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Warsaw Court of Appeal judgment dated 25 January 2017 Case No. VI ACa 1468/16

Filing of a petition to set aside an arbitration award is an action immediately aimed at enforcement of a claim and consequently interrupts the running of the statute of limitations on the claim.

Data wydania: 25-01-2017 | Case no.: VI ACa 1468/16

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

id: 20445

Katowice Court of Appeal judgment dated 18 November 2016 Case V ACa 67/16

1. The set of fundamental principles of procedure before the arbitral tribunal includes only the rules arising under the Civil Procedure Code and the rules agreed by the parties, which does not include the custom [under §9(3) of the Code of Best Practice for Permanent Arbitration Courts, providing that a party applying for default appointment of an arbitrator subject to nomination by both parties or by the previously appointed arbitrators should notify the appointment authority of all candidacies considered and rejected by the parties or the arbitrators and none of those persons should be appointed in the default procedure].

2. The legal classification of a contract by the arbitral tribunal is not subject to review on a petition to set aside an arbitration award.

Data wydania: 18-11-2016 | Case no.: V ACa 67/16

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

id: 20437

Warsaw Court of Appeal judgment dated 18 June 2015 Case No. I ACa 1822/14

1. An arbitration clause, which is an agreement to submit a dispute to an arbitration court for resolution, may be limited in time; that is, it may be in force only until a certain time, at the end of which it ceases to be in force; it may also be made under a condition applicable to the clause itself or the manner of proceeding and resolution by the arbitral tribunal.

2. Civil Procedure Code Art. 1168 governs situations in which the arbitration clause may cease to be in force (if the parties have not agreed on other legal consequences of events covered by the clause). The list set forth in this provision is therefore only exemplary, and the parties may also indicate other situations which will result in expiration (loss of force) of the arbitration clause. This is not changed by the fact that the current law does not regulate the loss of force of an arbitration clause in a situation where the time agreed by the parties in which the arbitral tribunal was required to issue an award expired, because the parties can provide otherwise. In the case considered here, the contractual specification of the deadline for completion of the proceeding before the arbitral tribunal with an award exerts the effect of expiration of the arbitration clause. Therefore this is not an instructive deadline whose only purpose was to encourage all of the participants in the arbitration proceeding, including also the arbitral tribunal, to seek a quick and effective resolution of the dispute.

3. Even when specifying its own rules for proceeding before the arbitral tribunal, the arbitral tribunal is not authorized to modify the mutual position of the parties with respect to the deadline set by them for resolution of the case. Such modification may be made by the parties themselves, but not by the arbitral tribunal.

4. In the event of doubt with respect to the scope of the arbitration clause, a restrictive interpretation should prevail. In interpreting the arbitration clause, it is not permissible to employ any presumptions which would indicate broader application of the arbitration clause. The declarations of will in the arbitration clause may not be supplemented by way of interpretation to include further external elements, events or occurrences.

Data wydania: 18-06-2015 | Case no.: I ACa 1822/14

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

id: 20401

Polish Supreme Court judgment dated 20 March 2015 Case No. II CSK 352/14

1. Parties who have submitted a dispute to a permanent arbitration court for resolution in accordance with its rules may in provisions accompanying the arbitration clause or by later agreement modify the provisions of the rules. … Acceptance by the permanent arbitration court (or its authorities) of changes to the rules made by the parties is another issue. The arbitration court may consent to conduct the proceeding in compliance with the rules as modified by the parties, or not accept the changes. However, if it does not accept the changes, the permanent arbitration court can only refuse to accept the case for consideration (Civil Procedure Code Art. 1168 §2), but it cannot conduct the proceeding according to the rules in the version that does not reflect the changes made by the parties if they refuse to give up those changes. If the permanent arbitration court has accepted the case for consideration, then it is required to respect the intent of the parties as manifest in the changes they have made to the rules of the arbitration court.

2. The priority of the intent of the parties over the rules of the permanent arbitration court applies as well when the parties have agreed that the arbitration proceeding is to include two instances, while the rules provide that the proceeding has one instance.

3. If the parties agree that the proceeding before the arbitration court is to include more than one instance (Civil Procedure Code Art. 1205 §2), then the arbitration regulations of the Civil Procedure Code and the principles and rules resulting therefrom also apply to the appellate arbitral tribunal, including establishment of the rules and manner of proceeding before that tribunal and ruling by that tribunal.

4. The rule specified by the parties that the arbitration proceeding is to include the possibility of appealing against the arbitration award issued at the first instance undoubtedly falls within the group of fundamental rules for purposes of Civil Procedure Code Art. 1206 §1(4). Violation of that rule by resolving the dispute at only one instance is a violation that could affect the result in the case, because the appeal could result in a different resolution.

5. Under the circumstances of the case, there was a violation of Civil Procedure Code Art. 1206 §1(4) by considering the dispute and issuing an arbitration award at only one instance, contrary to the rule agreed by the parties of arbitration proceedings at two instances.

Data wydania: 20-03-2015 | Case no.: II CSK 352/14

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

id: 20399

Warsaw Court of Appeal judgment dated 15 December 2014 Case No. VI ACa 311/14

1. It is permissible to seek to set aside an arbitration award in part, if the challenged resolution can be separated from the remaining part of the award.

2. In a proceeding to set aside an arbitration award, the court cannot set aside the award in part if the petitioner applied to set aside the award in its entirety and there are grounds to grant the petition. This is because a demand to set aside an arbitration award in part is not a lesser included demand in a demand to set aside the award in its entirety; it is a different type of demand. Moreover, if the particular parts of the award interlock so that none of the parts can be separated from the other parts without materially deforming the entirety, it is impermissible to set aside the award in part.

3. Informing a party only in the justification of the award that (despite denying the claim in its entirety) one of the party’s demands was not considered because the fee for that claim was not paid, when that demand was the subject of examination during the evidentiary proceeding and was the subject of the response to the statement of claim and pleadings by both parties, while at the same time granting the demands of the opposing party in their entirety, which resolution was dependent on the resolution of the plaintiff’s demands, indicates that the arbitration award is contrary to the public policy clause, depriving the party of the ability to exercise the rights provided by regulations of substantive law and also indirectly depriving the party of a defence against the counterclaims of the opposing party. This method of proceeding before the arbitration court violates the party’s right to a fair and honest trial.

4. Resolving the respondent’s demands in their entirety before resolving the claimant’s complete demand, regardless of whether or not the party could apply for supplementation of the award, is also contrary to fundamental principles of the legal order, including violation of the principle of equal treatment of the parties. Moreover, the arbitration court would already be bound by the award issued by it in the part concerning the counterclaim, and thus it could not issue a ruling with different substantive legal consequences. Undoubtedly the principles of a fair trial require that the party be informed prior to issuance of an award of the possible taking of a procedural decision as to one of the party’s claims, regardless of whether the claimant’s claim is deemed to be an alternative claim (as it was worded, in the event that the main claim is not upheld) or as a separate procedural claim in an accumulation of claims.

5. The defence of the ineffectiveness of an arbitration clause may be asserted not only by the respondent, but also by the claimant. However, it is indicated in the legal literature that in such case, the claimant, as the party initiating the proceeding before the arbitration court, should make a thorough analysis of the factual and legal state of the case, including issues connected with the grounds for commencement of the proceeding before the arbitration court, and if it concludes that the clause is ineffective, it should file the case with the state court, which upon the objection of the respondent will resolve the issue of the effectiveness of the clause. As indicated in the literature, asserting the ineffectiveness of the clause only at this stage violates the principle of due diligence which a professional participant in commercial dealings is required to comply with.

6. An arbitration clause may cease to be in force in the instances set forth in Civil Procedure Code Art. 1168 and 1195 §4 or in the bankruptcy law, or in the occurrence of certain substantive legal events (e.g. repudiation of the legal consequences of a declaration of will), including those indicated by the parties as the reasons for the clause ceasing to be in force. The mere change in the rules of the arbitration court does not result in loss of force of the clause, either under the regulations currently in force or in accordance with the regulations in force on the date of conclusion of the clause.

