id: 20355

Polish Supreme Court order dated 20 May 2011 Case No. IV CZ 18/11 »

1. Final refusal to issue an order enforcing an arbitration award definitively eliminates the possibility of treating the award as equivalent to a state court judgment, and thus eliminates the result of the proceeding up to that point before the arbitration court.

2. Without doubt, the debtor has standing to file a petition to set aside an arbitration award. The creditor is deprived of such possibility, however. A party satisfied with the resolution may only commence a proceeding provided for in Civil Procedure Code Art. 1212 §2. In the situation of the creditor, the proceeding for recognition or enforcement of the award is the only procedure available to such entity for review of the propriety and legality of the determination by a domestic arbitration court.

3. The Civil Procedure Code provides for two forms of review of the rulings of the arbitration court. Alongside the proceeding for enforcement of the rbitration award is the petition to set aside the arbitration award. ... These are independent proceedings, based on independent grounds. ... From the point of view of the proceeding before the state court, the case is definitively ended only by the proceeding on the petition to set aside the arbitration award.

4. An order on recognition or enforcement of an arbitration award issued abroad—unlike an order on recognition or enforcement of a domestic arbitration award—is analogous to rulings issued in the main proceedings on the merits of the case.

5. A cassation appeal on recognition or enforcement of a domestic arbitration award is impermissible.

Case no.: IV CZ 18/11  

Key issues: petition to set aside arbitration award, recognition and enforcement of domestic arbitration award, recognition and enforcement of foreign arbitration award

id: 20362

Polish Supreme Court judgment dated 28 January 2011 (Case No. I CSK 231/10) »

1. An arbitration court may rule on its own jurisdiction in a proceeding in which a claim has been filed (Civil Procedure Code Art. 1180 §1), including also in a separate order. In the regulations concerning procedure before the arbitration court, the Parliament did not provide a basis for issuance of an award dismissing a statement of claim commencing a proceeding before the arbitration court, including in a situation where the arbitration court finds that it has no jurisdiction to decide the dispute. It follows from these provisions that in instances indicated in Civil Procedure Code Art. 1190 §1, 1196 §1 and 1198, the arbitration court shall issue an order discontinuing the proceeding. It should thus be accepted that the arbitration court shall issue such an order also when, after beginning to receive evidence in the matter, it finds that the proceeding cannot continue because of the lack of an arbitration clause or the invalidity of such agreement. Conducting the proceeding and issuing an award then becomes impossible for a reason other than that stated in Civil Procedure Code Art. 1198 (1) and the beginning of (2).

2. The nature of a ruling issued by a court, including by an arbitration court, is decided by the substance of the ruling, and not the name or external form which the court gave to the ruling .... The ruling challenged by the claimant in the petition to set aside the arbitration award ... was not—contrary to the name used—an arbitration award, but in light of the nature of the determination made therein, an order.

3. An order discontinuing the proceedings before the arbitration court because of the lack of a valid arbitration clause, or an order dismissing the statement of claim for this reason, is a ruling ending the proceeding before the arbitration court, in which the court rules on its own lack of jurisdiction in the matter. While an order by the arbitration court in which the arbitration court denies a defence of the lack of the arbitration court’s jurisdiction may be challenged before the common court by either of the parties within two weeks (Civil Procedure Code Art. 1180 §3), the Parliament did not provide for the opportunity to challenge before the common court an order by the arbitration court in which the arbitration court rules that it lacks jurisdiction in the matter. Upon issuance of such ruling, a proceeding before the common courts is open to the parties interested in resolution of the dispute, and they may exercise their right of access to the courts in such proceeding.

4. A negative determination by the arbitration court as to its own jurisdiction in a matter is a final ruling and is not subject to review by the common court. A ruling by the arbitration court finding that it lacks jurisdiction in the matter may thus not be challenged by a petition to set aside an arbitration award as provided by Civil Procedure Code Art. 1205 ff.

Case no.: I CSK 231/10  

Key issues: arbitration clause, arbitration court procedure, jurisdiction of arbitration court, petition to set aside arbitration award

id: 20363

Polish Supreme Court judgment dated 30 September 2010 (Case No. I CSK 342/10) »

1. In a petition to set aside an arbitration award, review of the merits of the case decided by the arbitration court is excluded.

2. Fundamental principles of the legal order should be understood to mean not only fundamental principles of the social and political system, reflected in constitutional principles, but also the overriding principles governing specific fields of law. … Examples that have been held to be violations of the fundamental principles of the legal order within the meaning of Civil Procedure Code Art. 1206 §2(2) include violation of the principle of the autonomy of civil-law entities and the principle of economic liberty, awarding damages where no injury has been suffered, or accepting the effectiveness of setoff under conditions in which specific regulations exclude such possibility.

Case no.: I CSK 342/10  

Key issues: petition to set aside arbitration award, arbitration award

id: 20331

Polish Supreme Court judgment dated 9 September 2010 Case No. I CSK 535/09 »

1. A petition to set aside an arbitration award is an extraordinary means of review intended to set aside the award if at least one of the grounds exhaustively set forth in Civil Procedure Code Art. 1206 is justified.

2. When considering a petition [to set aside an arbitration award], the state court is bound by the grounds alleged by the petitioner. Only two of the grounds set forth in Civil Procedure Code Art. 1206 §2 are considered on the court’s motion: the non-arbitrability if the dispute and inconsistency of the arbitration award with the fundamental principles of the legal order of the Republic of Poland.

3. The assessment of whether an arbitration award is contrary to fundamental principles of the legal order is addressed to the content of the award, and not the correctness of the procedure before the arbitration court or the composition of the panel. … An arbitration award may be set aside under the public policy clause if it is found that the results included in the content of the award are not consistent with a specific norm which is regarded as one of the fundamental principles of the legal order in force in Poland. ... These principles include not only constitutional norms, but also the overriding norms in specific fields of law.

4. The requirements made of persons serving as arbitrators should be combined with a party’s right to learn about any ties the arbitrator may have to entities appearing in the proceeding. It is up to the party to evaluate such circumstances as grounds for a decision to select an arbitrator or to seek removal of an arbitrator. The arbitrator’s self-assessment is irrelevant, because the essence of a fair procedure is tied to objective judgment by others. ... The fundamental principles of the legal order include the right to a court as provided in Art. 45(1) of the Polish Constitution, an element of which is a party’s right to have its case heard by an independent court, in a fairly conducted procedure.

Case no.: I CSK 535/09  

Key issues: arbitrator, arbitration award, arbitration court procedure, petition to set aside arbitration award

id: 20298

Polish Supreme Court order dated 6 November 2009 Case No. I CSK 159/09 »

1. Whether a given ruling of a foreign court may be legally relevant cannot be determined in advance at the time of recognition. Thus it cannot be anticipated what effects the ruling might have or in what circumstances a given entity might rely on it in the future. Thus the petitioner is right in asserting that Civil Procedure Code Art. 1145 §1 does not provide grounds to refuse recognition of a ruling by a foreign court only because in the view of the court where recognition is sought it will not exert legal effects in Poland.

2. If the petitioner [seeking recognition] appeared as a party in a proceeding before an Austrian court, it not only has a legal interest to have standing in the recognition proceeding before the Polish court, but such interest also means that if the grounds set forth in Civil Procedure Code Art. 1146 do not exist, it may obtain recognition of the award as effective in Poland.

3. A ruling denying a petition to set aside an arbitration award, formally speaking, is a merits decision and not only procedural. Such rulings thus, as a rule, are capable of recognition. It should be pointed out, however, that the dispute between the parties on the merits was resolved by the arbitration court, acting on the basis of the intent of the parties as expressed in the arbitration clause. The judgment in a proceeding to set aside an arbitration award is therefore only a resolution with respect to the state’s exercise of oversight of arbitration rulings.

4. A judgment by a domestic court issued in a proceeding upon a petition to set aside an arbitration award must be taken into consideration in a proceeding seeking recognition of a foreign arbitration award only when permitted by the provisions governing such proceeding. As grounds for denial of recognition, the Civil Procedure Code and the New York Convention provide only for the court in the country deciding on recognition of a foreign arbitration award to consider, upon motion of a party, a judgment setting aside the arbitration award.

5. Given the specific nature of an arbitration award, which is issued based on the intent of the parties, and the function performed by a foreign court that denies a petition to set aside an arbitration award, there is no legal basis for recognition of such judgment by the foreign court, which essentially involves only oversight and not the merits. The connection between such judgment by a foreign court and the arbitration award, and thus the not entirely independent nature of the judgment, is primarily a barrier to treating the judgment as a ruling that may be recognized in Poland under Civil Procedure Code Art. 1145 §1.

Case no.: I CSK 159/09  

Key issues: arbitration award, New York Convention, petition to set aside arbitration award, recognition and enforcement of foreign arbitration award

id: 20323

Polish Supreme Court order dated 23 September 2009 Case No. I CSK 121/09 »

1. A proceeding upon petition to set aside an arbitration award may ... be conducted even in the event of the absence of an arbitration clause, or invalidity or ineffectiveness of such clause, or if the clause is no longer in force under applicable law (Civil Procedure Code Art. 1206 §1(1)). The parties may demand that an arbitration award be set aside for these reasons.

2. The issue of loss of force of an [arbitration] clause, as with the issue of the non-existence, invalidity, ineffectiveness or unenforceability of the clause, may be examined in a proceeding upon a petition to set aside an arbitration award only if the petitioner asserts the relevant allegation. The rule applicable in a proceeding before a state court is that the court is bound by the grounds of the petition and the limits of the motions made by the parties. Only grounds indicated in Civil Procedure Code Art. 1206 §2 may be considered by the court on its own motion.

Case no.: I CSK 121/09  

Key issues: petition to set aside arbitration award

id: 20295

Polish Supreme Court judgment dated 3 September 2009 Case No. I CSK 53/09 »

1. The task of the state court considering a petition to set aside an arbitration award is to examine whether there is a basis for setting aside the award as set forth in the act. This generally does not extend to a review of the arbitration award’s compliance with substantive law, or a review of whether it is supported by the facts cited in the justification for the award or whether such facts were correctly established.

2. Civil Procedure Code Art. 1206 sets forth an exhaustive list of the grounds for setting aside an arbitration award. As a rule, the court considering the petition is bound by the grounds alleged by the petitioner, and thus may set aside an arbitration award because of the existence of one of the grounds listed in Art. 1206 only if it was asserted in the petition. Only two of the grounds listed in Art. 1206 for setting aside an arbitration may be considered on the court’s own motion, whether or not asserted in the petition: if the dispute is non-arbitrable pursuant to statute (Art. 1206 §2(1)) or if the arbitration award is contrary to the principles of the legal order of the Republic of Poland (Art. 1206 §2(2)).

