id: 20356

Polish Supreme Court resolution dated 13 July 2011 Case No. III CZP 36/11 »

1. A joint and several debtor is not bound by an arbitration clause concluded by another joint and several debtor.

2. A partner of a registered partnership is not bound by an arbitration clause concluded by the partnership.

3. The acquirer of an enterprise (Civil Code Art. 55⁴) is bound by an arbitration clause concluded by the seller of the enterprise with its creditor prior to sale of the enterprise, covering disputes concerning obligations connected with conduct of the enterprise.

Case no.: III CZP 36/11  

Key issues: arbitration clause

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: 20361

Polish Supreme Court judgment dated 16 December 2010 (Case No. I CSK 112/10) »

1. It is clear that an arbitration clause may be binding also on legal successors with respect to the relationship under which disputes were submitted to the arbitration court for resolution, ... but an endorsee is generally protected by Art. 17 of the Promissory Note Law against defences by the promissory note debtors based on their personal relations with the prior holders of the note. This also includes protection against the defence that the promissory note dispute is subject to an arbitration clause. ... The promissory note debtor could assert against the endorsee the defence that the promissory note dispute is subject to an arbitration clause agreed with the prior holder of the promissory note only if the endorsee, in acquiring the promissory note, consciously acted to the injury of the debtor, i.e. knew of the existence of grounds for the debtor to assert the arbitration clause against the prior holder and also sought, to the injury of the debtor, to deprive the debtor of such defence. ... The promissory note debtor’s assertion against the acquirer of the promissory note, without any limitations, of the defence that the promissory note dispute is subject to an arbitration clause, could come into play only in instances where the promissory note was acquired by way of an assignment agreement or endorsement after protest for non-payment or after the deadline for protest, having the effect of an assignment (Promissory Note Law Art. 20(1), first sentence).

2. Although a clause submitting a promissory note dispute to an arbitration court is theoretically permissible under Civil Procedure Code Art. 1157, to do so must be regarded from the perspective of the promissory note creditor as highly irrational, as it deprives the promissory note creditor of the benefits afforded it by seeking payment of the promissory note in a proceeding for an order of payment before the common court. ... The position cannot be accepted ... that benefits comparable to those afforded to the party enforcing payment of a promissory note by a proceeding for order of payment may be assured in an arbitration proceeding by reference to the regulations concerning proceedings for order of payment within the parties’ agreement concerning “the rules and manner of proceeding before the arbitration court” (Civil Procedure Code Art. 1184 §1).

3. In light of the irrationality of submission of a promissory note dispute to an arbitration clause, it should be accepted that the effectiveness of such a clause requires an express reservation with respect to the given promissory note claim which in each instance does not raise any doubts. ... This rules out extending an arbitration clause included in the agreement underlying the issuance of the promissory note, with respect to disputes connected with such agreement, to a promissory note claim against the issuer.

Case no.: I CSK 112/10  

Key issues: arbitration court procedure, arbitration clause

id: 20360

Polish Supreme Court order dated 24 November 2010 (Case No. II CSK 291/10) »

1. The impermissibility of the common court’s hearing a case because of a binding arbitration clause (absent the grounds set forth in Civil Procedure Code Art. 1165 §2) also occurs when resolution of the matter presented for determination by the common court is not possible without resolving a dispute subject to the arbitration clause.

2. The principle of equality expressed in [Civil Procedure Code] Art. 1161 §2 requires ... that neither of the parties to a dispute to be decided by an arbitration court enjoy special rights in the proceeding before such court. This plainly applies to the manner in which arbitrators are selected. This is expressly stated in Art. 1169 §3, which provides that provisions of an agreement awarding one of the parties greater rights in appointment of the arbitration court shall be ineffective. This should be applied as relevant to a situation in which a provision of this type is contained in the rules of the permanent arbitration court selected by the parties.

Case no.: CSK 291/10  

Key issues: arbitrability of dispute, arbitration clause, arbitrator

id: 20330

Polish Supreme Court order dated 18 June 2010 Case No. V CSK 434/09 »

1. The ability to submit a dispute to arbitration concerns specific legal relationships in the abstract sense, not the specific claims arising thereunder (for performance, for a declaration, or to establish a legal relationship or right), which are not the subject of the arbitration clause.

2. The condition for arbitrability is the abstract ability of the parties to dispose of rights arising under the legal relationship between then, not their ability to conclude a specific judicial settlement. It is thus not relevant ... whether the parties could by their own will bring about the non-existence or invalidity of the agreement between them ... or if they could, independently or through a judicial settlement, bring about the end of the dispute arising between them.

Case no.: V CSK 434/09  

Key issues: arbitration clause, arbitrability of dispute

id: 20329

Polish Supreme Court order dated 21 May 2010 Case No. II CSK 670/09 »

Based on a grammatical interpretation of Civil Procedure Code Art. 1157, for purposes of this provision it is essential that a given type of dispute concerning property or non-property rights may be the subject of a judicial settlement, but the issue of whether a settlement under particular terms would be permissible or not ... is irrelevant. … The condition of being capable of settlement means the abstract ability of a party to dispose of its rights (or the claims arising therefrom), not the ability for the parties to conclude a specific judicial settlement. In other words, it is irrelevant whether under the specific circumstances the parties may conclude an agreement with particular terms, as the agreement may, in an abstract sense, concern a legal relationship and rights subject to the disposition of the parties, but in its terms it might in a given instance violate applicable regulations or principles of social coexistence (Civil Code Art. 58 §§ 1 and 2). Assessment of the arbitrability of a dispute should be separated from an assessment of whether a specific settlement and the terms thereof would violate the law or whether the condition of “mutual concessions” set forth in Civil Code Art. 917 is met.

Case no.: II CSK 670/09  

Key issues: arbitration clause, arbitrability of dispute

id: 20334

Gdańsk Appellate Court order dated 29 March 2010 (Case No. I ACz 277/10) »

1. Arbitrability of a dispute depends on its capacity for settlement, in both property and non-property cases, as is clearly provided by Civil Procedure Code Art. 1157.

2. Arbitrability is derived from settlement capacity. Thus it must first be considered whether a judicial settlement is permissible in the case. More precisely, this means the hypothetical possibility of ending the dispute in this manner, and thus a determination of whether the law permits conclusion of a settlement in cases of this category.

3. There are a number of arguments undermining ... the close connection between the subject of a trial and the ability to conclude a judicial settlement. First, a trial is conducted in the interest of the plaintiff, and pursuant to the principle of party initiative [dyspozycyjność] it generally lies within the plaintiff’s discretion to commence or continue prosecuting the action. Thus if the plaintiff concludes that the concessions made by the adversary are satisfactory, and enters into a settlement, the proceeding becomes moot. In such case a settlement has the same effect as withdrawal of the claim upon consent of the defendant. … Second, ... a settlement by definition addresses the legal relationship existing between the parties, and thus always extends beyond the specific claim by one of the parties. Thus it cannot be said that the overall regulation of the given legal relationship as a whole would be detached from the subject of the dispute (determination of the invalidity of the agreement), which is after all an element of this relationship. ... Third, it is accepted that a substantive legal settlement may cover a dispute over the existence of a legal relationship, as well as a legal relationship that in reality does not exist between the parties. ... In consequence, ... a judicial settlement would be permissible that would eliminate the existing dispute, addressing the mutual legal relationship of the parties regardless of whether the agreement were valid or invalid. Therefore, submission of a dispute seeking a declaration of the invalidity of the agreement to arbitration would also be possible.

4. If the arbitration court may determine the validity of an agreement in a proceeding seeking performance, it cannot be accepted that it is not authorized to do so in a proceeding seeking only a declaration of this fact. The competence of the arbitration court in this respect is confirmed by Civil Procedure Code Art. 1180 §1, which, in providing the arbitration court the right to rule on its own jurisdiction, provides that ... invalidity or expiration of the underlying agreement in which the arbitration clause is set forth does not in and of itself mean the invalidity or expiration of the clause. As it is authorized to determine whether, contrary to this presumption, the invalidity of the underlying agreement does render the arbitration clause invalid, the arbitration court may thus review the very issue of the validity of the underlying agreement. It thus follows from these considerations that a finding that disputes involving a declaration of the validity of an agreement are not arbitrable would be inconsistent with the systemic regulation of the institution of arbitration.

5. A finding of the invalidity of an agreement does not present any particular significance with respect to other claims arising out of the relations in force between the parties. Thus there is no reason that this category of cases would be reserved exclusively to the common courts. ... The legislative intent in reforming the arbitration procedure in 2005 was to give the parties the greatest latitude to submit a dispute to arbitration. Exceptions in this respect, particularly concerning property cases, should thus be expressly stated in the act (which follows from the beginning of Civil Procedure Code Art. 1157) or capable of justification based on important grounds. Doubts in this respect should be resolved in favour of arbitration of the dispute. There is no specific regulation excluding disputes of this type [for a declaration of the invalidity of an agreement] from the jurisdiction of the arbitration court, nor are there grounds for stating that the possibility of resolution thereof by an arbitration court would be unacceptable in the Polish legal order. It should finally be pointed out that a sort of “dismembering” of disputes arising out of a given legal relationship from the point of view of their arbitrability would give rise to significant practical complications. This would not only lead to a multiplicity of proceedings, but would also raise the question of the temporal and objective relationship between a state court judgment on declaration of the invalidity of an agreement and an arbitration award in a case involving performance of the agreement, in light of Civil Procedure Code Art. 1206 §1(6).

