Report No 8_Learning about withdrawal from contract

The Management Board of Mostostal Warszawa SA informs that on October 23, it received from the Investor - Przedsiębiorstwo Gospodarki Odpadami Sp. z o.o. in Kielce - a declaration about withdrawal from the agreement concluded on 19 July 2012 No. JRP/K-1-0/07/2012 (hereinafter "Agreement") with the Contractor - the consortium of: Mostostal Warszawa S.A. - Leader and Acciona Infraestructuras S.A. - Partner for the implementation of the investment project titled "Design and construction of Waste Disposal Plant for Kielce city and Kielce poviat in Promnik near Kielce", about which the Issuer informed in the current report no. 34/2012 of 20 July 2012.

 

The Investor referred to the Article 491 in conjunction with Article 635 in conjunction with Article 656 of the Civil Code in connection with § 57 and § 73 point 5 of the Agreement as the grounds for withdrawal.

 

At the same time the Issuer informs that it completely disputes the withdrawal from the agreement due to a lack of any grounds, both legal and factual.

 

In the assessment of the Investor, the gross infringement of the Contractor, which constitutes factual grounds for withdrawal from the agreement, is the failure to perform works. However, construction works cannot be performed as there is no final building permit decision for the discussed project task. On 16 March 2015, the Head Inspector of the Building Supervision in Warsaw decided about the invalidity of the building permit decision, which is an objective obstacle preventing performance of the discussed works.

 

Additionally, the Issuer informs that the declaration on withdrawal from the agreement was submitted three calendar days (1 business day) before the expiry of the deadline for the delivery of the payment guarantee by the Investor, as requested by the Contractor according to Article 649(1) of the Civil Code. 

 

The value of the contract was PLN 275,36 million gross, while the advancement of works as of 30 September 2015 was about 80%.

 

The value of the contract exceeds 10% of the value of sale revenues of the Company for the past four financial quarters.

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