Polish Supreme Court judgment
dated 21 May 2004
(Case No. III CK 60/03)
Summary by arbitraz.laszczuk.pl:
Timo K. entered in an agreement with production plant N. sp. z o.o. under which he licensed use of technical solutions, knowhow and trade secrets related to installation and operation of a foam breaker. He subsequently sought monetary and equitable relief against the licensee before the Court of Arbitration at the Polish Chamber of Commerce. In a 1999 preliminary award, the arbitration court held that the license agreement itself was invalid but the respondent was liable under a theory of unjust enrichment. In 2000 the arbitration court issued a final award enjoining the respondent from using the knowhow provided by the claimant for two years, excepting certain improvements made by the respondent.
The claimant brought an action before the Cracow District Court to set aside the award in part, insofar as it denied his request for an injunction that was unlimited in time and made an exception for use of improvements. The court denied the petition, holding that the award did not violate public policy.
The Cracow Regional Court denied the appeal on the same grounds, finding in addition that granting the relief sought by the claimant in full would be tantamount to awarding him ownership of equipment belonging to the respondent.
The claimant sought review by the Supreme Court in a cassation appeal, claiming that the order by the regional court ignored Poland’s obligations under the TRIPS Agreement and thus violated Art. 87 of the Polish Constitution, and seeking to set aside the order of the regional court as well as the final arbitration award.
The Supreme Court denied the cassation appeal, finding that it did not sufficiently specify the substantive law allegedly violated below, including which paragraph number of Constitution Art. 87 was at issue. (There are two paragraphs in Art. 87, (1) involving treaties and other sources of national law and (2) involving local law.)
Excerpt from the text of the court’s ruling:
When a petition [to set aside an arbitration award] is based on allegations of violation of substantive law, it is necessary to demonstrate one of the aggravating aspects of such violation that constitutes violation of the legal order or principles of social coexistence in the Republic of Poland (Civil Procedure Code Art. 712 §1(4)). A showing of violation of substantive law is not legally sufficient grounds for granting a petition to set aside an arbitration award.