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Warsaw Court of Appeal judgment dated 24 July 2014 Case No. I ACa 154/14

1. The fact that two arbitrators, constituting a majority of the panel, had already signed drafts of the awards was certainly not valid grounds for the presiding arbitrator to refuse to continue deliberations over the awards. This was not equivalent to the act of voting, not to mention equivalent to deliberations on the resolution and the grounds for the resolution. Refusal to continue the deliberations in order to discuss the comments means that it cannot be said that the deliberations were completed and voting was held on the awards. … As pointed out in the legal literature, the list of examples of violations with respect to regulations on voting, removal of an arbitrator and the award which were set forth in Civil Procedure Code Art. 712 §1(3) (in force through 16 October 2005) were not expressly carried over to the wording of Civil Procedure Code Art. 1206 §1(4). There is no doubt, however, that a violation of these rules should generally be treated as a violation of fundamental rules of procedure.

2. Ignoring evidence offered by a party because the arbitration court found the evidence to be unnecessary will not qualify as depriving the party of the ability to present a defence. Examination by the state court of whether the arbitration court correctly found such evidence to be unnecessary would constitute impermissible encroachment into the merits of the case. If the arbitration court ignored a certain portion of the defence presented by the party, while including in the grounds for the award a substantive explanation of the reasons it found the defence to be irrelevant, then the party’s allegation with respect to ignoring its defence is in reality directed against the substantive defence of the dispute and as such is impermissible.

Publication date: 24-07-2014 | Case no.: I ACa 154/14

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

id: 20389

Supreme Court of Poland judgment dated 15 May 2014 Case No. II CSK 557/13

1. The issue of the consistency of the resolution by the arbitration court with the determined state of facts is beyond cassation review in connection with Civil Procedure Code Art. 3983 §3.

2. The arbitration court’s violation of the substantive law governing the case, which generally is connected with Civil Procedure Code Art. 1194 §1, is subject to review by the state court considering a petition to set aside an arbitration award only in terms of application of the public policy clause—at the court’s own initiative or on the basis of an allegation in the petition.

3. The circumstances separately listed in Civil Procedure Code Art. 1206 §1 as grounds for setting aside an arbitration award, proof of which lies primarily in the interests of the party, are excluded from the scope of application of the public policy clause.

4. The arbitration court’s conduct of the proceeding ignoring evidence offered by a party may justify an allegation of violation of Civil Procedure Code Art. 1183 if the evidence was necessary to the resolution of the case.

5. If the evidence raised by the party was ignored as a result of the arbitration court’s interpretation of substantive law, the mere fact that the interpretation may be regarded as erroneous cannot justify granting a petition to set aside the award unless the award also violates fundamental principles of the legal order.

6. The arbitration court’s application of regulations on the limitations period or preclusion may not be regarded as a violation of fundamental principles of the legal order even if this occurred on the basis of an erroneous interpretation of the regulations.

Publication date: 15-05-2014 | Case no.: II CSK 557/13

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

id: 20267

Katowice Appellate Court order dated 8 May 2014 Case No. V ACz 343/14

1. Clause 20.8 of the [FIDIC Conditions of Contract for Plant and Design-Build] could apply in all instances where the parties did not decide for whatever reason to submit a dispute to the Dispute Adjudication Board. This conclusion is also justified by the placement of this provision. After detailed provisions concerning dispute resolution, at the end of the conditions of contract the parties decided to include a kind of savings clause maintaining the arbitration clause
in force regardless of whether the procedures provided for earlier were followed or not.

2. The argument that the arbitration clause gave the party initiating the proceeding the exclusive choice of which court the dispute should be resolved by should not be upheld.

3. The court of appeal did not share the view that the defence [of the arbitration clause] could be asserted at the latest at the stage of the dispute adjudication procedure conducted between the parties.

Publication date: 08-05-2014 | Case no.: V ACz 343/14

Key issues: arbitration agreement, jurisdiction of arbitral tribunal

id: 20148

Kraków Court of Appeal order dated 10 March 2014 Case No. I ACz 315/14

1. The wording of Civil Procedure Code Art. 1215 §2 leaves no doubt that it applies only to an award issued by an arbitration court abroad or a settlement concluded before such court.

2. The mere fact that a party belongs to the employers’ organization where the arbitration court operates is not grounds for finding the arbitration agreement to be invalid.

