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Order of the Supreme Court of Poland dated 27 March 2019 Case No. V CSK 107/18

1. The Court of Appeal shall rule on the enforcement of an arbitration award using provisions on appeal (Art. 12131 of the Polish Civil Procedure Code) and an order of the court of the second instance on enforcement of an arbitral award issued abroad shall be subject to a cassation appeal (Art. 1215 § 3 of the PCPC).

2. An application for declaration of enforceability in the form of granting of an enforcement clause to an arbitration award may be filed by a legal successor of a beneficiary of the arbitration award, if the beneficiary for the first time launches the procedure of incorporation of such an award to the domestic legal order (…). Jurisdiction of the court ruling in such a case is extended to include examination of the prerequisites from Art. 1214 § 3 and 1215 § 2 of the Polish Civil Procedure Code and legal succession (Art. 788 of the PCPC).

3. Article 788 of the Polish Civil Procedure Code applies to both court and out-of-court executive titles, including an arbitration awards which, after being declared enforceable by a court, have the same legal validity as a state court judgment (Art. 1212 § 1 of the Polish Civil Procedure Code).

4. [A]rbitration awards can be declared enforceable only one time.

5. Arbitration award is not an executive title (Art. 777 § 1 of the Polish Civil Procedure Code (…)). When a court declares it enforceable, such an award has the same legal validity as a court judgment (Art. 1212 § 1 of the PCPC) and becomes a writ of enforcement (Art. 1214 § 2 of the PCPC). An arbitration award which has been declared enforceable shall have such binding power as court judgments in force (Art. 365 of the PCPC) and shall have the force of res iudicata (Art. 366 of the PCPC). Such a writ of enforcement may be granted an enforcement clause as a result of a transfer of rights (Art. 788 of the PCPC) provided that the applicant is a legal successor of the person who obtained the writ of enforcement and the applicant proves legal succession with an official document or with a private document with an officially certified signature.

6. Neither legitimacy of a claim nor an obligation of a debtor resulting from an execution title to provide is not examined in the proceedings concerning enforcement of a foreign arbitration award (…).

Publication date: 27-03-2019 | Case no.: V CSK 107/18

Key issues: arbitration award, New York Convention, recognition and enforcement of foreign arbitration award

id: 20527

Supreme Court of Poland order dated 21 March 2019 Case No. II CSK 65/18

1. [T]he reasons for refusal of recognition or enforcement of a foreign arbitration award, referred to in Art. V (1) of the New York Convention, are taken into account only upon request of a party seeking refusal of recognition or enforcement of an award. This follows expressly from the wording of the New York Convention (…).

2. [I]t is impossible to assume that a simple reference to the circumstances referred to in Art. V (1) of the New York Convention, considered only at the request of a party could be decisive for recognition or enforcement of an award being in contradiction to the public policy clause, i.e. the circumstance considered ex officio in the light of Art. V (2) letter b of the New York Convention.   

3. All persons who participated in the foreign proceedings as a party or as a participant take part in the proceedings for recognition of a foreign arbitration award, and an exception to this rule can be only accepted when an application for recognition of a foreign award concerns a part of the award which does not apply to all parties or participants. Despite a change of the provisions regulating recognition of foreign arbitration awards, it needs to be considered that the stance of the Polish Supreme Court presented in the aforementioned ruling [I CSK 330/06] remains valid.

Publication date: 21-03-2019 | Case no.: II CSK 65/18

Key issues: New York Convention, recognition and enforcement of foreign arbitration award

id: 20539

Polish Supreme Court judgment dated 28 February 2019 Case No. V CSK 63/18

Although one cannot exclude the admissibility of modification of the Rules of Arbitration by the parties, it needs to be assumed that in this respect the claimant and the respondent have not made any modifications. It cannot be assumed that such modifications resulted from the fact that the sole arbitrator preferred – by issuing procedural orders – the use of opinions of private experts appointed by each of the parties, since these orders could not modify the Rules of Arbitration and none of the parties understood them that way (…).