7. The mere fact that one of the parties to the arbitration participated in creation of the list of arbitrators by nominating candidates for arbitrators from among persons who are authorities in the given field does not mean that there is dependency between the arbitrator and the party or that the party has greater rights. Despite the indirect influence of the banks over a portion of some panels of arbitrators, the rules of the Court of Arbitration at [the Polish Bank Association] ensure the impartially of the arbitration court and do not violate the principle of the equality of the parties in the arbitration proceeding. Because there are numerous arbitrators [on the list], and the party does not know which of them will hear the case and does not select a specific person as presiding arbitrator, it cannot be found that the party had greater rights than its opponent.

8. A petition to set aside an arbitration award may concern issues of the procedure followed only if fundamental principles of procedure before the arbitration court, arising out of a statute or specified by the parties, were not complied with (Civil Procedure Code Art. 1206 §1(4)). In essence this has to do with failure to comply with fundamental principles of civil procedure, but it was not demonstrated that the arbitration court failed to comply with such principles.

Data wydania: 15-12-2014 | Case no.: VI ACa 311/14

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

id: 20387

Warsaw Court of Appeal judgment dated 24 July 2014 Case No. I ACa 154/14

1. The fact that two arbitrators, constituting a majority of the panel, had already signed drafts of the awards was certainly not valid grounds for the presiding arbitrator to refuse to continue deliberations over the awards. This was not equivalent to the act of voting, not to mention equivalent to deliberations on the resolution and the grounds for the resolution. Refusal to continue the deliberations in order to discuss the comments means that it cannot be said that the deliberations were completed and voting was held on the awards. … As pointed out in the legal literature, the list of examples of violations with respect to regulations on voting, removal of an arbitrator and the award which were set forth in Civil Procedure Code Art. 712 §1(3) (in force through 16 October 2005) were not expressly carried over to the wording of Civil Procedure Code Art. 1206 §1(4). There is no doubt, however, that a violation of these rules should generally be treated as a violation of fundamental rules of procedure.

2. Ignoring evidence offered by a party because the arbitration court found the evidence to be unnecessary will not qualify as depriving the party of the ability to present a defence. Examination by the state court of whether the arbitration court correctly found such evidence to be unnecessary would constitute impermissible encroachment into the merits of the case. If the arbitration court ignored a certain portion of the defence presented by the party, while including in the grounds for the award a substantive explanation of the reasons it found the defence to be irrelevant, then the party’s allegation with respect to ignoring its defence is in reality directed against the substantive defence of the dispute and as such is impermissible.

Data wydania: 24-07-2014 | Case no.: I ACa 154/14

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

id: 20389

Supreme Court of Poland judgment dated 15 May 2014 Case No. II CSK 557/13

1. The issue of the consistency of the resolution by the arbitration court with the determined state of facts is beyond cassation review in connection with Civil Procedure Code Art. 3983 §3.

2. The arbitration court’s violation of the substantive law governing the case, which generally is connected with Civil Procedure Code Art. 1194 §1, is subject to review by the state court considering a petition to set aside an arbitration award only in terms of application of the public policy clause—at the court’s own initiative or on the basis of an allegation in the petition.

3. The circumstances separately listed in Civil Procedure Code Art. 1206 §1 as grounds for setting aside an arbitration award, proof of which lies primarily in the interests of the party, are excluded from the scope of application of the public policy clause.

4. The arbitration court’s conduct of the proceeding ignoring evidence offered by a party may justify an allegation of violation of Civil Procedure Code Art. 1183 if the evidence was necessary to the resolution of the case.

5. If the evidence raised by the party was ignored as a result of the arbitration court’s interpretation of substantive law, the mere fact that the interpretation may be regarded as erroneous cannot justify granting a petition to set aside the award unless the award also violates fundamental principles of the legal order.

6. The arbitration court’s application of regulations on the limitations period or preclusion may not be regarded as a violation of fundamental principles of the legal order even if this occurred on the basis of an erroneous interpretation of the regulations.

Data wydania: 15-05-2014 | Case no.: II CSK 557/13

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

id: 20267

Katowice Court of Appeal order dated 7 March 2014 Case No. I ACz 121/14

1. The regulations of Title III, Part Five, of the Civil Procedure Code, concerning arbitration, clearly adopt the principle of the priority of the mutual intent of the parties as to the composition of the arbitral tribunal and the manner of appointment of the arbitrators and the presiding arbitrator.

2. Appointment of the presiding arbitrator by the arbitrators may occur after the end of the one-month period following their appointment provided in the act, but before consideration of the application by the state court. … Because the basis for the Civil Procedure Code regulations concerning arbitration is to award priority to the intent of the parties, it would be groundless, irrational and contrary to a purposive interpretation of these regulations to deny the parties the right to decide for themselves on the composition of the arbitral tribunal solely because a court case is already pending concerning this—prior to issuance of a judicial ruling. The one-month period under Civil Procedure Code Art. 1171 §2 should be regarded as establishing the right of a party to file an application to the state court for appointment of an arbitrator or presiding arbitrator, and not as a preclusive period after which the parties lose the right to decide for themselves on whom to appoint as members of the arbitral tribunal.

Data wydania: 07-03-2014 | Case no.: I ACz 121/14

Key issues: arbitrator, arbitration procedure

id: 20412

Warsaw Court of Appeal judgment dated 15 January 2014 Case No. VI ACa 663/13

1. An arbitrator must not be connected to any of the parties to the proceeding; he should be free of any obligations and pressures, and in performing the duties of arbitrator should decide solely in accordance with his own determination, based on the material gathered in the case. Disclosure of such circumstances must be made promptly after the person is appointed as arbitrator or the circumstances arise. [Civil Procedure Code Art. 1174 §1] also refers to circumstances that could raise doubts as to the impartiality or independence of the arbitrator, not circumstances that do raise doubts.

2. The opposing party, and the not the arbitrator, is given the right to make an assessment of whether the circumstances disclosed by the arbitrator raise doubts or not, and potentially to initiate the procedure pursuant to Civil Procedure Code Art. 1176 §§ 3 and 4, including filing of an application to the state court to remove the arbitrator. It must be clearly stressed, however, that the existence of circumstances that could raise a doubt as to the independence or impartiality of an arbitrator is not equivalent to a finding of a lack of impartiality or independence of the person appointed as arbitrator.

3. The right to make a setoff is a subjective right of the holder and cannot be limited in its realization. Asserting this objection is also a procedural form of the respondent’s defence against the claimant, which it cannot be deprived of. In considering the defence of setoff asserted by the respondent as part of the examination of the justification for the principal claim, the arbitration court did not have to condition this examination on the existence of an arbitration clause in this respect.

4. The jurisdiction of the court considering a petition to set aside an arbitration award generally does not include review of the consistency of the award with substantive law or an examination of the correctness of the factual findings, other than a ruling based on a clearly selective and unobjective assessment of the evidence. Here, the grounds for the arbitration award are extensive, multifaceted and based on the indicated evidence, and explain the basis for the finding by the arbitration court that the claim for damages by the principal respondent asserted as a setoff to the claim of the principal claimant existed in the specified amount and the effectiveness of the setoff made, which resulted in denial of the principal claim. Examination of the justification for the petition is therefore not equivalent to substantive review of the award. Moreover, the appellant must remember that in deciding to submit the dispute for resolution by an arbitration court, it must be aware of both the positive and negative consequences. On one hand, the contracting parties are not exposed to the risk of lengthy proceedings, but on the other hand they waive certain procedural guarantees which apply in proceedings before the state court. Nor was there any barrier to the proceedings before the arbitration court being conducted in two instances (Civil Procedure Code Art. 1205 §2).

Data wydania: 15-01-2014 | Case no.: VI ACa 663/13

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

id: 20388

Łódź Court of Appeal judgment Dated 12 December 2013 Case No. I ACa 692/13

1. In a situation where the parties did not reach agreement on establishing the rules for the appellate proceedings and how they would be conducted, the arbitration court, in light of the parties’ intent clearly expressed in the arbitration clause, inconsistent with the rules in force at the arbitration court, should have either refused to accept the case for consideration or, pursuant to Civil Procedure Code Art. 1184 §2, conducted the appellate proceedings in the manner it saw fit.