Publication date: 10-03-2014 | Case no.: I ACz 315/14

Key issues: arbitration agreement, recognition and enforcement of domestic arbitration award

id: 20411

Katowice Court of Appeal order dated 7 March 2014 Case No. I ACz 121/14

1. The regulations of Title III, Part Five, of the Civil Procedure Code, concerning arbitration, clearly adopt the principle of the priority of the mutual intent of the parties as to the composition of the arbitral tribunal and the manner of appointment of the arbitrators and the presiding arbitrator.

2. Appointment of the presiding arbitrator by the arbitrators may occur after the end of the one-month period following their appointment provided in the act, but before consideration of the application by the state court. … Because the basis for the Civil Procedure Code regulations concerning arbitration is to award priority to the intent of the parties, it would be groundless, irrational and contrary to a purposive interpretation of these regulations to deny the parties the right to decide for themselves on the composition of the arbitral tribunal solely because a court case is already pending concerning this—prior to issuance of a judicial ruling. The one-month period under Civil Procedure Code Art. 1171 §2 should be regarded as establishing the right of a party to file an application to the state court for appointment of an arbitrator or presiding arbitrator, and not as a preclusive period after which the parties lose the right to decide for themselves on whom to appoint as members of the arbitral tribunal.

Publication date: 07-03-2014 | Case no.: I ACz 121/14

Key issues: arbitration procedure, arbitrator

id: 20412

Polish Supreme Court judgment dated 13 February 2014 Case No. V CSK 45/13

1. Application by the arbitration court of the substantive law applicable in the case is subject to review by the common court only insofar as required by the evaluation of the arbitration award, made by the court on its initiative, under the public policy clause set forth in Civil Procedure Code Art. 1206 §2(2), in terms of the award’s possible inconsistency with fundamental principles of the Polish legal system.

2. Alongside the principles of freedom of contract and the enforceability of contracts, the fundamental principles of the Polish legal system also include principles setting the boundaries of the freedom of contract and, in consequence, the limits of application of the principle of enforceability of contracts. These are more specifically the principle of business freedom, the principle of contractual fairness, and the principle of the compensatory nature of liability in damages, interpreted in compliance with the constitutional requirement of proportionality (Constitution Art. 31(3)), opposing inclusion in contracts of monetary consideration as a sanction for violation of an obligation in an amount far removed from the dimension of the loss, so that it becomes primarily a quasi-penal measure and leads to enrichment of the other party.

3. The reduction of the agreed contractual penalty by the arbitration court did not display the features of an arbitrary limitation of the legal consequences of providing for the contractual penalty, but fell within the bounds of statutory authority.

4. Any irregularities in application of Civil Code Art. 484 §2 by the arbitration court not resulting in the inconsistency of the award issued by it with the fundamental principles of the legal system could not be relevant in proceedings to set aside the award.

Publication date: 13-02-2014 | Case no.: V CSK 45/13

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

id: 20381

Gdańsk Appellate Court order dated 11 February 2014 Case No. I ACz 1475/13

1. Because the [New York] Convention exhaustively governs the grounds for recognition and enforcement of a foreign arbitration award (Art. V of the Convention), the Polish court may not resort to Art. 1215 § 2 in connection with Art. 1214 § 3 (2) of the Civil Procedure Code.

2. The arbitrator’s and counsel’s membership in the same barristers’ chambers does not automatically constitute a source of a conflict of interest but should be considered on a case-by-case basis.

3. In a proceeding for enforcement of a foreign arbitration award, the public policy clause cannot take the place of the procedure for appointment of an arbitrator which the party to the arbitration proceeding declined to follow and which served to reduce the risk of abuse of non-meritorious objections concerning the independence and impartiality of the arbitrator after the completion of the arbitration proceeding.

Publication date: 11-02-2014 | Case no.: I ACz 1475/13

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

id: 20190

Polish Supreme Court judgment dated 6 February 2014 Case No. I CSK 191/13

The state court hearing a petition to set aside an arbitration award may consider whether in the specific case there were valid grounds justifying a departure [by the arbitration court] from the rule of being bound by a legally final judgment, and reference to the circumstances permitting reopening of proceedings before a state court should be helpful in this respect. … From the point of view of the grounds for reopening proceedings, there is nothing preventing new factual circumstances from being disclosed as a result of actions conducted by an expert in a different case, after the end of the proceeding that would be reopened. It is essential that they be circumstances that already existed during the course of the completed proceeding.

Publication date: 06-02-2014 | Case no.: I CSK 191/13

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

id: 20384

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