ESPD – when to inform about the penalty?

Experience / 05.01.2024

In December 2023 the Regional Court of Warsaw published a justification of the ruling of October 24, 2023 on the exclusion of the Client from the tender proceedings due to the ordering party’s misrepresentation by concealing information about the allegedly charged contractual penalties. Lawyers of the law firm filed a complaint against the verdict of the NAC (National Appeals Chamber), as a result of which the Court amended the appealed ruling and found that the Client’s exclusion from the proceedings was groundless.

In a written statement of reasons for the ruling, the Regional Court agreed with the lawyers of the law firm’s argument that the evidence presented by the appellant did not prove that the Client had been charged with any contractual penalties in connection with the implementation of a previous public investment. The Court also approved the complaint’s allegations that the decompleted and unsigned documents could not form the basis for establishing the facts of the case.

The Court emphasized that the contractor is obliged to provide information in the ESPD (European Single Procurement Document) regarding the contractual penalty only if the imposition of the penalty actually occurred, i.e. when the ordering party made an unilateral statement of intent to the contractor in this regard. In the Court’s opinion, the mere triggering of the procedure for imposing a contractual penalty and the exchange of letters to obtain clarification or the other party’s position on penalties cannot be considered equivalent to the imposition of a penalty.

The Regional Court also noted the circumstance that not every contractual penalty obligatorily has to be notified in ESPD, but only one that is compensatory in nature, since only such a penalty will fulfill the premise indicated in Article 109, paragraph 1, item. 7 of the PPL (Public Procurement Law). The Court stressed that the penalties stipulated in contracts can perform various functions, depending on how the contractual provisions are shaped, and it will not always be a compensatory function.

It was worth fighting to win such a case. Thanks to the positive outcome, the Client has already begun implementation of the public contract in question, the value of which reaches nearly PLN 200 million.