Publication date: 28-02-2019 | Case no.: V CSK 63/18

Key issues: arbitration procedure, arbitrator

id: 20535

Polish Supreme Court judgment dated 8 February 2019 Case No. I CSK 757/17

1. By entering into an arbitration agreement, the parties revoke the competence of state courts to adjudicate the dispute, entrusting it to a body acting as per the will of the parties. Consequently, the state court control over an arbitration award, as much as it is necessary and statutorily guaranteed, is not instance control and by its nature must be incomplete, limited to the most far-reaching shortcomings and failures of arbitration, which are relevant not only from the point of view of the parties, but also of the general interest.

2. Given the vital role of the principle of the court being bound by the claim (…), it is deemed that the case in which an arbitral tribunal rules ultra petita ad aliu should not revoke the control of the state court. This assumption should be considered legitimate also in the light of the Polish Civil Procedure Code, with the proviso that the character of arbitration may justify an approach to the assessment of the limits of the claim more flexible than in the case of state courts.

3. [A]lthough, Art. 1188 § 1 of the Polish Civil Procedure Code does not indicate obligatory elements of a statement of claim in arbitration proceedings, including the exact wording of the claim (cf. Art. 187 § 1 point 1 of the Polish Civil Procedure Code), nonetheless the necessity to concretise the claim as an element determining the subject matter of arbitration proceedings may be derived indirectly from Art. 1202 first sentence of the Polish Civil Procedure Code; it may also be derived from the rules of procedure agreed upon by the parties or defined in the rules of arbitration.

4. Going beyond the limits of the statement of claim collided not only with the principle of availability which by virtue of its functions and the importance of the freedom of will for the institution of arbitration must be included into the principles of arbitration proceedings (…), but also with the principle of equality of the parties.

5. [S]ince the Arbitration Court ruled on a different claim than the claim advanced, the applicant was deprived of the ability to defend its rights.    

Publication date: 08-02-2019 | Case no.: I CSK 757/17

Key issues: arbitration agreement, arbitration award, arbitration procedure

id: 20538

Polish Supreme Court judgment dated 9 January 2019 Case No. I CSK 743/17

1. The public policy exception (…) is indeterminate, which leaves a court seized of a particular case with a wide range of discretion. If the exception is applied, the question is not whether an arbitration award is consistent with all relevant mandatory rules of the law, but whether it has caused an effect contrary to the fundamental principles of State legal order. Substantive review of arbitration awards is therefore limited to violation of the principles of legal order (…). If parties decide to submit a dispute to arbitration, they need to take these circumstances into account, including also little external control of arbitration awards (…). This does not mean, however, that if a dispute is submitted to arbitration, the parties have to agree to all kinds of procedural and substantive shortcomings of the arbitration tribunal.

2. The fundamental principles of legal order being the basis of assessment of an arbitration award shall be understand not only as constitutional norms, but also as ground rules in particular fields of law (…), and examination of a case in the scope of the grounds for setting aside an award under Art. 1206 § 2 (2) of the Polish Civil Procedure Code shall not go beyond a serious violation of law (…).

3. The public policy exception covers both the fundamental principles of procedural and substantive legal order. Public policy may procedurally be the basis for assessment of an award in two aspects. Firstly, subject to assessment is the compliance of the procedure which led to issue of an arbitration award with the fundamental procedural principles of legal order, and secondly, subject to assessment are the effects of an award from the point of view of their compliance with the procedural legal order, i.e. whether they are compatible with the procedural law system (…).  

4. Compliance or non-compliance of an arbitration award with the fundamental principles of legal order is determined by the wording thereof; it is however not allowed to make such an assessment on the basis of facts and evidence unknown to the arbitration tribunal.

5. It cannot be (…) excluded in advance that due to the consequences for the appealing party, an award adjudicating interest from a different date than the date resulting from the terms of the contract and relevant legal regulations will be in breach of the fundamental principles of legal order, especially if the time lag is significant (…).   

Publication date: 09-01-2019 | Case no.: I CSK 743/17

Key issues: petition to set aside arbitration award

id: 20537

Order of the Supreme Court of Poland dated 28 November 2018 Case No. III CSK 406/16

1. [A]n appeal against a court order concerning recognition of a foreign arbitration award is decided at a hearing in camera.

2. [A]n application concerning enforcement of a foreign arbitration award by granting of an enforcement clause, as well as an appeal against this order shall be decided by courts at hearings in camera (…).