3. Under the public policy clause set forth in Civil Procedure Code Art. 1206 §2(2), an arbitration award is subject to being set aside if the effects determined by the wording of the award are incompatible with a specific norm that is held to be a fundamental principle of public policy.

4. Application by the arbitration court of the proper substantive law for resolution of a dispute, which it is generally required to do under Civil Procedure Code Art. 1194 §1, is thus subject to review by the state court considering a petition to set aside an arbitration award only insofar as application of such law is required by the public policy clause, which is considered by the court on its own motion.

Case no.: I CSK 53/09  

Key issues: petition to set aside arbitration award

id: 20342

Szczecin Appellate Court judgment dated 27 May 2009 (Case No. I ACa 177/09) »

1. By adopting an arbitration clause, the parties voluntarily restrict their own constitutional ... right to resort to the courts.... Matters are most often entrusted to arbitrators for resolution because of their specialized knowledge, e.g. in the field of construction (in construction cases) or concerning commercial practices (in matters related to international transactions), where specialized knowledge is more important than knowledge of the substantive legal norms of a given legal system. In cases of this type, the arbitrators’ legal intuition may be sufficient. In such instances, it should be accepted that the arbitration court is not bound by regulations of substantive law, given the nature of the matters submitted to the jurisdiction of the arbitration court.

2. Pursuant to Civil Procedure Code Art. 714, the court is bound by the grounds for the petition to set aside the arbitration award, and additionally will consider on its own motion whether the award violates the rule of law or good practice. The allegation that the arbitration award violates the rule of law essentially concerns the issue of the permissible scope of review of the determination by the arbitration court by the common courts. ... Such review authority does not concern the issue of the correctness of the determination in terms of compliance with substantive law, or compliance with procedural regulations. The only basis for such review may be aggravated violations, of particular seriousness and weight, such that they also constitute a violation of the rule of law. The grounds for setting aside an arbitration award are formal in nature, as it is impermissible to examine whether the arbitration court resolved the dispute correctly in factual and legal terms, but only whether there was a violation of the public policy clause.

3. Violation of the rule of law should be understood to mean an offence against fundamental legal institutions. A determination violating the rule of law would include one that offends overriding legal principles and is contrary to the commonly accepted legal order in force in the Republic of Poland. An arbitration award may violate the rule of law if it results in a determination violating the applicable principles of a state governed by the rule of law. It is essential in this respect that when considering the case and ruling, the arbitration court is not bound by provisions of substantive law, but only may not violate the applicable principles of a state governed by the rule of law.

4. There is no catalogue of fundamental principles of the legal order, but they must be inferred from the entirety of legal norms in force.

5. It is a general principle of civil law that damages are due only when the injured party has suffered a loss, the function of damages is to compensate for loss, and damages may not exceed the amount of the loss. It should thus be recognized that an arbitration award violates the public policy clause if the damages awarded do not correspond to the loss suffered.

6. In a situation where the parties failed to specify the rules of procedure, under Civil Procedure Code Art. 705 §2 the arbitration court will apply the rules of procedure it deems appropriate. It is generally not bound by the provisions of the Civil Procedure Code in this respect. For this reason as well, the arbitration court need not lay down a procedure in advance, i.e. at the outset of the proceeding. It may thus do so during the course of the proceeding, including by issuance of separate orders with respect to successive activities. This extensive discretion of the arbitration court is limited, however, by Civil Procedure Code Art. 705 §2, third sentence, by the requirement to thoroughly explore the circumstances necessary to resolve the case. It is clear in this respect that the arbitration court may not violate the principles of the rule of law or social coexistence.

7. The adversary principle, and the principle of the parties’ availability, also apply in a proceeding before an arbitration court, and such court may not omit a thorough exploration of the circumstances necessary to resolve the case. … The “inability to omit a thorough exploration of the circumstances of the case,” as referred to in Civil Procedure Code Art. 705 §2, third sentence, should be understood primarily as a duty to conduct the proceeding before the arbitration court in a manner that assures the parties themselves of the ability to present any allegations and evidence, and, as an aspect of the equal treatment of the parties, to address the allegations and evidence presented by the opposing side.

8. The fundamental principles in force under Polish law with respect to liability for loss caused by non-performance or improper performance of an obligation, as expressed by the Civil Code provisions concerning the effects of non-performance of obligations, are a duty to redress loss by the party to a contract that failed to perform or improperly performed its obligation, and, significantly, an ordinary causal relationship between the party’s action and the loss. The duty to redress loss in this respect may not be determined randomly or arbitrarily, but must correspond to the extent of the loss suffered (even if based on a consideration of all of the circumstances of the case), and default interest is due from the day following the date on which the debtor fell into delay. An arbitration award that was issued in violation of these principles is an award that violates the rule of law.

Case no.: I ACa 177/09  

Key issues: arbitration clause, arbitration court procedure, petition to set aside arbitration award

id: 20264

Polish Supreme Court order dated 7 May 2009 Case No. IV CZ 41/09 »

Under [former] Civil Procedure Code Art. 715 applicable in this case, whose current counterpart is [former] Art. 1207 §2, a proceeding upon a petition ... to set aside an arbitration award should be governed by provisions concerning an adversarial proceeding at the first instance. Thus the provisions that should be applied include Civil Procedure Code Art. 23, which provides that in cases seeking delivery or return of property for lease or tenancy, the amount in dispute in the case of agreements for a definite period is the rent for the period in dispute, but no more than one year; and for agreements for an indefinite period, the rent for a period of three months.

Case no.: IV CZ 41/09  

Key issues: petition to set aside arbitration award

id: 20259

Polish Supreme Court order dated 28 January 2009 Case No. IV CZ 107/08 »

1. The grounds for permissibility of a cassation appeal from a judgment in a case seeking to set aside an arbitration award are the same as those from other judgments by the court of second instance, except that classification of the case in this respect is a two-step process, in the sense that determination of the subject of the ruling and the appeal requires resort to the arbitration award. A cassation appeal is thus permissible in cases: 1) in which the subject of the ruling by the arbitration court was property/financial rights [majątkowe] of a value no less than that specified in Civil Procedure Code Art. 398² §1 (unless the scope of the challenge to the arbitration award was for a lesser amount), and 2) in which the subject of the ruling by the arbitration court was (also) non-property/financial rights; the latter may now be the subject of an arbitration clause within the scope provided by Civil Procedure Code Art. 1157.

2. If a party moves to set aside an arbitration award in its entirety and the petition is denied in its entirety by the court, the subject of the appeal from the judgment of the court of first instance and the judgment of the court of second instance denying the appeal will be the same as the subject of the arbitration award.

Case no.: IV CZ 107/08  

Key issues: petition to set aside arbitration award

id: 20258

Polish Supreme Court resolution dated 21 January 2009 Case No. III CZP 136/08 »

1. The provisions of the Civil Procedure Code governing arbitration are not all of the same nature, but are divided into two main groups. One set of provisions governs issues related to the permissibility of a petition [to set aside an award], the formal requirements for the petition and the course of the proceeding, and thus are strictly procedural provisions. The other set of provisions includes those specifying the grounds of a petition to set aside an arbitration award, functionally analogous to provisions of substantive law and setting forth the grounds for the substantive determination by the court on the merits of the dispute and the justification for the petition. The differentiation among provisions of the Civil Procedure Code concerning a petition to set aside an arbitration award is reflected by the fact that in the event of filing of a cassation appeal in such a case, allegations of violation by the court of provisions of the Civil Procedure Code governing the permissibility of a petition and the course of the proceeding on the petition should be asserted as part of the second basis for a cassation appeal, that is, violation of procedural regulations, while allegations with respect to the grounds of the petition should be asserted as part of the first basis for a cassation appeal, that is, violation of substantive law.

2. The provisions of the Civil Procedure Code governing the grounds for a petition to set aside an arbitration award should thus be treated as analogous to provisions of substantive law, which is also essential for interpretation of interim provisions. From the point of view of principles for interim law, provisions governing the grounds for a petition to set aside an arbitration award should be treated analogously to provisions of substantive law, and are thus subject to the interim rules for substantive law and not procedural law.

3. The literal wording of Art. 2 of the amending act should be understood to mean that the regulation refers only to provisions concerning arbitration that are strictly procedural in nature, and thus concern the proceeding in a case upon a petition [to set aside an arbitration award]. It does not include provisions specifying the grounds for the petition, which should be governed by interim rules for provisions of substantive law.

4. Where an arbitration award was issued under the prior regulations of the Civil Procedure Code, but the case seeking to set aside the award was commenced under a petition filed after entry into force of the amending act, under Art. 2 of the amending act the new provisions should apply to the proceeding pursuant to the petition with respect to permissibility of the petition and the course of the proceeding, but the grounds for the petition to set aside the arbitration award should be determined and assessed in accordance with the former provisions in force prior to 17 October 2005.

5. In a case pursuant to a petition to set aside an arbitration award issued prior to the effective date of the Act of 28 July 2005 Amending the Civil Procedure Code (Journal of Laws Dz.U. No. 178 item 1478), commenced after the effective date of the act, the prior regulations of the Civil Procedure Code apply to an allegation of lack or invalidity of an arbitration clause stated as the grounds for the petition. The petitioner may assert such grounds for the petition even if it did not raise such objection in the proceeding before the arbitration court.

6. The rule set forth in Civil Procedure Code Art. 712 §2 clearly demonstrates that the legislative intent was to limit preclusion to an objection of exceeding the scope of an arbitration clause, and the intent was not to introduce such preclusion for an objection of lack of an arbitration clause.

Case no.: III CZP 136/08  

Key issues: petition to set aside arbitration award, arbitration clause

id: 20257

Polish Supreme Court judgment dated 27 November 2008 Case No. IV CSK 292/08 »

1. A judicial proceeding to set aside an arbitration award should be conducted through to the end in accordance with the provisions in force upon commencement of the proceeding, that is, applying Civil Procedure Code Art. 165 §1, at the time of filing of the petition to set aside the award with the proper court. Thus if the petition was filed prior to 17 October 2005 [when the law was amended], the proceeding thereby initiated should be conducted thereafter in accordance with Civil Procedure Code Art. 712–715, but a proceeding commenced by a petition filed on that date or later, in accordance with Civil Procedure Code Art. 1205–1211. Similarly, a proceeding before an arbitration court should be conducted through to the end in accordance with provisions in force upon commencement of the proceeding. However, in light of the rule set forth in Civil Procedure Code Art. 1186, the date of commencement of a proceeding before an arbitration court will generally be the date of service on the respondent of the document containing the demand for arbitration.

2. In instances in which arbitrators are appointed by each party independently, a new arbitrator appointed by one of the parties has the same status as the former arbitrator. Since the former arbitrator was unable to reach agreement on selection of a super-arbitrator and it was necessary for the super-arbitrator to be appointed by the court, the decision of the court in this respect could hardly be questioned just because of the appearance of a new arbitrator. There is no need to assure him an influence over appointment of the super-arbitrator, since his predecessor with an analogous status failed to make use of his opportunity in this respect.

