Conotoxia sp. z o.o. is applying to the Voivodeship Administrative Court to suspend the Polish Financial Supervision Authority's (KNF) decision. The Company calls for the case to be reviewed as soon as possible and points out that, due to the KNF's actions, it will have to terminate more than 300,000 customer contracts by the end of the year. According to Conotoxia, upholding the decision's enforceability will hurt its users, who will not be able to receive funds as part of their complaints, among other things. The Company also highlights that the Authority's communication negatively affects the activities of its related entities, including Cinkciarz.pl sp. z o.o.
Conotoxia sp. z o.o. filed a motion with the Voivodeship Administrative Court to suspend the implementation of the Authority's decision of 2 October 2024 to revoke the Company's licence to provide payment services as a national payment institution. The Company also appealed for the Court to schedule a hearing immediately. As the letter reads, urgent consideration of the case is necessary as all legal effects of the Authority's decision will come into effect on 31 December 2024. In Conotoxia's view, processing the motion to suspend implementation of the decision after that date would mean that the Company's right to seek interim protection under the de facto rules would be a sham.
'The Company is obliged to terminate all legal relationships arising from all of the Company's payment services contracts by 31 December 2024. This means more than 314,000 legal relationships with payment account holders must be terminated,' the letter reads.
According to Conotoxia, the decision taken by the Authority may lead to irreparable damage to the Company's customers and, as a result, have the exact opposite effect to that intended. Instead of ensuring the stability of the market and the users' safety, the KNF's decision may lead to significant disruptions and delays in providing Conotoxia's services to customers. In the Company's view, the only way to minimise this risk and rectify the mistakes made in the Authority's actions is to suspend the enforcement of the decision until the Authority itself or the Court makes a substantive decision.
In its application, the Company indicates that the entry into force of the bans on accepting deposits or transfers contained in the KNF's decision results in a range of negative consequences for customers' interests. These may involve, among other things, the necessity to refuse to accept deposits that are beneficial to users, e.g. on account of accepted complaints or chargebacks, the necessity to refuse to accept deposits for customers who receive refunds on account of withdrawal from agreements concluded remotely paid for using the Company's services, or the necessity to refuse to accept deposits that were initiated by the user even before the decision had its effect, but which topped up Conotoxia's accounts as a supplier after that date due to the time of the transaction.
'The consequence of damage to the Company's customers will be claims for damages directed against the Company. This will result in significant damage to the Company. If substantial damage is to be understood as such damage that cannot be compensated by the subsequent return of the fulfilled or enforced service, nor will it be possible to restore the thing to its original state, then the damages paid by the Company to the customers will fall into this category. For there is no question of the return of the payment, nor will it be possible to restore the thing to its original state. In addition, the legal effects that will occur during the execution of the decision will result in a significant or permanent change in reality. The return to the previous state of affairs in such a case will not take place or can only take place after a longer period or with a relatively large expenditure of effort and resources,' we read in the application to the Court.
In its application, the Company also notes that the Authority's decision, as well as the 'unofficial' information flowing from the Authority to the media, may have a severe impact on the activities carried out by other entities related to Conotoxia, in particular Cinkciarz.pl sp. z o.o., which has been acting as an agent for Conotoxia. 'Such enunciations against the backdrop of the decision also lead to significant damage to the Company or cause effects that are difficult to reverse. They may undermine the search for an investor whose support would enable further development of the Company. The Company is in advanced talks with international investment funds in this regard. However, untrue information or even allegations on the grounds of the decision further destabilise the Company's operations and intensify unjustified market panic. To make matters worse, they also significantly impede the Company's owner's ability to negotiate with potential investors with whom discussions are underway to raise funds for the Company's further development and expansion,' indicates Conotoxia.
Conotoxia sp. z o.o. continues to declare that it is taking and will continue to take all measures to stop the effects of the decision taken by the KNF and to withdraw it from the market. In the Company's view, the actions taken by the Authority in its case carry the risk of causing negative consequences for users of the services provided by Conotoxia.