case law

id : 20369

id: 20369

Polish Supreme Court order

dated 25 January 2012

Case No. V CSK 44/11

Summary by arbitraz.laszczuk.pl:

In March 2004 and August 2006, a Polish company, E.-G. SA, entered into agreements with Cyprus companies, S. Ltd and S.H. Ltd, for sale of shares in a Polish steel mill, Huta P. SA. Both agreements were signed for the Polish company by Natalie J., and both agreements contained arbitration clauses calling for arbitration under ICC rules before the Arbitration Service of the Cyprus Chamber of Commerce and Industry.

E.-G. SA subsequently filed claims in the Polish state court against S. Ltd and S.H. Ltd (joined cases), seeking possession of property—apparently, the shares allegedly sold under the 2004 and 2006 agreements. The defendants asserted the arbitration clauses as a defence. The plaintiff claimed that Natalie J. was not actually a member of the management board at the time of signing of the agreements, contrary to the information disclosed in the National Court Register, and was not duly authorized to sign the agreements for the company.

Natalie J. was entered in the National Court Register for the company as the sole member of the management board, authorized to represent the company, from 28 April 2004 through 3 August 2007. According to the entry, she had held that office since 30 June 2003. The district court appointed a curator for the company on 15 March 2006, but this was not reflected in the National Court Register.

In 2010, the regional court dismissed the claim, holding that the information in the National Court Register stating that Natalie J. was authorized to represent the company was presumed to be correct in dealings with the Cyprus companies as third parties. The court also rejected testimony by Harry C., an alleged representative of S.H. Ltd, offered to prove that Mordechai K., the person signing the 2004 agreement for S.H. Ltd, was not authorized to represent that defendant in signing the agreement, accepting instead a statement issued in 2009 by Harry C. acknowledging that he had issued authorization to Mordechai K. to sign the agreement for S.H. Ltd.

The court of appeal affirmed.

On cassation appeal, the Supreme Court found that the lower courts had not adequately examined what steps E.-G. SA had taken in order to correct the allegedly incorrect entry in the National Court Register and whether the Cyprus companies were aware of the true nature of Natalie J.’s authorization to represent the company at the time of signing of the two agreements, since the first agreement was signed before she was disclosed in the National Court Register as the sole member of the management board and the second agreement was signed after appointment of a curator for the company. The court also held that the lower courts had not established a sufficient foundation for accepting the 2009 statement acknowledging the authority of Mordechai K. to sign the agreement for S.H. Ltd. and rejecting testimony offered to the contrary.

The Supreme Court vacated the judgment below accordingly and remanded the case to the court of appeal for reconsideration.

Excerpt from the text of the court’s ruling:

Art. 24 [of the Brussels I Regulation (44/2001)] concerns the issue of domestic jurisdiction, but the lack of domestic jurisdiction and the existence of an arbitration clause are two separate procedural barriers. Thus Art. 24 of Regulation 44/2001 does not constitute grounds for preclusion of assertion of the defence of a clause calling for foreign arbitration. The defendants raised the defence of the arbitration clause in the response to the statement of claim, which meets the requirement of Civil Procedure Code Art. 1165 §1.

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