NCBiR’s allegations and their basis
NCBiR indicated that the basis for the termination of the contract and the demand for reimbursement was the alleged submission of a false statement by the beneficiary regarding the fulfillment of the conditions necessary for obtaining the grant. However, analysis of the data showed that the possible failure was entirely marginal and resulted from an insignificant technical discrepancy that arose after the required documents had already been submitted. In subsequent months, the settlements confirmed that the discrepancy was purely technical, incidental and completely without fault. Such an insignificant discrepancy could not constitute grounds for assuming that the beneficiary acted in a manner that misled the authority, let alone justify NCBiR’s rescission of its declaration of intent to conclude the contract.
Legal argumentation of the law firm
Acting on behalf of the client, the Law Firm presented NCBiR with a detailed argumentation, which demonstrated the lack of any basis for formulating charges against the beneficiary and the gross disproportionality of the demand for reimbursement of the grant. We stressed that the imposition of a sanction involving repayment of the full value of the support would be completely disproportionate to the scale of the failure, which would violate the principle of proportionality under national and EU law, as well as being in conflict with established case law, including the By the judgment of the Supreme Court of October 7, 2015. (I CSK 878/14) . We also pointed out that any doubts arising in the background of the project’s implementation should first be resolved in dialogue and with the cooperation of the parties, and not through unilateral actions of a ruling nature, especially when they concern issues of marginal importance. Our argument was further bolstered by an analysis of economic realities, including widespread problems for entrepreneurs in settling contributions after the introduction of the so-called “Polish Deal” and frequent adjustments and automatic offsets in the Social Security system, which fostered technical, non-fault errors.
Effects of actions and protection of customer interests
The actions taken successfully challenged the legitimacy of NCBiR’s position and led to its change. Thanks to the arguments presented and the substantive support of the Firm’s legal team, the client avoided the obligation to repay the funds and was able to continue implementing the R&D project. The company, which operates in the field of aviation and new technologies, entered the competition with the full intention of conducting the project in a reliable and efficient manner. It provided complete documentation to the best of its knowledge, and once the contract was concluded, it conducted the project with due diligence, properly accounting for the funds and developing its innovation, infrastructure and employment activities. An incidental technical lapse in billing – promptly compensated for – could not undermine her credibility or ability to carry out the project. Even less could it justify claims for reimbursement of funds, the fulfillment of which would result in serious, unwarranted consequences, such as halting research, reducing employment or stunting technological development.
The importance of the case and its implications
Settlement of the dispute at this stage avoided serious business consequences, including destabilization of operations and loss of jobs, and prevented the halting of work on an innovative solution of significant importance to the development of the aviation sector. This case is an example of effective protection of the beneficiaries of public funds when the actions of public institutions are taken without a proper assessment of the proportionality and real materiality of the alleged misconduct. It also shows that a careful, comprehensive and precisely prepared legal argumentation can effectively protect the interests of entrepreneurs implementing key research and development projects in Poland.
The law firm’s team responsible for handling the case
The following were responsible for handling the case on the law firm’s side:
- Damian Wojnowski, LL.M. – Partner,
- Attorney Zuzanna Bokina-Kiełbasa – Legal Counsel, Managing Associate Corporate&Energy Team,
- Martyna Dobkowska-Pragacz – Attorney Trainee, Associate
Frequently asked questions
Can minor, technical errors in research project settlements result in a demand for the return of the entire funding?
No, if the breach is marginal, technical and unintentional in nature, it does not constitute grounds for terminating the agreement and demanding the return of the full amount. The authority cannot apply sanctions in a manner grossly disproportionate to the scale of the violation, which would be contrary to the principle of proportionality. Such action would also violate the established case law position on this matter.
What are the consequences for an entrepreneur if a public authority determines that they submitted a false declaration when applying for funds?
The authority may decide to terminate the agreement and demand the return of the received funding. However, if the differences in documentation are purely technical and do not mislead the authority as to the essence of the matter, such allegations are unfounded. The beneficiary’s credibility is not undermined by incidental errors that have no impact on the achievement of the project’s objective.
Can problems with ZUS contribution settlements after the introduction of the Polish Deal be considered grounds for sanctions?
No, widespread problems of entrepreneurs with settlements and frequent automatic corrections in the ZUS system may contribute to the occurrence of technical errors. These are recognized as unintentional and incidental, which does not authorize the authority to take unilateral action of an administrative nature. Such doubts should be clarified through dialogue, not through the imposition of severe financial sanctions.
What harmful business effects can be avoided by effectively defending against a demand for the return of funding?
Effective defense allows avoiding the suspension of research, reduction of employment and inhibition of technological development. Avoiding the return of funds also protects against destabilization of operational activities and loss of jobs. This allows the entrepreneur to continue the implementation of a key research and development project without unjustified interruptions.
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HWW Hewelt Wojnowski Lindner i Wspólnicy is a Warsaw law firm advising businesses and public entities. We combine experience in commercial law, energy, tax, data protection and litigation to deliver solutions tailored to our clients’ business realities.
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