Case no.: I ACz 277/10  

Key issues: arbitration clause

id: 20322

Warsaw Appellate Court judgment dated 15 December 2009 Case No. I ACa 486/09 »

1. It is accepted that an arbitration clause passes to legal successors under a general succession (the heirs of a party to the agreement) or legal successors under a specific succession (as a result of assignment of a claim). This position is unobjectionable under the assumption that an arbitration clause is a contractual agreement. Only in that case may there be said to be a claim (the subject of the assignment under Civil Code Art. 509 §1). The Appellate Court classifies the arbitration clause in precisely this way.

2. Conclusion of a sale agreement does not automatically mean conclusion also of an arbitration agreement. ... Exercise of a pre-emptive right results in conclusion of an agreement on sale of the item covered by the right. This effect does not apply to agreements concluded between the obligor and a third party, even when the agreements are closely related to the sale agreement....

Case no.: I ACa 486/09  

Key issues: arbitration clause

id: 20328

Polish Supreme Court order dated 2 December 2009 »

1. A claim for disgorgement of unjust enrichment under Unfair Competition Act Art. 18(1)(4), as a property/financial dispute [majątkowe], lies within the disposition of the parties and may be the subject of a settlement between the parties. Therefore it may also be the subject of an arbitration clause (see Civil Procedure Code Art. 1157).

2. [The arbitration clauses in the case] expressly concern disputes arising out of or related to agreements for cooperation in the sale of goods. The act of unfair competition committed by the defendant, consisting of charging additional fees, was not ... related to performance of the agreements and did not arise in connection with performance of the agreements, but was only committed while performing the agreements.... The claim asserted by it thus is not contractual in nature and is not related to the terms of the agreements concluded between the parties, but concerns an act of unfair competition committed by the defendant. It is difficult to assume that when concluding the clauses in question the parties anticipated that one of them would commit an act of unfair competition and submitted disputes in this respect for resolution by the arbitration court. It is clear from the wording of the clauses that they concern disputes connected with performance of the agreements, and not any and all disputes arising during the time of performance of the agreements.

Case no.: I CSK 120/09  

Key issues: arbitration clause, arbitrability of dispute

id: 20326

Judgment of the Court of Justice of 6 October 2009., C-40/08, Asturcom Telecomunicaciones SL v Cristina Rodríguez Nogueira »

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that a national court or tribunal hearing an action for enforcement of an arbitration award which has become final and was made in the absence of the consumer is required, where it has available to it the legal and factual elements necessary for that task, to assess of its own motion whether an arbitration clause in a contract concluded between a seller or supplier and a consumer is unfair, in so far as, under national rules of procedure, it can carry out such an assessment in similar actions of a domestic nature. If that is the case, it is for that court or tribunal to establish all the consequences thereby arising under national law, in order to ensure that the consumer is not bound by that clause.

Case no.: C-40/08  

Key issues: arbitration clause

id: 20294

Warsaw Appellate Court order dated 24 September 2009 Case No. I ACa 995/08 »

1. The New York Convention does not contain provisions indicating the form in which the parties should make a choice of law governing the arbitration clause. Art. V(1)[(a)] of the New York Convention does not require that the choice of law governing the arbitration clause be made in writing. The term “indication” should be interpreted to mean behaviour by a person in the form of writing, or any other behaviour that sufficiently reveals the person’s intent. Art. VI(2) of the European Convention on International Commercial Arbitration made at Geneva on 21 April 1961 uses the term “indication” without specifying the form, and thus “indication” should be interpreted as any behaviour by the parties indicating their joint intent.

2. It is not possible to conclude a settlement where, based on the nature of the disputed legal relations, the parties cannot freely dispose of the rights. Thus the appellate court holds that a dispute over the effectiveness of an agreement on sale of shares in a limited-liability company is not arbitrable.

3. The plaintiff determines who is a party when it initiates a dispute. The attribute of being a party is purely formal in nature and is not tied to the existence of a substantive legal claim, nor does it determine the jurisdiction of the arbitration court to decide the merits of the case. In a case where the arbitration court finds that it lacks jurisdiction over a “party,” it cannot be inferred that the ruling on the merits of the dispute is binding on that party. The party was not a party to the dispute on the merits because the arbitration court did not have jurisdiction over it.

4. Assessment of procedural acts of the parties in an arbitration proceeding lies within the power of the arbitration court, and a court ruling on recognition of an award may not make assessments contrary to that of the arbitration court, or assessments under the Polish Civil Procedure Code, which was not applicable in the proceeding before the arbitration court.

5. The state court is bound by the ruling of the arbitration court concerning its lack of jurisdiction to resolve specific disputes, regardless of whether the arbitration court’s interpretation of the scope of the arbitration clause was correct or not. It is clear that the arbitration court is authorized to rule on its own jurisdiction.

6. In order to decide on its jurisdiction, the arbitration court must consider the grounds for or against its jurisdiction. This cannot mean, however, that in cases in which the same issues are decisive of both the jurisdiction of the arbitration and the resolution on the merits the authority to resolve the issue of jurisdiction is also authority to decide the merits of the dispute. Otherwise the party would de facto be deprived of the ability to effectively assert the defence of lack of jurisdiction on the part of the arbitration court.

7. None of the provisions of law providing the arbitration court the authority to decide on its jurisdiction and analyze all factual and legal issues necessary to perform this task provides it a priori authority to decide the merits of the case. If the jurisdictional determination is negative, the arbitration court must refrain from deciding the merits of case. Review of the merits in such instance serves only as a basis for the jurisdictional ruling.

8. It is impermissible that res judicata effect of a ruling by the arbitration court would exert effects in Poland with respect to persons not covered by the legal finality of such ruling in the country of origin.

Case no.: I ACa 995/08  

Key issues: arbitrability of dispute, arbitration clause, jurisdiction of arbitration court, recognition and enforcement of foreign arbitration award

id: 20265

Polish Supreme Court resolution dated 4 June 2009 Case No. III CZP 29/09 »

1. It is permissible for the defendant to withdraw the defence of an arbitration clause during the course of an interlocutory appeal proceeding initiated by appeal from an order of the court of first instance ruling on the justification for this defence.

2. In the case of withdrawal of the defence of an arbitration clause, the Civil Procedure Code does not provide for review by the court in the same manner as occurs in the case of withdrawal of a petition (Civil Procedure Code Art. 203 §4). The defendant’s procedural measure of withdrawing the defence of an arbitration clause is thus subject to assessment by the court just like any other procedural measure taken by a party during the course of a proceeding.

3. The defendant’s withdrawal of the defence of an arbitration clause may occur only until such time as the defence has given rise to the legal effect which it entails under the law. Such effect consists of the court’s dismissal of the petition, if the defence is upheld, or refusal to dismiss the petition if the court finds that the defence is unjustified or asserted too late. The criterion in such respect is the time at which the order dismissing or refusing to dismiss the petition becomes legally final, and not the time of issuance of the order.

Case no.: III CZP 29/09  

Key issues: arbitration clause

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: 20343

Katowice Appellate Court order dated 25 May 2009 (Case No. V ACz 300/09) »

1. The existence of the “arbitration court” as an institution is an expression of the state’s relinquishment of its sovereign authority—in this instance, its judicial authority. Thus the legislature (the state) provides the parties to certain legal relationships the option of pursuing disputes arising out of such relationships outside of the common (state) court. Whether to submit their disputes to an arbitration court for resolution is left to the decision of the parties, by making a relevant clause giving the arbitration court jurisdiction. It should be pointed out that the state does not definitively relinquish its judicial authority in its entirety, but provides in relevant procedural regulations that despite the existence of a valid arbitration clause, a party to a dispute may nonetheless file a statement of claim (or motion) with the common court, which will consider the dispute on the merits if no objection is made by the opposing litigant (within the applicable time – Civil Procedure Code Art. 1165 §1).

2. The legislature provided for a kind of “review” of arbitration awards, via the institution of the petition to set aside an arbitration award (Civil Procedure Code Art. 1205) and the institution of recognition and enforcement of an arbitration award (or settlement concluded before an arbitration court) – Civil Procedure Code Art. 1212 ff. Thus the court of first instance had no need to conduct an interpretation of the arbitration clause in terms of its compliance with the Polish Constitution. The court does, however, have an obligation to determine whether a given dispute arises out of a legal relationship that is covered by the arbitration clause—but only upon assertion of the defence by the opposing litigant prior to joining issue on the merits of the case.