2. In a situation of inconsistency between the arbitration agreement calling for two instances of arbitration proceedings and the rules of the arbitration court calling for one instance, priority should be accorded to the intention of the parties, and thus the arbitration clause. As the parties first mutually agreed on the rule of two instances before the arbitration court they selected, and second, failed only to agree on the rules for procedure at the second instance, the arbitration court was obligated to establish these rules itself.

3. As the parties referred to proceedings at two instances in the arbitration clause, failure to comply with this requirement by the arbitration court must be regarded as a violation of fundamental rules of procedure before the arbitration court (Civil Procedure Code Art. 1206 §1), resulting in granting the petition and setting aside the challenged award.

Data wydania: 12-12-2013 | Case no.: I ACa 692/13

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

id: 20404

Gdańsk Court of Appeal judgment dated 28 November 2013 Case No. I ACa 550/13

1. The view cannot be shared that in connection with the dispute that had arisen the contractor should have brought about the appointment of a dispute adjudication board and presented the dispute to it, and the consequence of failure to take such actions is the loss of the possibility of effectively pursuing the claim. The section [of the FIDIC contract conditions] on Claims, Disputes and Arbitration does not provide for such sanctions.

2. In proceedings before the arbitration court the arbitrators are not bound by decisions of the [FIDIC] dispute adjudication board, whose decisions should be treated as evidence in the case. The decision by the dispute adjudication board cannot be treated analogously to an arbitration award, nor is the proceeding before the board a part of the proceeding before the arbitration court.

3. The contracting entity was properly informed of the need to perform additional works and did not dispute the need to perform them. It thus may not effectively allege that payment for such works violates fundamental principles of the legal order because public monies were involved in financing the works.

Data wydania: 28-11-2013 | Case no.: I ACa 550/13

Key issues: arbitration procedure, jurisdiction of arbitral tribunal, petition to set aside arbitration award

id: 20396

Polish Supreme Court judgment dated 28 November 2013 Case No. IV CSK 187/13

1. Because an arbitration award may be set aside only for grounds set forth in the law which are generally considered at the court’s own motion, while, with the exception of the invalidity of the proceedings before the court of second instance, a cassation appeal is considered within the bounds of the grounds stated for the cassation appeal, a cassation appeal in a proceeding seeking to set aside an arbitration award may — apart from the instance of invalidity of the proceedings before the court of second instance — be granted only if one of the grounds asserted in the cassation appeal is upheld containing an allegation which justifies or may justify a finding of grounds for setting aside the arbitration award asserted in the petition to set aside the award or considered at the court’s own motion.

2. The separate listing of the circumstances [in Civil Procedure Code Art. 1206 § 1 (2), (4) and (5)] as grounds for setting aside an arbitration award leads to the conclusion that they are excluded from the scope of application of the public policy clause.

3. For the arbitration court to conduct the proceeding ignoring the proffer of evidence, when the party has not given up introduction of the evidence and the evidence was necessary for resolution of the case, will constitute a violation of [the second sentence of Civil Procedure Code Art. 1183], setting forth one of the fundamental principles of arbitration procedure.

Data wydania: 28-11-2013 | Case no.: IV CSK 187/13

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

id: 20158

Polish Supreme Court judgment dated 11 October 2013 Case No. I CSK 769/12

1. Participation in a judicial proceeding by entities lacking judicial capacity would result in the invalidity of the proceeding, while issuance of an arbitration award with respect to such entities would be regarded as a violation of the fundamental principles of the legal order of the Republic of Poland, because it would violate one of the fundamental procedural rules that only a party vested with judicial capacity can be a party to proceedings. Moreover, such an award would also violate the fundamental principle of civil law that only entities vested with legal capacity can be the subject of civil-law rights and obligations.

2. If a party raises the objection that the arbitration court lacks jurisdiction or the objection that a demand asserted by the opposing party exceeds the bounds of the arbitration clause (Civil Procedure Code Art. 1180 §2), and the arbitration court deems these objections unfounded, the arbitration court may issue an award, stating therein that it deemed the objections raised to be unfounded, or overrule the objections in a separate order. In the first instance, the correctness of the position of the arbitration court on the objection raised by the party may be reviewed in a petition to set aside the arbitration award. However, if the arbitration court issues an order overruling the objection, review of the correctness of this position by the state court may occur only under the procedure provided for in Civil Procedure Code Art. 1180 §3, i.e. by the party who raised the objection applying to the state court for a ruling within two weeks after service of the order on the party. The party’s failure to initiate such procedure for review of the order issued by the arbitration court deprives the party of the possibility of effectively basing a petition to set aside the arbitration award on the same objections constituting grounds for a petition to set aside an arbitration award under Civil Procedure Code Art. 1206 §1 (1) and (3).

3. The arbitration court’s violation of regulations of law, even regulations that are mandatorily applicable, does not necessarily mean violation of fundamental principles of the legal order, even if the arbitration court resolves the dispute according to the law governing the given relationship, when under Civil Procedure Code Art. 1194 §1 the parties did not authorize it to decide on the basis of general principles of law or equity.

4. The intervention by the arbitration court with respect to the demand presented concerned … the method of fulfilment of the performance demanded. In procedural law there are no more specific rules of a fundamental nature referring to ruling on the manner of fulfilling the performance demanded in the statement of claim by several persons. The case law permits a certain intervention by the court here, e.g. awarding the demanded amount in solidum instead of jointly and severally, and vice versa. … From the point of view of the principle that it is up to the parties to frame their demands [dyspozytywność] it is essential that the identity of the subject of the demand be maintained, and the scope and factual grounds justifying upholding the demand. With respect to the demand that was asserted, the arbitration award maintained the identity of the debtor and the creditor, the type of relief, its amount and indivisibility, and also the factual grounds justifying granting the relief.

5. The essence of this agreement [a consortium] is at least similar to the agreement of an ordinary partnership [spółka cywilna], and sometimes contains the essential elements thereof, which justifies application of the regulations governing ordinary partnerships as relevant to the relations between members of the consortium, including the regulations concerning joint commonality [wspólność łączna]. … It does not violate the public policy clause for the arbitration court to award damages to three entities “jointly” despite the lack of a legal relationship among these entities creating joint commonality among them.

6. The arbitration court’s ruling on the basis of the regulations of applicable law, if the parties do not provide otherwise (Civil Procedure Code Art. 1194 §1), is one of the fundamental principles of procedure before the arbitration court. Therefore violation of this principle by the arbitration court may be asserted as an allegation of violation of Civil Procedure Code Art. 1206 §1(4). Under this allegation, however, the state court cannot be expected to review the substantive correctness of the award issued by the arbitration court.

7. The position that suffering injury as a result of non-performance or improper performance of an obligation arising out of a contract does not justify wilful satisfaction of the claim for damages out of the established security, contrary to the conditions agreed with the counterparty, does not violate fundamental principles of the legal order, i.e. the principles of the rule of law (Constitution Art. 2), protection of property rights and equality of counterparties cooperating with one another (Constitution Art. 20), economic liberty (Constitution Art. 22), and equality before the law (Constitution Art. 32(2)).

Data wydania: 11-10-2013 | Case no.: I CSK 769/12

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

id: 20394

Kraków Court of Appeal order dated 7 August 2013 Case No. I ACz 1251/13

1. The absence in the Polish system of a legal regulation concerning relief from the costs of arbitration proceedings is a subject not lying within the jurisdiction (justiciability) of the state court. This excludes the permissibility of implementing through a judicial ruling the standards of procedural law reserved for judicial proceedings for the sake of a proceeding before an arbitration court. … The “law of indigents” within the meaning of the Act on Court Costs in Civil Cases is not of a substantive civil nature, but is a systemic regulation guaranteeing the fulfilment of Art. 45(1) of the Polish Constitution, ensuring the right of access to the courts, and Art. 177 of the Polish Constitution, which establishes the presumption of the jurisdiction of the state court. Following the rules of interpretation of the Act on Court Costs in Civil Cases, there are therefore no grounds for finding that an application for relief from the costs of an arbitration proceeding may be resolved through the courts.

2. The presumption of justiciability (Civil Procedure Code Art. 1 and 2) does not exclude commencement of a judicial proceeding despite the commencement of an arbitration proceeding. … It is not a barrier to consideration of a case by the state court that the case is also pending at the same time before an arbitration court.

