Dróg Krajowych i Autostrad (General Director for National 
Roads and Motorways). The performance of the contract was partly financed by 
means of EU funds — the Cohesion Fund on the basis of the project co-financing 
agreement. 
Pursuant to Article 492(1)(1) of the Kodeks Spółek Handlowych (Code of 
Commercial Companies), Porr Polska Construction SA, established in Warsaw, as 
the acquiring company and Teerag-Asdag Polska sp. z o.o. as the target company 
were merged by way of transfer of all assets to Porr Polska Construction SA, 
established in Warsaw. 
The appellant issued a number of VAT invoices to the respondent, enclosing 
documentation concerning partial acceptance of the works with each of them. 
On 3 September 2014, Krol Zakład Robót Wodno-Kanalizacyjnych sp. k. DT, 
established in Warsaw, issued to Porr (Polska) SA, established in Warsaw, interest 
note No 1/09/2014 for the amount of PLN 283 591.26 payable within seven days 
of the date of receipt of the request for payment. 
By letter of 5 September 2014, the appellant requested that the respondent pay 
statutory interest amounting to PLN 283 591.26 within seven days of receipt of 
the request. 
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In its judgment of 25 September 2017, the Sąd Rejonowy dla m.st. Warszawy w 
Warszawie (District Court for the Capital, Warsaw) dismissed the claim. The 
court held that, taking into account the fact that the contract of 9 September 2009, 
which constituted the basis for the action and concerned services consisting in the 
performance of the construction works described in the technical documentation 
enclosed with the contract, was financed in part by the EU Cohesion Fund, any 
claims by the appellant against the respondent for payment of interest in 
commercial transactions based on that contract were inadmissible. 
[Or. 4] Proceedings before the Sąd Okręgowy (Regional Court): 
The appellant disagreed with that judgment and lodged an appeal in which it 
alleged, inter alia, an infringement of Article 233(1) of the Kodeks Postępowania 
Cywilnego (Code of Civil Procedure) in connection with the finding that the 
contract of 9 September 2009 was financed in part by the EU Cohesion Fund. The 
appellant stated that at the stage of signing the contract it was not aware that the 
contract would be financed in part by the EU Cohesion Fund. The co-financing 
agreement concerned the contract concluded between a consortium, which 
included the respondent, and the Treasury, and not the contract between the 
appellant and the respondent. The appellant alleged an infringement of 
Article 4(3)(c) of the Ustawa o terminach zapłaty w transakcjach handlowych z 
dnia 12 czerwca 2003 r. (Law on Payment Terms in Commercial Transactions of 
12 June 2003) and of Article 5 of the Kodeks Cywilny (Civil Code) due to an 
infringement of the accepted rules of social conduct consisting in discrimination 
against a Polish undertaking in comparison with its counterparts operating in EU 
countries. 
1. EU LAW: 
- Directive 2000/35/EC of the European Parliament and of the Council of 
29 June 2000 on combating late payment in commercial transactions. 
- Treaty establishing the European Community. 
recitals 13, 20 and 22 [of Directive 2000/35] 
(13) This Directive should be limited to payments made as remuneration for 
commercial transactions and does not regulate transactions with consumers, 
interest in connection with other payments, e.g. payments under the laws on 
cheques and bills of exchange, payments made as compensation for damages 
including payments from insurance companies. 
(20) The consequences of late payment can be dissuasive only if they are 
accompanied by procedures for redress which are rapid and effective for the 
creditor. In conformity with the principle of non-discrimination contained in 
Article 12 of the Treaty, those procedures should be available to all creditors who 
are established in the Community. 
KROL 
 
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(22) This Directive should regulate all commercial transactions irrespective of 
whether they are carried out between private or public undertakings or [Or. 5] 
between undertakings and public authorities, having regard to the fact that the 
latter handle a considerable volume of payments to business. It should therefore 
also regulate all commercial transactions between main contractors and their 
suppliers and subcontractors. 