3. There may be various reasons for loss of force of an arbitration clause. In addition to the procedural grounds listed in Civil Procedure Code Art. 1168 (previously Art. 702 §1) and Art. 1195 §4 (previously Art. 707 §2), it could also involve such events as dissolution of the arbitration agreement, occurrence of a suspensory condition, or lapse of the deadline by which an arbitration award should have been issued. Termination of the agreement containing the clause does not in and of itself constitute such grounds, however. This rule is now stated clearly by Civil Procedure Code Art. 1180, but should not have been in doubt prior to adoption of that provision.

Case no.: IV CSK 292/08  

Key issues: arbitrator, arbitration clause, arbitration court procedure, petition to set aside arbitration award

id: 20338

Poznań Appellate Court judgment dated 27 August 2008 (Case No. I ACa 568/08) »

1. The provisions of the rules of the arbitration court cannot be relevant for determining whether the parties made an arbitration clause in accordance with the rules set forth in the Civil Procedure Code. ... In assessing the validity of an arbitration agreement as a legal act, the common court considers the circumstances resulting in invalidity of legal acts according to the regulations in force, that is, whether actions were taken without complying with requirements as to form provided for by statute or by the parties under pain of invalidity, and whether the substance of the action is contrary to or intended to circumvent a statute, or contrary to principles of social coexistence, and whether there were defects in the declarations of will.

2. A thorough analysis of the substantive justification of the determination by an arbitration court exceeds the bounds of a proceeding commenced upon a petition referred to in Civil Procedure Code Art. 1205 ff. ... The view is stated in the case law that determinations by an arbitration court are binding, and the common court has no right to conduct substantive review of a case concluded in a ruling of an arbitration court, apart from exceptions provided by statute.

Case no.: I ACa 568/08  

Key issues: petition to set aside arbitration award, arbitration clause

id: 20251

Polish Supreme Court Order dated 9 July 2008 Case No. V CZ 42/08 »

There is a great deal of autonomy in arbitration procedure, entirely consistent with the intention of lawmakers, distinctly limiting the availability of review by the state court. The basic goal of this legal regulation is to expedite the procedure for resolving civil disputes, not create an additional phase of pre-judicial procedure. Parties who decide to submit a dispute to an arbitration court must thus count on such conditions, including also minimal external review of arbitration awards.

Case no.: V CZ 42/08  

Key issues: petition to set aside arbitration award

id: 20249

Polish Supreme Court judgment dated 11 June 2008 Case No. V CSK 8/08 »

1. Review of the merits of an arbitration award by the state court is limited to a determination of whether the award violates public policy. The phrase used by the Parliament, “fundamental principles of the legal order” (Civil Procedure Code Art. 1206 §2(2)), clearly demonstrates that this has to do with violation of provisions of substantive law that would infringe on the principles of the rule of law, and the arbitration award infringes the guiding legal principles in force in Poland, conflicts with the legal order in force, i.e. violates the principles of the political and socioeconomic system.

2. Redress of injury should be regarded as a fundamental principle of the legal order. Damages should clearly correspond to the injury.

3. Carrying out a legal act intended to circumvent the statutory prohibition on setoff of claims covered by an arrangement violates public policy.

Case no.: V CSK 8/08  

Key issues: petition to set aside arbitration award

id: 20341

Szczecin Appellate Court judgment dated 23 April 2008 (Case No. I ACa 204/07) »

1. The issue of the scope of an arbitration clause involves interpretation of the declarations of will of the parties expressed in the document, where the main role is played by rules of linguistic meaning.

2. When considering a petition to set aside an arbitration award, the state court will examine the case only with respect to the grounds listed in Civil Procedure Code Art. 712 §§ 1 and 2. The ruling by the state court is limited in this case either to setting aside the arbitration award in whole or part, or denying the petition. ... The task of the court in a proceeding initiated by a petition to set aside an arbitration award is not to determine the merits of the matter that was previously resolved by the arbitration court, applying provisions of substantive and procedural law, but only to assess the justification for the petition under the grounds set forth in Civil Procedure Code Art. 712 §§ 1 and 2. The court with which a petition to set aside an arbitration award has been filed does not act as a court of second instance, authorized to review the merits of the case applying provisions of substantive law, but reviews the challenged award only from the perspective of the violations indicated in Civil Procedure Code Art. 712 §§ 1 and 2.

3. [Civil Procedure Code Art. 712 §1(2)] refers to the necessity to comply with the principle of the equality of the parties before the arbitration court, to hear them out, and the possibility for a party to address the evidence and allegations presented by the opposing party. As stated by the Supreme Court, only if the arbitration court did not hear the party at all or did not allow it to submit its allegations can it be said that the party was deprived of the opportunity to defend its rights.

4. Pursuant to the rule set forth in Civil Procedure Code Art. 705, in a proceeding before an arbitration court the parties have the right to establish the rules of procedure themselves. Their determination of the procedure may occur in the arbitration agreement or in an additional agreement, but no later than the time the proceeding is commenced. Lack of agreement by the parties means that the right to select the arbitration procedure passes to the arbitrators, as if they were assuming the rights of the parties.

5. A ruling by an arbitration court may not be challenged because of erroneous decision of the case in legal or factual terms. Violation of the law may be grounds for setting aside an arbitration award only if the content of the ruling violates the rule of law or principles of social coexistence. Assessment of whether the ruling violates the rule of law or principles of social coexistence is formulated narrowly, and such conclusion may be reached only if the arbitration award would result in a material violation of such principles.

Case no.: I ACa 204/07  

Key issues: arbitration clause, arbitration court procedure, petition to set aside arbitration award

id: 20335

Warsaw Appellate Court judgment dated 16 April 2008 (Case No. I ACa 1334/07) »

1. It should be borne in mind that the arbitration court, which is not bound by provisions on procedure before the court (Civil Procedure Code Art. 1184 §2), has greater discretion than in a civil proceeding shaped by the Civil Procedure Code.

2. The arbitration court ... took evidence on its own initiative from the review of the websites and a review of the search capabilities of the Google Internet search engine with respect to the words in dispute ..., without being requested to do by the parties to the proceeding and without citing specific circumstances of the case justifying such initiative by the court, but in the view of the Appellate Court this does not constitute a serious violation of the adversary principle.

3. Taking evidence not in compliance with the rules set forth in Civil Procedure Code Art. 235–237 ... is not equivalent to violation of fundamental rules of procedure within the meaning of Civil Procedure Code Art. 1206 §1(4), which limits the ability to set aside an arbitration award to the principles of a fair trial and procedural violations material enough that they could influence the arbitration award.

4. An arbitration award will also be set aside if the award is contrary to fundamental principles of the legal order of the Republic of Poland. … This does not have to do with internal inconsistency of the form of the ruling, i.e. inconsistency between the specific parts of the ruling. This provision, which is an exception to the rule that when considering a petition to set aside an arbitration award, the state court generally does not review the resolution by the arbitration court on the merits, and in particular does not review whether the award is founded on the facts cited in the justification or whether such facts were correctly determined (as it is undisputed that arbitrators should have greater discretion than a state court in interpreting and applying the law), restricts substantive review of arbitration court rulings only to instances of violation of the principles of the legal order, i.e. instances where the effects of the arbitration court ruling would cause a material violation of such principles, which should be understood to mean the principles of the political and socioeconomic system. This means that the state court proper to consider the petition may not consider the substantive side of the dispute..., and an allegation of violation of specific provisions of substantive law may be effective only insofar as the violation of specific norms also violates the principles of the legal order.

Case no.: I ACa 1334/07  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20248

Polish Supreme Court judgment dated 6 March 2008 Case No. I CSK 445/07 »

1. An allegation under Civil Procedure Code Art. 712 §1(2) refers to deprivation of a party’s right to a defence only before the arbitration court, and thus it could not serve in this respect as independent and effective grounds for a cassation appeal, which may involve a challenge to the correctness of the proceeding before the state appellate court, but not in an arbitration proceeding.

2. There is a consensus that the authority to review [a ruling of an arbitration court by a state court] does not involve the issue of the correctness of the ruling in terms of its compliance with substantive law, or compliance with procedural regulations. The basis for such review may only be an aggravated violated of particular importance and weight—of the sort that also constitutes a violation of the rule of law. By no means may such review turn into a form of appellate review of the merits.

3. A petition to set aside an arbitration award is in ... the nature of an extraordinary legal instrument based on very narrowly defined grounds, which do not include undue explanation of the circumstances necessary to resolve the matter. Thus it must be concluded that violation of Civil Procedure Code Art. 705 §2, third sentence, may also provide grounds for a petition under Civil Procedure Code Art. 712 §1(4) only when it is of an extreme nature, and thus when it takes the form of complete omission of an explanation of the circumstances of the case or ignoring the evidence as a whole.

4. An arbitration court may not take into consideration facts not cited by the parties, or presume that the claimant’s allegations are true if the claimant fails to appear at the hearing, or assume facts to be true if they are not denied.

Case no.: I CSK 445/07  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20246

Polish Supreme Court resolution dated 4 January 2008 Case No. III CZP 113/07 »

1. The subject of a proceeding [upon a petition to set aside an arbitration award] is a petition through which a party challenges the ruling of an arbitration court. The state court does not reconsider the case that was submitted to the arbitration court for decision and does not review the correctness of the award in terms of its compliance with provisions of substantive law or the correctness of the factual findings serving as the basis for the ruling. The proceeding does not have to do with a claim to be tried in the sense of an adversary proceeding, but rather with setting aside an award determining a specific legal status between the parties, and the petition shall contain a justification of the statutory ground the existence of which will result in setting aside the arbitration award.

2. The legal nature of a petition to set aside an arbitration award, framed in this way, means that the claim submitted to the arbitration court for decision is irrelevant to the petition and to the proceeding commenced as a result of filing the petition. Beyond the issue of the jurisdiction of the court (Civil Procedure Code Art. 696), it is irrelevant whom the dispute is between and over what, whether the matter submitted to the arbitration court for decision is in the nature of a commercial case, or an employment case, within the meaning of the Civil Procedure Code, or whether, if the case had been filed in a proceeding before the state court, it would be heard in a proceeding for order of payment, or under a summary or simplified proceeding. In consequence, the claim which the arbitration court ruled on in the award being challenged cannot determine what regulations are applicable in the proceeding upon a petition to set aside the award.

3. Regulations concerning separate procedures in commercial cases do not apply in a proceeding upon petition to set aside an arbitration award.