3. An application for relief from the costs of an arbitration proceeding cannot be resolved through the courts (Civil Procedure Code Art. 199 §1(1)).

4. A finding of the lapse of legal force of an arbitration agreement may result from the inability of the arbitration court to consider the case in light of the objective inability (the proportion of the degree of wealth of the interested person and the foreseeability of such costs as of the date of the arbitration agreement in relation to the level of the fees, constituting an excessive barrier to the accessibility of the arbitration court) to cover the advance arbitration costs by an interested person who has commenced the proceeding before the arbitration court. The evaluation of the circumstances connected with the existence of the last of these grounds is reserved for the state court deciding a possible objection by the defendant under Civil Procedure Code Art. 1165 §1 in proceedings connected with the dispute formally covered by the wording of the arbitration agreement.

Data wydania: 07-08-2013 | Case no.: I ACz 1251/13

Key issues: arbitration agreement, arbitration procedure

id: 20407

Warsaw Court of Appeal judgment dated 13 May 2013 Case No. I ACa 1298/12

1. The proceeding on a petition to set aside an arbitration award is not a “review” proceeding, by instances, of a state court. No ordinary means of appeal lies against an arbitration award, but only a petition to set aside the arbitration award. Such petition, as stressed in the literature, is not a means of appeal but an extraordinary means of judicial oversight by the state court of the activity of the arbitration court.

 2. It does not appear warranted to conclude from the wording of Art. 1213 of the Civil Procedure Code (referring to a proceeding for recognition or enforcement of an arbitration award) that it is necessary to present the original of the [arbitration agreement] or a certified copy thereof in the arbitration proceeding. This is primarily because it would extend the grounds for the petition under Art. 1206 of the Civil Procedure Code.

3. Art. 1197 §§ 1 and 2 of the Civil Procedure Code should be read together, meaning that the arbitration award must contain both the operative wording and the grounds, as necessary elements; the award must be signed and then served on the parties (Civil Procedure Code Art. 1197 §4).

4. Violation of the public policy clause must refer to the operative wording of [the award], which will function in legal circulation, and not to the level of the grounds.

5. Only if the state court finds that the [evidentiary] procedure was not conducted at all, or was conducted incompletely, or in an obviously defective way, violating principles of logical reasoning connecting facts in a chain of cause and effect, selective admission of evidence in the case, admitting evidence only from one party, unjustifiably ignoring evidence submitted by the opposing party, and the like, can it be found that the requirements referred to in Art. 1206 §1(4) of the Civil Procedure Code were not met.

Data wydania: 13-05-2013 | Case no.: I ACa 1298/12

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

id: 20429

Warsaw Court of Appeal judgment dated 25 January 2013 Case No. I ACa 374/12

1. A proceeding on a petition to set aside an arbitration award is not an appellate review proceeding by the state court. No ordinary means of appeal lies against an arbitration award, but only a petition to set aside the award. As stressed in the legal literature, such a petition is not an appellate measure but an extraordinary means of judicial oversight by the state court over the activity of the arbitration court. This has the fundamental consequence that the state court generally does not examine the resolution by the arbitration court, and in particular does not review whether it is founded on the facts cited in the justification for the award, or whether the appropriate provisions of substantive law were applied. The state court may set aside an arbitration award only in exceptional instances, indicated in narrowly interpreted provisions of the code. Consequently, in the event of doubt the award should be upheld rather than set aside.

2. In examining the grounds and conditions set forth in Civil Procedure Code Art. 1206 §1(4), what is essential is failure to comply with the requirements for the fundamental rules of procedure before the [arbitration] court arising out of statute or specified by the parties. Such rules include basing the award on the established state of facts, which occurs after considering evidence.

3. The judicial discretion (of the arbitration court) in evaluating the relevance of specific evidence or allegations for making factual findings and issuing a ruling is appropriately broader than that referred to in Civil Procedure Code Art. 233 §1, and the state court “reviews” it only in terms of the “fundamental principles” of procedure before the arbitration court. Thus only if the state court finds that such procedure was not conducted at all or was conducted incompletely, or was obviously conducted defectively, violating the rules of logical understanding, connecting of facts in a chain of cause and effect, selective admission of evidence in the case, taking evidence only from one party, unjustifiably ignoring evidence offered by the opposing party, and so on, can it be found that the requirements referred to in Civil Procedure Art. 1206 §1(4) were not met. The cited provision should be interpreted narrowly, limiting the possibility of setting aside an arbitration award to the principles of a fair trial and procedural violations which could have had an impact on the arbitration award.

4. Violation of substantive law may be grounds for setting aside an arbitration award only when the substance of the award violates fundamental principles of the legal order. It should be borne in mind that the arbitration court is not bound not only by civil procedure regulations (Civil Procedure Code Art. 1184 §2), but also regulations of substantive civil law.

5. The rules establishing the obligation to pay damages may be regarded as comprising one of the fundamental principles of the legal order in the state; in other words, if anyone suffers an injury and the grounds for liability under any of the civil liability regimes are met, then within the bounds provided by law (Civil Code Art. 361 §§ 1 and 2) damages should be awarded against the person responsible.

Data wydania: 25-01-2013 | Case no.: I ACa 374/12

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

id: 20422

Polish Supreme Court order dated 19 October 2012 Case No. V CSK 503/11

1. Violation of the principle of the equality of the parties may also occur through adoption of the specific wording of the rules of an arbitration court (Civil Procedure Code Art. 1161 §3). … Under the Civil Procedure Code provisions on arbitration, the equality of the parties means—generally speaking—awarding the parties equal rights, both within the main arbitration clause itself and in the rules of the permanent arbitration court, creating equal opportunities for the parties in the definitive resolution of the dispute covered by the agreement.

2. In determining whether the principle [of the equality of the parties] is complied with in the arbitration agreement, a clear distinction should be made between the content of the arbitration agreement itself (also including the provisions of the rules of the permanent arbitration court) and the general rules of operation of the permanent arbitration court. … The principle of the equality of the parties within the meaning of Civil Procedure Code Art. 1161 should be addressed to the content of the arbitration agreement itself, and not to such elements of an organizational nature, which only establish the necessary and proper legal and organizational infrastructure to assure the parties the ability to establish the appropriate panel of arbitrators within the individual legal dispute.

3. Organizational ties between permanent arbitration courts and various professional associations or business organizations are not determinative of a specific dependence on the organizations where the arbitration courts operate or a lack of impartiality of specific arbitrators.

Data wydania: 19-10-2012 | Case no.: V CSK 503/11

Key issues: arbitrator, arbitration agreement, arbitration procedure

id: 20278

Warsaw Appellate Court judgment dated 14 June 2012 Case No. I ACa 1241/11

1. The regional made an erroneous interpretation of Civil Procedure Code Art. 1206 §1(5) by incorrectly assuming that demonstration of the statutory ground for setting aside an arbitration award in the form of issuance of the award on the basis of a forged or altered document requires proof of this fact through a legally final conviction for commission of a criminal offence. The ground for setting aside an arbitration award consisting of the fact that the arbitration award was obtained through a criminal offence or that the basis for issuance of the award was a forged or altered document is the same as the basis for reopening a civil proceeding set forth in Civil Procedure Code Art. 403 §1(1). However, Art. 1206 §1(5) does not expressly require that the criminal act underlying obtaining of the arbitration award be established by a legally final criminal judgment, which means that such fact may be the subject of independent findings by the regional court.

2. There is great autonomy in arbitration procedure, entirely consistent with the legislative intent, significantly limiting the opportunities for review by the state court. The basic purpose of this legal regulation is to expedite the procedure for resolution of civil disputes, and not to create an additional phase of pre-judicial procedure. When the parties decide to submit a dispute to an arbitration court, they therefore must take into account such conditions, also including the minimal external review of its awards.

3. For the state court to conduct a proceeding concerning alteration of documents, which the petitioner did not attempt to demonstrate in the arbitration proceeding, would essentially involve the state court replacing the juridical activity of the arbitration court, which is not provided for by the civil procedure regulations.