Case no.: V ACz 300/09  

Key issues: arbitration clause

id: 20262

Polish Supreme Court judgment dated 8 April 2009 Case No. V CSK 405/08 »

1. Exclusion of a case from consideration and determination by the state courts because of an arbitration clause is not the same as non-justiciability, and a defence of submission to arbitration is not a defence of non-justiciability. ... The defence that the dispute is subject to an arbitration clause is a separate basis for dismissal of a petition, governed by Civil Procedure Code Art. 1165 §1, apart from non-justiciability (Art. 199 §1(1)).

2. Consideration of a case by the state court despite the existence of an arbitration clause does not ... render the proceeding invalid. If a state court conducts a proceeding in a case subject to an arbitration clause, completes the proceeding and issues a judgment, despite assertion of a valid, effective, enforceable defence of an arbitration clause (Civil Procedure Code Art. 1165 §1), the appellate court, upholding the defence in the appellate proceeding under Art. 386 §3, shall vacate the judgment appealed from and dismiss the petition.

3. An interlocutory appeal lies from an order refusing to dismiss a petition ([Civil Procedure Code] Art. 394 §1(1)). According to the Supreme Court, this excludes the possibility of the defendant’s relying on the defence of an arbitration clause pursuant to Civil Procedure Code Art. 380, which refers only to orders by the court of first instance that are not subject to interlocutory appeal. If the courts of both instances held the defence of an arbitration clause to be ungrounded, the determination of this issue is final, and neither the court on its own motion, or the defendant by way of allegation, may return to this issue during the further course of the proceeding.

Case no.: V CSK 405/08  

Key issues: arbitration clause

id: 20261

Polish Supreme Court order dated 25 March 2009 Case No. V CSK 390/08 »

1. Under Bankruptcy & Reorganization Law Art. 142 and 147, an arbitration clause made by the debtor loses force upon declaration of bankruptcy, and pending proceedings are subject to discontinuance. This applies both to declaration of bankruptcy with the possibility of concluding an arrangement, as well a declaration of bankruptcy involving liquidation of the debtor’s assets. The reasoning behind this provision was that achieving the purposes of a bankruptcy proceeding requires that a dispute to which the debtor is a party be resolved strictly in accordance with the letter of the substantive law and in compliance with all conditions of the law of civil procedure.

2. Loss of force of an arbitration clause means that if suit is filed before a state court after declaration of bankruptcy, the defendant cannot effectively allege the arbitration clause as a defence.

Case no.: V CSK 390/08  

Key issues: arbitration clause

id: 20324

Judgment of the Court of Justice of 10 February 2009, C-185/07, Allianz SpA, formerly Riunione Adriatica di Sicurtà SpA and Generali Assicurazioni Generali SpA v West Tankers Inc. »

It is incompatible with Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters for a court of a Member State to make an order to restrain a person from commencing or continuing proceedings before the courts of another Member State on the ground that such proceedings would be contrary to an arbitration agreement.

If, because of the subject-matter of the dispute, that is, the nature of the rights to be protected in proceedings, such as a claim for damages, those proceedings come within the scope of Regulation No 44/2001, a preliminary issue concerning the applicability of an arbitration agreement, including in particular its validity, also comes within its scope of application.

It follows that the objection of lack of jurisdiction raised on the basis of the existence of an arbitration agreement, including the question of the validity of that agreement, comes within the scope of Regulation No 44/2001 and that it is therefore exclusively for the court to rule on that objection and on its own jurisdiction, pursuant to Articles 1(2)(d) and 5(3) of that regulation.

Accordingly, the use of an anti-suit injunction to prevent a court of a Member State, which normally has jurisdiction to resolve a dispute under Article 5(3) of Regulation No 44/2001, from ruling, in accordance with Article 1(2)(d) of that regulation, on the very applicability of the regulation to the dispute brought before it necessarily amounts to stripping that court of the power to rule on its own jurisdiction under that regulation.

It follows, first, that an anti-suit injunction is contrary to the general principle that every court seised itself determines, under the rules applicable to it, whether it has jurisdiction to resolve the dispute before it. It should be borne in mind in that regard that Regulation No 44/2001, apart from a few limited exceptions, does not authorise the jurisdiction of a court of a Member State to be reviewed by a court in another Member State.

Secondly, in obstructing the court of another Member State in the exercise of the powers conferred on it by Regulation No 44/2001, namely to decide, on the basis of the rules defining the material scope of that regulation, including Article 1(2)(d) thereof, whether that regulation is applicable, such an anti-suit injunction also runs counter to the trust which the Member States accord to one another’s legal systems and judicial institutions and on which the system of jurisdiction under Regulation No 44/2001 is based.

Lastly, if, by means of an anti-suit injunction, the national court were prevented from examining itself the preliminary issue of the validity or the applicability of the arbitration agreement, a party could avoid the proceedings merely by relying on that agreement and the applicant, which considers that the agreement is void, inoperative or incapable of being performed, would thus be barred from access to the court before which it brought proceedings under Article 5(3) of Regulation No 44/2001 and would therefore be deprived of a form of judicial protection to which it is entitled.

This finding is supported by Article II(3) of The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, signed in New York on 10 June 1958, according to which it is the court of a Contracting State, when seised of an action in a matter in respect of which the parties have made an arbitration agreement, that will, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Case no.: C-185/07  

Key issues: arbitration clause

id: 20260

Polish Supreme Court order dated 5 February 2009 Case No. I CSK 311/08 »

Submission to an arbitration court of disputes under a contractual relationship means that the jurisdiction of the arbitration court extends to any and all claims for performance of the contract, claims arising in the event of non-performance or improper performance of the contract, claims to restore undue consideration arising in the event of invalidity of the contract or rescission of the contract, as well as tort claims if they arise out of an event that also constitutes non-performance or improper performance of the contract.

Case no.: I CSK 311/08  

Key issues: jurisdiction of arbitration court, arbitration clause

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: 20256

Polish Supreme Court judgment dated 26 November 2008 Case No. III CSK 163/08 »

1. [When the state court has set aside an arbitration award] it is necessary for the claimant to file a new claim before a new arbitration court, or at least a written declaration of assertion before such arbitration court of the claims in the previous scope or as amended. From such time (or, currently, from the date of service of such document on the opposing party, Civil Procedure Code Art. 1186), a new proceeding is commenced before the arbitration court which is not a continuation of the previous proceeding that resulted in the arbitration award that was set aside.

2. The petition to set aside the arbitration award ... dated 16 December 2006, filed under the new regulations, commenced a case before the state court to set aside the arbitration award, and under the rule set forth in Art. 2 of the amending act [Act dated 28 July 2005 Amending the Civil Procedure Code (Journal of Laws Dz.U. No. 178 item 1478)] it was conducted in accordance with the new regulations. This means that the petitioner should base it in procedural respects on the new regulations for such procedure provided in Part Five, Title VII of the Civil Procedure Code; however, because the subject of the petition is the award and the proceeding before the arbitration court conducted in accordance with the former regulations, on substantive legal grounds the petition may rely only on the former rules, because the arbitration court was required to apply those rules and not the new ones. The grounds for the petition should thus be based on the former regulations.

3. In light of the circumstances of conclusion of the agreement, its purpose, and the statements by the attorneys before the arbitration court ... and failure for nearly five years to assert the lack of an arbitration clause, the intent of the parties ... was, as correctly found by the courts of both instances, to submit disputes arising under the agreement to the arbitration court for resolution, and not only mediation. … This position ... does not lead to validation of the lack of an arbitration clause by the behaviour of the parties before the arbitration court and the state courts or to avoidance of the requirement for written form of an arbitration clause, but constitutes only an interpretation of the declarations of will of the parties concerning an unclear arbitration clause expressed in written form and made ... in accordance with the requirements of Civil Code Art. 65.

4. An arbitration court is not a “court” or “other state body or body of the public administration” within the meaning of Civil Procedure Code Art. 365 §1, nor is there another “instance provided by statute” in which an arbitration court is bound by the award by another arbitration court, even concerning the same parties and the same claims.

5. An arbitration award, insofar as it denies a petition in some part with legal finality, does not have res judicata effect within the meaning of Civil Procedure Code Art. 365.

Case no.: III CSK 163/08  

Key issues: arbitration award, arbitration clause, arbitration court procedure

id: 20255

Polish Supreme Court order dated 30 October 2008 Case No. II CSK 263/08 »

1. An effective arbitration clause requires that the arbitration court be entrusted with the function of resolving disputes.

2. Under Civil Procedure Code Art. 1161 §§ 1 and 3, the parties may submit a dispute for resolution by a permanent arbitration court or an arbitration court appointed ad hoc. The clause must be made in writing (Civil Procedure Code Art. 1162). In the event of indication of a permanent arbitration court, under Civil Procedure Code Art. 1161 §3 the clause must indicate the court, which should be regarded as an essential element of such agreement. Indication of a permanent arbitration court should be precise enough in order to identify the permanent arbitration court; that is, it should state at least the seat of the permanent arbitration court, as well as its name if there is more than arbitration court operating in the given city.

3. Contractual provisions submitting specific disputes to an arbitration court for resolution must be interpreted narrowly, as such agreement constitutes in certain respects a restriction on the right of judicial recourse guaranteed by Art. 45(1) of the Polish Constitution, cited in the cassation appeal. The bounds within which the parties have limited the right to judicial protection of their rights should thus be interpreted narrowly.