3. [I]t shall be assumed that when Art. 1215 § 1 of the PCPC indicates the court which “rules after conducting a hearing”, this means, similarly as in the case of the preceding Art. 1214 § 1 of the PCPC, only the court of first instance. This conclusion is supported by the provisions of Art. 1158 § 1 of the PCPC.

4. In view of (…) the thesis that a party which entered into a dispute before a foreign arbitral tribunal cannot claim in the proceedings for enforcement of the award of this foreign arbitral tribunal that an arbitration agreement does not exist, it should be noted, above all, that the Court of second instance (…) has failed to apply this sanction to the participant of the proceedings. Nevertheless, it must be taken into consideration that the doctrine and case law (…) approve of such a position, although the New York Convention does not provide for the preclusion of a pleading of an arbitration agreement. In its reasoning it is emphasized that the essence of the New York Convention is to make the parties act in accordance with the principles of good faith and with the public decency, and thus the parties are prohibited from acting contrary to these principles. This interpretation makes it impossible to take disloyal actions against co-participants and the arbitral tribunal. However, it should be born in mind at all times that the presented view concerns preclusion of pleadings which the application’s opponent had failed to raise in the deliberative proceedings before the arbitral tribunal. If the pleading of non-existence or invalidity of an arbitration agreement was raised before a foreign arbitral tribunal, a party to the proceedings may still effectively invoke this pleading in the proceedings concerning enforcement of the arbitration award in Poland. This opportunity is not taken away, if the arbitral award has not been challenged before the courts of its origin, which is optional in the light of the New York Convention.

5. Although this does not follow directly from the wording of Art. V (1) letter a in fine of the New York Convention, this provision shall be applied not only if an arbitration agreement is concluded, but is invalid. This provision shall also be applied in the situation when there is no arbitration agreement (no arbitration agreement has been concluded).

6. [I]t is assumed that a ‘written form’ includes also documents exchanged by means of distance communication. Although the provisions of the New York Convention done in 1958 do not expressly indicate other forms of distance communication, a teleprinter, a telefax and forms of electronic communication, including e-mails, are treated in the doctrine equally to a telegram, if they result in automatic written record of the transmitted text. An electronic signature is not required to exchange electronic correspondence. It is permissible to conclude an arbitration agreement also in the ‘ordinary’ electronic form, which does not require an electronic signature verifiable by a valid qualified certificate (…).

7. It is impossible to conclude an arbitration agreement either tacitly or implicitly, as the written form is required.

8. An arbitration agreement is not a provision of an obligatory agreement, even if this agreement has the form of a clause in the ‘main’ contract, and therefore its effectiveness is considered autonomously.

9. [A]ssessment of the validity and efficiency of an authorisation to conclude an arbitration agreement shall be made autonomously, i.e. regardless of the assessment of existence of the entitlement of the attorney-in-fact to perform a legal act which is the source of the legal relation on the basis whereof disputes may be subjected to the competence of the arbitral tribunal.

Publication date: 28-11-2018 | Case no.: III CSK 406/16

Key issues: arbitration agreement, New York Convention, recognition and enforcement of foreign arbitration award

id: 20530

Polish Supreme Court judgment dated 8 November 2018 Case No. II CSK 481/18

Pursuant to Art. 1204 § 2 of the Polish Civil Procedure Code, permanent arbitration courts, and the International Court of Arbitration at the International Chamber of Commerce in P. is such a court, may keep files in their own archives and then they should make them available to courts and other authorities on their demand.

Publication date: 08-11-2018 | Case no.: II CSK 481/18

Key issues: arbitration procedure

id: 20529

Warsaw Court of Appeal judgment dated 27 August 2018 Case No. VII Aga 386/18

1. Under the current legislation, it is assumed that pursuant to Art. 1161 § 1 of the Polish Civil Procedure Code in each case an arbitration agreement is required to refer a dispute to arbitration. An arbitral tribunal to resolve disputes may, in particular be the Sports Arbitral Tribunal at the Polish Olympic Committee established in the Sports Act of 25 June 2010.

