RKKW Client wins in court dispute over contract for outsourcing of accounting, bookkeeping and tax services

The Regional Court in Warsaw dismissed actions against the RKKW Client related to a contract for bookkeeping services and keeping tax documents.

The RKKW’s Client is a public company, a financial investor investing in companies operating in the real estate industry. These companies are mainly engaged in leasing of commercial, logistic and office premises, sale of completed building plots, or sale of houses and apartments.

RKKW’s Client outsourced its bookkeeping and tax services to a company that provides such services professionally. The scope of the outsourced services included the RKKW’s Client and the companies in which the Client invested. Due to improper performance of services, the cooperation was terminated. However, the service provider did not hand over all bookkeeping and tax documentation, in particular all elements of the ledgers, to RKKW’s Client and its companies. This was an act of coercion on the part of the service provider to pay its remuneration for the services whose proper performance was questioned by RKKW’s Client.

RKKW’s Client and its companies were sued by the service provider for payment of remuneration for the provision of services. The defense strategy against the claims involved, among other things, the raising of a set-off plea by the RKKW’s Client and the other defendant companies. The set-off plea was based on the damage incurred by RKKW’s Client and the other companies. The source of the damage was the service provider’s failure to hand over all of the ledgers and tax documentation. The defendants claimed that the failure to hand over all the ledgers and tax documentation was contrary to the Polish Accounting Act, was a disloyal behavior of the counterparty, and did not fulfill the business purpose of the contract for bookkeeping services. The plaintiff, on the other hand, argued that the scope of the obligation to hand over accounting, bookkeeping, and tax documentation was regulated by the contract, which, however, was ambiguous in this respect, which was also the subject of the interpretation dispute.

In the case against the RKKW’s Client, the trial court awarded the claim to the service provider. In the case against the company in which RKKW’s Client invested, the trial court dismissed the plaintiff’s claim. Both judgments were appealed. The Regional Court in Warsaw, hearing the appeal of the RKKW’s Client and the appeal of the service provider, respectively, decided that the service provider was not entitled to claims—agreeing with the arguments of the RKKW’s Client. The appeal court stated that the provider of bookkeeping services is obliged (after contract termination) to hand over bookkeeping documentation in such a way that the owner of the ledger could immediately and on its own undertake bookkeeping. The court also held that the service provider should act loyally towards its business partner and hand over everything it has obtained for the business partner, albeit on its behalf.

The case was led by attorney-at-law Marcin Michalik (Senior Associate) and Aleksandra Rudzińska (Junior Associate), and the project was coordinated by attorney-at-law Aneta Pankowska (Partner).