case law

id : 20159

id: 20159

Polish Supreme Court order

dated 9 February 1999

Case No. I CKN 887/98

Summary by arbitraz.laszczuk.pl:

Claimant K. Oy, a Finnish company, obtained an award from an arbitration court in Helsinki against a Polish company, E.-C. sp. z o.o., containing a declaration that the claimant held title to certain equipment and had no duty to restore a bank guarantee to the respondent, and also awarding costs to the claimant.

K. Oy applied to the province court in Poland for enforcement of the award. The court denied the application, holding that notice of the arbitration, served on the respondent via a notary, was not properly served because it should have been served through the foreign court, and it was doubtful whether the respondent ever received notice of the arbitration. Consequently, the respondent failed to participate in the arbitration.

The appellate court denied the interlocutory appeal, holding that service of notice of the arbitration did not comply with the Polish-Finnish treaty on mutual legal assistance and—apart from the award of costs—the award was not capable of enforcement by way of execution.

On cassation appeal, the Supreme Court held that the service provisions of the Polish-Finnish treaty on mutual legal assistance were irrelevant because the arbitration court was not a state body and in any event the Hague Service Convention rather than the bilateral treaty would have applied, but the Hague Service Convention does not apply to service in arbitration proceedings. The objection to enforcement of the declaratory portion of the award was also irrelevant because under the New York Convention there is no separate procedure for enforcement and recognition. The Supreme Court granted the cassation appeal accordingly and remanded the matter to the appellate court for reconsideration.

Excerpts from the text of the court’s ruling:

1. A cassation appeal from an order of the court of second instance concluding the proceeding in cases seeking enforcement of a ruling of a foreign court or an arbitration award issued abroad is permissible.

2. It follows from their essence and basic functions that arbitration courts are non-state courts, established by the will of the parties, within the bounds in which they may dispose of private rights and within the framework of applicable laws. There is thus no justification for regarding arbitration courts as an organ of the state.

3. There is no requirement in [the New York Convention] that a foreign arbitration award be “capable of enforcement by way of execution,” as is provided in Civil Procedure Code Art. 1150 §1. The convention does not provide for separate proceedings for recognition and enforcement of an arbitration award, but provides uniform conditions for denial of the motion with respect to both forms of award.

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