Article 18 [TFEU] 
(ex Article 12 TEC) 
Within the scope of application of the Treaties, and without prejudice to any 
special provisions contained therein, any discrimination on grounds of nationality 
shall be prohibited. The European Parliament and the Council, acting in 
accordance with the ordinary legislative procedure, may adopt rules designed to 
prohibit such discrimination. 
2. NATIONAL LAW 
Ustawa o terminach zapłaty w transakcjach handlowych z dnia 12 czerwca 2003 r. 
(Law of 12 June 2003 on Payment Terms in Commercial Transactions) (Journal 
of Laws [Dz. U.] of 2003, No 139, item 1323). 
Article 4(3)(c) of the Law 
The Law shall not apply to contracts which concern the supply of goods or 
provision of services for consideration, financed in whole or in part by the EU 
Structural Funds and the Cohesion Fund. 
LEGAL DOUBTS OF THE NATIONAL COURT: 
1 EU law. The Charter of Fundamental Rights of the European Union recognises 
that everyone is equal before the law and also prohibits all discrimination. 
Equality before the law and the right to non-discrimination are fundamental rights 
of individuals that do not depend on their background or economic status and 
form part of EU law as general legal principles (Article 18 [TFEU]). 
2 The principle of non-discrimination as a value and positive obligation and also as 
a competence of the European Union and the Member States serves certain 
economic [Or. 6] objectives, for instance when it facilitates market access; it also 
assists the pursuit of certain social policies, as in the case where it serves the 
integration of excluded persons; it can also be considered an individual right. 
3 The objective of Directive 2000/35/EC of the European Parliament and of the 
Council. The directive is aimed at preventing delays in payments between 
undertakings. Heavy administrative and financial burdens are placed on 
businesses, particularly small and medium-sized businesses, as a result of 
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excessive payment periods and late payment. Moreover, these problems are a 
major cause of insolvencies threatening the survival of businesses and result in 
numerous job losses (recital 7). 
The consequences of late payment can be dissuasive only if they are accompanied 
by procedures for redress that are rapid and effective for the creditor. In 
conformity with the principle of non-discrimination contained in Article 12 of the 
Treaty, those procedures should be available to all creditors established in the 
[European Union]. 
4 Interpretation of the directive. The terms contained therein have been defined in 
the broadest possible manner so that their wording could not become a reason for 
excluding certain categories of entities or transactions from the provisions of the 
directive. This directive should regulate all commercial transactions irrespective 
of whether they are carried out between private or public undertakings or between 
undertakings and public authorities, having regard to the fact that the latter handle 
a considerable volume of payments to businesses. The directive should therefore 
also regulate all commercial transactions between main contractors and their 
suppliers and subcontractors. 
5 List of entities excluded from the operation of the directive. There are certain 
restrictions on the application of the directive; these are referred to in 
Article 6([3]): (1) debts that arise from insolvency proceedings; (2) claims for 
interest of less than EUR 5; and (3) transactions concluded before 8 August 2002 
(before the final date for the transposition of the directive into the national law of 
the Member States). 
6 [Or. 7] Changes — Polish law. On 1 January 2004, the Ustawa z 12 czerwca 2003 
r. o terminach zapłaty w transakcjach handlowych (Law of 12 June 2003 on 
Payment Terms in Commercial Transactions) entered into force, replacing the 
Ustawa z 6 września 2001 r. o terminach zapłaty w obrocie gospodarczym (Law 
of 6 September 2001 on Payment Terms in Business Transactions). However, the 
exclusion in question (the Law shall not apply to contracts that concern the supply 
of goods or provision of services for consideration, financed in whole or in part by 
the EU Structural Funds and the Cohesion Fund) was repeated in the new Law 
(Article 4(3)(c)). The subsequent Ustawa o terminach zapłaty w transakcjach 
handlowych (Law on Payment Terms in Commercial Transactions), which was 
enacted on 8 March 2013, does not provide for such an exclusion. However, the 
new Law applies only to contracts concluded after its entry into force. Owing to 
the fact that the EU legislature allowed the Member States to exclude from the 
scope of Directive 2011/7/EU contractual relationships concluded before 
16 March 2013 in their entirety, including the effects of those contractual 
relationships which arise after that date (judgment of the Court of Justice of 1 June 
2017, C-330/16), it is not disputed that the Law of 12 June 2003 on Payment 
Terms in Commercial Transactions applies to the case in question owing to the 
fact that the contract was concluded on 9 September 2009. 
