Wrocław Appellate Court order
dated 10 May 2012
Case No. I ACz 660/12
Summary by arbitraż.laszczuk.pl:
In August 2004, two individuals, T.O. and L.K., entered into an investment agreement with a Luxembourg company concerning certain companies owned by T.O. and L.K. The investment agreement included an arbitration clause calling for arbitration in Switzerland. The parties subsequently entered into a series of share purchase agreements, in August–December 2004, which were related to the investment agreement and made direct reference to it, under which the individuals agreed to sell their shares to the Luxembourg company. The share purchase agreements included arbitration clauses calling for arbitration in Poland. (All of the agreements including arbitration clauses were signed prior to 17 October 2005, the effective date of significant amendments to the Polish arbitration law.)
The agreements including arbitration clauses were signed for the Luxembourg company by attorneys-in-fact acting under powers of attorney authorizing the attorney to act for the company in investment-related matters or in concluding share purchase agreements. Some of the powers of attorney specifically authorized the attorney to enter into arbitration clauses and some did not. Following the signing of the agreements, the Luxembourg company consistently regarded the agreements as valid and exercised its rights to acquire shares pursuant to the share purchase agreements.
In a lawsuit in the Wrocław Regional Court involving the Luxembourg company and other parties, T.O. and L.K. intervened to assert a claim against the Luxembourg company seeking a declaratory judgment concerning amounts allegedly owed them under the share purchase agreements. They sought interim relief to secure their claims against the Luxembourg company, in response to which the Luxembourg company filed pleadings addressed to the merits of the claim. Then, in its response to the principal statement of claim, the defendant asserted as a defence the arbitration clauses included in the share purchase agreements.
In February 2012, the Wrocław Regional Court dismissed the statement of claim on the basis of the arbitration clauses (relying on the new wording of the arbitration provisions of the Civil Procedure Code as amended effective 17 October 2005).
The appellate court denied the plaintiffs’ interlocutory appeal. The court held that the defence of the arbitration clauses was asserted on time, in the response to the statement of claim, when joining issue on the merits of the principal claim. The inconsistency between the arbitration clause in the investment agreement and the arbitration clauses in the share purchase agreements was immaterial because the contracts covered different actions and disputes under the different contracts could be resolved differently. To determine whether the arbitration clauses were valid and effective, the regional court should have relied on the prior wording of the arbitration law, under which a power of attorney specifically authorizing the attorney to conclude an arbitration clause was required, but the arbitration clauses were nonetheless effective and binding on the defendant because it had acknowledged and ratified the arbitration agreements entered into on its behalf without proper authority.
Excerpts from the text of the court’s ruling:
1. The validity and effectiveness of an arbitration clause, which are issues governed by regulations of substantive law, are determined by the regulations in force as of the time the arbitration clause was concluded.
2. The invalidity or expiration of the main agreement in which an arbitration clause was included does not in itself mean the invalidity or expiration of the arbitration clause.
3. When the defendant files its response to the statement of claim, it must raise the defence of the arbitration clause, because it is through the response to the statement of claim that it joins issue on the merits of the case.
4. Upon filing of a principal intervention by the plaintiffs, ... a new proceeding was commenced, which was pending independently of the trial (Civil Procedure Code Art. 75). In this case, the defendant joined issue only after service upon it of a copy of the statement of claim, upon filing of the response to the statement of claim. Thus, even though incidental proceedings in the case were pending previously—a proceeding for interim relief and a proceeding on submission of a deposit against costs—in which the defendant raised defences on the merits, it should be found that they were connected with the subject matter of those proceedings, and the defendant stated its position with respect to the demand in the statement of claim only in the response to the statement of claim. Only from that time was there a dispute pending between the parties.
5. A general power of attorney is insufficient to conclude an arbitration clause. ... A power of attorney to perform specific types of acts is required for effective agreement on an arbitration clause, even when the arbitration clause is included in a bilateral contract.