Case no.: III CZP 113/07  

Key issues: petition to set aside arbitration award

id: 20244

Polish Supreme Court order dated 29 November 2007 Case No. III CSK 176/07 »

1. Arbitration is a procedure for resolving civil disputes by a decision-making body that is not a state court, but its jurisdiction is based on an agreement of the parties. For this reason, Art. 45 of the Polish Constitution, which refers to state bodies of the justice system identified in Constitution Art. 175(1), does not apply directly to arbitration.

2. When considering a case, an arbitration court is not bound by general regulations of procedural law applicable in a judicial proceeding, if the parties or the arbitration court have not otherwise provided for the procedure.

3. The indication in the second sentence of Civil Procedure Code Art. 1184 §2 that an arbitration court is not bound by judicial procedure regulations does not refer to mandatorily applicable provisions of the Civil Procedure Code governing procedure before the arbitration court. … Unless otherwise agreed by the parties, the arbitration court may conduct the proceeding as it deems fit, but subject to the provisions of the act. The rule of the priority of the intent of the parties in establishing the arbitration procedure, under Civil Procedure Code Art. 1184 §1, is subject to a limitation in that their selected manner of proceeding before the arbitration court may not be contrary to provisions of the law of the state which they selected that are in force in such a proceeding. The wording of Art. 1184 §1 (“if not otherwise provided by the act”) means that the parties may not, by their intent, change or exclude such provisions, and thus they are regulations of mandatory applicability [juris cogentis].

4. A state court considering a case upon a petition to set aside an arbitration award does not decide the dispute between the parties, and thus does not assess whether the arbitration court decided the case correctly in factual or legal terms, but only examines it from the point of view of grounds to set aside the award set forth in Civil Procedure Code Art. 1206.

5. Violation by the arbitration court of rules and regulations of the Civil Procedure Code binding on it governing arbitration procedure may provide grounds for a petition to set aside the arbitration award on the basis of failure to comply with fundamental rules of procedure before such court, arising under the act referred to in Civil Procedure Code Art. 1206 §1(4).

Case no.: III CSK 176/07  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20243

Polish Supreme Court judgment dated 27 November 2007 Case No. IV CSK 239/07 »

1. The arbitration court’s “replacement” of the parties in submitting declarations of will to extend tenancy agreements must be regarded as an action contrary to the rule of law. This type of ruling, absent a very clear contractual provision authorizing a ruling in this respect, conflicts with one of the fundamental principles of civil law: the principle of the autonomy of persons under the civil law, and included therein, the principle of freedom of contract.

2. Violation of the rule of law need not ... involve violation of principles arising under the Polish Constitution. The same result occurs if the arbitration court violates a fundamental principle of civil law.

3. Issuance of an enforcement clause for an arbitration award or confirmation of its effectiveness does not exclude the possibility to review whether the award violates the rule of law or principles of social coexistence in a proceeding to set aside the award.

Case no.: IV CSK 239/07  

Key issues: petition to set aside arbitration award

id: 20242

Polish Supreme Court judgment dated 19 October 2007 Case No. V CSK 181/07 »

1. It is accepted in the literature and in the precedent that res judicata effect, governed by Civil Procedure Code Art. 366, is ascribed only to rulings on the merits. … An order dismissing a petition to set aside an arbitration award, which does not belong to the category of listed merits determinations, does not enjoy res judicata effect and cannot justify an allegation of the invalidity of the proceeding based on Civil Procedure Code Art. 379(3).

2. Given that the petition to set aside the arbitration award was not based on Civil Procedure Code Art. 712 §1(1), it was impermissible for the court to consider sua sponte the issue of the invalidity of the arbitration clause.

Case no.: V CSK 181/07  

Key issues: petition to set aside arbitration award, arbitration clause

id: 20241

Polish Supreme Court order dated 12 October 2007 Case No. V CZ 91/07 »

1. Under Civil Procedure Code Art. 1206, in a case seeking to set aside an arbitration award, the court’s jurisdiction leads to consideration of the petition within the grounds asserted by the petitioner (which may be the circumstances listed in Art. 1206 §1), and beyond that, as provided in Art. 1206 §2, the court will set aside an arbitration award only if it finds that 1) under the law, the dispute may not be resolved by an arbitration court, or 2) the arbitration award is contrary to fundamental principles of the legal order of the Republic of Poland (the public policy clause).

2. The grounds for a petition to renew a proceeding to set aside an arbitration award may concern only this proceeding and no other proceeding, and more specifically may not apply to a proceeding for enforcement of an arbitration award and issuance of an enforcement clause, or a proceeding before an arbitration court.

3. Allowing the court to assess the compliance of an arbitration award with the fundamental principles of the legal order on the basis of facts or evidence which the arbitration court was not aware of would impermissibly expand the narrowly defined limits set by the law for the court’s review of an arbitration award. The opportunity to bring up new facts or evidence in a proceeding to set aside an arbitration award that could affect the decision on the dispute resolved by the award (as a result of its assessment under the public policy clause) would turn the proceeding into a proceeding not recognized by the Civil Procedure Code, comparable to a proceeding to renew the proceeding that ended in the arbitration award.

Case no.: V CZ 91/07  

Key issues: petition to set aside arbitration award

id: 20240

Polish Supreme Court judgment dated 12 September 2007 Case No. I CSK 192/07 »

1. The construction of the petition to set aside an arbitration award shows that this instrument is not intended for substantive review of the correctness of the decision of the arbitration court by the state court, as in the case of appellate review within a judicial proceeding.

2. The assessment of a decision by an arbitration court in substantive terms involves an assessment of whether it violates the rule of law or principles of social coexistence.

Case no.: I CSK 192/07  

Key issues: petition to set aside arbitration award

id: 20237

Polish Supreme Court judgment dated 11 May 2007 Case No. I CSK 82/07 »

1. When assessing whether a party was truly deprived of the opportunity to defend its rights in a proceeding before an arbitration court, the course of the arbitration proceeding should be considered scrupulously, also bearing in mind that the court is not authorized to review the decision made on the merits and that in making an arbitration agreement the parties consciously waived submission to the strictures in place for a proceeding before a [state] court.

2. A party is deprived of the opportunity to defend its rights before the arbitration court when the principle of equality of the parties is violated, and one of the parties is not heard and does not have the opportunity to address the evidence and allegations presented by the opposing party. For these reasons, every instance in which the arbitration court refuses to admit evidence sought by a party cannot be equated with depriving the party of a defence, because this happens only when the party has no opportunity to present and argue for its position.

3. Substantive review of an arbitration award by the court is limited to an assessment of whether the award that was issued violates principles of the legal order. The term used in the law, “fundamental principles of the legal order” (Civil Procedure Code Art. 1206 §2(2)) clearly indicates that this refers to such violations of substantive regulations that would result in violation of the principles of the rule of law, and the award violates the leading legal principles in force in the Republic of Poland and conflicts with the legal order in force, that is, violates the principles of the political and socio-economic system.

4. When deciding to submit a dispute for resolution by an arbitration court, the parties must be aware of both the positive and the negative effects of entering into the relevant clause in an agreement: on one hand they avoid a long-lasting proceeding, but on the other hand they waive certain procedural guarantees in force in a judicial proceeding.

Case no.: I CSK 82/07  

Key issues: petition to set aside arbitration award

id: 20291

Katowice Appellate Court judgment dated 29 December 2006 Case No. I ACa 1589/06 »

Determination of whether an arbitration award violates fundamental principles of public order must be formulated narrowly, which means that the public policy clause may be successfully invoked only when the arbitration award would result in serious violation of such principles. This is thus an exceptional basis for setting aside an arbitration award and may be applied only in special circumstances, where the effects of the arbitration award would be incompatible with fundamental principles of the legal system. Mere inconsistency of the award with such principles is thus insufficient.

Case no.: I ACa 1589/06  

Key issues: petition to set aside arbitration award

id: 20232

Supreme Court judgment dated 13 December 2006 Case No. II CSK 289/06 »

1. The arbitration court is subject only to the provisions of the Civil Procedure Code that govern procedure before the arbitration court. For this reason, a violation of general provisions of civil procedure law or overriding principles of civil procedure may serve as grounds for setting aside an arbitration award only if it results in violation of fundamental principles of the legal order of the Republic of Poland or principles of social coexistence.

2. A violation of the rule of law or principles of social coexistence as referred to in Civil Procedure Code Art. 712 §1(4) must be part of the content of the ruling itself, and thus it is insufficient if the violation occurred in the proceeding before the arbitration court.

3. If the arbitration court ignores evidence offered by a party because the arbitration court deemed the evidence unnecessary, that will not be regarded as depriving the party of a defence. The state court’s review of whether the arbitration court correctly found the evidence to be unnecessary would constitute impermissible intrusion into the merits of the case.

Case no.: II CSK 289/06  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20231

Supreme Court judgment dated 8 December 2006 Case No. V CSK 321/06 »

1. Setting aside an arbitration award is justified ... only by such an offence to substantive law that it would result in a determination that undermines the rule of law. A violation of the rule of law should be understood to mean an offence against fundamental legal institutions. Thus a ruling that violates the rule of law would be one, for example, that contradicts overriding legal principles and is contrary to the generally accepted legal order in force in the Republic of Poland. In other words, an arbitration award may violate the rule of law if it results in a ruling that violates the principles of the rule of law in force.

2. The state court thus does not examine whether an arbitration award is contrary to substantive law or is founded on the facts determined in the award, or whether the facts were properly determined. The state court considers the case only from the point of view of the grounds for setting aside an award, which are exhaustively set forth in Civil Procedure Code Art. 712 (now Art. 1206 §2).

Case no.: V CSK 321/06  

Key issues: petition to set aside arbitration award

id: 20290

Warsaw Appellate Court judgment dated 29 November 2006 Case No. I ACa 657/06 »

1. An essential difference between proceedings before a state court and an arbitration court is that the arbitration court is not bound by provisions of civil law. Thus mere failure to apply a particular provision of substantive law, or defective application, is insufficient to set aside an arbitration award. Violation of substantive law is grounds to set aside an arbitration award only if it results in a decision violating overriding legal principles in force in the Republic of Poland.

2. In a proceeding upon petition to set aside an arbitration award it is impermissible to review whether the arbitration court decided the case correctly in factual and legal terms.

3. An allegation that an arbitration award violated principles of social coexistence and good practice, or that it violated the principle of confidence in public authorities, is misplaced. An arbitration court is not a public authority.

Case no.: I ACa 657/06  

Key issues: petition to set aside arbitration award

id: 20289

Warsaw Appellate Court judgment dated 8 November 2006 Case No. I ACa 792/06 »

1. As a rule, the right to a defence in a proceeding before an arbitration court may also be violated by preventing proof of allegations or defences. Mere submission of statements and expression of a position is primarily relevant to explanation and interpretation of legal issues, and may be insufficient for establishing the factual grounds for a decision which is after all not subject to appellate review. It should be added that this has to do with proof of circumstances that in the view of the arbitration court are highly relevant to the decision.