Case no.: II CSK 263/08  

Key issues: arbitration clause

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: 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: 20245

Polish Supreme Court judgment dated 6 December 2007 Case No. IV CSK 317/07 »

1. It may be regarded as settled law that making an arbitration agreement is an action outside the ordinary course of business..., and thus as a rule it does not lie within the authority granted under a general power of attorney as provided in Civil Code Art. 98.

2. Civil Procedure Code Art. 199 §1(2) requires that a petition be dismissed if a case involving the same claim between the same parties is pending or has already been adjudicated with finality. It is clear that this provision applies as relevant to a proceeding to set aside an arbitration award under Civil Procedure Code Art. 1207 §2 (formerly Art. 715). However, in order for Civil Procedure Code Art. 199 §1(2) to be applicable, the subject of both cases must be the same claim (in the sense of the relief sought), which occurs only when both the subject and the legal basis of the dispute are identical. ... There is no such identity between a demand for the court to appoint an arbitrator under Civil Procedure Code Art. 701 (prior to repeal of that provision) and a petition to set aside an arbitration award. The subject and legal basis of the two matters are entirely different. While in both instances a ground for the ruling may be the issue under assessment of the effectiveness of the arbitration clause, but the identity in the subject matter of the cases is not determined by the similar or even identical scope of the factual circumstances being considered, but by the claims for relief drawn from such facts by the parties.

Case no.: IV CSK 317/07  

Key issues: arbitration clause

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: 20238

Polish Supreme Court judgment dated 20 June 2007 Case No. V CSK 126/07 »

1. Under Art. 2 of the amending act [i.e. the Act dated 28 July 2005 Amending the Civil Procedure Code, Journal of Laws Dz.U. No. 178 item 1478], proceedings before arbitration courts and proceedings before courts for recognition or enforcement of an arbitration award, as well as a petition to set aside an arbitration award, commenced prior to the effective date of the act, are conducted in accordance with the prior regulations.

2. The view of the petitioner cannot be upheld under which [the other party], pursuant to Civil Procedure Code Art. 4791⁴ §2, was required to assert the defence of the lack of the required power of attorney in the response to the petition filed with the arbitration court, at the latest. Under Civil Procedure Code Art. 705, in a proceeding before an arbitration court, the parties themselves could, up until commencement of the proceeding, establish the procedure that should be applied in consideration of the case, and if they failed to do so, the arbitration court applied the procedure that it saw fit and was not bound in this respect by civil procedure regulations.

Case no.: V CSK 126/07  

Key issues: arbitration court procedure, arbitration clause

id: 20235

Polish Supreme Court order dated 22 February 2007 Case No. IV CSK 200/06 »

1. If a proceeding in which Civil Procedure Code Art. 1162 §2 may be applicable was commenced after entry into force of the amending act, then under Art. 2 [of the Act dated 28 July 2005 Amending the Civil Procedure Code] it is permissible to apply it, and the complex nature of an arbitration clause, combining properties of a substantive and a procedural legal agreement, does not prevent application of the interim regulation set forth in the code. Art. 2, being later and specific, excludes Art. XV §2 of the Regulations Introducing the Civil Procedure Code and the prohibition on retroactive application of the law set forth in Art. XXVI of the Regulations Introducing the Civil Code (Act dated 23 April 1964, Journal of Laws Dz.U. No. 16 item 94, as amended).

2. The constitutional order of priority of legal acts (Polish Constitution Art. 91(1)) requires an assessment of requirements as to form first and foremost under the New York Convention, which sets forth in Art. II (1) and (2) the requirement of written form, understood broadly to include an exchange of letters or telegrams.

3. An arbitration agreement that is dependent on an election left up to the professional, the defendant company, without indicating the rules on which the decisions of the American Arbitration Association are based, imposing on the customer foreign law that differs substantially from European law, additional difficulties in enforcing claims because of the different system of law, distance and costs, and the commonly known difficulties in obtaining a visitor’s visa to the United States, creates a situation that must be regarded as an impermissible clause for purposes of Directive 93/13 (EEC). The arbitration clause imposed on the plaintiff constitutes an impermissible contract clause which results in a situation inconsistent with Art. 6(2) of the directive and justifies renunciation of the obligation to submit the case to arbitration.

4. An interpretation of [New York Convention] Art. II (1) and (2) does not allow for the conclusion that conclusion of an agreement in an implicit manner meets the requirement for ordinary written form, without departing from the sense of the rule. Nor is there any reason for finding that acceptance of content on a website is in written form, particularly since the convention is silent on specific issues, i.e. concerning the time, place and manner of acceptance of a form available on the Internet.

5. According to [Civil Procedure Code Art. 1162 §2], the form of an arbitration clause is fulfilled also when the clause is included in correspondence or statements submitted using telecommunications in a manner that enables the content to be fixed, or a written agreement incorporating a separate document containing a provision on submission of a dispute to resolution by an arbitration court. Entering a webpage containing a form of agreement addressed to an indefinite set of readers, and online confirmation of one’s intent to conclude an agreement, does not constitute a declaration enabling the content to be fixed. In particular, a factual computer action of “confirmation,” unlike a typical electronic signature of basic, i.e. lower reliability, does not provide a basis for identifying or reconstructing the content of the declaration. This requirement would be fulfilled, however, by a declaration transmitted by e-mail enabling identification of the sender.

Case no.: IV CSK 200/06  

Key issues: New York Convention, arbitration clause

id: 20292

Warsaw Appellate Court judgment dated 6 February 2007 Case No. VI ACa 462/06 »

An arbitration agreement is a separate agreement supplemental to the main agreement (in this case a construction contract). The arbitration agreement, even if it is set forth in a clause within the main agreement, is not a provision of such agreement (the underlying contract), and thus its effectiveness is considered separately.

Case no.: VI ACa 462/06  

Key issues: arbitration clause

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: 20288

Poznań Appellate Court judgment dated 3 July 2006 Case No. I ACa 46/06 »

1. Civil Procedure Code Art. 698 §§ 1 and 2 may not be interpreted expansively.

2. If the agreement does not provide for the arbitration court the function of dispute resolution, this type of clause is not an arbitration clause.

3. An arbitration clause may be subject to canons of interpretation in accordance with the principles set forth in Civil Code Art. 65.

Case no.: I ACa 46/06  

Key issues: arbitration clause

id: 20224

Supreme Court order dated 17 May 2006 Case No. I CSK 16/06 »

1. Mere assertion of the defence of the existence of an arbitration clause is not grounds in any event for dismissal of a statement of claim. In order to have that effect, the defence must be justified, which is subject to the assessment of the court.

2. The task of the court is to clarify whether the resolution of the case rests with the arbitration court, which also includes assessment of the validity of the arbitration clause.

Case no.: I CSK 16/06  

Key issues: jurisdiction of arbitration court, arbitration clause

id: 20287

Poznań Appellate Court judgment dated 11 May 2006 Case No. I ACa 1279/05 »

1. An arbitration agreement, even when set forth in a clause in the “main” agreement, is not a provision of the underlying contract and thus its effectiveness is considered independently.

2. In order to make an arbitration agreement, a generic power of attorney is sufficient (specifying the type of actions which the attorney-in-fact is authorized to take), or a general power of attorney if making the arbitration agreement may be deemed to be an act within the ordinary course of business.

3. The importance of an arbitration agreement concerning a specific legal relationship is a reflection of the importance of the legal relationship subject to the arbitration agreement. There are no grounds for finding that contractual exclusion of the jurisdiction of the state courts, even in the case of a matter that is petty in relation to the subject of the enterprise, is outside the ordinary course of business. Such assumption would hinder the parties’ ability to submit a dispute to the jurisdiction of the arbitration court, which would be inconsistent with the requirements of commerce, and would also create uncertainty in trade. Similarly, an arbitration agreement may be concluded on the basis of a generic power of attorney, which should specify the type of legal acts included within the authority as well as the subject matter. If the type of legal acts was not clearly defined, the canons for interpretation of declarations of will (Civil Code Art. 56 and 65) are applicable in order to determine the true intent of the principal.

4. Under Civil Procedure Code Art. 712 §1(3), a party may seek to set aside an arbitration award if procedures were not followed before the arbitration court as determined by the parties or by the law, particularly provisions concerning the composition of the arbitration court, voting, removal of an arbitrator, and the award. There could be no violation of the procedure established by the parties when, as the appellant itself states, the parties did not establish any procedure. Only establishing the procedure in the agreement creates a duty on the part of the arbitrators to comply with the procedure, under sanction of setting aside the arbitration award if the procedure is not followed (Civil Procedure Code Art. 705 §1 and Art. 712 §1(2)). Otherwise, the arbitration court will apply the procedure it deems fit (Civil Procedure Code Art. 705 §2).

Case no.: I ACa 1279/05  

Key issues: arbitration court procedure, arbitration clause

id: 20216

Supreme Court order dated 8 July 2005 (Case No. II CK 759/04) »

1. Assertion by the defendant in the defences against an order for payment of defences concerning the contractual relationship whose performance was secured by issuance of a guarantee promissory note (the underlying relationship) means that a case based on a relationship under the Promissory Note Law ... was shifted to the general ground of civil law....

