Insides
SUCCESS IN A PROPERTY RESTITUTION CASE AGAINST THE STATE TREASURY
Given the turbulent and in many instances tragic history of Poland in the 20th Century, illegal state property seizure and the lengthy legal campaign for restitution constitute both lasting legacies and pose many remaining challenges with complex legal backgrounds.
Recently, Gostynski and Partners successfully completed restitution proceedings, which were initiated 11 years ago. We were able to obtain a favourable judgment of the Court of Appeal in Warsaw in the case for compensation for an unlawfully seized family enterprise which occurred in 1963 under Communist rule. Our team represented the heir of the owner of the seized enterprise.
The case was highly complex since legal actions needed to take into account the bitter reality of the post-war economy of Poland and the provisions of law introduced by the Soviet-backed Communist regime. Nevertheless, the analysis of archival documents, including pre-and post-war legal acts provided grounds to question the validity of the nationalization decision leading to the property seizure.
Obtaining the final favourable verdict was preceded by two separate and challenging administrative proceedings initiated in 2009. The first step involved proceedings before the Ministry of Agriculture and Rural Development. This successfully questioned a decision issued in 1956 that established compulsory State management over the enterprise.
Given this decision, an application was made to the Ministry of Economy to declare the decision which transferred the enterprise of our client to the Treasury, as invalid. In 2011, the Ministry of Economy initially refused to issue such a decision. However, this was subsequently and successfully challenged. After persistent and compelling legal arguments, the Ministry of Economy eventually declared that the seizure of the enterprise had indeed, been executed in violation of the law. This was a major step forward towards restitution but not without significant remaining obstacles.
At that time it was determined the physical restitution of the unlawfully nationalized enterprise was not feasible since the only existing component of the original enterprise was land on which the enterprise was once located. Furthermore, the land had been sold before initiation of the restitution proceedings. Under such circumstancee, our client was entitled to compensation for the damage caused as a result of the illegal nationalization decision.
Therefore, our legal action demanded the amount of over half a million PLN should be paid by the State Treasury to our client as fair compensation for the land on which his family enterprise once stood.
Regrettably, the Ministry of Economy acting on behalf of the State Treasury refused to pay the compensation. So, in 2012 a claim was filed at the Regional Court in Warsaw. The basis of the claim for compensation was straightforward. Namely, if the decision of 1963 had not been issued, our client's father would have maintained the enterprise as his main asset. The nationalization of the enterprise in 1963 effectively resulted in a significant minimization of the value of the assets for its rightful owner.
During the court proceedings, the claim was extended by over 70.000 PLN which was the value of the movables – machinery and other devices etc. that constituted part of the seized enterprise.
The Regional Court in Warsaw issued a favourable verdict in 2017. The Court of first instance awarded our client compensation for the land property as well as the movable property which were part of the nationalized enterprise. Our client won the case in 95% , where the awarded amounts were equivalent of the values estimated by expert witnesses.
Predictably, the Ministry of Treasury appealed against the verdict claiming that some of the components of the enterprise should not be included, therefore the amount awarded by the court of first instance was overstated. The appeal proceedings lasted for another 3 years! However last week, a final verdict dismissed the appeal of the State Treasury effectively upholding the verdict of first instance.
Although the case was highly complex and required long term commitment by our staff, Gostynski and Partners never waivered from its firm belief that our client (as lawful heir) should obtain compensation for unlawful actions taken by the Polish communist government over half a century ago. The arc of history is indeed long, varied and highly unpredictable. However, with determination and commitment it is possible to shift this arc ever so slightly in the direction of fairness and justice. Consequently, this must be cause for quiet satisfaction and modest celebration!
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