2. The rules of the arbitration court did not provide for expansion of the statement of claim, nor did they prohibit it. In such case, the inability to repeat the procedure for selection of arbitrators should, in the view of the Appellate Court, be assessed in light of the type of demand. If this really had to do with a claim not related to the existing claim, but requiring special qualifications of the panel, it could be concluded that there was an infringement of fundamental rules of procedure resulting in setting aside of the award in such part.

3. An untrue statement in a document later offered in evidence by a party is not ... grounds for a petition to set aside an arbitration award under Civil Procedure Code Art. 1206 §1(5).

4. An arbitration court is not bound by provisions of substantive law. This means that arbitration awards may be reviewed only within a limited scope. Setting aside an arbitration award is thus justified only by an infringement of substantive law that would also bring the decision into conflict with the overriding legal principles in force in the Republic of Poland. In other words, an arbitration award may be unlawful if it results in a decision that violates controlling principles of the rule of law.

5. Existence of the grounds set forth in Civil Procedure Code Art. 1206 §2(2) is not determined by the number of provisions violated but by the relation between a specific violation of law to the narrowly defined principles of the legal order of the Republic of Poland.

Case no.: I ACa 792/06  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20325

Judgment of the Court of Justice of 26 October 2006, C-168/05, Elisa Maria Mostaza Claro v Centro Móvil Milenium SL »

Council Directive 93/13 on unfair terms in consumer contracts must be interpreted as meaning that a national court seised of an action for annulment of an arbitration award must determine whether the arbitration agreement is void and annul that award where that agreement contains an unfair term, even though the consumer has not pleaded that invalidity in the course of the arbitration proceedings, but only in that of the action for annulment.

Case no.: C-168/05  

Key issues: petition to set aside arbitration award, arbitration clause

id: 20230

Supreme Court judgment dated 18 October 2006 Case No. II CSK 123/06 »

The fundamental principles in force under Polish law with respect to liability for loss caused by non-performance or improper performance of an obligation, which are expressed in provisions of the Civil Code concerning the effects of failure to perform obligations, [are] ... the duty to redress loss by the party to an agreement which failed to perform or improperly performed an obligation, and an ordinary causal relationship between the behaviour and the loss. The duty to redress loss in this respect may not be determined arbitrarily or at will, but must correspond to the extent of the loss suffered (even as the result of an assessment based on consideration of all the circumstances of the case), and default interest is due from the date that the debtor falls into arrears. An arbitration award that was issued in violation of these principles is an award violating the rule of law.

Case no.: II CSK 123/06  

Key issues: petition to set aside arbitration award

id: 20229

Supreme Court judgment dated 4 October 2006 Case No. II CSK 117/06 »

An arbitration award that is clearly inconsistent with a legal norm established by the parliament in the social interest violates the rule of law within the meaning of Civil Procedure Code Art. 712 §1(4).

Case no.: II CSK 117/06  

Key issues: petition to set aside arbitration award

id: 20225

Supreme Court order dated 17 May 2006 Case No. I CSK 104/05 »

1. The constitutive elements of an arbitration award are defined by Civil Procedure Code Art. 708 §1, which is a regulation of mandatory applicability. One of these elements is a resolution of the demands of the parties (Art. 708 §1(4)). Thus it should be accepted that any ruling by the arbitration court containing the indicated elements, including a resolution of the demands of the parties, constitutes an arbitration award within the meaning of Book Three of the Civil Procedure Code, regardless of the form given to the ruling by the arbitration court.

2. In its case law, the Supreme Court has stressed on numerous occasions that the type of appellate instrument must be determined by the subject of the resolution, and not the form which the court gave to the ruling. ... This view applies also to rulings by an arbitration court.

Case no.: I CSK 104/05  

Key issues: petition to set aside arbitration award, arbitration award

id: 20221

Supreme Court judgment dated 31 March 2006 Case No. IV CSK 93/05 »

1. The defectiveness of an arbitration award in violating the rule of law must appear from the very wording of the ruling, and not from violation of regulations concerning proceedings before such court. Procedural violations might justify only some other ground for setting aside the arbitration award.

2. The minimum requirements that must be met by the justification for an arbitration award are set forth in Civil Procedure Code Art. 708 §1(5). If the grounds by which the arbitration court was guided when ruling on the demands of the parties may be deduced from the justification, that is sufficient for these requirements to be deemed to be satisfied.

3. The view cannot be accepted ... that the duty to conduct a thorough investigation of the circumstances necessary to resolve the case (Civil Procedure Code Art. 705 §2, third sentence) is performed by assessing the allegations of the parties and indicating why some of them are found to be valid and others not. Such assessment is made at the stage of making the ruling, and is expressed in the justification for the ruling made. Investigation of the circumstances that are relevant (essential) to the case occurs at an earlier phase of the proceeding and consists of hearing the parties, permitting them to submit statements with respect to the motions and allegations of the opposing party and the result of the evidentiary proceedings, and finally receiving evidence necessary to illuminate the circumstances essential to resolve the case.

Case no.: IV CSK 93/05  

Key issues: petition to set aside arbitration award, arbitration award

id: 20286

Poznań Appellate Court judgment dated 16 November 2005 Case No. I ACa 912/05 »

The task of the court in a proceeding upon a petition to set aside an arbitration award is not to decide the merits of the case already decided by the arbitration court, applying provisions of substantive and procedural law, but only to conduct a review of the grounds for the petition under Civil Procedure Code Art. 712 §§ 1 and 2. The court where a petition to set aside an arbitration award is filed does not act as a court of second instance, authorized to review the case on the merits applying provisions of substantive law, but assesses the challenged award only in terms of the violations indicated in Civil Procedure Code Art. 712 §§ 1 and 2, and in the case considered here, Art. 712 §1(4).

Case no.: I ACa 912/05  

Key issues: petition to set aside arbitration award

id: 20285

Poznań Appellate Court judgment dated 26 October 2005 Case No. I ACa 172/05 »

An arbitration award issued in violation of Civil Code Art. 64 and 65 §§ 1 and 2 infringes the rule of law because it forces the defendant to conclude a specific, unfavourable contract even though there is no duty to conclude such contract either under provisions of law or under the obligations undertaken by the defendant. This is a violation of the principle of commercial freedom, manifest among other things in the freedom to establish the terms of agreements and in the freedom to choose commercial partners.

Case no.: I ACa 172/05  

Key issues: petition to set aside arbitration award

id: 20284

Katowice Appellate Court judgment dated 25 October 2005 Case No. I ACa 1174/05 »

When considering the petition, the court is authorized only to assess whether the arbitration award being challenged is affected by the violations set forth in Civil Procedure Code Art. 712 §1, and thus, in this case, violation of the rule of law or principles of social coexistence. Only then may an allegation of violation of substantive law provide a valid basis for setting aside an arbitration award, if such violation also constitutes an infringement of the principles of the rule of law.

Case no.: I ACa 1174/05  

Key issues: petition to set aside arbitration award

id: 20218

Supreme Court judgment dated 11 August 2005 (Case No. V CK 86/05) »

1. The limitation of the scope of review of an arbitration award to the grounds set forth in the act, but also those on which the petition to set aside the arbitration award is based, is subject to the exception of the duty of the [state] court, expressly provided in Civil Procedure Code Art. 714, to review on its own motion whether a violation of law by the arbitration court resulted in issuance of an award that violates the legal order or principles of social coexistence.

2. In a proceeding to set aside an arbitration award, the subject of the case is clearly the review of the award within the grounds of the mandatory provisions of the Civil Procedure Code, and the subject of the proceeding may not be regarded as falling within the scope of the business activity of any business entities.

3. A proceeding to set aside an arbitration award is a distinct type of proceeding, containing elements of a cassation proceeding, but the reference set forth in the mandatorily applicable rule of Civil Procedure Code Art. 715 does not justify application, even only as relevant, of the code provisions concerning the procedure in commercial cases, because the subject matter and function of the two types of proceedings are completely different.

Case no.: V CK 86/05  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20211

Polish Supreme Court judgment dated 21 December 2004 (Case No. I CK 405/04) »

In a case seeking to set aside an arbitration award, the court will consider on its own motion only one of the grounds for the petition, namely that provided by Civil Procedure Code Art. 712 §1(4), i.e. whether the arbitration award violates the legal order or principles of social coexistence. This means that all other grounds for the petition, including that there was no arbitration clause or the clause was invalid or expired (Civil Procedure Code Art. 712 §1(1)), will be considered by the court only if asserted in the petition (the petition was based on such grounds).

Case no.: I CK 405/04  

Key issues: petition to set aside arbitration award

id: 20282

Katowice Appellate Court judgment dated 18 October 2004 Case No. I ACa 565/04 »

1. The court where a petition to set aside an arbitration award is filed does not act as a court of second instance, authorized to review the case on the merits applying provisions of substantive law, but assesses the challenged award only in terms of the violations indicated in Civil Procedure Code Art. 712 §§ 1 and 2.

2. There can be no violation of the rule of law where the arbitration award complies with substantive law in force and was not issued in violation of provisions of substantive law, let alone gross violation. Only a gross violation would warrant a finding that the arbitration award violated the rule of law.

Case no.: I ACa 565/04  

Key issues: petition to set aside arbitration award

id: 20205

Polish Supreme Court judgment dated 16 June 2004 (Case No. III CK 97/04) »

The relative nature of Civil Code Art. 740, relied on by the appellant, ... means that even if this provision served as the substantive legal grounds for considering the claim that is the subject of the dispute, it cannot be treated as a fundamental provision, essential to the legal order.

Case no.: III CK 97/04  

Key issues: petition to set aside arbitration award

id: 20204

Polish Supreme Court judgment dated 21 May 2004 (Case No. III CK 60/03) »

When a petition [to set aside an arbitration award] is based on allegations of violation of substantive law, it is necessary to demonstrate one of the aggravating aspects of such violation that constitutes violation of the legal order or principles of social coexistence in the Republic of Poland (Civil Procedure Code Art. 712 §1(4)). A showing of violation of substantive law is not legally sufficient grounds for granting a petition to set aside an arbitration award.

Case no.: III CK 60/03  

Key issues: petition to set aside arbitration award

id: 20199

Polish Supreme Court judgment dated 26 September 2003 Case No. IV CK 17/02 »

A finding that an award is inconsistent with the facts does not always result in setting aside the award. It is accepted that an application alleging violation of the rule of law is justified when the effect of an arbitration award conflicts with fundamental principles of the legal order of the state.

Case no.: IV CK 17/02  

Key issues: petition to set aside arbitration award, arbitration award

id: 20191

Polish Supreme Court judgment dated 11 July 2002 Case No. IV CKN 1211/00 »

1. Arbitration awards may be reviewed only to a limited extent. Setting aside an arbitration award is thus justified only by such an abuse of substantive law that it also constitutes a decision that violates the leading principles of law in force in the Republic of Poland. In other words, an arbitration award may violate the rule of law only if it results in a resolution violating the principles of a state governed by the rule of law.

