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Swedish Court sides with Abris Capital in $171 million award against Poland

Abris Capital Partners Fund I, one of the largest PE funds in CEE, won the award after a Stockholm Chamber of Commerce tribunal determined that Poland had expropriated its investment in FM Bank.

A Swedish appeals court (on 22 Feb 2019) largely upheld an arbitral award worth more than $171 million issued to a Luxembourg investment firm following the alleged forced sale of its shareholding in a Polish bank, rejecting Poland’s jurisdictional arguments based on last year’s Achmea decision.

The Svea Court of Appeal concluded that Poland had waited too long to argue that the underlying arbitration agreement had not been valid under a decision issued last March by the European Court of Justice in a case involving the Dutch insurer Achmea BV, in which the court concluded that arbitration clauses in investment treaties between European Union member states are precluded under EU law.

Nor were the awards invalid, since the underlying dispute was arbitrable and the manner in which the awards were made was not contrary to Swedish public policy, according to a summary of the decision provided by the Swedish law firm Mannheimer Swartling, which represents PL Holdings in the dispute.

The Svea court did, however, set aside a part of the final award regarding approximately €20 million ($22.7 million) in pre-award interest, according to Martin Wallin of Wallin & Partners, part of the legal team representing Poland. The court found that the tribunal had improperly amended the award after a deadline, thereby exceeding its mandate.

The court also concluded that the tribunal had made a procedural error by issuing a partial award without communicating with the parties beforehand, though this error did not warrant setting aside the awards since Poland hadn’t established that the error affected the outcome of the case, according to the summary provided by Mannheimer Swartling.

Wallin noted that the court also took the “unusual” step of leaving the door open for an appeal to the Swedish Supreme Court, though he declined to say whether such an appeal was in the works.

An attorney for PL Holdings declined further comment.

PL Holdings — which is linked through its corporate structure to Abris Capital Partners Fund I, one of the largest private equity funds in Central and Eastern Europe — won the award after a Stockholm Chamber of Commerce tribunal determined that Poland had expropriated its investment in FM Bank PBP Spolka Akcyjna, or FM Bank PBP, according to the award, a copy of which was previously provided to Law360.

The tribunal awarded more than 653.6 million Polish zloty ($171 million) plus interest and €3.5 million ($3.96 million) in costs and fees.

PL Holdings became the sole shareholder of a Polish bank called Polski Bank Przedsiebiorzcosci Spolka Akcyjna, or PBP Bank, in 2012, and a year later it also acquired an interest in a second Polish bank, FM Bank Spolka Akcyjna, or FM Bank. Those two banks were then merged into a new entity, FM Bank PBP, with PL Holdings becoming the 99.59 percent shareholder, according to a previous award issued by the Stockholm Chamber of Commerce tribunal in June 2017, a link to which was provided in a database maintained by the United Nations.

Shortly thereafter, a Polish government entity created in 2006 to supervise the activity of all banks and credit institutions in Poland called Komisja Nadzoru Finanswego, or the KNF, prohibited PL Holdings from exercising its voting rights relating to its holding in FM Bank PBP and ordered the company to sell its shares in the bank.

PL Holdings argued in the arbitration that, among other things, those measures lacked any legal or factual basis and were not made in the interest of any public purpose, according the June 2017 award.

The SCC tribunal was chaired by George A. Bermann and included Julian D. M. Lew and Michael E. Schneider.

Poland is represented by Martin Wallin of Wallin & Partners.

PL Holdings is represented by Robin Oldenstam and Jacob Rosell Svensson of Mannheimer Swartling.

The case is Poland v. PL Holdings SARL in the Svea Court of Appeal. A case number wasn’t immediately available Friday.

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