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Polish Supreme Court judgment dated 20 January 2016 Case No. IV CSK 282/15

1. Accepting that an arbitration award does not have binding force or res judicata effect would totally undermine the purpose for the existence of arbitration.

2. Pursuant to Civil Procedure Code Art. 1212 §1, the state court is bound, under the rules set forth in Civil Procedure Code Art. 365, by a legally final and enforceable arbitration award, which also has res judicata effect in the respect indicated in Civil Procedure Code Art. 366.

3. Under Civil Procedure Code Art. 365, both the court and the parties are bound by a legally final and enforceable arbitration award issued in the case pending with their participation. This binding force means that such award is of a preclusive nature in another case between the same parties if the specific relationship exists between the award and the subsequently pending case consisting in the legally final prior ruling impacting the resolution of the pending case.

Publication date: 20-01-2016 | Case no.: IV CSK 282/15

Key issues: arbitration award

id: 20415

Polish Supreme Court judgment dated 4 December 2015 Case No. I CSK 26/15

The concept of “public policy” is included in numerous provisions of Polish public law. This concept under the New York Convention corresponds to the concept of “fundamental principles of the legal order” included in a dozen or more provisions of Polish law. Fundamental principles of the legal order constituting grounds for evaluating an arbitration award should be understood to mean not only constitutional norms, but also the principal norms in specific fields of law.

Publication date: 04-12-2015 | Case no.: I CSK 26/15

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

id: 20408

Polish Supreme Court judgment Dated 29 October 2015 Case No. I CSK 922/14

Examination of the case with respect to the grounds for setting aside an award under Civil Procedure Code Art. 1206 §2(2) may not proceed beyond aggravated violations of law. This position results directly from the wording of this provision, which authorizes the state court to set aside an arbitration award if it finds that it is contrary to fundamental principles of the legal order of the Republic of Poland, and not if it is inconsistent with just any regulation in force in that system.

Publication date: 29-10-2015 | Case no.: I CSK 922/14

Key issues: petition to set aside arbitration award

id: 20409

Warsaw Court of Appeal judgment dated 9 October 2015 Case No. I ACa 2048/14

1. An arbitration clause included in an agreement of the parties cannot be a limitation on exercise of a subjective right. Such a clause has a different purpose; if the relevant objection is raised, it excludes the possibility of pursuing a claim covered by the clause before the state court. An arbitration clause aims at exerting procedural effects, preventing resolution of the dispute by the state court. It does not automatically carry over to a proceeding to defeat execution, as that does not serve to pursue a claim. It is a claim to establish a right.

2. Civil Code Art. 498 does not contain a requirement that a claim be undisputed or that the claim presented for setoff be undoubted as to its existence and easy to demonstrate. All the more, there are no grounds for requiring that it be reduced to a judgment, including an arbitration award.

Publication date: 09-10-2015 | Case no.: I ACa 2048/14

Key issues: arbitration agreement

id: 20421

Warsaw Court of Appeal judgment dated 18 June 2015 Case No. I ACa 1822/14

1. An arbitration clause, which is an agreement to submit a dispute to an arbitration court for resolution, may be limited in time; that is, it may be in force only until a certain time, at the end of which it ceases to be in force; it may also be made under a condition applicable to the clause itself or the manner of proceeding and resolution by the arbitral tribunal.

2. Civil Procedure Code Art. 1168 governs situations in which the arbitration clause may cease to be in force (if the parties have not agreed on other legal consequences of events covered by the clause). The list set forth in this provision is therefore only exemplary, and the parties may also indicate other situations which will result in expiration (loss of force) of the arbitration clause. This is not changed by the fact that the current law does not regulate the loss of force of an arbitration clause in a situation where the time agreed by the parties in which the arbitral tribunal was required to issue an award expired, because the parties can provide otherwise. In the case considered here, the contractual specification of the deadline for completion of the proceeding before the arbitral tribunal with an award exerts the effect of expiration of the arbitration clause. Therefore this is not an instructive deadline whose only purpose was to encourage all of the participants in the arbitration proceeding, including also the arbitral tribunal, to seek a quick and effective resolution of the dispute.

3. Even when specifying its own rules for proceeding before the arbitral tribunal, the arbitral tribunal is not authorized to modify the mutual position of the parties with respect to the deadline set by them for resolution of the case. Such modification may be made by the parties themselves, but not by the arbitral tribunal.