2. An arbitration award also requires examination in terms of whether it violates the principle of the freedom of economic activity, enshrined in Art. 20 of the Constitution. Under Art. 5 of the Economic Activity Law dated 19 November 1999 (Journal of Laws Dz.U. 1999 No. 101 item 1178, as amended), this constitutional principle is manifest in the rule that taking up and conducting economic activity shall be free for all persons, under equal rights, and compliance with conditions defined by law is a statutory requirement for limiting the application of this principle.

3. A finding cannot be upheld … that an arbitration court did not violate principles of social coexistence without an attempt to address specific principles more closely. In the context of contractual relations, these principles are manifest in the existence of the universally accepted rules of decent behaviour, with respect to a potential counterparty as well. With respect to commercial relations, of particular relevance are the principles of fair dealing and commercial honesty, which may be demanded of a business entity—a professional on the market—namely observance of good practice, fair dealing, honest treatment, loyalty and trust.

Case no.: IV CKN 1211/00  

Key issues: petition to set aside arbitration award

id: 20189

Polish Supreme Court judgment dated 11 April 2002 Case No. III CKN 492/01 »

1. It follows from the nature of a petition to set aside an arbitration award that the state court with jurisdiction to hear the petition may not consider the merits of the dispute, because in deciding the case and issuing its ruling, the arbitration court is not bound by substantive or procedural law, so long as it does not violate the rule of law or principles of [social] coexistence. This means that the state court will not examine whether the arbitration award is consistent with substantive law or is justified by the facts found in the award, or whether such facts were correctly determined. The state court considers the case only in terms of the grounds for setting aside the award, which are exhaustively listed in Civil Procedure Code Art. 712.

2. The failure by the arbitration court to reduce a contractual penalty, in violation of Civil Code Art. 484 §2, may constitute justified grounds for setting aside an arbitration award, if the awards results in a resolution that clearly conflicts with principles of social coexistence. An arbitration award assessing a clearly grossly excessive contractual penalty violates such principles.

Case no.: III CKN 492/01  

Key issues: petition to set aside arbitration award

id: 20188

Polish Supreme Court judgment dated 12 March 2002 Case No. IV CKN 844/00 »

1. A proceeding before the state court pursuant to a petition to set aside an arbitration award is formal in nature, which is evident among other aspects from the limitation of the grounds for the petition (Civil Procedure Code Art. 712 §1) and the deadline for filing it (Civil Procedure Code Art. 713 §§1 and 2), and by the court’s being bound by the grounds for the petition for renewal, while it is permissible for the court to consider on its own motion whether the award violates the rule of law or principles of social coexistence (Civil Procedure Code Art. 714). In consequence, these regulations must be interpreted strictly.

2. A petition to set aside an award is a specific pleading in the nature of appellate review. It must meet the formal requirements of a pleading (Civil Procedure Code Art. 126) and provide the grounds and justification (Civil Procedure Code Art. 714 a contrario). The existence of any of the grounds may not be presumed. Action by the court consisting of interpretation of the grounds for the petition in order to ascribe grounds other than those expressly stated would usurp the role of the party to perform its procedural duties, and would also threaten arbitrary interpretation not necessarily consistent with the position taken by the petitioner. Thus it should be regarded as impermissible.

3. The concepts of the rule of law and principles of social coexistence are not the same. Lumping them into one normative category of general clauses does not mean it is permissible to apply them interchangeably and ascribe the same substance to the two concepts.

Case no.: IV CKN 844/00  

Key issues: petition to set aside arbitration award

id: 20184

Polish Supreme Court judgment dated 11 July 2001 Case No. V CKN 379/00 »

The essence of an arbitration clause is submission of a dispute to the arbitration court for resolution. If the agreement does not provide the arbitration court with a dispute-resolution function, then it does not contain an arbitration clause.

Case no.: V CKN 379/00  

Key issues: petition to set aside arbitration award, arbitration clause

id: 20281

Cracow Appellate Court judgment dated 24 April 2001 Case No. I ACa 277/01 »

1. Pursuant to Civil Procedure Code Art. 712 §1(4), an arbitration award may be set aside if the ruling on the demands of the parties violates the rule of law or principles of social coexistence. This provision enacts a general clause representing the principle of domestic public policy. This means that violation or incorrect interpretation of substantive law, and the resulting defect of the ruling, in and of itself does not constitute a violation of the rule of law. A violation of substantive law must be such that it would result in issuance of a ruling that would by its content violate fundamental principles of the rule of law, particularly situations where a ruling is issued using an institution that is impermissible by operation of law.

2. Incorrect interpretation of substantive law and other violations not rising to such level cannot lead to a finding that the grounds for the petition set forth in Civil Procedure Code Art. 712 §1(4) have been met.

Case no.: I ACa 277/01  

Key issues: petition to set aside arbitration award, arbitration award

id: 20181

Polish Supreme Court judgment dated 28 November 2000 Ca e No. IV CKN 171/00 »

1. After the period indicated in Civil Procedure Code Art. 713 §1 expires, the ability to supplement the grounds for a petition to set aside an arbitration award is precluded.

2. It cannot be accepted ... that an award violates the rule of law solely on the grounds that the ruling is not consistent with certain provisions of substantive law. The arbitration court is generally not bound at all by provisions of substantive law. It is bound to apply mandatorily applicable provisions of law whose violation would be tantamount to violation of the rule of law or principles of social coexistence.

Case no.: IV CKN 171/00  

Key issues: petition to set aside arbitration award

id: 20178

Polish Supreme Court order dated 29 August 2000 Case No. I CKN 161/00 »

If under Art. 87 of the Public Procurement Law the appellate proceeding is governed by the arbitration provisions of the Civil Procedure Code (unless otherwise provided by statute), the petition to set aside must be dismissed if the deadline to file the petition is not met.

Case no.: I CKN 161/00  

Key issues: petition to set aside arbitration award

id: 20174

Polish Supreme Court order dated 31 May 2000 Case No. I CKN 182/00 »

1. A petition to set aside an arbitration award constitutes a special form of state court supervision over the arbitration court. Avenues of appeal will lie from the judgment by the court issued as a result of consideration of the petition, under general rules, not excluding a cassation appeal.

2. For the parties to an arbitration proceeding, the opportunity to file a petition to set aside the arbitration award constitutes a specific means of review of the award issued in the proceeding, and the ruling by the state court concluding the proceeding on the petition to set aside the arbitration award definitively concludes the proceeding before the state court. Thus only such a ruling may be characterized as “concluding the proceeding in the matter.” ... Thus also such characterization may be not be ascribed to an order on enforcement of an arbitration award.

Case no.: I CKN 182/00  

Key issues: petition to set aside arbitration award

id: 20280

Warsaw Appellate Court judgment dated 29 May 2000 Case No. I ACa 65/00 »

The arbitration court’s violation or incorrect interpretation of substantive law, and the resulting defect of the ruling, in and of itself does not constitute a violation of the rule of law. A violation of substantive law must be such that it would result in issuance of a ruling that would by its content violate fundamental principles of the rule of law. The fact that the case concerns public procurement paid for out of public funds does not change this assessment and does not mean that violation of any of the provisions of [the Public Procurement Law] constitutes a violation of the rule of law.

Case no.: I ACa 65/00  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20173

Polish Supreme Court judgment dated 28 April 2000 Case No. II CKN 267/00 »

1. Mere incorrect interpretation of substantive law by the arbitration court may not justify granting a petition to set aside the arbitration award. It will be otherwise if the arbitration award, in violating specific norms of substantive law, at the same time violates the rule of law. This has to do with an instance in which ... the violation of substantive law by the arbitration court results in a resolution that violates the leading legal principles in force in the Republic of Poland.

2. The arbitration court’s not being bound by provisions of substantive law derives primarily from the fact that resolution of a matter is typically entrusted to arbitrators because of their special knowledge, e.g. in the field of construction (in construction cases) or concerning commercial practices (in cases related to international transactions)—where such specialized knowledge is more important than knowledge of the substantive legal norms of a specific legal system. In such cases, the arbitrators’ legal intuition may be sufficient.

Case no.: II CKN 267/00  

Key issues: petition to set aside arbitration award

id: 20165

Polish Supreme Court judgment dated 13 December 1999 Case No. III CKN 478/98 »

1. A petition to set aside an arbitration award cannot be regarded as an avenue of appeal. A petition to set aside an arbitration award and the proceeding initiated by filing the petition is of a specific nature. It combines features of an extraordinary avenue of appeal and an independent claim, understood in a specific manner, seeking to establish a right or a legal relationship. This is because the petition is intended to change the legal situation governed by the ruling by the arbitration court, and seeks to set aside the legally final award of the arbitration court.

2. The deadline of one month to file a petition to set aside an arbitration award (Civil Procedure Code Art. 713 §1) is also met if by that time the petition is filed with a court other than the one that would have been competent to decide the dispute if the parties had not made an arbitration clause (Civil Procedure Code Art. 696 §1).

Case no.: III CKN 478/98  

Key issues: petition to set aside arbitration award

id: 20163

Polish Supreme Court ruling dated 22 September 1999 Case No. I CKN 654/99 »

1. For the parties to an arbitration proceeding, the opportunity to file a petition to set aside the arbitration award constitutes a specific means of review of the award issued in the proceeding, and the ruling by the state court concluding the proceeding on the petition to set aside the arbitration award definitively concludes the proceeding before the state court. Thus only such a ruling may be characterized as “concluding the proceeding in the matter.” ... Therefore such characterization may be not be ascribed to an order on enforcement of an arbitration award.

2. No cassation appeal will lie from an order by the court of second instance denying an interlocutory appeal from an order on enforcement of an arbitration award, because it is not a ruling concluding the proceeding in the matter within the meaning of Civil Procedure Code Art. 392 §1.

Case no.: I CKN 654/99  

Key issues: petition to set aside arbitration award, recognition and enforcement of domestic arbitration award

id: 20320

Judgment of the Court of Justice of 1 July 1999, C-126/97, Eco Swiss China Time Ltd v Benetton International NV »

1. Where domestic rules of procedure require a national court to grant an application for annulment of an arbitration award where such an application is founded on failure to observe national rules of public policy, it must also grant such an application where it is founded on failure to comply with the prohibition laid down in Article 85 of the Treaty (now Article 81 EC). That provision constitutes a fundamental provision which is essential for the accomplishment of the tasks entrusted to the Community and, in particular, for the functioning of the internal market. Also, Community law requires that questions concerning the interpretation of the prohibition laid down in Article 85 should be open to examination by national courts when they are asked to determine the validity of an arbitration award and that it should be possible for those questions to be referred, if necessary, to the Court of Justice for a preliminary ruling.

