I posed approximately this question in a text from September 27, 2019, published on my blog. On Monday, December 20, 2021, the Regional Court in Warsaw issued a final judgment in this case, dismissing the defendant’s appeal and fully upholding our position expressed in the lawsuit. I can therefore confirm the assumption made in September 2019: yes, the beneficial owner of a company is liable for obligations arising from the legal servicing of that company. Legal servicing that he, of course, ordered, authorized, and supervised.
Regional Court Judgment
The Regional Court in Warsaw completely dismissed the defense line presented by the defendant, which was mainly based on questioning the active standing of the Plaintiff and the passive standing of the Defendant. In other words, the defendant claimed that no cooperation (advisor-client relationship) connected us, and if anyone should be sued, it should be the Company, but certainly not him. The Regional Court rightly found, however, that a long-term cooperation existed between the parties, to which the provisions on mandate should be applied, i.e., Art. 750 of the Civil Code, and awarded the claim in full together with costs for both instances.
Practical implications
This ruling has significant practical implications for lawyers and advisors who provide services related to foreign companies. The key takeaway is that even when legal services are formally ordered for a foreign entity, the person who actually controls that entity, authorizes services, and benefits from them can be held personally liable for the fees. This is particularly important in situations where the foreign company itself has limited assets or has been dissolved.
The court established that what matters is not the formal party to the engagement, but the actual relationship between the advisor and the person exercising control over the company. This follows from the general principles of contract law and the provisions on mandate contracts under Polish law.
Paweł Osiński
Attorney, expert in international corporate law