4. Because the petitioner did not seek to correct or supplement the record [before the arbitration court], failure to exercise this special measure means that it lost the right to assert irregularities in preparation of such document. Pursuant to §13 of the Rules [of the Court of Arbitration at the Polish Chamber of Commerce in force from 1 January 2007], if the provisions of the Rules or the procedure agreed by the parties is not followed, a party who knew of such violation but failed to assert an objection promptly or within another time determined by the parties is deemed to waive the opportunity to raise such allegation in the proceeding before the arbitration court.

5. The limits of the discretion of the arbitration court in conducting the evidentiary procedure are established by the requirements of thorough examination of the circumstances essential to resolve the matter and equal treatment of the parties to the proceeding. Depriving a party of the opportunity to defend its rights should be interpreted narrowly. The arbitration court’s rejection of evidence offered by a party because it finds the evidence unnecessary does not constitute depriving the party of an opportunity of a defence.

Data wydania: 14-06-2012 | Case no.: I ACa 1241/11

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

id: 20274

Polish Supreme Court judgment dated 13 April 2012 Case No. I CSK 416/11

1. The rule of the binding force of legally final judicial rulings, as an element of the values protected under the Constitution and in the international order making up a state governed by the rule of law, which the Republic of Poland is, is included among the fundamental principles of the legal order of the Republic of Poland.

2. The state judicial system and arbitration are not identical. The lack of identity does not mean, however, that arbitration courts, and particularly their rulings, are irrelevant for the judicial system. While it is true that under Art. 175 of the Constitution, justice is dispensed by the state courts, it should be clearly stressed that as part of the dispensation of justice, the state courts oversee the activity of arbitration courts, and more precisely the rulings issued by them.

3. A ruling by a state court on recognition or enforcement of an arbitration award results in ascribing to the award the same force that rulings of state courts have, which is clearly confirmed by Civil Procedure Code Art. 1212 §1. This means that such a ruling, thanks to the state court ruling connected with it, must be treated in legal dealings the same as any other ruling of a state court. ... If an arbitration ruling has the same force as a ruling of a state court, this means that Civil Procedure Code Art. 365 §1 [i.e. preclusive effect] applies to it. Civil Procedure Code Art. 1212 does not provide for any exceptions from the equivalence of the effects of the arbitration court ruling to a state court ruling.

4. If the parties and the arbitration court appointed by them wish the ruling of the arbitration court to be equivalent in its effects to a state court ruling, they must take into consideration that the arbitration court has already ruled preclusively in the same matter between the same parties. If the prior ruling by the arbitration court has already been recognized or enforced by the state court, this has fundamental significance for the ability to recognize a further ruling issued between the same parties. A state court which is ruling on recognition or enforcement of a further ruling may not ignore the fact that the state court has already spoken on the same matter. In other words, the court will be bound by the ruling of the state court that recognized or enforced the prior arbitration court ruling.

5. It follows from Civil Procedure Code Art. 365 §1 that a court ruling on recognition of a second arbitration ruling, being bound by the prior ruling also by a state court, should not permit two rulings to be found in legal circulation which decided the same preclusive issue differently in the same matter between the same parties.

6. The lack of a basis to apply the regulations on a proceeding upon a petition to reopen [a legally final judgment] directly to assessment of an arbitration award, and on the other hand the lack in Polish law of a regulation for reopening a proceeding with respect to arbitration awards, cannot result in the unfettered discretion of an arbitration court in determining whether to take into consideration an earlier award in which a certain issue was already preclusively ruled on between the same parties. … If the arbitration court expects its award to be recognized, it should take into consideration the prior resolution of the preclusive issue in the award that was already recognized with legal finality by the state court. When examining the permissibility of a departure from this rule, the court in a proceeding to set aside an arbitration award may not rely on the mere assertion by the arbitration court that new facts or evidence has appeared in the case, but should determine, applying as relevant the criteria for assessment developed in the context of the legal regulations for reopening of a proceeding concluded in a legally final judgment, whether they are truly new facts and evidence, and whether the party could have asserted them in the prior proceeding.

Data wydania: 13-04-2012 | Case no.: I CSK 416/11

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

id: 20375

Polish Supreme Court judgment dated 15 March 2012 Case No. I CSK 286/11

1. Factual findings by the arbitration court are generally binding on the state court hearing a petition by a party dissatisfied with the resolution of the case by the arbitration court. The proceeding before the state court is not in the nature of the review proper to a common court of second instance, however, but is limited to the grounds expressly stated by the regulations, which are the permissible legal grounds for a petition to set aside an arbitration award (Civil Procedure Code Art. 1206 §§ 1 and 2).

2. Only if the state court finds that the [evidentiary] procedure was not conducted at all or was conducted incompletely, or was clearly conducted defectively, in violation of the rules of logical understanding and linking of facts in a chain of cause and effect, with selective admission of evidence in the case, admitting evidence only from one side, excluding without justification evidence offered by the opposing side, and the like, may it be found that the requirements referred to in Civil Procedure Code Art. 1206 §1(4) were not met. ... This provision should be interpreted narrowly, limiting the possibility of upsetting an arbitration award to the principles of a fair trial and procedural violations that could have an effect on the arbitration award.

3. The defendant’s argument that the principles of civil liability for injury do not belong to the fundamental principles of the legal order in Poland cannot be sustained. Under the civil law, and thus in private legal relationships, as a result of various events—particularly dangerous acts, acts arising out of commercial activity, vehicular traffic, as well as legal acts—the occurrence of injury is of universal dimensions and requires legal regulations guaranteeing liability in damages. Regulations in this respect belong to the fundamental norms of the law of obligations, and under tort liability and contractual liability may be regarded as forming some of the fundamental principles of the legal order of the state.

4. Art. 45 of the Polish Constitution does not refer at all to arbitration, but only to the state courts.

Data wydania: 15-03-2012 | Case no.: I CSK 286/11

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

id: 20368

Polish Supreme Court judgment dated 9 March 2012 Case No. I CSK 312/11

1. In the view of the appellant, it was allegedly deprived of the opportunity to defend its rights before the arbitration court (Civil Procedure Code Art. 1206 §1(2)) because the arbitration court upheld a claim as to liability which had never been raised. … As the appellant ... does not allege that it was stipulated otherwise between the parties, it may be assumed that under the rule set forth in Civil Procedure Code Art. 1188 §2 the arbitration court regarded the claim for damages set forth in a pleading as effectively asserted.

2. The principle of the equal rights of the parties was respected in the proceeding before the arbitration court, as each of the parties was provided an opportunity to present its position on the matter at each stage of the proceeding.

3. The public policy clause, like any general clause, is not precisely defined, which leaves great discretion to the court ruling on a specific case, but nonetheless, on the basis of this clause, the review of the constitutive elements of an arbitration award may not take on the dimensions proper to a review of the merits (correctness) of the award. ... The prohibition of a review of the merits (correctness) of an award is tied to the essence of application of the public policy clause. In applying the clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable regulations of law, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order.

4. The fundamental principles of the legal order are the fundamental constitutional rules concerning the socio-economic system and the overriding principles governing specific fields of substantive and procedural law. It has been recognized in the case law that such principles include economic freedom and the freedom of contract, ... the principle of the autonomy of the will of the parties and the equality of entities, ... and the principle of social justice.

5. Procedural public policy ... may be grounds for assessing an arbitration award in two aspects. First, the procedure which led to issuance of the arbitration award is assessed for its compliance with fundamental procedural principles of the legal order. Second, the effects of the arbitration award are assessed from the perspective of their consistency with procedural public policy, i.e. whether they are reconcilable with the system of procedural law, e.g. whether they violate the principle of res judicata or the rights of third parties.

Data wydania: 09-03-2012 | Case no.: I CSK 312/11

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

id: 20370

Poznań Regional Court judgment dated 25 May 2011 Case No. IX GC 704/10

1. A petition to set aside an arbitration award is an extraordinary means of review of arbitration rulings by the state court. It is not an appeal, but combines the features of an extraordinary means of challenge with a claim to establish a right or legal relationship. But it cannot be agreed that it is a type of appeal or means of challenge.