2. Shifting the case to the general ground of civil law, making it necessary to resolve the justification of the plaintiff’s claim arising under the leasing agreement in force between the parties, means that in resolving this, the clause submitting disputes that may arise out of such agreement to resolution by an arbitration court cannot be ignored. Therefore, the defendant’s assertion of the defence of an arbitration clause in the defences against the order for payment is effective and results in setting aside the order for payment and dismissal of the statement of claim (Civil Procedure Code Art. 202, 493 §1, 199 §1(4) and 496).

Case no.: II CK 759/04  

Key issues: arbitration clause

id: 20213

Supreme Court resolution dated 24 February 2005 (Case No. III CZP 86/04) »

1. The defence of an arbitration clause concerning the legal relationship between the issuer of a promissory note and the payee is also effective with respect to the issuer of the promissory note when, alongside the issuer of the note, the guarantor of the promissory note, who was not a party to the agreement submitting the dispute for resolution by the arbitration court, is also a defendant.

2. A promissory note obligation may be subject to an arbitration clause.

3. The effect of shifting the dispute onto the general ground of civil law, meaning that the resolution of the dispute requires assessment of the justification of the claim in light of the “underlying relationship” in connection with which the promissory note was issued, does not occur by the mere fact of filing defences to the order for payment. This effect depends on whether the interested party takes the relevant actions, and the court has no duty to act in this respect on its own initiative. The actions taken by the party may consist of the defendant’s assertion of defences to an order for payment with respect to the lack of grounds for the claim pursued based on the underlying relationship, or the plaintiff’s assertion, in the statement of claim or in the proceeding conducted as a result of assertion of defences to the order for payment, of allegations justifying the claim asserted also on the basis of the underlying relationship.

4. In the event of lack of actions by the parties causing the dispute to be shifted to the general ground of civil law, the dispute in the proceeding conducted pursuant to the defences against the order for payment is subject to consideration under the promissory note relationship.

5. A promissory note guarantor may defend against the holder of the note with all defences available to the person for whom he issued the guarantee, but this applies only to substantive defences (Art. 32 of the Promissory Note Law dated 28 April 1936, Journal of Laws Dz.U. 1936 No. 37 item 282), but the defence of an arbitration clause is a procedural defence. Without being a party to the agreement ... containing the arbitration clause, the defendant cannot assert the arbitration clause.

6. Civil Procedure Code Art. 72 §3 cannot be interpreted as a provision that changes the consequences of the lack of procedural grounds, and specifically as eliminating the effectiveness of an arbitration clause. If the clause is effective with respect to one substantive co-party, of any type, but is not effective with respect to the other co-party, the case with respect to the first co-party cannot be considered at all by the state court, and the statement of claim in this respect is subject to dismissal; however, with respect to the other co-party, the case is subject by consideration by the state court.

Case no.: III CZP 86/04  

Key issues: arbitrability of dispute, arbitration clause, jurisdiction of arbitration court

id: 20212

Supreme Court judgment dated 18 February 2005 (Case No. V CK 467/04) »

1. The proper interpretation of Civil Code Art. 123 §1(1) leads ... to the conclusion that only the appointment of a court of other body to consider a case or enforce claims of a given type must be expressly provided for by statute. This requirement, for obvious reasons, does not apply to an arbitration court, because the direct source of its appointment, as provided by the Parliament (Civil Procedure Code Art. 698 §1), is the intent of the parties expressed in the agreement they have concluded to submit the dispute to the jurisdiction of an arbitration court, in the form of an arbitration clause.

2. Because it is undisputed that in another, previously commenced case pursuant to a petition to set aside the award of the arbitration court, it was adjudicated with legal finality that the parties to this proceeding did not make an effective arbitration clause, it cannot correctly be found that the plaintiff’s filing of a statement of claim before the Permanent Court of Arbitration at the Wielkopolska Chamber of Industry and Commerce in Poznań could be treated as an action by the plaintiff before an arbitration court for purposes of Civil Code Art. 123 §1(1).

Case no.: V CK 467/04  

Key issues: arbitration clause

id: 20209

Polish Supreme Court order dated 3 November 2004 (Case No. III CK 510/03) »

1. An agreement to submit a dispute to an arbitration court for resolution is a form of evidence because it demonstrates that the parties are subject to an arbitration clause under which an arbitration award was issued, and one of the conditions for enforcement of a foreign arbitration award is for the movant to demonstrate that the parties were bound by such an agreement.

2. If a specific provision imposes on a given person an obligation to present documents as evidence, there is no justification for applying Civil Procedure Code Art. 248. For this reason, Art. 248 does not apply in a proceeding for enforcement of a foreign arbitration award insofar as Art. IV(1)(b) of the [New York] Convention, as a specific regulation, imposes on the movant the obligation to present the original or a certified copy of the agreement to submit the dispute to the arbitration court for resolution. In a proceeding for recognition or enforcement of an arbitration award conducted under the Convention, the arbitration agreement thus constitutes a condition for granting the motion.

Case no.: III CK 510/03  

Key issues: New York Convention, arbitration clause

id: 20207

Polish Supreme Court order dated 25 August 2004 (Case No. IV CK 144/04) »

An arbitration clause is an act outside the ordinary course of business.

Case no.: IV CK 144/04  

Key issues: arbitration clause

id: 20202

Polish Supreme Court order dated 13 February 2004 (Case No. II CK 451/02) »

1. Conclusion of an agreement on an arbitration clause should be treated as an act outside the ordinary course of business of the principal. As a result, a general power of attorney referring only to acts within the ordinary course of business is insufficient (Civil Code Art. 98, first sentence).

2. An [arbitration] clause included in an underlying agreement (e.g. a tenancy agreement) is not one of the provisions of the underlying agreement, but its content and legal effectiveness must be considered separately (autonomously). This means that effective conclusion of the underlying agreement and the agreement on the arbitration clause would require issuance of different forms of power of attorney. While a general power of attorney may be sufficient for conclusion of a tenancy agreement (Civil Code Art. 98, first sentence), with respect to the arbitration clause at least a power of attorney to enter into specific types of acts [pełnomocnictwo rodzajowe] would be required (Civil Code Art. 98, second sentence).

Case no.: II CK 451/02  

Key issues: arbitration clause

id: 20197

Polish Supreme Court order dated 8 August 2003 Case No. V CK 486/02 »

1. The condition for the effectiveness of an arbitration clause under [Civil Procedure Code Art. 1105 §2] of the “foreign status” of at least one of the parties refers to the stage of conclusion of the forum selection agreement, and thus has to do with the parties to that agreement and not the parties to the dispute covered by the arbitration clause. The purpose of the forum selection clause is to submit future property disputes to an arbitration court (Civil Procedure Code Art. 697 in connection with Art. 1105 §2), and thus the effectiveness of the clause referring to an arbitration court operating abroad is determined by the forum selection agreement establishing such clause, so long as the limiting conditions listed in Civil Procedure Code Art. 1105 §2 are met at the time of conclusion of the agreement.

2. The necessity to examine the legal force and effectiveness of an arbitration clause, but according to the state of facts as of the date of conclusion of the forum selection agreement, may lead to a situation in which a foreign arbitration court will be proper to decide the dispute even though as of the date of commencement of the dispute the parties to the dispute no longer meet any of the characteristics of “foreignness” listed in Civil Procedure Code Art. 1105 §2, i.e. having a registered office abroad or operating an enterprise abroad which is connected with the dispute....

Case no.: V CK 486/02  

Key issues: jurisdiction of arbitration court, arbitration clause

id: 20196

Polish Supreme Court order dated 2 April 2003 Case No. I CK 287/02 »

1. It is correctly accepted in the literature that even if there are doubts as to the scope of matters covered by an arbitration clause, under the principle of interpretation in favour of the contract (favor contractus), which is enshrined in many modern legal systems (e.g. Polish Civil Code Art. 58 §3, Napoleonic Code Art. 1157, Italian Civil Code Art. 1367), it would be resolved in favour of extending the clause to disputes under a promissory note issued to secure performance of the underlying agreement.

2. Application of regulations concerning a proceeding for order for payment (Civil Procedure Code Art. 484¹–497) is not excluded in a proceeding before an arbitration court.

3. The only rules of the Civil Procedure Code which the parties may not exclude or modify in the procedure before the arbitration court are the mandatorily applicable provisions of Book Three of the Civil Procedure Code, concerning the arbitration court.

Case no.: I CK 287/02  

Key issues: arbitration court procedure, arbitration clause

id: 20192

Polish Supreme Court judgment dated 27 September 2002 Case No. IV CKN 1320/00 »

1. The bar to justiciability in the form of the existence of an arbitration clause is relative in nature, as the court will consider it only if raised by the defendant, and the defence is asserted and justified prior to joining issue on the merits. The court is not authorized to consider it upon the court’s own motion. In consequence, under Civil Procedure Code Art. 379, consideration of the case by the state court despite the existence of an arbitration clause does not invalidate the proceeding.

