The peculiarities of execution of monetary obligations denominated in foreign currency in Poland

The monetary obligations (e.g. payment for goods (works, services), compensation for damages, return of unjust enrichment) to be performed in Poland may be denominated and performed (paid) in foreign currency. The relevant provisions derive from Article 353-1 and Article 358 § 1 of the Polish Civil Code (Kodeks cywilny, or k.c.).

These provisions apply regardless of the parties involved (natural or legal persons) and tax residency of such parties.

At the same time, Art. 358 § 1 of k.c. entitles the debtor to fulfill his monetary obligation denominated in a foreign currency in the national currency of Poland - Polish zloty (PLN). The debtor may exercise this right unlessa rule of law, a court decision, a contract or other legal act reserves the performance of the obligation exclusively in a foreign currency.

As a general rule, in such a case, the pecuniary sum denominated in a foreign currency shall be calculated into PLN according to the average exchange rate announced by the National Bank of Poland (Narodowy Bank Polski, or NBP) on the day of the obligation’s maturity (Art. 358 § 2 of k.c.).

However, there are several exceptions to this rule:
  1. If the rule of law provides for a particular exchange rate or procedure of the foreign currency calculation into PLN, such rate or procedure shall apply. 

    For example, pursuant to Art. 6 of the Consumer Credit Act (Ustawa o kredycie konsumenckim, or UoKiK), the value of a consumer credit granted in a foreign currency shall be calculated into PLN according to the average exchange rate announced by NBP on the last day of the quarter preceding the date of the credit contract conclusion.

  2. If the contract provides for a particular exchange rate or procedure of the foreign currency calculation into PLN, such rate or procedure shall apply. Thus, the parties are entitled to stipulate the terms and conditions for the fulfillment of a monetary obligation denominated in a foreign currency without taking the general rule into account. 

    For example, the contract may provide that the cost of goods (works, services) denominated in a foreign currency shall be paid in PLN according to: 

    1) the average exchange rate announced by NBP on the day of the contract conclusion; or

    2) the average exchange rate announced by a certain bank (PKO Bank, Bank Pekao, Santander Bank, etc.) on a certain date.

  3. If the monetary obligation arises from a court decision, the exchange rate or procedure of the foreign currency calculation into PLN provided for by such court decision shall apply.

    For example, the court decision on recovery of unjust enrichment in foreign currency may stipulate that the execution of such court decision shall be made in PLN according to the average exchange rate announced by NBP on the day such decision was made or on the day it entered into legal force.

In the event that neither  a rule of law, nor a court decision, nor a contract, nor other legal act determine the particular exchange rate or the procedure of foreign currency calculation into PLN, there are two additional exceptions to the general rule: 

1. If the debtor delays in performance, the creditor has the right to demand the performance of the monetary obligation in PLN according to the average exchange rate announced by  NBP on the day of the actual payment (Art. 358 § 3 of k.c.).

NB: In this case, the right to choose a currency of performance of the monetary obligation denominated in a foreign currency belongs exclusively to the debtor (both in case of proper performance of the obligation and in case of its delay or failure to perform). The creditor is not entitled to demand the performance of a monetary obligation denominated in a foreign currency from the debtor in PLN, unless the debtor himself has chosen this method of payment.

However, if the debtor delays or fails to perform his monetary obligation and chooses to pay it in PLN, the creditor has the right to choose the exchange rate between the options provided by Art. 358 § 2 and Art. 358 of k.c.).

This position is supported by the case law of the Supreme Court of Poland. These rules provide for a balance between maintaining the stability of the Polish national currency and the interests of the parties of the obligation.

2. If a monetary obligation is enforced by the court decision, the court, when issuing a writ of execution, may oblige the enforcement officer to convert the awarded amount into PLN according to the average exchange rate announced by NBP on the day when a money allocation plan is made or, when no such plan is made - on the day of payment of the amount to the creditor (Art. 783 § 1, Art. 798-1 § 1, Art. 1024 § 1 of the Polish Code of Civil Procedure (Kodeks postępowania cywilnego, or k.p.c.)).

Thus, if the subject matter of a monetary obligation does not directly require the debtor to perform it in foreign currency, the performance of such obligation in PLN in the meaning of of Art 354 § 1 of k.c. shall be deemed proper.
Therefore, when doing business in Poland, it should be taken into account that the creditor is not entitled to refuse the acceptance of such a way of the monetary obligations performance.

Thus, please, note that detailed elaboration of the terms of payment of pecuniary sum denominated in foreign currency is important at the very stage of contract negotiation.

If you have any questions, they can be addressed to REVERA Polska Associate Pavel Manoilau (p.manoilau@revera.legal).


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