Aktueller Bericht Nr. 59 / 2014

Conclusion of a court settlement on Hala Czyżyny in Kraków with the Urban Municipality of Kraków

The Management Board of Budimex SA, in reference to current reports no. 41/2007 of 10 September 2007; no. 22/2009 of 10 March 2009; no. 53/2009 of 16 July 2009; no. 75/2010 of 29 October 2010; and no. 10/2011 of 17 February 2011, announces that at a hearing on 28 July 2014 the Company concluded a court settlement with the Urban Municipality of Kraków under which the Urban Municipality of Kraków committed itself to pay to Budimex SA in Warsaw an amount of PLN 3,451,398.92 within 60 days from concluding the settlement. The above amount includes the principal and interest thereon until the date of the settlement. The parties mutually waved legal costs. The parties shall pay any costs of expert opinions outstanding upon the conclusion of the settlement in half. The parties have waived mutual further claims related to the contract executed by the parties on 20 December 2005 and its dissolution.
History of the case: on 10 March 2009 the Regional Court in Kraków issued a ruling on the case brought by Budimex Dromex SA against the Urban Municipality of Kraków, adjudicating PLN 20,708 thousand with statutory interest thereon since 5 November 2007 to be paid to Budimex Dromex SA and a refund of legal costs of PLN 143 thousand. The lawsuit of Budimex Dromex SA concerned the refund of an amount collected by the Urban Municipality of Kraków on 5 November 2007 from bank guarantees established by Budimex Dromex SA as a performance bond of the contract for the design and execution of a sports and entertainment arena in Kraków-Czyżyny executed on 20 December 2005 between the Consortium of Budimex Dromex SA, Ferrovial Agroman SA and Decathlon SA, and the Urban Municipality of Kraków. The Municipality collected the said amount to satisfy a contractual penalty stipulated in the contract after submitting a statement on rescinding the contract and charging a contractual penalty in connection with that rescission, although the grounds of charging such a penalty had been questioned by Budimex Dromex.
On 15 July 2009 the Court of Appeal in Kraków, as the court of second instance in the case described above, issued a ruling in which it changed the ruling of the court of first instance, adjudicating an amount of PLN 6,903 thousand with statutory interest thereon since 20 November 2007 until the date of payment to be paid by the Urban Municipality of Kraków to Budimex Dromex SA as well as a refund of legal costs of PLN 20 thousand. The Court of Appeal dismissed the appeal of the Urban Municipality of Kraków in the remaining scope and adjudicated PLN 70 thousand to be paid by Budimex Dromex SA to the Municipality on account of a refund of costs of appeal proceedings. Budimex Dromex filed a cassation appeal against the ruling with the Supreme Court.
On 20 October 2010 the Supreme Court recognised the cassation and remanded the case to the Court of Appeal for further action.
By way of a ruling of 17 February 2011, the Court of Appeal in Kraków, re-examining the appeal of the Urban Municipality of Kraków against the ruling of the Regional Court in Kraków of 10 March 2008, revoked the ruling of the Regional Court in Kraków of 10 March 2008 in the part recognising the claim of over PLN 6,903 thousand (i.e. as to the amount of PLN 13,805 thousand), and remanded the case for further action and a decision on legal costs to the Regional Court in Kraków. The case brought by Budimex SA (as the general successor of Budimex Dromex SA) against the Urban Municipality of Kraków for the payment of PLN 20,708 thousand became final in that stage in the scope of the amount of PLN 6,903 thousand with statutory interest thereon calculated since 20 November 2007 having been adjudicated to be paid by the Urban Municipality of Kraków. The remaining elements of the claim are to be re-examined by the District Court in Kraków. The Court admitted evidence from documents and an expert opinion requested by Budimex SA. After an expert opinion had been prepared, the parties took a stance on it in their pleadings. A supplementary expert opinion was drawn up and then an additional supplementary opinion. At a hearing on 14 October 2013 the Court ordered that another opinion be prepared by a new expert.