2. The relative nature of this defence is also evident in that it may be considered and decided only at the preliminary phase of the proceeding (“before joining issue on the merits”). The defendant thus definitively loses the opportunity to assert such defence in the further course of the proceeding. Such procedural preclusion extends also to a situation in which the defence was not asserted in time, or when despite assertion of the defence it was denied by the court. Under Civil Procedure Code Art. 394 §(1), there is a right of interlocutory appeal from refusal to dismiss the statement of claim. This excludes the possibility of the defendant’s asserting the defence of the existence of the arbitration clause under the procedure of Civil Procedure Code Art. 380.

Case no.: IV CKN 1320/00  

Key issues: arbitration clause

id: 20187

Polish Supreme Court resolution dated 8 March 2002 Case No. III CZP 8/02 »

1. A submission to arbitration is an agreement to submit a dispute to an arbitration court for resolution (Civil Procedure Code Art. 698 §1), whose most far-reaching consequence is exclusion of the matter from the jurisdiction of the state court (Civil Procedure Code Art. 697 §2). The agreement may concern either a dispute that has already arisen (when it is then referred to as a “compromise”) or disputes that may arise in the future out of a designated legal relationship (in which case it then called an “arbitration clause,” because as a rule it is included in the “main” agreement).

2. The validity of an arbitration clause should be assessed autonomously. A submission to arbitration, even when set forth in the form of a clause in the “main” contract, is not a provision of the bilateral contract, and thus its effectiveness is considered independently. This issue is treated similarly to an agreement on jurisdiction, which is regarded as autonomous regardless of whether it was included in the text of the “main” agreement itself.

3. The assessment of the existence of an attorney's authority to enter into an arbitration agreement should be made separately from the assessment of the existence of the attorney's authority to make the legal act that is the source of the legal relationship which (or, more precisely, disputes arising out of which) is to be submitted to the jurisdiction of the arbitration court. Consequently, assessment of the effectiveness of the power of attorney to enter into the arbitration clause is independent of the assessment of the effectiveness of the power of attorney to enter into the “main” agreement, and a finding that the attorney was duly authorized to conclude the main agreement will not be conclusive on the determination of whether the attorney was also duly authorized by the principal to submit disputes arising out of the agreement to the jurisdiction of the arbitration court, and thus to exclude such disputes definitively from the jurisdiction of the state court.

4. A submission to arbitration is an act exerting direct effect on realization of the legal protection to which a party is entitled. The importance of such submission and its procedural effects are thus serious enough that making a submission to arbitration should be regarded as an act outside the ordinary course of business. The submission has effects under procedural law, shaping the litigation posture of the party bound by the submission. The effect of a submission to arbitration on the manner in which legal protection is pursued is essentially always the same, as it always results in eliminating the jurisdiction of the state court. These characteristics of a submission to arbitration, considering its autonomous nature, justify the holding that a submission to arbitration is an act outside the ordinary course of business. This classification is favourable from the point of view of certainty of legal transactions and clarity of the criteria applied when assessing the effectiveness of powers of attorney.

Case no.: III CZP 8/02  

Key issues: arbitration clause

id: 20186

Polish Supreme Court judgment dated 5 February 2002 Case No. II CKN 1143/00 »

1. There is no doubt that a party may conclude an agreement to submit a dispute to an arbitration court for resolution (an arbitration clause) not only in person, but may also do so through an attorney.

2. In any event, insofar as not governed by Civil Procedure Code Art. 697 and 698, an arbitration clause may be governed by the Civil Code (directly or possibly secondarily). The Civil Code regulations concerning representation (Art. 95–109) are thus applicable to a power of attorney, including authorization to enter into an arbitration clause.

3. Civil Code Art. 98 does not determine whether entering into an arbitration clause is an act outside the ordinary course of business. Only a finding that entering into an arbitration clause is an act outside the ordinary course of business would justify a finding that a general power of attorney is insufficient to authorize such an act. Because the law does not require a power of attorney to enter into an individually identified arbitration clause (a specific power of attorney), a power of attorney including authority to enter into arbitration clauses (a generic power of attorney) would suffice.

Case no.: II CKN 1143/00  

Key issues: arbitration clause

id: 20185

Polish Supreme Court order dated 11 October 2001 Case No. IV CKN 139/01 »

1. The essence of an arbitration clause is submission of a dispute for resolution by the arbitration court. If the agreement does not provide the arbitration court with a dispute-resolution function, then such clause is not an arbitration clause governed by Civil Procedure Code Art. 697–715.

2. An agreement to submit a dispute to the jurisdiction of an arbitration court in which the “decisional” function of the arbitration court would consist solely of conducting mediation in order for the parties to reach a settlement is not an arbitration clause.

Case no.: IV CKN 139/01  

Key issues: arbitration clause

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: 20182

Polish Supreme Court order dated 15 December 2000 Case No. I CKN 1131/00 »

1. The ability for the dispute to be heard by the state court is excluded so long as the parties are bound by an arbitration clause. The Civil Procedure Code expressly mentions only two situations in which an arbitration clause loses force (Art. 702 §1 and 707 §2). There is no doubt, however, that this may occur also in other instances, specifically if a written agreement is concluded dissolving the clause.

2. If the parties were bound by a cooperation agreement which contains an arbitration clause, the original arbitration clause remains valid following lapse of a settlement agreement submitting enforcement of a specific claim to the state courts.

Case no.: I CKN 1131/00  

Key issues: jurisdiction of arbitration court, arbitration clause

id: 20179

Polish Supreme Court order dated 29 August 2000 Case No. I CKN 240/00 »

1. Because the respondent signed the contract, and it was undisputed that the contract was previously signed by the claimant, an “agreement in writing” was established as referred to in Art. II(2) and Art. V(1)(a) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards dated 10 June 1958 ([promulgated in Poland at] Journal of Laws Dz.U. 1962 No. 9 item 41) and in the section of the Ukrainian Code of Procedure governing the rules of the arbitration court ..., and in denying the interlocutory appeal against the order enforcing the award of the Ukrainian arbitration court the appellate court did not violate these provisions.

2. Civil Procedure Code Art. 1105 §2 governs matters subject to consideration in the situation provided for in Art. V(2)(a) of the [New York] Convention, and not in the situation governed by Art. V(1)(a) of the Convention.

Case no.: I CKN 240/00  

Key issues: New York Convention, arbitration clause

id: 20172

Polish Supreme Court order dated 16 March 2000 Case No. I CKN 1507/99 »

1. Exclusion of the jurisdiction of the court and submission of a specific dispute to the jurisdiction of the arbitration court is determined by the agreement of the parties—concluded within the framework laid down by law. With respect to the form of such contract, under the requirements of Civil Procedure Code Art. 698 §1 and Art. 1105 §2, it must be a written agreement. While both of those regulations refer to conclusion of an agreement by the parties, ... when the agreement provides for the possibility of accession to the agreement by new entities, if they make such accession such entities are bound by the contents of the entire agreement, including the arbitration clause. ... When acceding to such agreement, the new entities need not conclude a separate agreement with respect to the arbitration clause, as the declaration of the intention of accession, made in writing, also means acceptance of the arbitration clause included in the agreement. The requirement with respect to the content and the form of such agreement is thus fulfilled.

2. A foreign arbitration court may be competent to resolve a dispute between entities that do not meet any of the characteristics of “foreignness” mentioned in Civil Procedure Code Art. 1105 §2, i.e. a registered office abroad, Or operating an enterprise there which is connected with the dispute that has been instituted. … Fulfilment of such requirements, i.e. the foreign element, by any of the parties is determined as of the time of conclusion of the jurisdictional agreement, and not as of the time of commencement of the dispute between the parties who are bound by the arbitration clause.

Case no.: I CKN 1507/99  

Key issues: jurisdiction of arbitration court, arbitration clause

id: 20168

Polish Supreme Court order dated 1 March 2000 Case No. I CKN 845/99 »

The plaintiff’s sale of its shares in the defendant company does not affect the plaintiff’s continuing to be bound by the arbitration clause included in the articles of association, because it is the legal relationship (the subject of the dispute)—in this case, a share in net profit—that was submitted to the jurisdiction of the arbitration court, and not specific parties to the dispute having the legal status of a shareholder.

Case no.: I CKN 845/99  

Key issues: arbitration clause

id: 20169

Polish Supreme Court order dated 1 March 2000 Case No. I CKN 1311/98 »

An arbitration clause is an agreement governed by Civil Code Art. 65.

Case no.: I CKN 1311/98  

Key issues: arbitration clause

id: 20160

Polish Supreme Court judgment dated 16 February 1999 Case No. I CKN 1020/98 »

1. An agreement vesting jurisdiction in a foreign court or an arbitration court operating abroad (Civil Procedure Code Art. 1105 §§ 1 and 2) must be preceded by the existence of domestic jurisdiction. Exclusive jurisdiction of a Polish court may, however, constitute a barrier to effective conclusion of an agreement on jurisdiction. But such barrier functions only with respect to vesting jurisdiction in a foreign state court (Civil Procedure Code Art. 1105 §1, second sentence) and does not apply with respect to vesting jurisdiction in a foreign arbitration court, which is subject only to the limitations provided in Civil Procedure Code Art. 697 §1.

