case law

id : 20148

id: 20148

Katowice Appellate Court order

dated 8 May 2014

Case No. V ACz 343/14

Summary by arbitraz.laszczuk.pl:

In a construction contract between a Polish investor and a Polish contractor governed by the FIDIC “Yellow Book” (Conditions of Contract for Plant and Design-Build), in the particular conditions the parties modified the arbitration clause in 20.6 of the Conditions of Contract (providing for international arbitration under the Rules of Arbitration of the International Chamber of Commerce) to provide for “international arbitration” under the Rules of the Court of Arbitration at the Polish Chamber of Commerce in Warsaw.

When the contractor was not paid, it filed a claim with the Gliwice Regional Court against the investor for payment of its fee. The investor moved to dismiss the case because of the arbitration clause. The court granted the motion.

On interlocutory appeal, the contractor argued inter alia that the arbitration clause was conditioned on first following the procedures in the Conditions of Contract for submission of the dispute to the Dispute Adjudication Board, which had not been done in this case. The court disagreed. Clause 20.8 of the Conditions of Contract provide that a dispute may proceed directly to arbitration when there is no DAB in place or the DAB’s appointment has expired. Therefore the arbitration clause continued to apply whether or not the DAB procedure had been followed. The court denied the appeal accordingly.

Excerpts from the text of the court’s ruling:

1. Clause 20.8 of the [FIDIC Conditions of Contract for Plant and Design-Build] could apply in all instances where the parties did not decide for whatever reason to submit a dispute to the Dispute Adjudication Board. This conclusion is also justified by the placement of this provision. After detailed provisions concerning dispute resolution, at the end of the conditions of contract the parties decided to include a kind of savings clause maintaining the arbitration clause
in force regardless of whether the procedures provided for earlier were followed or not.

2. The argument that the arbitration clause gave the party initiating the proceeding the exclusive choice of which court the dispute should be resolved by should not be upheld.

3. The court of appeal did not share the view that the defence [of the arbitration clause] could be asserted at the latest at the stage of the dispute adjudication procedure conducted between the parties.

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