2. The list of grounds for a petition to set aside an arbitration award provided in Civil Procedure Code Art. 1206 §§ 1 and 2 are exhaustive in nature; that is, the court may not set aside an arbitration award for reasons other than those set forth in this provision. It should nonetheless be pointed out that one of the grounds for the petition—the public policy clause—is in the nature of a general clause, which means that the list of circumstances which may justify setting aside an award is not closed.

3. Not every violation of the rules for procedure before the arbitration court established by the parties or arising under the code should result in setting aside an arbitration award. It is justified to accept by way of interpretation that the fundamental rules of procedure are those whose violation could have an effect on the result in the proceeding before the arbitration court in the specific case.

4. With respect to review of arbitration awards, the purpose of the public policy clause is to protect the national legal system against resolutions that are incompatible with the system. The resolution by the arbitration court, understood as an individual and concrete norm expressed in the arbitration award, as well as the method by which it was issued, is subject to assessment from the point of view of compatibility with the fundamental principles of the legal system.

5. The state court does not review the correctness of the arbitrators’ resolution, but it must examine and assess it in order to review the compatibility of the resolution with public policy. In other words, the state court should—at least insofar as the allegation of incompatibility [with public policy] arises—create a model of the ruling which in its opinion is correct, and then compare that to the arbitrators’ resolution, in order to determine whether the nature and scale of the inconsistency justifies the allegation of violation of public policy.

6. A gross and obvious discrepancy between the facts appearing from the arbitration case file (or facts that are commonly known or known to the state court in its official capacity) and the facts assumed as the basis for the award may not remain entirely beyond the scope of interest of the state court.

7. In the meaning of consistency with the fundamental principles of the legal system of the Republic of Poland, the point of the Parliament was not that a ruling be consistent with all regulations of Polish law, but only that there be consistency with the fundamental principles of the legal system of the Republic of Poland.

8. The principle of the enforceability of contracts belongs to the group of fundamental principles of the Polish legal system. It is not absolute in nature, however, and is subject to a number of statutory exceptions. One of them is Civil Code Art. 5, setting forth the notion of abuse of a subjective right.

9. The principle of estoppel (venire contra factum proprium) and the clean-hands doctrine are not counted among the fundamental principles of arbitration court procedure and are not recognized as a part of the legal system of the Republic of Poland.

10. The rule of impartiality leads the arbitrators to maintain an impartial attitude toward the case and the participants in the proceeding. In turn, the formal equality of the parties is manifest in the right to be heard and equal procedural measures. The principle of equality in the proceeding before the arbitration court has two aspects: hearing out the parties by the arbitration court, and the opportunity to present their allegations and evidence to support them (the opportunity to use the same procedural measures). The principle of directness requires that evidence be taken before the full panel of the arbitration court.

11. If no injury was caused, awarding damages should be regarded as inconsistent with the fundamental principles of the legal system of the Republic of Poland.

Data wydania: 25-05-2011 | Case no.: IX GC 704/10

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

id: 20376

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.

Data wydania: 28-01-2011 | Case no.: I CSK 231/10

Key issues: arbitration agreement, arbitration procedure, jurisdiction of arbitral tribunal, petition to set aside arbitration award

id: 20362

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.

Data wydania: 16-12-2010 | Case no.: I CSK 112/10

Key issues: arbitration agreement, arbitration procedure

id: 20361

Rzeszów Court of Appeal judgment dated 28 October 2010 Case No. I ACa 304/10

1. The grounds for setting aside an arbitration award in the form of failure to comply with fundamental rules of procedure cannot be equated with the grounds set forth in Civil Procedure Code Art. 1206 §2(2) arising out of the public policy clause, and the latter constitute separate grounds for setting aside an award.

2. The mandatorily applicable Civil Procedure Code Art. 1197 §2 provides that the statement of the reasons which guided the arbitral tribunal in issuing the award constitutes an inseparable part of the award. The reasons stated essentially constitute an integral part of the award. … The reasons for the resolution included in the justification may also prove relevant for determining the binding force of the legally final award, and thus the bounds of its substantive legal finality, even though this generally involves the binding force of the operative wording of the award. The reasons for the resolution are also covered by res judicata in situations where they must be referred to in order to determine precisely the substance of the resolution.

Data wydania: 28-10-2010 | Case no.: I ACa 304/10

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

id: 20400

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

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

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

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

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

Data wydania: 09-09-2010 | Case no.: I CSK 535/09

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

id: 20331

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.

Data wydania: 27-05-2009 | Case no.: I ACa 177/09

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

id: 20342

Warsaw Appellate Court judgment dated 14 January 2009 Case No. VI ACa 785/08

1. Violation by the arbitration court of regulations of substantive law or erroneous interpretation thereof, even if resulting in an erroneous ruling, does not in itself—even if it really did occur—constitute a violation of the fundamental principles of the legal system.

2. Civil Procedure Code Art. 1185 indicates that the consultation among the arbitrators may occur at any place (and thus even in a hospital).

3. Drawing up and signing the award is not an act that requires the preparation of minutes. As provided in §31 of the Rules [of the Court of Arbitration at the Polish Chamber of Commerce], minutes are prepared of a hearing and any act of the arbitration court. The mere physical drawing up of the text of the award is not an act of the arbitration court; it is a technical, auxiliary act, which may be performed by only one person at a time. Signing of the award, which is an act addressed to the members of the panel of arbitrators, should be analyzed similarly. Placement of a signature by each of the arbitrators is the act of the arbitrator alone, not of the panel of arbitrators. It thus does not require the preparation of minutes, which is reserved for an act of the entire arbitration court.

4. Only a violation of the “fundamental” rules of procedure before the arbitration court (Civil Procedure Code Art. 1206 §1(4)) may be grounds for setting aside an arbitration award. … Issues connected with drawing up the minutes of the consultation among the arbitrators and issuance of the award cannot be regarded as belonging to this group. Even if minutes of these actions actually should have been prepared, the lack thereof would not mean that a “fundamental” rule of procedure had been violated, but only a rule of order.

Data wydania: 14-01-2009 | Case no.: VI ACa 785/08

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

id: 20348

Polish Supreme Court judgment dated 7 January 2009 Case No. II CSK 397/08

1. An arbitration clause is an agreement which is governed by the Civil Code, including Art. 58 § 2. … Such agreement requires a specific power of attorney, and thus the power of attorney granted to the other partner—and that only to arrange banking formalities—was not sufficient for conclusion of an arbitration clause, and thus the clause was invalid.

2. It is clear from Civil Procedure Code Art. 714 that in a proceeding to set aside an arbitration award the court will consider on its own initiative only one of the grounds for the petition, namely that provided in Civil Procedure Code Art. 712 §1(4), i.e. whether the arbitration award violates the rule of law or principles of social coexistence. This means that all other grounds for the petition, including that there was no arbitration clause or that the clause was invalid or ceased to be in force (Art. 712 §1(1)), will be considered by the court only if they were asserted in the petition to set aside the arbitration award.

3. There is no catalogue of the rule of law, but such principles are shaped by the case law. Merits review of an arbitration award by the state court is thus limited to an assessment of whether the award violates such principles. ... This has to do with such violations of regulations of substantive law that result in violation of the principles of the rule of law, and the arbitration award violates the leading legal principles in force in the Republic of Poland, conflicts with the legal system, or violates the principles of the political and socio-economic order.

4. Conducting an evidentiary proceeding is intended to determine a state of facts, and it is not the task of the state court to conduct a new merits assessment of the correctness of the claims pursued before the arbitration court.

5. An arbitration award holding effective a setoff in violation of Civil Code Art. 505(1), or awarding damages in a situation in which no loss was suffered, violates the principles of the rule of law.

6. Whether the assessment by the arbitration court was correct is unreviewable by the state court, but without a doubt ruling on the basis of a selective, unobjective assessment of the evidence violates the principles of the rule of law.

Data wydania: 07-01-2009 | Case no.: II CSK 397/08

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

id: 20353

Warsaw Appellate Court judgment dated 10 December 2008 Case No. I ACa 655/08

1. While it is true that Civil Procedure Code Art. 697–711, in the wording in force through 16 October 2005, do not contain a provision that includes the content of Art. 1185, currently in force, which provides that the arbitrators’ deliberations may occur at any place, there should be no doubt that the arbitration court also had such authority under the regulations previously in force. … The arbitrators may meet for joint discussion, conduct a telephone conference, or consult with one another through an exchange of written correspondence.