2. The requirement of “foreign status” of one of the parties as a condition for the permissibility of an arbitration clause as provided for in Civil Procedure Code Art. 1105 §2, refers to the phase of conclusion of the agreement on jurisdiction, and thus applies to the parties to such agreement and not the parties to the dispute covered by the arbitration clause.

3. Civil Procedure Code Art. 1105 §2 also applies to multilateral agreements. ... In the case of a multilateral agreement, it may happen that a foreign arbitration court has jurisdiction to hear a dispute between parties that are domestic entities.

Case no.: I CKN 1020/98  

Key issues: arbitration clause, jurisdiction of arbitration court, New York Convention

id: 20279

Katowice Appellate Court order dated 6 October 1998 Case No. I ACz 841/98 »

It follows from the very nature of entering into a contract through implicit acts that this may involve only acts that were actually performed by the parties. In a situation where the opposing party denies submitting the dispute to the arbitration court, it cannot be said that an arbitration clause was concluded implicitly.

Case no.: I ACz 841/98  

Key issues: recognition and enforcement of foreign arbitration award, arbitration clause

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: 20151

Polish Supreme Court order dated 22 May 1998 Case No. II CKN 192/98 »

1. Assessment of the correctness of the court’s interpretation of the parties’ declarations of will articulated in the arbitration clause goes beyond the hypothesis of the rule set forth in Civil Procedure Code Art. 698 §2, and is tied to the issue of proper application of Civil Code Art. 65 §§ 1 and 2.

2. The provisions of the Civil Procedure Code admit the possibility of concluding agreements on submission of a dispute for resolution by an arbitration court, but also the possibility of dissolving or renouncing them in an implicit manner. Thus if the defence of an arbitration clause is not asserted by the defendant by the time it joins issue in the dispute on the merits of the case, it should be accepted that the parties implicitly renounced the agreement on consideration of the case by the arbitration court which was previously concluded.

3. There are no grounds to deprive the defendant of the right to subsequently withdraw the defence of an arbitration clause previously asserted by it, and withdrawal of the asserted defence may be made expressly or implicitly.

Case no.: II CKN 192/98  

Key issues: arbitration clause

id: 20277

Warsaw Appellate Court order dated 22 October 1997 Case No. I ACz 929/97 »

It is not possible to enter into an agreement submitting to an arbitration court all disputes that may arise out of any future legal relations, undetermined as of the time of entering into the agreement, but in the event of conclusion of a specific agreement between the parties creating a legal relation between them, it is possible and permissible to submit to arbitration any and all disputes that may arise in the future under such legal relation.

Case no.: I ACz 929/97  

Key issues: arbitration clause

id: 20276

Warsaw Appellate Court order dated 10 September 1997 Case No. I ACz 813/97 »

An international treaty is binding both on the states that ratified it and on persons whose sphere of activity it governs. It is thus not necessary in a contract for the parties to refer to the provisions of an international treaty in force as the basis for the manner of dispute resolution or enforcement of an award.

Case no.: I ACz 813/97  

Key issues: arbitration clause

id: 20275

Warsaw Appellate Court order dated 21 August 1997 Case No. I ACz 756/97 »

1. Because an agreement does not limit the jurisdiction of the arbitration court in time only to the period in which the agreement is in force, it is clear that the arbitration court has jurisdiction to decide disputes also after the agreement expires. A different interpretation would be illogical and contrary to the nature of an arbitration clause. Disputes between the parties to an agreement typically arise after the agreement has expired or been terminated and concern mutual claims for the period when the agreement was in force.

2. Civil Procedure Code Art. 697 §2 clearly provides that so long as an agreement is in force to submit disputes concerning property rights to an arbitration court for resolution, the state court cannot be called upon to decide a dispute. The nature of the dispute is also the assessment of whether the debtor acknowledged in writing the receivable pursued by the creditor. This issue cannot be separated and submitted to a state court for decision. Dismissal of the petition because resolution of the case lies with the arbitration court (Civil Procedure Code Art. 199 §1(4)) is not subject to any condition and is not subject to the discretion of the court. If the grounds set forth in this provision are found (upon a defence asserted by the defendant, Civil Procedure Code Art. 202), the court shall dismiss the petition without considering whether or not the defendant acknowledges the claim asserted in the petition.

Case no.: I ACz 756/97  

Key issues: arbitration clause

id: 20340

Gdańsk Appellate Court order dated 11 December 1996 (Case No. I ACz 1007/96) »

1. If resolution of the case lies with the arbitration court to which the parties submitted the dispute for determination, specifying such court in the relevant arbitration clause, then only such arbitration court, and not the common court in Poland, is competent to decide the case, regardless of the substantive legal nature or the source of the plaintiff’s claim.

2. Pursuant to Civil Procedure Code Art. 697 §2, so long as the parties are bound by an agreement to submit a dispute for resolution by an arbitration court, they cannot demand that the case be heard by the court, and if a petition is filed with the court it has the duty in such a case to dismiss the statement of claim, pursuant to Civil Procedure Code Art. 199 §1(4), if the defendant has asserted the relevant defence in compliance with the requirements of Civil Procedure Code Art. 202, first sentence.

Case no.: I ACz 1007/96  

Key issues: arbitration clause

id: 20142

Polish Supreme Court order dated 19 June 1996 Case No. I CO 17/96 »

The existence of a contract provision that may qualify as a valid arbitration clause, or as a contractual exclusion of the jurisdiction of the Polish courts (Civil Procedure Code Art. 1105), as well as contractual submission of the parties’ relations to “international law” (not more closely defined), prevents an affirmative determination by the Supreme Court that the dispute is subject to the jurisdiction of the Polish courts, which is a necessary condition for designation of the proper court. Ascribing to determination of jurisdiction the role of a condition, and thus conditioning the court’s authority to designate the court on a preliminary finding that there is domestic jurisdiction in the case, is based on Civil Procedure Code Art. 1099, which requires the court to take this issue into consideration on its own initiative no matter the posture of the case. The inability to make clear findings concerning jurisdiction thus requires denial of the motion to designate the court.

Case no.: I CO 17/96  

Key issues: arbitration clause

id: 20271

Białystok Appellate Court order dated 29 February 1996 Case No. I ACz 69/96 »

The parties and the arbitration court itself are given great discretion to determine the procedure before the arbitration court, although the Civil Procedure Code does establish certain minimum rules that are mandatorily applicable (juris cogentis).

Case no.: I ACz 69/96  

Key issues: jurisdiction of arbitration court, arbitration clause

id: 20138

Polish Supreme Court order dated 18 February 1993 Case No. I CRN 6/93 »

1. The provisions of Civil Procedure Code Part II concerning interim relief to secure a claim are applicable in a case with a “foreign element”. ... The existence of domestic jurisdiction for the proceeding on the merits is not a necessary condition for the proceeding seeking interim relief.

2. Pursuant to Civil Procedure Code Art. 734, when issuing an interim order prior to commencement of the proceeding in the case, the court will set a deadline by which the case shall be commenced or the security will lapse. Following the doctrine, in considering the matter the Supreme Court took the view that filing a claim before a foreign arbitration court before such deadline meets the conditions of this provision.

Case no.: I CRN 6/93  

Key issues: state court assistance, arbitration clause

id: 20123

Polish Supreme Court order dated 9 July 1979 Case No. II CZ 37/77 »

Under Art. 4 of the Protocol on Arbitration Clauses signed at Geneva on 24 September 1923 (Journal of Laws Dz.U. 1931 No. 42 item 372), an arbitration clause is in the nature of a reference. Such reference does not mean that the courts have no jurisdiction in the event that the submission, arbitration clause or arbitration lapses or ceases to be in force for any reason. This provision is in the nature of a specific law in relation to the provisions of the Civil Procedure Code, particularly Art. 1099. Therefore, Civil Procedure Code Art. 1099 may not apply to the case if the arbitration lapses. Then the issue of domestic jurisdiction will be an open question.

Case no.: II CZ 37/77  

Key issues: arbitration clause

id: 20122

Polish Supreme Court order dated 7 March 1979 Case No. III CRN 10/79 »

1. Which cases that are subject to consideration by the state courts may be submitted to arbitration is determined by the regulations governing arbitration proceedings.

2. Issuance of an enforcement clause must be preceded by a legally final ruling by the state court, pursuant to Civil Procedure Code Art. 711, confirming the enforceability of the arbitration award.

3. The only cases falling under the non-adversarial procedure that may be heard by an arbitration court are those rather rare cases whose nature allows for this, that is, those that meet the grounds [for arbitrability] provided in Civil Procedure Code Art. 697 §1.

4. Under current law, adversarial and non-adversarial proceedings are parallel tracks for judicial proceedings, and the non-adversarial procedure in property matters in which the court commences the proceeding upon application is not so different from the rules applicable in an adversarial proceeding that mere submission of a given matter to resolution through the non-adversarial procedure results in exclusion of the possibility of submitting such matter to an arbitration court for resolution.