2. Community law does not require a national court to refrain from applying domestic rules of procedure according to which an interim arbitration award which is in the nature of a final award and in respect of which no application for annulment has been made within the prescribed time-limit acquires the force of res judicata and may no longer be called in question by a subsequent arbitration award, even if this is necessary in order to examine, in proceedings for annulment of a subsequent arbitration award, whether an agreement which the interim award held to be valid in law is nevertheless void under Article 85 of the Treaty (now Article 81 EC), where the time-limit prescribed does not render excessively difficult or virtually impossible the exercise of rights conferred by Community law.

Case no.: C-126/97  

Key issues: petition to set aside arbitration award

id: 20154

Polish Supreme Court judgment dated 3 September 1998 Case No. I CKN 822/97 »

1. An assignee enters into the legal position of the assignor. The flip side of this rule, as it were, is the permissibility of the debtor’s asserting against the assignee any defences that it had against the assignor as of the time it received notice of the assignment (Civil Code Art. 513 §1). The debtor of a claim under an agreement containing an arbitration clause who is sued before the state court may thus assert the arbitration clause as a defence (Civil Procedure Code Art. 697 §2 in connection with Art. 202) against the assignee as well.

2. The effectiveness of an arbitration clause against an assignee excludes assertion of the lack of an arbitration clause, as the plaintiff appears as an assignee who acquired the claim subject to the clause.

3. It is accepted that a conclusion of violation of the rule of law is justified when the result of the arbitration award conflicts with fundamental principles of the legal order of the state..., for example, the ruling by the arbitration court is clearly inconsistent with the established facts.

4. With respect to the criterion indicated in Civil Procedure Code Art. 712 §1(4) of principles of social coexistence, it is necessary to indicate specific principles of social coexistence that are irreconcilable with which the effects of the arbitration award.

Case no.: I CKN 822/97  

Key issues: petition to set aside arbitration award, arbitration clause

id: 20152

Polish Supreme Court judgment dated 27 May 1998 Case No. I CKN 709/97 »

The arbitration court is not bound by regulations of substantive law in force, as the one criterion for assessing the correctness of the award provided by the code is the requirement of lawfulness and principles of social coexistence. This means ... that a petition to set aside an arbitration award may not be granted only because the award is found to have legal or factual defects.

Case no.: I CKN 709/97  

Key issues: petition to set aside arbitration award

id: 20147

Polish Supreme Court judgment dated 16 May 1997 Case No. I CKN 205/97 »

1. Civil Procedure Code Art. 705 §2 specifies the procedure only before the arbitration court, as demonstrated at least by its placement in Chapter 3, Title 3 of the Civil Procedure Code, containing regulations governing the procedure before the arbitration court. Thus because Art. 705 §2 imposes specific duties only on the arbitration court, it could not be violated by the court of second instance, which is a state court.

2. Civil Procedure Code Art. 714 defines the bounds of action by the common court hearing a petition to set aside an arbitration award, based on the grounds listed in Art. 712 §1. It is thus clear that Art. 714 defines the bounds of the action of the common court, but it is the court hearing the case in the first instance. Thus the allegation of violation of Art. 714 cannot be addressed directly to the court of appeal, which is a court of second instance.

3. The regulations of the Civil Procedure Code concerning the procedure before the arbitration court do not contain a requirement that the arbitration court is absolutely bound by the rules of substantive law when it considers the merits of the dispute. Art. 712 §1(4) and a linguistic interpretation thereof justify the conclusion that it is the duty of the arbitration court to apply imperative legal norms whose violation would also violate the rule of law Or principles of social coexistence.

4. Even violation of norms of substantive law by the arbitration court will not always be tantamount to violation of the rule of law or principles of social coexistence, because it will depend on the circumstances of the specific case.

5. Civil Procedure Code Art. 712 §1(4) will be met only by a violation of substantive legal norms, even those of a peremptory nature, made by the arbitration award, as a result of which the ruling by the arbitration court will also cause a clear violation of the overriding principles of the legal order in force in the Republic of Poland, or conflict with clearly defined principles of social coexistence.

6. There may be said to be a violation of systemic statutes having such effect with respect to statutes governing the system and principles for functioning of the State as a whole or its highest bodies, but not the functioning of one specific local governmental unit.

Case no.: I CKN 205/97  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20272

Poznań Appellate Court judgment dated 23 May 1996 Case No. I ACr 189/96 »

1. Recusal of an entire court may not be demanded, but only recusal of specific judges (one or more of them), identified by name, but this does not mean that in this case the arbitration court itself could determine that the motion by the defendant should not be granted. The province court correctly stated that the arbitration court may not decide a motion to recuse an arbitrator, either on the merits or on procedural grounds, even if the motion was clearly unjustified or late.

2. The ruling issued as a result of a petition to set aside an arbitration award is in the nature of cassation, and thus the state court may only set aside the award or deny the petition, and may not rule on the merits. In consequence, when the state court sets aside an arbitration award by granting a petition under Civil Procedure Code Art. 712 §1(2)–(5), the arbitration court retains its jurisdiction to decide the dispute.

Case no.: I ACr 189/96  

Key issues: arbitrator, jurisdiction of arbitration court, petition to set aside arbitration award

id: 20364

Judgment of the Court of Justice of 6 October 2009., C-40/08, Gemeente Almelo and Others v Energiebedrijf IJsselmij NV »

A national court which, in a case provided for by law, determines an appeal against an arbitration award must be regarded as a court or tribunal within the meaning of Article 177 of the Treaty, even if under the terms of the arbitration agreement made between the parties that court must give judgment according to what appears fair and reasonable.

Case no.: C-393/92  

Key issues: petition to set aside arbitration award

id: 20139

Polish Supreme Court order dated 27 July 1993 Case No. I CO 23/93 »

The Polish state court has jurisdiction in a proceeding to set aside an arbitration award if the award in a dispute of an international character was rendered in Poland, even if none of the links referred to in Civil Procedure Code Art. 1103 would justify such jurisdiction. And conversely, it should be found that the Polish court does not have jurisdiction in a proceeding to set aside an arbitration award rendered abroad, even if one of the links referred to in Civil Procedure Code Art. 1103 could have justified such jurisdiction.

Case no.: I CO 23/93  

Key issues: petition to set aside arbitration award

id: 20135

Polish Supreme Court judgment dated 27 April 1988 Case No. I CR 81/88 »

In the context of Civil Procedure Code Art. 712(4), violation of the principles of social coexistence is equated with conditions disqualifying an arbitration award to a degree depriving it of value as the basis for resolution of the dispute (violation of the rule of law, unintelligibility or inconsistency), and thus highly exceptional.

Case no.: I CR 81/88  

Key issues: petition to set aside arbitration award

id: 20133

Polish Supreme Court judgment dated 3 June 1987 Case No. I CR 120/87 »

1. A petition to set aside an arbitration award is not ... an appeal, but a procedural measure with a nature similar to a petition to reopen a proceeding.

2. The statement in the second sentence of Civil Procedure Code Art. 705 §2 that an arbitration court is not bound by civil procedure regulations does not refer to mandatorily applicable regulations set forth in Book Three of the code. Civil Procedure Code Art. 712–715, which have this character, apply in every arbitration proceeding. The lack of any indication to this effect in the rules defining the procedure before the arbitration court therefore does not exclude the permissibility of filing a petition with the state court to set aside an award issued by a permanent arbitration court (Civil Procedure Code Art. 695).

Case no.: I CR 120/87  

Key issues: petition to set aside arbitration award, arbitration award

id: 20130

Polish Supreme Court order dated 27 June 1984 Case No. II CZ 67/84 »

The scope of the challenge is set by the party and is binding on the court (Civil Procedure Code Art. 696) when considering an action commenced by a petition to set aside an arbitration award (Civil Procedure Code Art. 712–715).

Case no.: II CZ 67/84  

Key issues: petition to set aside arbitration award

id: 20128

Polish Supreme Court order dated 27 August 1982 Case No. II CR 214/82 »

[In an action to set aside an arbitration award] a link that could justify domestic jurisdiction is issuance of the award in Poland, as such a ruling, when legally final, would become a domestic Polish ruling equivalent to a judgment of a Polish state court (Civil Procedure Code Art. 711 §2). However, the seat of an international arbitration court which may hear cases in the territory of other countries for which it was established will not serve as such a link.

Case no.: II CR 214/82  

Key issues: petition to set aside arbitration award

id: 20119

Polish Supreme Court resolution dated 20 February 1974 Case No. III CZP 2/74 »

1. A creditor’s application to the state court for confirmation of the enforceability of an arbitration award, as well as an application for issuance of an enforcement clause for the award, do not interrupt the running of the statute of limitations on the claims covered by the arbitration award.

2. The state court’s confirmation of the enforceability of an arbitration award and issuance of an enforcement clause for the award are two distinct actions by the court, made under separate procedures: namely, confirmation of enforceability occurs in a proceeding provided for in Part One, Book Three of the Civil Procedure Code, which governs the procedure before the arbitration court and before the state court in matters concerning arbitration awards, while issuance of an enforcement clause for an arbitration award occurs in an execution proceeding (Part Two, Book One of the Civil Procedure Code). Moreover, an enforcement clause may be issued only for an arbitration award as to which a legally final order of the state court confirming its enforceability has been issued pursuant to Civil Procedure Code Art. 711.

3. Arbitration, based on the agreement of the parties and carried out by arbitrators, persons trusted by the parties, who in performance of their voluntarily assumed obligations are generally constrained by procedural regulations to only a small degree, must of necessity be overseen by the state courts. Such oversight has to do on one hand with the correctness of the appointment of the arbitration court and the parties’ selection of the arbitrators, and on the other hand with the substance of the actual ruling by the arbitration court. By its nature, the review of the substance of the award cannot includes the very correctness or justice of the resolution, but is limited to whether the ruling was issued under conditions assuring the parties protection of their rights, and whether the resolution violates the rule of law or principles of social coexistence. Review of an arbitration award in the broadest sense is performed by a state court only upon request of a party, asserted in the form of a petition to set aside the arbitration award, as provided in Civil Procedure Code Art. 712 ff, limited in time and in the scope of grounds for challenging the award. However, review of the consistency of the award with principles of the rule of law and principles of social coexistence is made by the state court on its own motion, and the institution of confirmation of enforceability of the award serves this purpose.

4. An order confirming the enforceability of an arbitration award, although a necessary condition for permitting enforcement of the award through state compulsion, does not in itself constitute an act seeking to enforce the award. Thus asserting a demand for confirmation of enforceability is not among the acts undertaken “with the immediate purpose of enforcement, declaration or security” of the claim adjudged by the award within the meaning of Civil Code Art. 123 §1(1).

