Katowice Court of Appeal order
dated 24 October 2016
Case No. V ACz 1118/16
Summary by arbitraz.laszczuk.pl:
The plaintiff, a Polish company and subcontractor for a construction project, filed suit in the Katowice Regional Court against the defendant, a Spanish company and general contractor for the project, seeking over EUR 200,000 allegedly owed for its work under the contract. The defendant asserted as a defence the existence of an arbitration clause in the contract, which provided that any dispute arising out of the contract would be resolved amicably, but if it could not be resolved amicably within 90 days after summoning the other party to negotiations, the dispute would be resolved by a panel of three arbitrators under the ICC arbitration rules. The regional court upheld the defence and dismissed the case.
On interlocutory appeal to the Katowice Court of Appeal, the plaintiff alleged that there was new evidence that should be considered, specifically that in the correspondence between the parties the defendant admitted that the plaintiff’s claim was undisputed, and consequently there was no “dispute” between the parties for purposes of the arbitration clause. The plaintiff also argued that in light of the presumption in favour of the jurisdiction of the state courts, the choice-of-law clause in the contract, stating that application and interpretation of the contract was subject to Polish law and the parties submitted to the jurisdiction of Polish law on all matters governed by the contract, amounted to a choice of the Polish state courts rather than arbitration. The plaintiff also alleged inter alia that the defence of the arbitration clause should be rejected because assertion of that defence by the defendant constituted an abuse of a right pursuant to Art. 5 of the Polish Civil Code.
The court of appeal held that there was a dispute between the parties within the meaning of the arbitration clause, involving payment as well as interpretation of the arbitration clause. There was nothing in the choice-of-law clause constituting a choice of the jurisdiction of the state courts rather than arbitration. The notion of abuse of a right refers to substantive rights and does not cover the procedural act of asserting a defence to a lawsuit. Consequently, the order dismissing the case was correct, and the court of appeal denied the interlocutory appeal.
Excerpt from the text of the court’s ruling:
The rule provided in Art. 5 of the Civil Code cannot be applied to institutions of procedural law. … Thus abuse of a subjective right is not, for example, a procedural act such as filing a statement of claim, but pursuing claims via the courts when this constitutes exercise of a right contrary to principles of social coexistence or the socioeconomic purpose of the right. … In asserting the defence of the arbitration clause, the defendant did not exercise any subjective right arising out of a civil-law relationship, but only a procedural entitlement arising under Art. 1165 §1 of the Civil Procedure Code.