Polish Supreme Court order
dated 7 November 2013
Case No. V CSK 545/12
Summary by arbitraz.laszczuk.pl:
A. SA, an insurance company, filed a claim against M. sp. z o.o. in the Gliwice Regional Court, alleging that the defendant was responsible for a loss suffered by the insured, P. sp. z o.o., which the insurer had paid, and the claim by the injured party against the defendant had passed to the insurer through insurance subrogation. The defendant moved to dismiss the action, asserting as a defence an arbitration clause in the agreement between it and the injured party. The regional court denied the motion to dismiss the action, holding that under insurance subrogation, only substantive defences passed to the insurer and not procedural defences such as the defence of the arbitration clause.
On interlocutory appeal, the Katowice Court of Appeal held that under insurance subrogation, the insurer entered into the same claim as the claim held by the insured, up to the amount of compensation paid, regardless of whether the claim was in contract or tort, and subject to the existing limitations on the claim, including the arbitration clause. The court of appeal amended the order of the regional court accordingly and dismissed the claim. It did not address the defendant’s allegation that subrogation had been excluded in the insurance agreement because that was a substantive defence which could not be considered on the interlocutory appeal.
On cassation appeal, the Supreme Court of Poland found that the court of appeal had relied on general legal statements and had failed to determine whether the claim in question fell within the subjective and objective scope of the arbitration clause, based on the intent of the parties to the contract between the injured party (P. sp. z o.o.) and the defendant (M. sp. z o.o.) The court of appeal had also failed to determine whether it was the intent of the parties to the insurance contract (between A. SA and P. z o.o.) that the insurer become subrogated to the claim in question and also succeed to the arbitration clause. This prevented the Supreme Court from reviewing the correctness of the ruling by the court of appeal. The Supreme Court set aside the order of the court of appeal accordingly and remanded the case to the court of appeal for reconsideration.
Excerpts from the text of the court’s ruling:
1. Under the circumstances of the specific case, it is essential that the parties making an arbitration clause fulfilled the requirements set forth in Civil Procedure Code Art. 1161 §1 to adequately identify the subject matter of the arbitration clause. Precise determination of this must adequately identify the legal relationship which is subject to submission to the arbitration court for consideration.
2. Submission to an arbitration court of disputes arising out of a contractual relationship demarcates its authority to determine the existence, effectiveness and validity of the contract, any claims for performance of the contract, claims arising in the event of non-performance or improper performance of the contract, claims for restoration of consideration provided without foundation which arise in the event of the ineffectiveness of the contract or renunciation of the contract, tort claims if they arise out of an event which constitutes non-performance or improper performance of the contract, and, depending on the parties’ agreement, disputes arising against the background of a settlement concluded with respect to a claim arising out of the contract which contained an arbitration clause.
3. An arbitration clause concerns the broadly understood jurisdiction of the court to consider a case, and its fundamental effect is exclusion of the jurisdiction of the state courts in favour of the authority of the arbitration court. It therefore falls within the broadly understood functional definition of a procedural act, highlighting its subject matter and effects and the assumption that procedural acts should not be limited to unilateral acts.
4. There are exceptions to the rule that an arbitration clause is binding on the parties that made it, including exceptions concerning expansion of the bounds of the arbitration clause to include persons who are legal successors of the parties, under general as well as specific grounds, within the legal relationship submitted to consideration by the arbitration court.
5. The scope of examination of a court considering the defence of an arbitration clause which if granted would result in dismissal of the statement of claim (Civil Procedure Code Art. 1165 §1) includes not only determination of the fact of existence of the agreement submitting the dispute to consideration by the arbitration court, but also whether the plaintiff’s claim, as expressed in the relief sought and the factual allegations in support of the claim, falls within the subjective and objective scope of the agreement. The necessity to consider this defence at the stage before joining issue on the merits of the case cannot be regarded as meaning that it is impermissible to address any substantive legal issues at all. If therefore the allegation that the claim asserted in the statement of claim falls within the scope of an arbitration clause requires examination of the content of the contract and the mutual intent of the parties that concluded it, the court may not decline to make such findings and resolve these issues.