Polish Supreme Court judgment
dated 12 October 2012
Case No. IV CSK 82/12
Summary by arbitraz.laszczuk.pl:
In 2006, J.B. SA, a company operating a football club in Poland, entered into a contract with W.T. to serve as the manager of the club. One section of the manager’s contract provided that any disputes related to the contract would be resolved by the common court proper with respect to the registered office of the company. The following section provided that matters not regulated by the contract would be governed by the Civil Code and by a resolution of the Polish Football Association (PZPN) setting forth rules governing relations between football clubs and their managers.
A dispute arose between the company and the manager concerning the manager’s entitlement to a bonus for the team’s advancement. In 2009 the manager filed a claim with the PZPN Football Arbitration Court. The company objected that there was no arbitration clause. In 2010 a panel of three arbitrators issued an award in favour of the manager for PLN 60,000, which was upheld by a panel of five arbitrators on a motion by the company for reconsideration.
The district court granted the petition by the company to set aside the award on the ground that there was no arbitration clause. The court rejected the manager’s argument that the parties had incorporated by reference the arbitration provisions set forth in the statute, resolutions or regulations of PZPN or its Football Arbitration Court, holding that the parties had expressly agreed on the jurisdiction of the state court. The regional court denied the manager’s appeal.
On cassation appeal, the Supreme Court upheld the reasoning of the courts below, and further found that even if the statute of PZPN contained an arbitration clause with respect to disputes arising out of the relationship of association, the company was not a member of PZPN and the dispute between the company and the manager over a bonus was not a dispute arising out of the relationship of association. The court denied the cassation appeal accordingly.
Excerpts from the text of the court’s ruling:
1. The essence of establishment of an “arbitration clause by reference” is that the intention to submit a dispute to an arbitration court for resolution is not stated in the agreement signed by the parties or documents exchanged by the parties, but in a separate document which is not signed by the parties but which the parties only refer to through another document, i.e. the main (basic) agreement. The condition for making an arbitration clause in this manner is fulfilled if the following conditions are all met. First, the main (basic) agreement itself, in connection with which the document containing the arbitration clause is to be applied, must be made in writing. Second, such agreement must contain an express reference to the document in which there is a provision on submission of disputes that may arise out of the agreement to an arbitration court for resolution, where the reference is of a type that makes the clause an integral part of the agreement.
2. From the point of view of the form of an arbitration clause, the solution adopted [in Civil Procedure Code Art. 1163] is a specific form of an “arbitration clause by reference,” where an arbitration clause is set forth only in the articles of association or statute of a company, or the statute of a cooperative or association, and the act or deed of joining the company, cooperative or association includes only submission to the articles of association or statute, including the arbitration clause contained therein. The scope of the binding force of such arbitration clause is limited in terms of entities: It binds the company and its shareholders, or the cooperative or association and its members. Moreover, this regulation expressly provides that the binding force of an arbitration clause contained in the articles of association or statute of a company or the statute of a cooperative or association applies to disputes arising out of the corporate relationship or disputes arising out of the relationship of membership in the cooperative or association.