2. An arbitrator’s duty to maintain confidentiality with respect to both the content and the course of the arbitrators’ deliberations is regarded as extremely important, which is why the view should be adopted, as stated in the literature, that the obligation to maintain confidentiality excludes an arbitrator from testifying before the court as to circumstances the arbitrator learned of while performing such function.

3. Under Civil Procedure Code Art. 1206 §1(2), a demand to set aside an arbitration award may be regarded as justified if the party demonstrates that it was deprived of the ability to defend its rights in the proceeding before the arbitration court. This provision refers to the necessity in the arbitration proceeding to observe requirements concerning the principle of the equality of the parties, hearing out the parties, and the ability for a party to address evidence and allegations presented by the opposing party. … The right to equal treatment of the parties extends further than the right to be heard. This principle requires the arbitration court more specifically to assure that the parties are treated equally during the course of the entire proceeding, which means identical treatment of the parties in a similar situation. The prohibition on discrimination against either of the parties applies to the entire proceeding before the arbitration court, but in practice it applies first and foremost to the evidentiary procedure.

4. It should be regarded as a violation of the principle of equal treatment of the parties to conduct an evidentiary procedure essentially limited to the evidence presented by the claimant, including all evidence from the testimony of witnesses, while at the same time refusing to hear the witnesses indicated by the respondent, in a situation where it clearly appears from the allegations of the respondent that the witnesses will testify as to circumstances highly relevant to resolution of the case.

5. In the arbitration clause, the parties are required to identify the subject of the dispute or the legal relationship out of which the dispute has arisen or may arise. Thus as the parties in the agreement submitted to the Court of Arbitration at the Polish Chamber of Commerce disputes arising in connection with the agreement, it should be found that they had in mind not any and all disputes that might exist between them, including disputes with respect to claims for unjust enrichment, but only disputes concerning claims arising on the basis of the agreement as concluded, that is, contractual claims.

Data wydania: 10-12-2008 | Case no.: I ACa 655/08

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

id: 20374

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.

Data wydania: 27-11-2008 | Case no.: IV CSK 292/08

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

id: 20257

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.

Data wydania: 26-11-2008 | Case no.: III CSK 163/08

Key issues: arbitration agreement, arbitration procedure, arbitration award

id: 20256

Warsaw Appellate Court judgment dated 25 April 2008 Case No. VI ACa 928/07

1. The schedule of fees for actions of the arbitration court constituting an annex to the rules of the court in force from 1 January 2000, which does not require payment of an arbitration fee on a defence of setoff, was applicable to the case decided by the arbitration court. … As the arbitration court failed to consider the defence of setoff because of failure to pay the arbitration fee, the allegation in the appeal that the procedure before the arbitration court was not observed in the arbitration proceeding is correct. … In consequence, it should be held that the petition to set aside the arbitration award on the basis of Civil Procedure Code Art. 712 §1(3) is justified by the wording of this provision.

2. Submission of the dispute existing between the parties for resolution by the arbitration court does not justify the conclusion that the parties waive the right to a fair and thorough procedure assuring the ability to satisfy the legal interests of the parties which are worthy of protection. The right to a fair procedure is a pillar of a democratic state governed by the rule of law, and for these reasons violation of such right justifies the conclusion that the rule of law was violated. This will be the case more specifically in the event of failure to consider the defence of setoff asserted by the party as a result of the arbitration court’s application of a regulation that was not in force with respect to payment of a fee as a condition for consideration of the motion. The principle of fair procedure requires consideration of the defence of setoff duly asserted by the respondent.

Data wydania: 25-04-2008 | Case no.: VI ACa 928/07

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

id: 20347

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.

Data wydania: 23-04-2008 | Case no.: I ACa 204/07

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

id: 20341

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

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

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

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

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

Data wydania: 16-04-2008 | Case no.: I ACa 1334/07

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

id: 20335

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

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

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

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

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

Data wydania: 06-03-2008 | Case no.: I CSK 445/07

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

id: 20248

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

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

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

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

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

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

Data wydania: 29-11-2007 | Case no.: III CSK 176/07

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

id: 20244

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.

Data wydania: 20-06-2007 | Case no.: V CSK 126/07

Key issues: arbitration agreement, arbitration procedure

id: 20238

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

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

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

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

Data wydania: 13-12-2006 | Case no.: II CSK 289/06

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

id: 20232

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

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

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

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

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

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

Data wydania: 08-11-2006 | Case no.: I ACa 792/06

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

id: 20289

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).

Data wydania: 11-05-2006 | Case no.: I ACa 1279/05

Key issues: arbitration agreement, arbitration procedure

id: 20287

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

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

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

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

Data wydania: 11-08-2005 | Case no.: V CK 86/05

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

id: 20218

Polish Supreme Court resolution dated 26 November 2003 Case No. III CZP 83/03

1. An arbitration court is not bound by the civil procedure regulations, but may not avoid conducting a thorough examination of the circumstances necessary to decide the case. Thus it is stated in the literature that in a proceeding before an arbitration court the provisions of the Civil Procedure Code concerning appointment of attorneys do not apply, and more specifically it is possible to appoint as attorneys persons other than those referred to in Civil Procedure Code Art. 87, and moreover there is no specific form required for a power of attorney to appear before an arbitration court, and the scope, duration and effects of the appointment should be assessed pursuant to civil law.

2. In an arbitration clause the parties may exclude representation by an attorney and require participation in person before the arbitration court.

3. With respect to service, it is accepted ... that the arbitration court is not bound by the procedure or form for service provided in the Civil Procedure Code and may use the procedure for summoning parties, witnesses and experts that it deems proper and effective. This applies as well to service of an arbitration award under Civil Procedure Code Art. 709. While not bound by provisions of the Civil Procedure Code, the arbitration court must nonetheless insure procedural rules that afford the party an opportunity to present a defence.

4. In a public procurement procedure conducted under the Public Procurement Law dated 10 June 1994 (unified text at Journal of Laws Dz.U. 2002 No. 72 item 664, as amended), the award by a panel of arbitration shall be served on appointed counsel.

Data wydania: 26-11-2003 | Case no.: III CZP 83/03

Key issues: arbitration procedure

id: 20200

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.

Data wydania: 02-04-2003 | Case no.: I CK 287/02

Key issues: arbitration agreement, arbitration procedure

id: 20196

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

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

Data wydania: 29-05-2000 | Case no.: I ACa 65/00

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

id: 20280

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

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

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

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

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

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

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

Data wydania: 16-05-1997 | Case no.: I CKN 205/97

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

id: 20147

Judgment of the Court of Justice of 23 March 1981, C-102/81, Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co KG

1. An arbitrator who is called upon to decide a dispute between the parties to a contract under a clause inserted in that contract is not to be considered as a “court or tribunal of a member state” within the meaning of Article 177 of the Treaty where the contracting parties are under no obligation, in law or in fact, to refer their disputes to arbitration and where the public authorities in the Member State concerned are not involved in the decision to opt for arbitration and are not called upon to intervene automatically in the proceedings before the arbitrator.

2. If in the course of arbitration resorted to by agreement between the parties questions of community law are raised which the ordinary courts may be called upon to examine either in the context of their collaboration with arbitration tribunals or in the course of a review of an arbitration award, it is for those courts to ascertain whether it is necessary for them to make a reference to the court of justice under Article 177 of the treaty in order to obtain the interpretation or assessment of the validity of provisions of community law which they may need to apply in exercising such functions.

Data wydania: 23-03-1982 | Case no.: 102/81

Key issues: arbitration procedure

id: 20319

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

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

Data wydania: 21-12-1973 | Case no.: I CR 663/73

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

id: 20118

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

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

Data wydania: 22-12-1970 | Case no.: III CRN 327/70

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

id: 20114

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)).

