polish

case law

id : 20538

id: 20538

Polish Supreme Court judgment

 dated 8 February 2019,

Case No. I CSK 757/17

Summary by arbitraz.laszczuk.pl:

In a petition to set aside an arbitration award issued by the Court of Arbitration at the Polish Chamber of Commerce (Arbitration Court) on 24 April 2014 in the case brought by C. Sp. z o. o. (C.) against P. S.A. in W. (P.), the applicant, P., sought to have the arbitration award set aside in points I and II of the conclusion and demanded the participant, C., be ordered to pay the costs of the legal proceedings.

The applicant argued, among other things, that it had been deprived of the ability to defend its rights [Art. 1206 § 1 point 2 of the Polish Civil Procedure Code (PCPC)] and that the requirements with regard to the composition of the arbitral tribunal or fundamental principles of procedure before such a tribunal, arising under the statute or specified by the parties, had not been observed (Art. 1206 § 1 point 4 of the PCPC in connection with § 36 of the Rules of the Arbitration Court of 27 November 2003). It also claimed that the arbitral award was contrary to the fundamental principles of the legal order of the Republic of Poland (Art. 1206 § point 2 of the PCPC).  

According to the findings of the Regional Court (Sąd Okręgowy), the parties conducted two proceedings before the Arbitration Court.

During the proceedings P. challenged the jurisdiction of the arbitral tribunal and demanded the proceedings be suspended until the petition filed by P. to set aside the award of the Arbitration Court was considered.

In the judgment of 24 April 2014, the Arbitration Court, among other things, confirmed its jurisdiction to hand down a verdict and dismissed the application to suspend the proceedings.

As a result of the petition to set aside the arbitration award filed by P., the Regional Court found all allegations groundless.

P. decided to bring an appeal, but the Appeal Court dismissed the case and stated that none of the aforementioned grounds for setting aside of the award deserved consideration. 

P. filed a cassation appeal to the Polish Supreme Court. It alleged that Art. 1206 § 1 point 2 of the PCPC, Art. 1206 § 1 point 4 of the PCPC with regard to § 36 sec. 2 point 1 of the Rules of the Arbitration Court of 27 November 2003 and Art. 1206 § 2 point 2 of the PCPC had been infringed. 

According to the Supreme Court, the Appeal Court ruled beyond the limits of the statement of the claim. Consequently, the Appeal Court incorrectly found that in the proceedings before the Arbitration Court there had been no violation of fundamental principles of procedure before such tribunal. Moreover, the applicant had been deprived of the ability to defend its rights and the judgment issued by the Arbitration Court was contrary to the fundamental principles of the legal order of the Republic of Poland.

The Supreme Court set aside the challenged judgment and remanded the case for reconsideration to the Appeal Court, leaving it for this court to rule on the costs of the cassation proceedings.

Excerpts from the Supreme Court Judgement:

1. By entering into an arbitration agreement, the parties revoke the competence of state courts to adjudicate the dispute, entrusting it to a body acting as per the will of the parties. Consequently, the state court control over an arbitration award, as much as it is necessary and statutorily guaranteed, is not instance control and by its nature must be incomplete, limited to the most far-reaching shortcomings and failures of arbitration, which are relevant not only from the point of view of the parties, but also of the general interest.

2. Given the vital role of the principle of the court being bound by the claim (…), it is deemed that the case in which an arbitral tribunal rules ultra petita ad aliu should not revoke the control of the state court. This assumption should be considered legitimate also in the light of the Polish Civil Procedure Code, with the proviso that the character of arbitration may justify an approach to the assessment of the limits of the claim more flexible than in the case of state courts.

3. [A]lthough, Art. 1188 § 1 of the Polish Civil Procedure Code does not indicate obligatory elements of a statement of claim in arbitration proceedings, including the exact wording of the claim (cf. Art. 187 § 1 point 1 of the Polish Civil Procedure Code), nonetheless the necessity to concretise the claim as an element determining the subject matter of arbitration proceedings may be derived indirectly from Art. 1202 first sentence of the Polish Civil Procedure Code; it may also be derived from the rules of procedure agreed upon by the parties or defined in the rules of arbitration.

4. Going beyond the limits of the statement of claim collided not only with the principle of availability which by virtue of its functions and the importance of the freedom of will for the institution of arbitration must be included into the principles of arbitration proceedings (…), but also with the principle of equality of the parties.

5. [S]ince the Arbitration Court ruled on a different claim than the claim advanced, the applicant was deprived of the ability to defend its rights.    

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