Supreme Court resolution
dated 24 February 2005
Case No. III CZP 86/04
Summary by arbitraz.laszczuk.pl:
Aldona K. issued promissory notes to S.A.S. sp. z o.o. to secure performance of a contract wholesaler agreement. The agreement contained a clause calling for arbitration before the Court of Arbitration at the Polish Chamber of Commerce, but the promissory note declaration did not contain an arbitration clause. Andrzej M. guaranteed payment of the promissory notes, but was not a party to the wholesaler agreement. The district court issued an ex parte order for payment to S.A.S. under the promissory notes, against K. and M. jointly and severally. The defendants then filed defences against the order for payment, and the regional court set aside the order for payment on the grounds that the dispute was subject to arbitration.
On appeal, the appellate court filed a certified question with the Supreme Court to determine whether the arbitration clause between the plaintiff and the issuer of the promissory note was effective when the plaintiff brought an action against both the issuer and the guarantor, who was not a party to the arbitration clause. The Supreme Court held that once the underlying contract was before the court, the arbitration clause required the claim to be dismissed against the defendant who was a party to the arbitration clause. The claim could proceed before the state court against the guarantor who was not a party to the arbitration clause.
Excerpts from the text of the court’s ruling:
1. The defence of an arbitration clause concerning the legal relationship between the issuer of a promissory note and the payee is also effective with respect to the issuer of the promissory note when, alongside the issuer of the note, the guarantor of the promissory note, who was not a party to the agreement submitting the dispute for resolution by the arbitration court, is also a defendant.
2. A promissory note obligation may be subject to an arbitration clause.
3. The effect of shifting the dispute onto the general ground of civil law, meaning that the resolution of the dispute requires assessment of the justification of the claim in light of the “underlying relationship” in connection with which the promissory note was issued, does not occur by the mere fact of filing defences to the order for payment. This effect depends on whether the interested party takes the relevant actions, and the court has no duty to act in this respect on its own initiative. The actions taken by the party may consist of the defendant’s assertion of defences to an order for payment with respect to the lack of grounds for the claim pursued based on the underlying relationship, or the plaintiff’s assertion, in the statement of claim or in the proceeding conducted as a result of assertion of defences to the order for payment, of allegations justifying the claim asserted also on the basis of the underlying relationship.
4. In the event of lack of actions by the parties causing the dispute to be shifted to the general ground of civil law, the dispute in the proceeding conducted pursuant to the defences against the order for payment is subject to consideration under the promissory note relationship.
5. A promissory note guarantor may defend against the holder of the note with all defences available to the person for whom he issued the guarantee, but this applies only to substantive defences (Art. 32 of the Promissory Note Law dated 28 April 1936, Journal of Laws Dz.U. 1936 No. 37 item 282), but the defence of an arbitration clause is a procedural defence. Without being a party to the agreement ... containing the arbitration clause, the defendant cannot assert the arbitration clause.
6. Civil Procedure Code Art. 72 §3 cannot be interpreted as a provision that changes the consequences of the lack of procedural grounds, and specifically as eliminating the effectiveness of an arbitration clause. If the clause is effective with respect to one substantive co-party, of any type, but is not effective with respect to the other co-party, the case with respect to the first co-party cannot be considered at all by the state court, and the statement of claim in this respect is subject to dismissal; however, with respect to the other co-party, the case is subject by consideration by the state court.