Is It Important to Formulate Allegations in the appeal to the National Appeals Chamber?

In May this year, the Regional Court in Warsaw – Public Procurement Court (hereinafter: the Court), in case no. XXIII Zs 16/24, took a position on whether the National Appeals Chamber (hereinafter: NAC) can rely on factual findings that were not included in the appeal but were only presented during the hearing.

The appellant claimed in the appeal that the contracting authority failed to reject the offer submitted by contractors jointly applying for the contract, despite their offer not being properly secured with a bid bond. The appellant argued that the consortium had provided the bid bond in the form of an insurance guarantee, which did not meet the requirements of unconditionality and was issued by an entity not listed among the notified insurance entities by the Financial Supervision Authority. According to the appellant, this should be considered equivalent to a failure to provide a bid bond.

NAC, in the justification of its ruling, explicitly stated that the allegation was based on the fact that the guarantee was issued by an unauthorized entity and that in the appeal, the lack of authorization was inferred from the absence of the main branch’s entry in the register of the Financial Supervision Authority. However, the Court emphasized that NAC had unjustifiably concluded that the appellant was challenging the validity of issuing the guarantee as an insurance activity performed by an entity lacking the appropriate license from the competent financial supervisory authority. The Court pointed out that such a conclusion was not derived from either the content of the allegation or its justification in the appeal. In the Court’s opinion, it is not NAC’s role to compensate for the party’s failure to properly formulate the factual basis of its allegations.

The legislator has explicitly established that the appeal proceedings before NAC follow an adversarial model, and NAC is bound by the allegations defined by the party requesting legal protection. Any instance of NAC exceeding the legal or factual basis of the allegation in its ruling should be considered an action taken ex officio, constituting a violation of Article 555 of the Public Procurement Law.

The Court thus ruled that the appellant unjustifiably expanded the allegations during the hearing before NAC by introducing and proving previously unmentioned circumstances, even though the original factual basis of the claim had been clearly formulated. While the Court acknowledged that the structural requirements of an appeal imply that the allegation’s content is not limited solely to the statements in the introductory section (petitum) but also includes the factual circumstances presented in the appeal’s justification, it concluded that in this case, neither the allegation itself nor its justification indicated that the appellant was questioning the validity of issuing the guarantee as an insurance activity performed without the proper license. Instead, the appellant had only contested the absence of the issuer on the list of notified insurance entities maintained by the Financial Supervision Authority. The Court considered this to be a distinct factual basis for the allegation.

According to the Court, NAC unjustifiably based its position on the admissibility of examining and evaluating arguments and evidence presented by the appellant only during the hearing. NAC incorrectly concluded that the allegation in the appeal referred to the issuance of the guarantee by an unauthorized entity, thus allowing a broader examination of the lack of authorization rather than limiting it to the absence from the Financial Supervision Authority’s list. The Court held that if the appellant wanted this issue to be examined in such an extensive manner, it should have been explicitly stated in the appeal’s allegation, rather than being introduced only during the hearing before NAC. In light of the aforementioned considerations, the Court changed the challenged ruling and dismissed the appeal.

It should therefore be pointed out that this ruling emphasises the importance of properly formulating allegations in an appeal to NAC, as their precise wording determines the appeal’s effectiveness. At the same time, a contractor supporting the contracting authority must pay close attention to the appeal’s structure, both in terms of legal and factual grounds, and should highlight any errors made by the appellant during the proceedings before NAC.