Polish Supreme Court ruling
dated 19 September 1934
Case No. C I 1998/33
Summary by arbitraz.laszczuk.pl:
In Grodno (former Russian territory), Mikita K., the purchaser of real estate, obtained an arbitration award in 1932 against the sellers, in which the arbitration court found that the sellers had owned the property. Mikita K. applied to the municipal court for enforcement of the award. The court refused to enforce the award because it was collusive. The court held that there was no genuine dispute between the parties, but they had colluded to create a fictitious dispute with the purpose of creating a document confirming that the sellers owned the property in question, to make up for the lack of a proper document of title, in order to circumvent the legal requirements for establishing ownership of real estate. In 1933, the Grodno Regional Court denied the appeal.
On cassation appeal, the Supreme Court of Poland held that an arbitration court is authorized to resolve only genuine disputes, and not collusive, fictitious disputes intended to circumvent the law. The court denied the cassation appeal accordingly.
Excerpt from the text of the court’s ruling:
Art. 1387 of the [former Russian] Civil Procedure Code authorizes arbitration courts to rule in disputes between the parties not on the basis of general regulations of judicial procedure and not on the basis of provisions of substantive law, but according to its own conscience—but not by any means to resolve fictitious disputes arising out of collusion between the parties in order to circumvent regulations of law.