27 April 2020

In our Client’s four cases, in its rulings of December 5, 2019 (case ref. no. – I GSK 199/18, I GSK 194/18, I GSK 398/18 and I GSK 449/18), the Supreme Administrative Court (SAC) recognized the charges raised in the cassation appeals by the Law firm’s managing partner – advocate Michał Sobczyński – ruling that the prescriptive period of the obligation to repay the grant collected from the budget of a local government unit utilized in breach of its purpose, unduly or in an excessive amount, accrues from the end of the year in which the beneficiary received and was supposed to utilize the grant.

The key issue in the foregoing cases was the method of defining the commencement day of the prescriptive period for the repayment of the educational grant that has not been used or has been used unduly. The facts of the case are that the educational grant was collected in 2010, whereas in 2014 it was established that it had been used unduly. The decision on the repayment was made only in 2016. The law firm defended the position favorable for the Client that the obligation to repay the grant had already been time-barred (prescribed) when the 1st instance court was giving its ruling. This charge was based on the assumption that the 5-year prescription period should be computed from the end of the year in which the grant was received by the beneficiary (in the foregoing cases – from December 31, 2010). The Supreme Administrative Court shared this position.

In its rationale for the rulings, the SAC pointed out that the prescriptive period should be closely linked to the nature of the repayable liability. Let alone the peculiarity of the situation where the funds were not used, fully or partially, within a year, the obligation to repay is not within the core nature of the grant which, as to the principle, consists in a non-repayable transfer of public funds from the budget to the beneficiary. Therefore, in the case when the funds allocated are non-due as defined in the act, while the obligation to repay the undue grant arises as of the moment premises occur as specified by law, the obligation to repay should be linked to the day when the funds were received by the beneficiary.

Concurrently, the SAC underlined that in order for the day when the prescriptive period starts to accrue to be defined, the ruling concerning the obligation to repay the grant, is not relevant. Legally effective service of such a ruling is possible only before the prescriptive period lapses.

The position presented by the SAC in the foregoing rulings converges with the latest jurisprudence which standardizes the discrepancies which have occurred to date in terms of computing the prescriptive period. It also represents an effective defense when the repayment of the educational grant is pursued by the entity 5 years after the end of the year in which the beneficiary received the grant and was supposed to utilize it.