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Jara Drapala & Partners Wins First Final Polish Judgment Regarding "Stock Exchange Damage"

Jara Drapala & Partners Wins First Final Polish Judgment Regarding "Stock Exchange Damage"


Jara Drapala & Partner has persuaded the Court of Appeal in Warsaw to dismiss an appeal of a judgment by the Regional Court awarding compensation to IT company and firm client Exorigo-Upos sp. z o.o. for "stock exchange damage."

According to JDP, "the dispute arose with respect to acquisition of a minority shareholding in a listed company in 2010. The damage resulted from non-performance by another shareholder (the defendant), who gained the dominant position in the company, of the obligation to announce a tender offer for all other shares and hence buy the minority shareholding held by the claimant."

"The Court of Appeal in Warsaw," the firm reports, "sharing the position presented by JDP attorneys, pointed out to the precedent aspects of the case. In the case-law, there [are] practically no decisions concerning the relationship between the shareholder’s tort and its consequences consisting in a loss suffered by another shareholder, the value of which is calculated on the basis of time-varying parameters (change in stock prices). Also assessment of business decisions made by the shareholder who suffered damage (when to sell shares, what sales strategy to adopt) in the context of the cause-and-effect relationship, predictability of future changes in stock prices and calculation of the damage suffered were important. In the proceedings, an interesting issue emerged, namely potential damage caused to other shareholders who did not participate in the proceedings alongside the claimant."

According to JDP, "it is one of the first judgments in Poland regarding remedy for so called stock exchange damage which may be relevant in similar cases in the future. The judgment is final and non-appealable."

The JDP team was led by Partners Przemysław Drapala and Marcin Chomiuk, and Associate Mateusz Jaworski.

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