Case no.: III CRN 10/79  

Key issues: recognition and enforcement of domestic arbitration award, jurisdiction of arbitration court, arbitration clause, arbitrability of dispute

id: 20113

Polish Supreme Court resolution dated 5 November 1970 Case No. III CZP 63/70 »

1. After a state court sets aside an arbitration award, as a result of granting a petition based on Civil Procedure Code Art. 712 §1(2)–(5), the arbitration court continues to maintain its jurisdiction to resolve the dispute.

2. A judgment by the court issued under Civil Procedure Code Art. 712 §1 (2)–(5), setting aside an arbitration award for the reasons exhaustively listed in that article, may not eliminate the civil-law agreement on the arbitration clause. Setting aside of an arbitration award under this article is strictly a matter of quashing; it abrogates the arbitration award, but does not deprive of legal force the agreement in which the parties submitted the dispute to resolution by the arbitration court. So long as the agreement remains in force, it may not be demanded that the dispute be heard by the court (Civil Procedure Code Art. 697 §2).

3. The entire arbitration award need not be challenged under Civil Procedure Code Art. 712, and even when the entire award is challenged, the judgment may set aside only part of the challenged award. Nor may it be excluded that the arbitration court will issue a partial award. A petition to set aside an arbitration award may be based on the same grounds that would provide grounds for a petition to reopen a civil proceeding. In all of these instances, if the position were adopted that the arbitration clause is abrogated by a state court judgment setting aside an arbitration award, there would be undesirable consequences arising from the different assumptions that may guide each of these courts (the arbitration court is not bound by provisions of substantive law).

4. A reservation in the agreement in which the parties provide that setting aside of an arbitration award under Civil Procedure Code Art. 712 will also cause the arbitration clause to be set aside is not excluded. However, even in such case, the reason for expiration of the clause will not be the force of the judgment setting aside the award, but the wording of the agreement linking the effectiveness of the clause to such a judgment.

Case no.: III CZP 63/70  

Key issues: arbitration clause

id: 20111

Polish Supreme Court order dated 26 June 1969 Case No. I CZ 150/66 »

The claim that the effectiveness of exclusion of domestic jurisdiction in favour of arbitration in London is defeated by the unenforceability in Poland of arbitration awards issued in the UK—in the absence of a treaty—is unjustified. The issue of the enforceability of arbitration awards cannot influence the effectiveness of jurisdictional clauses, because Polish law permits such clauses to be included in agreements with foreign counterparties.

Case no.: I CZ 150/66  

Key issues: arbitration clause

id: 20109

Polish Supreme Court order dated 9 January 1969 Case No. I CZ 3/68 »

1. Both an arbitration clause provided for in Civil Procedure Code Art. 698 and an agreement provided for in Art. 1105 require signatures of both of the contracting parties in order to be valid.

2. Neither inclusion of a Centrocon arbitration clause in a bill of lading nor reference to such a clause provided in a charter party meets the requirements for written form of the agreement provided by Civil Procedure Code Art. 1105 §3. A bill of lading is not a contract. Under Maritime Code Art. 120 ff., a bill of lading is a unilateral declaration of intent by the shipper or its representative in the form of a document constituting proof of acceptance of the cargo on the ship and authorizing the holder to dispose of the cargo and to receive delivery thereof.

Case no.: I CZ 3/68  

Key issues: arbitration clause

id: 20110

Polish Supreme Court order dated 9 January 1969 Case No. I CZ 92/67 »

The defence that the dispute is subject to consideration by an arbitration court is effective only if the parties to the proceeding made a valid arbitration clause.

Case no.: I CZ 92/67  

Key issues: arbitration clause

id: 20105

Polish Supreme Court order dated 22 April 1966 Case No. I CR 433/64 »

The wording of §14 of the Transport Protocol on Polish-Czechoslovakian Cooperation for 1961, “When entering into any agreements, ... the interested enterprises ... shall stipulate the jurisdiction of the International Court of Arbitration in Gdynia for resolution of any possible disputes,” does not justify the conclusion that this provision submits all such future disputes identified therein to resolution by the arbitration court.

Section 14, as its wording indicates, only imposes on the enterprises of both of the contracting states the duty to include arbitration clauses in the agreements they conclude, and thus the position taken in the order appealed from is correct, that because the charter party binding on the parties does not contain such clause, this dispute is subject to the jurisdiction of the common court.

Case no.: I CR 433/64  

Key issues: jurisdiction of arbitration court, arbitration clause

id: 20104

Polish Supreme Court resolution dated 25 October 1965 Case No. III CO 58/65 »

The defence that a matter is submitted to an arbitration court for resolution may only be raised upon objection by the defendant. As the defendant does not appear in the preparatory phase, the relevant defence may be asserted only once the case is pending.

Case no.: III CO 58/65  

Key issues: arbitration clause

id: 20103

Polish Supreme Court order dated 20 April 1964 Case No. II PR 251/64 »

The plaintiff could have alleged [loss of force of the arbitration clause] in the statement of claim filed with the state court, without first obtaining a separate ruling (court order) declaring the expiration of the arbitration clause. Under Civil Procedure Code Art. 498 §1, the “clause loses force” for the reasons set forth therein by operation of law, and a court ruling on expiration of the clause is merely declarative in nature.

Case no.: II PR 251/64  

Key issues: arbitration clause

id: 20101

Polish Supreme Court resolution dated 13 November 1962 Case No. 1 CO 30/61 »

An arbitration clause in a lease agreement ... concerning premises subsequently transferred to the State Treasury is not binding on the State Treasury. Under Art. 399 §1 of the Obligations Code, the acquirer is not also bound by any and all types of additional agreements which do not constitute integral elements of the lease relationship, and an arbitration clause should be regarded as one such additional agreement.

Case no.: 1 CO 30/61  

Key issues: arbitration clause

id: 20097

Polish Supreme Court judgment dated 27 June 1960 Case No. 4 CR 874/59 »

1. An arbitration clause is an agreement which requires written form in order to be valid. For the clause to be valid, there must be submission of a dispute for determination by an arbitration court, in a written declaration (Civil Procedure Code Art. 486 and 487). It is not possible to conclude an agreement submitting a dispute to determination by an arbitration court in an implicit manner.

2. Appointment of an arbitrator is not ... in and of itself a declaration submitting a dispute for determination by an arbitration court, and is not equivalent to making and signing an arbitration clause.

Case no.: 4 CR 874/59  

Key issues: arbitration clause, arbitrator

id: 20093

Polish Supreme Court resolution dated 3 April 1957 Case No. I CO 4/57 »

1. It is permissible to make arbitration clauses with respect to disputes involving property claims between entities of the socialized economy and non-socialized domestic entities.

2. In Art. 509 and 510 §1(4), the Civil Procedure Code permits a situation in which an arbitration court does not apply governing law, by not carving out any exceptions with respect to the types of parties. But if in its determination the arbitration court committed a violation of mandatorily applicable regulations or principles of social coexistence, such an award would be subject to being set aside (Civil Procedure Code Art. 509 and 510 §1(4)).

Case no.: I CO 4/57  

Key issues: arbitration court procedure, arbitration clause

id: 20089

Polish Supreme Court ruling dated 10/16 December 1953 Case No. II C 316/53 »

1. In the system of the People’s Democratic State, where protection of social property is one of the overriding duties of citizens, contractual provisions which submit final resolution of disputes concerning property rights of the State Treasury to the discretion of other actors than the courts or other institutions appointed to do so by law cannot be regarded as permissible and valid.

2. A clause appointing an arbitration court whose erroneous ruling on the relief sought by the parties may be set aside pursuant to a petition to set aside an arbitration award only if the award is unintelligible or inconsistent, exceeds the bounds of the submission, or by its substance violates the rule of law or principles of social coexistence in the People’s Democratic State (Civil Procedure Code Art. 510 §1(4)), may cause a diminution of social assets if the arbitration court in issuing its ruling is not guided by governing law, and more specifically by regulations of substantive law. Therefore, submission of such a dispute to an arbitration court for resolution cannot be reconciled with due protection of state property, for which the authorities of the State are appointed.

Case no.: II C 316/53  

Key issues: arbitration clause, arbitrability of dispute

id: 20307

Warsaw Appellate Court decision dated 5 March 1929 Case No. I 1 C 9/29 »

This type of clause [for arbitration in Paris], under the current law and from the point of view of the court and the legal rules that were in force when the agreement was concluded, is moot, because given the lack of a bilateral convention with France, an arbitration award issued in France would be unenforceable in Poland, as under the general rule of private international law no person may be deprived of the pursuit of its rights and claims.

Case no.: I 1 C 9/29  

Key issues: arbitration clause

id: 20315

Warsaw Regional Court ruling dated 6/17 February 1926 Case No. I C N 2991/25 »

The defendant’s objection to appointment of a super-arbitrator is not justified by Civil Procedure Law Art. 1370¹, which clearly vests this right with the court, and the arbitrators’ mutual selection of the super-arbitrator is not provided for in the statute.

Case no.: I C N 2991/25  

Key issues: arbitration clause, arbitrator