The Registry Court cognizance in the scope of cancellation of unlawful entry from the National Court Registry – in the context of the Supreme Court resolution, day of 8 December, 2017., file no. III CZP 54/17.

The legal issue arose in case considered by the District Court, which raised serious doubts and pertained to question whether the Registry Court within the frameworks of proceedings defined in Art. 12 Par. 3 of the Act on the National Court Registry on cancellation of the entry due to inadmissible data, is entitled to examine the validity of legal actions, which form the basis of the entry

The District Court when analysing views expressed in doctrine and body of rulings noted that meaning of the term “data inadmissible in view of effective law regulations”, which is defined in Art. 12 Par. 3 of the Act on the National Court Registry is variously interpreted. As regards the Registry Court cognizance specified in Art 12 Par. 3 of the Act on the National Court Registry in the context of possibility to cancel the resolution of business partner’s meeting of capital companies, the District Court emphasized that a belief prevails in literature that this precept does not not give court causes for examining the validity of resolutions of business partner’s meetings and general shareholder’s meetings. Advocates of this standpoint contend that this rule is not applicable to entries based on resolutions of business partner’s meeting of the limited liability company or the general shareholder’s meeting of the joint-stock company if these resolutions were actionable, especially if they were under pain of nullity (Art. 252 and 425) in case when time to challenge them ineffectively elapsed. A distinct stance would result in thwarting the purpose, which underlied the Art. 425 KSH, that is limiting in time possibilities to challenge resolutions. Moreover, the view that court’s consideration for ex officio nullity on expiry of deadlines prescribed for challenge ought to be rejected since the meaning of defined terms in these regulations is completely excluded. Conferring upon the Registry Court of entitlement to multiple changes of their own rulings and to cancel entries would infringe the rule of law and consistency and reliability of entries. When assessing the Registry Court cognizance it is necessary not to lose sight of the fact that the resolution at variance with the agreement or statute is effective until the time of its repealing by the court’s verdict and therefore the Registry Court should not be empowered to cancel resolutions of capital companies’ meetings ex officio, which are in its view conflicting with the act.

The District Court also emphasized that discrepancy  in clarification of the expression “inadmissible data” occurs not only in doctrine, but also occurred in judicial decisions, where two interpretations of this concept. The Supreme Court assumes in some body of rulings that the concept “inadmissible data” should be broadly understood. Register proceedings is of restricted nature and does not benefit settling disputes between registered entities, however its scope is not as narrow as to prevent the Registry Court from examining notions, which decide the legality of entity. Explanation of regulations, which standardise the course of register proceedings must allow for legal presumption of authenticity of entries, which arises from Art. 17 of the Act on the National Court Registry. In that case, the obligation of examining the content of documents appended to petition provided for in Art. 23 Par. 1 of the Act on the National Court Registry also includes the assessment of validity of legal transaction covered by the document, which constitutes the basis of entry; in the event of establishing invalidity of resolutions for the above reason, it is necessary to refuse to enter data based on them, into the register (The Supreme Court ruling, day of 17 September, 2008, III CSK 56/08, resolution, day of 20 January 2010, III CZP 122/09).

In the District Court’s view a different stance was expressed by the Supreme Court in decision, day of 2 December, 2015, IV CSK 99/15, where they espoused a narrow interpretation of the definition “inadmissible data” laid down in Art. 12 Par. 3 of the Act on the National Court Registry. The Supreme Court pointed out in this ruling that the argument of grammar interpretation is in favour of it in the first place; since it is without foundation for identifying this formulation with “data conflicting with law”. Next elaborating on the content of this concept into the Registry Court’s examination of validity of legal transaction, which constitutes the basis of the entry, is not reflected in explicit statutory authorization. Pursuant to Art. 23 of the Act on the National Court Registry, the Registry Court cognizance is limited to examining conformity of documents as regards form and centent with legal regulations, and then does not include the supervision of validity of legal transactions, which form the basis for creating the document.

Bearing in mind jurisdictional discrepancies above, the court examining the case addressed the legal question to the Supreme Court, which was the following:

“Is the Registry Court obliged to examine the validity of legal transactions, which are the basis for entry withinthe frameworks of proceedings laid down in Art. 12 Par. 3 of the Act on the National Court Registry on cancellation of the entry due to inadmissible data?”

In response to the aforesaid legal question, the Supreme Court adopted the resolution on the day of 8th of December, 2017, according to which:

“The Registry Court is not obliged to examine the conformity with the act of resolution of the business partner’s meeting or the general meeting, which constitutes the substantive legal basis of the record made,withinthe frameworks of proceedings laid down in Art. 12 Par. 3 of the Act from day of 20 August, 1997 on the National Court Registry (consolidated text in Journal of Laws from 2017, item 700 as amended) on cancellation of the inadmissible entry due to effective law regulations.”

In the light of the resolution above it is necessary to ascertain that the Supreme Court espoused a narrower understanding of the scope of the Registry Court cognizance with respect to entries already disclosed.