4. In the event of doubt with respect to the scope of the arbitration clause, a restrictive interpretation should prevail. In interpreting the arbitration clause, it is not permissible to employ any presumptions which would indicate broader application of the arbitration clause. The declarations of will in the arbitration clause may not be supplemented by way of interpretation to include further external elements, events or occurrences.

Publication date: 18-06-2015 | Case no.: I ACa 1822/14

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

id: 20401

Supreme Court of Poland order dated 28 May 2015 Case No. III CZ 20/15

1. A judicial proceeding examining an allegation of the lack of jurisdiction of an arbitration court is an incidental proceeding, not concerning the merits of the case but only a preliminary and incidental issue. Pursuant to Civil Procedure Code Art. 1080 §3, fourth sentence, Civil Procedure Code Art. 1207 applies as relevant to such proceeding, which means that the judicial proceeding examining the allegation of lack of jurisdiction of an arbitration court is conducted in accordance with the regulations of Book One, Part One, i.e. the regulations governing trials.

2. A cassation appeal lies only against judgments of the court of second instance ending the proceeding in the case and against orders of the court of second instance on dismissal of the statement of claim or discontinuance of the proceeding, if they end the proceeding in the case. There is no doubt that an order of the court of second instance denying an interlocutory appeal against an order of the court of first instance overruling an allegation of lack of jurisdiction of an arbitration court is not one of these rulings, and thus a cassation appeal will not lie against such an order.

3. The impermissibility of a cassation appeal against an order of the court of second instance issued pursuant to Civil Procedure Code Art. 1180 §3, fifth sentence, does not limit in any respect the party’s right to a fair trial.

Publication date: 28-05-2015 | Case no.: III CZ 20/15

Key issues: arbitrability of dispute

id: 20397

Judgment of the Court of Justice of 13 May 2015, Gazprom

Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as not precluding a court of a Member State from recognising and enforcing, or from refusing to recognise and enforce, an arbitral award prohibiting a party from bringing certain claims before a court of that Member State, since that regulation does not govern the recognition and enforcement, in a Member State, of an arbitral award issued by an arbitral tribunal in another Member State.

Publication date: 13-05-2015 | Case no.: C-536/13

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

id: 20392

Warsaw Court of Appeal judgment dated 7 May 2015 Case I ACa 1557/14

In light of the formalized nature of proceedings on a petition to set aside an arbitration award, as expressed in the exhaustive list of grounds for the petition and the fact that the court is bound by the grounds asserted in the petition, the mere fact that the bounds of the petition extend to the entire arbitration award is insufficient to consider during the appellate proceeding an allegation that was not asserted in the petition.  

It is accepted that an arbitration award is subject to being set aside under the public policy clause if an infringement of substantive law by the arbitration court leads to consequences irreconcilable with the fundamental principles of the Polish legal system, that is, effects that are plainly and grossly contrary to such principles or any one of them.

The principle of the freedom of economic activity is one of the fundamental principles of the Polish legal system.

Publication date: 07-05-2015 | Case no.: I ACa 1557/14

Key issues: petition to set aside arbitration award

id: 20398

Warsaw Court of Appeal order dated 31 March 2015 Case No. I ACz 358/15

1. Rulings of arbitration courts, like rulings of foreign courts, may have content departing from the requirements imposed on such domestic rulings by Polish law.

2. The absence of an express regulation with respect to adjustment of arbitration rulings does not exclude such adjustment if as a result of an indubitable interpretation of the arbitration ruling it is possible to conduct an interpretation of the foreign writ so that it would exert the same effects as a domestic ruling by indentifying the relief and its scope.

2. As Art. 783 §1 of the Civil Procedure Code provides for the possibility of including in the enforcement clause, when needed, information concerning identification of the relief subject to execution and the scope of execution, this means that the possibility of the court making an interpretation of a writ of execution in the form of a ruling of an arbitration court is not excluded if it involves only identification of the relief and its scope.

3. Only in a situation where making an objective interpretation is not possible should the application be denied, because issuance of an enforcement order which the execution authorities cannot execute would conflict with public order. Interpretation does not consist of issuing the court’s own ruling, replacing or amending the ruling of the arbitration court, but should only display or make more understandable the intention of the arbitration court already expressed in the ruling—even if it is set forth imperfectly and inadequately defined for purposes of its enforcement—and in this respect help give effect to that intention.

4. It is incorrect to refuse to issue an enforcement clause solely because the award somewhat less precisely describes the scope of the parties’ settlements with respect to the costs of the proceeding.

Publication date: 31-03-2015 | Case no.: I ACz 358/15

Key issues: costs of arbitration, recognition and enforcement of foreign arbitration award

id: 20428

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