Polish Supreme Court judgment
dated 26 September 2003
Case No. IV CK 17/02
Summary by arbitraz.laszczuk.pl:
A public procurement procedure was conducted for construction of a local school building. The first tender was won by Ryszard U. Following a protest by another bidder, M. SA, the first tender was invalidated. A second tender was conducted, which was again won by Ryszard U. Following an appeal by M. SA to a panel of arbitrators, the result was overturned. The third tender was won by M. SA. The protest by Ryszard U. was upheld and the panel of arbitrators ordered that the tender be repeated.
In the fourth tender, the contracting authority requested information about Ryszard U.’s creditworthiness from his bank, and subsequently awarded the contract to M. SA. U.’s protest and appeal to the panel of arbitrators were denied. U. filed a petition with the regional court to set aside the award of the panel of arbitrators, alleging violation of public policy because the award was contrary to the facts and violated the principles of equal treatment of bidders and fair competition. The regional court denied the petition, but on appeal the appellate court set aside the award, holding that it was a violation of equal treatment of bidders to demand additional credit information concerning only one bidder, and that the award was contrary to the facts and thus violated public policy. The respondents filed a cassation appeal with the Polish Supreme Court against the judgment of the appellate court.
In the meantime, apparently, before the award in question was issued, the building that was the subject of the tender had already been completed and delivered for occupancy. This fact would be relevant when the court was ruling on whether the award violated public policy, but the appellate court failed to explore this issue thoroughly. Therefore, the Supreme Court vacated the judgment setting aside the award and remanded the case to the appellate court for reconsideration.
Excerpt from the text of the court’s ruling:
A finding that an award is inconsistent with the facts does not always result in setting aside the award. It is accepted that an application alleging violation of the rule of law is justified when the effect of an arbitration award conflicts with fundamental principles of the legal order of the state.