2. [B]y stipulating the institution of an arbitral tribunal in the bylaws of a sports association, the parties are assured the possibility to subject an award to judicial review in the form of a petition to set aside an arbitration award. Therefore, it needs to be assumed that a state court may review an arbitration award.

3. [S]ince the lawmaker has not stipulated an express legal ground which would ensure jurisdiction of state courts in case of disputes, there are no grounds to question the ability of arbitral tribunals established by internal bodies of sports organisations to resolve such kind of disputes.

4. Admissibility of referring a dispute to arbitration is contingent upon prior establishment of an arbitral tribunal and conclusion of an effective arbitration agreement in interior regulations, which in the scope of disputes arising from the association relationship may be included in the bylaws. This also applies to Polish sports associations. (…). An arbitration agreement contained in the bylaws of Polish sports associations, sports associations or sports clubs covers only disputes arising out of an association or company relationship. However, an arbitration agreement does not cover disputes between sports clubs and players. (…). It should be added that such an agreement is binding to the limited extent of issues arising from a membership relationship.

5. An arbitration agreement should unequivocally and precisely indicate that the parties covenant to refer specified disputes to arbitration.

Publication date: 27-08-2018 | Case no.: VII AGa 386/18

Key issues: arbitrability of dispute, arbitration agreement, jurisdiction of arbitral tribunal, petition to set aside arbitration award

id: 20544

Judgment of the Warsaw Court of Appeal dated 2 August 2018 Case No. VII AGa 1162/18

1. The scope of a state court’s review and its determinations are limited to allegations raised in a petition to set aside an arbitration award. A state court has the authority only to review whether the reasons for setting aside of an award are present (…) and only in this limited scope the proceedings are similar to the proceedings before a state court of II instance.

2. [I]f a party had the possibility to raise before an arbitral tribunal an allegation of being deprived of the right to protect their rights, but they did not do that, it is inadmissible to raise a plea that the party was deprived of the ability to protect their rights before the arbitral tribunal in view of the party not being actually deprived of the ability to protect their rights.

3. [I]n the proceedings commenced as a result of a petition to set aside an arbitration award, a state court does not examine the arbitral tribunal’s assessment of the accuracy of evidence, the correctness of factual findings or interpretation and application of substantive law. The legitimacy of particular means by way of which an arbitral tribunal has resolved the disputed legal relationship is neither subject to a state court’s assessment (…). The essence of a petition to set aside an arbitration award is to create a control mechanism respecting, on the one hand, separateness and autonomy of arbitration, and on the other hand, preventing non-state courts’ rulings infringing the rule of law from functioning in the legal circulation.

4. Competence of the court hearing a petition to set aside an arbitration award does not – as a matter of principle – include the control of the award’s compliance with substantive law and review of correctness of factual findings, except for ruling based on obviously selective and unreliable examination of evidence.

5. [T]he proceedings concerning a petition to set aside an arbitration award do not result in reconsideration of the merits of the dispute between the parties, but are intended only to verify the applicant’s allegations as to the existence of the grounds raised in the application provided for in Art. 1206 § 1 of the PCPC and assess whether any of the prerequisites provided for in Art. 1206 § 2 of the PCPC exist, whether or not asserted by the applicant.

6. “The public policy clause”, like any general clause, is not precisely defined, which leaves great discretion to the court ruling on a specific case. Nevertheless, on the basis of this clause, review of the constitutive elements of an arbitration award may not take on the dimensions proper for a review of the merits (correctness) of the award. The prohibition of a review of the merits of an award is related to the essence of the application of the public policy clause. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order (…).

7. In the case-law, it is indicated that an infringement, by an arbitral tribunal, of substantive law applicable to the resolved relationship, compliance with which – as a matter of principle – is prescribed in Art. 1194 § 1 of the PCPC, may result in setting aside of an award of this tribunal only when it is connected with an infringement of the fundamental principles of the legal order (…). The primary difference between proceedings commenced by an appeal and proceedings commenced by a petition to set aside an arbitration award is demonstrated by the permitted scope of interference of a state court in the rulings of arbitral tribunals.

Publication date: 02-08-2018 | Case no.: VII AGa 1162/18

Key issues: arbitration procedure, petition to set aside arbitration award

id: 20547

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