Case no.: III CZP 2/74  

Key issues: petition to set aside arbitration award, recognition and enforcement of domestic arbitration award

id: 20118

Polish Supreme Court judgment dated 21 December 1973 Case No. I CR 663/73 »

As the arbitration court is not even required to rule on the basis of provisions of substantive law, an erroneous interpretation thereof cannot be regarded as a violation of the rule of law. Nor may the arbitration court be required not to apply regulations involving the statute of limitations and preclusion. More justified would be the opposite view, that failure to apply such regulations, which were enacted primarily in the interest of protecting the legal order—not disturbing settled matters (quieta non movere)—and entering an award for time-barred claims, could justify an allegation of violation of the rule of law.

Case no.: I CR 663/73  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20114

id: 20114 Polish Supreme Court judgment dated 22 December 1970 Case No. III CRN 327/70 »

A petition to set aside an arbitration award may be based on the same grounds that provide the basis for reopening a proceeding. Under Civil Procedure Code Art. 403 §1, reopening of a proceeding may be sought on the grounds that the judgment was based on a forged or altered document. However, this does not apply to a situation in which the allegation of forgery of the document was raised in the earlier proceeding and found by the court to be groundless. In such situation, a petition to reopen the proceeding may be based on newly discovered facts or evidence (Civil Procedure Code Art. 403 §2) demonstrating that the court’s conclusion as to the authenticity of the document was erroneous, or upon discovery of a legally final criminal conviction for forging or altering the document.

Case no.: III CRN 327/70  

Key issues: arbitration court procedure, petition to set aside arbitration award

id: 20108

Polish Supreme Court judgment dated 13 December 1967 Case No. I CR 445/67 »

1. Because when considering and ruling on a dispute the arbitration court is not bound by provisions of substantive or procedural law, so long as it does not violate the rule of law or principles of social coexistence, it thus also follows from the essence of a petition to set aside an arbitration award that the state court with jurisdiction to consider the petition may not review the merits of the dispute. This means that the state court will not examine whether the arbitration award is contrary to substantive law or is based on the facts stated in the award, or whether such facts were properly determined. The state court will consider the case only from the perspective of the grounds for setting aside the award, exhaustively listed in Civil Procedure Code Art. 712.

2. Attention should be paid to the fundamental distinction between consideration of a case on the basis of Civil Procedure Code Art. 711 §3 and Art. 712. It is clear from a comparison of these two provisions that when ruling pursuant to Art. 711 §3, the state court relies only on the file of the arbitration court and does not admit any evidence in order to determine the factual circumstances necessary to assess whether the substance of the arbitration award violates the rule of law or principles of social coexistence, and thus this provision authorizes the court to find that the substance of the arbitration award violates the rule of law or principles of social coexistence only when this appears from the arbitration file submitted to the court. However, pursuant to a petition to set aside an arbitration award, a normal adversarial proceeding is held (Civil Procedure Code Art. 715), in the course of which it is possible to conduct an evidentiary proceeding under general rules, and thus to admit evidence in order to determine the factual circumstances necessary for an assessment of the grounds asserted in the petition.

3. In the event of the legally final setting aside of an arbitration award, the way is open to the parties to assert a claim on the same subject matter before the state court, or for the parties to conclude a new clause and again submit the matter to a designated arbitration court for resolution.

Case no.: I CR 445/67  

Key issues: petition to set aside arbitration award

id: 20102

Polish Supreme Court judgment dated 15 February 1964 Case No. I CR 123/63 »

1. The arbitration award in this case could be considered only under Civil Procedure Code Art. 510, and more precisely—given the lack of other allegations—from the point of view of whether the award in its substance violates the rule of law or principles of social coexistence.

2. The arbitration court considered the case as if the agreement between the parties had not been performed at all, which is clearly contrary to the state of facts..., and if that is so, the ruling by the court of first instance results in ... grossly privileging the defendant, to the detriment of the State Treasury. Such a grossly erroneous ruling violates the rule of law (Civil Procedure Code Art. 510 §1(4)).

Case no.: I CR 123/63  

Key issues: petition to set aside arbitration award

id: 20100

Polish Supreme Court judgment dated 6 January 1961 Case No. 2 CR 532/59 »

1. A petition [to set aside an arbitration award] must state specifically what allegations the petitioner is asserting against the arbitration award, and must be filed within the time provided in Civil Procedure Code Art. 511. Upon expiration of such period, the right to file the petition lapses, and if a petition was filed on time, the ability to extend the petition to include other grounds also lapses.

2. If a petition [to set aside an arbitration award] was filed on time (Civil Procedure Code Art. 511 §1), the issue of whether the arbitration award violates the rule of law or principles of social coexistence in the People’s State must be taken into consideration by the court at its own initiative, and thus also when the petition does not include an allegation in this respect or if the petitioner in raising such allegation perceives such defectiveness of the arbitration award in some respect other than that in which it actually occurred.

3. If in a proceeding pursuant to a petition to set aside an arbitration award a party raises further allegations against the arbitration award after the deadline under Civil Procedure Code Art. 511, such new allegations, because they are precluded, may not constitute additional grounds for the petition, but nonetheless must be considered by the court at its own initiative insofar as they are relevant to a determination which the court must make at its own initiative, namely a determination of whether the arbitration award violates the rule of law or principles of social coexistence in the People’s State.

4. It follows from the fact that the code lists exhaustively the grounds for the petition [to set aside an arbitration award] (Civil Procedure Code Art. 510 §1) that the scope of such grounds may not be interrelated logically in such a manner that some of them are controlling and others are subordinate to them. If the grounds were interrelated in that way, the code would not have listed one of the grounds separately if all of it could be subsumed under another of the grounds.

5. The fact that the code permits arbitration (Civil Procedure Code Art. 8) and ascribes legal force to arbitration awards equal to state court judgments (Civil Procedure Code Art. 508 §2) even though arbitration awards may not be consistent with provisions of substantive law excludes acceptance of the position that any inconsistency with provisions of substantive law in and of itself disqualifies an arbitration award. As long as the substance of the award does not violate the rule of law or principles of social coexistence (Civil Procedure Code Art. 509 and 510 §1(4)), the issue of whether the award is consistent with provisions of substantive law is not subject to any review.

Case no.: 2 CR 532/59  

Key issues: petition to set aside arbitration award

id: 20099

Polish Supreme Court judgment dated 14 November 1960 Case No. 2 CR 1044/59 »

Erroneous interpretation or improper application of substantive law does not in and of itself constitute sufficient grounds for a petition to set aside an arbitration award, defined by Civil Procedure Code Art. 510 §1(4) as violation of the rule of law or principles of social coexistence in the People’s State. Violation of substantive law may constitute sufficient grounds to set aside an arbitration award if it would result in a determination that clearly violates the overriding principles of the legal system in the People’s State or violates principles of social coexistence. Such principles must also be respected in arbitration.

Case no.: 2 CR 1044/59  

Key issues: petition to set aside arbitration award

id: 20098

Polish Supreme Court resolution dated 12 October 1960 Case No. 3 CO 21/60 »

1. No review [by the province court] will lie against an order by the county court appointing an arbitrator pursuant to Civil Procedure Code Art. 492.

2. An interested party will be able to assert its allegations connected with appointment of an arbitrator under Civil Procedure Code Art. 492 in an eventual petition to set aside the arbitration award, which may be filed with the state court in the event of the existence of the defects referred to in Civil Procedure Code Art. 510 §1.

Case no.: 3 CO 21/60  

Key issues: petition to set aside arbitration award, arbitrator

id: 20092

Polish Supreme Court ruling dated 17 September 1956 Case No. 3 CR 505/56 »

1. It follows from Civil Procedure Code Art. 488 §2, which provides that each party shall appoint one arbitrator and the arbitrators so appointed “shall appoint a presiding arbitrator,” unless the arbitration clause provides otherwise, and from Art. 492, which provides that in the event of lack of agreement between the arbitrators, the presiding arbitrator shall be appointed by the state court, that the appointment of a presiding arbitrator is mandatory unless the arbitration clause provides otherwise.

2. Because as a result of failure to appoint a presiding arbitrator the arbitration court was not appointed in the prescribed composition, the award issued by an arbitration court composed of two arbitrators was made in an invalid proceeding.

3. Under applicable law, violation of regulations concerning the composition of the arbitration court constitute absolute grounds for setting aside the arbitration award in every instance.

Case no.: 3 CR 505/56  

Key issues: petition to set aside arbitration award, arbitrator

id: 20091

Polish Supreme Court ruling dated 14 February 1956 Case No. IV CO 29/55 »

1. It follows from the title of Book III and from the first sentence of Civil Procedure Code Art. 510 that the petition provided for in this chapter is applicable only to arbitration awards, and via such petition it is possible only to seek to set aside an award. Such petition cannot be extended by analogy to apply also to a settlement, as the role of the arbitration court in conclusion of a settlement is limited to accepting and documenting the settlement, and thus the settlement does not contain any of the elements constituting the essence of a judicial determination.

2. A party rightly disputing the validity of a settlement is not in any respect bound by the settlement, but should assert such invalidity not by relying on Civil Procedure Code Art. 510, but by other means. An action for a declaration of the invalidity of the settlement will serve this end, or an action based on Civil Procedure Code Art. 573 if the party wishes to restrict itself to depriving the settlement of its enforceability, although in such instance the time limits provided in Art. 573 §1(2) will not apply because they are strictly tied to the res judicata effect of a judgment, which settlements do not have.

3. Absolute invalidity, which would deprive an award or settlement of the character of a judicial act even without the need to challenge the award, would come into play if persons were sitting as arbitrators who had not actually been appointed as such.

4. Under Civil Procedure Code Art. 508 §1, arbitration awards as well as settlements concluded before an arbitration court are equivalent to state court judgments. Thus with respect to an undertaking to make declarations of will, they exert the same effects as state court judgments.

Case no.: IV CO 29/55  

Key issues: petition to set aside arbitration award, settlement before arbitration court

id: 20296

Polish Supreme Court ruling dated 12 November 1955 Case No. 1 CR 378/55 »

1. A proceeding upon a petition to set aside an arbitration award is not an appeal against the award. In the proceeding upon a petition to set aside an arbitration [award], the state court does not judge the case anew, nor does it conduct full review of the award, but its task is only to determine whether the grounds to set aside the award alleged in the petition exist.

2. An arbitration court rules within its discretion, but the bounds of such discretion are set by Civil Procedure Code Art. 510 §1.

3. An arbitration clause is also a type of disposition by the parties, an effect of which is the possibility of the arbitration court to resolve the dispute in a manner that violates substantive law but is nonetheless binding on the party.

4. As the challenged arbitration award does not in its substance violate the rule of law, even if it violated substantive law, the Supreme Court has no basis for ruling on whether the award is consistent or inconsistent with substantive law.

Case no.: 1 CR 378/55  

Key issues: petition to set aside arbitration award