What happened is roughly this: in Poland's Constitutional Tribunal (which is as close of an equivalent of US Supreme Court as you can get in a country with a civil law system), the judges are not elected for life, but only for fixed term. As the term of the elected government was coming to an end, so were the terms of 5 of the justices in the Tribunal. However, two of these terms ended within the elected government's term, and three after it ended. As a result, the ruling party (PO) had a clear right to nominate 2 justices, and hardly any right to nominate the other three. It decided to nominate all 5 nevertheless.
The party that won the subsequent election, PiS, refused to recognize any of the 5 justices nominated by PO, and nominated 5 of their own. What happened afterwards you can read in the Wikipedia article.
As far as I can tell, neither of these actions was based on any “loophole”. However, the nature of the rule of law is that it only works as long as everyone plays by the rules. When the government decides it does no longer has to play by the rules, there isn’t much that can be done to oppose them, as they still hold all the power, and are presumed to hold political authority.
The party that won the subsequent election, PiS, refused to recognize any of the 5 justices nominated by PO, and nominated 5 of their own. What happened afterwards you can read in the Wikipedia article.