case law

id : 20097

id: 20097

Polish Supreme Court judgment

dated 27 June 1960

Case No. 4 CR 874/59

Summary by arbitraz.laszczuk.pl:

In July 1949, Kazimierz S. and Jan S., the owners of a sea fishing enterprise, entered into an agreement with the founders of a cooperative under which they would transfer the fishing enterprise to the cooperative for it to use without charge for three years. The cooperative, to be named “K.G.,” was then at the stage of being established but was not yet registered. The agreement included an arbitration clause. It also provided that upon registration of the cooperative, all rights and obligations under the agreement would automatically pass to the cooperative. In August 1949, the cooperative K.G. was registered. In 1953, the cooperative was taken over by another cooperative, F.N. In 1957, Kazimierz S. and Jan S. commenced an arbitration proceeding against the cooperative F.N. The cooperative appointed one of the arbitrators. The arbitration court issued an award in favour of the claimant for the value of the investments and machinery and equipment subsequently taken over by F.N.

F.N. filed a petition with the province court to set aside the award on the grounds inter alia that there was no arbitration clause. The province court denied the petition, holding that the cooperative K.G. had implicitly ratified the agreement, including the arbitration clause, and the cooperative F.N. was also bound by the agreement and the clause as the legal successor of K.G.

The cooperative sought review by the Polish Supreme Court, alleging that there was no arbitration clause. The court held that the arbitration clause had to be made in writing, which required an affirmative act in writing and could not be done by implicit ratification of an existing agreement. Nor did appointment of an arbitrator cure the lack of a written submission to arbitration.

Excerpts from the text of the court’s ruling:

1. An arbitration clause is an agreement which requires written form in order to be valid. For the clause to be valid, there must be submission of a dispute for determination by an arbitration court, in a written declaration (Civil Procedure Code Art. 486 and 487). It is not possible to conclude an agreement submitting a dispute to determination by an arbitration court in an implicit manner.

2. Appointment of an arbitrator is not ... in and of itself a declaration submitting a dispute for determination by an arbitration court, and is not equivalent to making and signing an arbitration clause.

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