KROL 
 
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7 Exclusions from the scope of the Law. In Article 4(3)(c) of the Law of 12 June 
2003, the legislature excluded from its scope the supply of goods or provision of 
services for consideration, financed in whole or in part from the funds provided by 
international financial institutions of which the Republic of Poland is a member or 
with which cooperation agreements have been signed, from non-refundable aid 
from the European Union and from the EU Structural Funds and the Cohesion 
Fund. 
8 In the explanatory memorandum to the draft Law of 6 September 2001 on 
Payment Terms in Business Transactions […] it was indicated that with respect to 
the performance of contracts financed from the aforementioned sources, the 
relevant institutions’ procedures apply, which allow payment terms longer than 30 
days, and these cannot be shortened under the current contract [Or. 8] financing 
framework, which is governed by the provisions of the Ustawa o finansach 
publicznych (Law on Public Finance). 
9 In the view of the Sąd Okręgowy (Regional Court), the above argumentation is 
clearly pragmatic in its nature and does not clarify why it is not possible to change 
the manner in which contracts are financed. Under Directive 2000/35/EC of the 
European Parliament and of the Council of 29 June 2000 on combating late 
payment in commercial transactions (OJ 2000 L 200, p. 35), there is no distinction 
between transactions based on the origin of funds used for their financing, and 
thus no different treatment is provided for contracts financed from international 
funds and from non-refundable aid from the EU Structural Funds. This may lead 
to discrimination against undertakings in comparison with their counterparts 
operating in EU Member States […]. 
10 Doubts on the part of the national court. Against this background, doubt arises as 
to whether EU law, in particular recitals 13, 20 and 22 of Directive 2000/35/EC of 
the European Parliament and of the Council of 29 June 2000 on combating late 
payment in commercial transactions and Article 18 [TFEU], which lays down the 
principle of non-discrimination, permits the possibility of excluding compensation 
for late payment in respect of transactions financed in whole or in part by the EU 
Structural Funds and the Cohesion Fund, which follows from Article 4(3)(c) of 
the Law on Payment Terms in Commercial Transactions. 
11 As indicated, the directive has a relatively broad scope of application, with the 
few restrictions being justified either by the interest of consumers or debtor 
protection in bankruptcy proceedings. In the view of the Regional Court, the non-
discrimination principle precludes the exclusion from the scope of the directive of 
the supply of goods or provision of services for consideration, financed in whole 
or in part from the funds provided by international financial institutions of which 
the Republic of Poland is a member or with which cooperation agreements have 
been signed, from non-refundable aid from the [Or. 9] European Union and from 
the EU Structural Funds and the Cohesion Fund. This category of supply of goods 
or provision of services is not listed in the directive. 
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12 Teleological arguments. The exclusion of those types of supply of goods or 
provision of services from the directive is also precluded by the principle of non-
discrimination and the prohibition of the grossly unfair exclusion of the right to 
compensation for late payments. The national regulation may lead to overt 
discrimination against undertakings in comparison with their counterparts 
operating in EU Member States depending on the source from which the 
transaction is financed. Significantly, at the time of signing the contract the 
appellant was not aware that the contract would be financed in part by the EU 
Cohesion Fund. The co-financing agreement concerned the contract concluded 
between a consortium, which included the respondent, and the Treasury, and not 
the contract between the appellant and the respondent. The source of financing 
was unknown to the appellant. In the view of the Regional Court, exclusions of 
the supply of goods or provision of services from the scope of the directive should 
be restrictive and justified by the wording of the directive itself or by teleological 
reasons. In the present case, however, the national court finds no such reasons. 
In the light of these circumstances, an answer is required in order to resolve the 
dispute before the national court.