case law

id : 20411

id: 20411

Kraków Court of Appeal order

dated 10 March 2014

Case No. I ACz 315/14

Summary by arbitraz.laszczuk.pl:

A Polish company, A.H. sp. z o.o., brought an arbitration claim against another Polish company, T. sp. z o.o., before an arbitration court at an employers’ association in Poland. The arbitration court issued an award in March 2013 denying the claim. A.H. sp. z o.o. failed to file a timely petition to set aside the award. T. sp. z o.o. filed an application with the Kraków Regional Court for recognition of the award. A.H. sp. z o.o. objected to the application on the grounds that the arbitration agreement was invalid and ineffective because T. sp. z o.o. was a member of the employers’ association where the arbitration court operated, and offered evidence, including witness testimony, to show the other party’s connection to the employers’ association. The regional court was puzzled that A.H. sp. z o.o. would assert the invalidity of the arbitration clause, as it was the party which had commenced arbitration, and the other party had joined issue in the arbitration proceeding. Other of its arguments apart from the claim that the award violated public policy could not be raised in a proceeding for recognition of an award issued in Poland, but could have been raised in a petition to set aside the award, which the party had however failed to file. Thus the evidence offered was irrelevant and inadmissible. The court issued an order accordingly recognizing the award.

On interlocutory appeal, the Kraków Court of Appeal held that most of the grounds for denying recognition asserted by A.H. sp. z o.o. applied only in the case of an award issued outside of Poland. The award also did not violate public policy merely because the other party was a member of the employers’ association where the arbitration court operated, as there were numerous safeguards in place in the law, the arbitration agreement, and the rules of the arbitration court to prevent unequal treatment of the parties. The evidence offered before the regional court was intended to prove that the arbitration agreement was invalid, but because the validity of the arbitration agreement was beyond the review of the court considering the application for recognition of an award issued in Poland, the evidence was irrelevant and the lower court had properly refused to hold a hearing on the matter. The court of appeal denied the interlocutory appeal accordingly.

Excerpts from the text of the court’s ruling:

1. The wording of Civil Procedure Code Art. 1215 §2 leaves no doubt that it applies only to an award issued by an arbitration court abroad or a settlement concluded before such court.

2. The mere fact that a party belongs to the employers’ organization where the arbitration court operates is not grounds for finding the arbitration agreement to be invalid.

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