Data wydania: 03-04-1957 | Case no.: I CO 4/57

Key issues: arbitration agreement, arbitration procedure

id: 20093

Polish Supreme Court ruling dated 26 October 1948 Case No. Wa C 291/48

1. An arbitration clause is a contract within the meaning of the Obligations Code and with respect to its validity is subject to the general regulations of the code concerning contracts. Thus Art. 52 §2 should also apply to an arbitration clause, under which despite the invalidity of one provision of the clause the clause generally remains in force, and the plaintiff wishing to demonstrate the invalidity of the entire clause had to prove that without the invalid provision the clause would not have been concluded.

2. For purposes of Civil Procedure Code Art. 480 §1, a dispute is defined precisely when the circumstances identifying the dispute are set forth in the arbitration clause.

3. Civil Procedure Code Art. 494 §2 does not require the arbitration court to establish all of its procedures in advance. On the contrary, the arbitration court establishes its procedure also for purposes of Art. 494 §2 when it issues specific orders necessary to conduct the proceeding, as the need arises, i.e. separately for each procedural measure.

4. The arbitration court is not bound by provisions of substantive or procedural law. ... The only limit on its discretion when ruling is public policy, which the substance of the ruling must not violate.

Data wydania: 26-10-1948 | Case no.: Wa C 291/48

Key issues: arbitration agreement, arbitration procedure

id: 20085

Polish Supreme Court ruling dated 27 May 1947 Case No. C III 81/47

1. If an arbitration clause requires written form, and a power of attorney to conclude such clause may be issued only in writing, then ratification of the clause also requires written form.

2. The general provisions of the Civil Procedure Code concerning hearing of cases are not binding on an arbitration court; only the provisions of the code governing the procedure before such court (Art. 494–500) are binding.

Data wydania: 27-05-1947 | Case no.: C III 81/47

Key issues: arbitration agreement, arbitration procedure

id: 20081

Polish Supreme Court ruling dated 21 May 1946 Case No. C III 879/46

1. It cannot be accepted ... that since the arbitration court decided to apply the regulations of the Civil Procedure Code in its proceedings, any failure to apply such regulations calls for setting aside the arbitration award. ... Requirements may not be imposed on the arbitration court that are stricter than those imposed on the state court.

2. Recusal is ruled on by the arbitration court, in which the presiding arbitrator or other arbitrator whose recusal is sought cannot be replaced by another judge, as in the state court; in the case of removal of the presiding arbitrator or one of the other arbitrators, the arbitration court would not be able to function at all.

3. Since the parties agreed to arbitration, and the arbitration agreement is binding on them, one party may not do anything by act or omission to prevent arbitration. Thus if a party refuses to appoint an arbitrator, the other party may apply to the state court to appoint an arbitrator, and if the arbitrators appointed by the parties, who may act in this respect in accordance with the wishes of the parties, do not reach agreement on appointment of a presiding arbitrator, a party may apply to the state court to appoint a presiding arbitrator.

4. The matter is different if the arbitration court cannot be empanelled or the arbitration cannot be held, without fault of the parties, or if the arbitration court cannot be empanelled in the composition or manner to which the parties agreed and expressed their intent in the arbitration clause. If, for example, the clause provides that the presiding arbitrator is to be selected mutually by the parties, but such agreement cannot be reached, the state court may not appoint the presiding arbitrator, as this would violate the clause, which in such case lapses and ceases to be in force. Similarly, if the clause provides that in the event of a lack of agreement by the arbitrators on selection of the presiding arbitrator, the presiding arbitrator is to be appointed not by the state court but by another institution or person, and such person or institution cannot appoint or refuses to appoint the presiding arbitrator, the arbitration court cannot be empanelled, without fault of the parties, and the parties may not be forced to submit the case to an arbitration court empanelled in a manner other than provided for in the clause. The Civil Procedure Code does not contain any provision under which in such case the state court could take the place of the institution or third party indicated in the clause. The clause thus lapses in this case as well. Of course, both parties may mutually amend the clause in the manner provided by law.

Data wydania: 21-05-1946 | Case no.: C III 879/46

Key issues: arbitrator, arbitration agreement, arbitration procedure

id: 20080

Polish Supreme Court ruling dated 18 March 1938 Case No. C II 2989/37

1. Arbitrators are not bound by provisions of procedural law, as they may specify the procedure to be followed within their own discretion (Civil Procedure Code Art. 494 §2), nor are they bound by provisions of substantive law in deciding the case.

2. An arbitration court rules in accordance with general principles of equity and fair commercial practice, and may not be constrained by provisions of substantive or procedural law, and thus the Parliament provides in Civil Procedure Code Art. 503 for the ability to set aside an arbitration award only in exceptional instances, and such provisions are subject to a strict interpretation, not an expansive interpretation.

3. The state court is not competent to delve into allegations of violation of provisions of substantive law or general provisions of procedural law applicable in a judicial proceeding, nor does it have the right to enter into the merits of the resolution by the arbitration court....

Data wydania: 18-03-1938 | Case no.: C II 2989/37

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

id: 20073

Polish Supreme Court ruling dated 21 December 1937 Case No. C II 1605/37

The Civil Procedure Code does not contain a provision concerning auxiliary intervention in a proceeding before an arbitration court. If the parties do not specify the procedure themselves before the arbitrators take up their duties, the arbitration court shall specify the procedure in its own discretion (Civil Procedure Code Art. 494 §2), and in that case may apply the regulations of the Civil Procedure Code if not prohibited by the special regulations concerning arbitration or by the nature of this separate form of proceeding. As an intervenor is not a party, there is no fundamental barrier to admitting an auxiliary intervenor, even over the objection of the parties (Civil Procedure Code Art. 75), particularly if it does not violate the arbitration clause, because admission of an intervenor does not admit a new party to the dispute.

Data wydania: 21-12-1937 | Case no.: C II 1605/37

Key issues: arbitration procedure

id: 20071

Polish Supreme Court ruling dated 13 December 1937 Case No. C III 1626/37

1. If the parties have not specified the procedure, the arbitration court shall specify the procedure in its own discretion. In this respect, the arbitration court is not subject to any restrictions other than those set forth in the act ([Civil Procedure Code] Art. 503 §1(3)), i.e. in the regulations concerning procedure before the arbitration court (Art. 497–502). These regulations do not require the arbitration court to specify its procedure in writing, nor do they prohibit the arbitration court from changing the procedure it has adopted for another procedure, and, finally, they do not prohibit the arbitration court from departing in certain instances from the procedure it has previously specified.

2. The place of issuance of an award is the place identified by the arbitration court in the award. Stating as this place the place in which the award was handed down within the meaning of [Civil Procedure Code] Art. 497 is recommended; however, so long as the arbitration court is not bound by the procedure specified by the parties themselves (Art. 494 §1), it may determine in its own discretion which place to identify in the award as the place of issuance of the award, so long as it is not contrary to the rule set forth in Art. 497. Such a decision by the arbitration court may fall within the scope of specifying the procedure.

3. The regulations in the act concerning procedure before the arbitration court ([Civil Procedure Code] Art. 494–502) do not contain provisions on announcement of the award, and it may thus be issued without announcement. Nor does the act tie any consequences to announcement of the award, which it does not provide for announcement of at all. Consequences are, however, tied to service of copies of the award, as specified in Art. 500 §1, and under Art. 504 §1 a petition to set aside an arbitration award must be filed within one month after service of the award. The date of issuance of an award is therefore not the date of its announcement.

4. The very act of issuance of an award by the arbitration court is not identical with signing of the written formulation of the resolution of the relief sought by the parties and the reasons for the resolution. Both the literal wording and the substance of the provisions set forth in [Civil Procedure Code] Art. 498 and 499 lead to the conclusion that the time of issuance of an award is the time when the arbitration court took a final decision on what the resolution of the relief sought by the parties would be, and for what reasons, and when to this end the award was handed down within the meaning of Art. 497. The award is not yet in force, but enters into force only when it is made in writing, contains all the information required by Art. 498, and is signed by the arbitrators in the manner provided in Art. 499; nonetheless, the award already exists, it has already been “handed down” and thus was “issued.”

Data wydania: 13-12-1937 | Case no.: C III 1626/37

Key issues: arbitration procedure, arbitration award

id: 20069

Polish Supreme Court ruling dated 5-23 October 1936 Case No. C III 1875/35

1. Any person against whom an arbitration award is effective within the meaning of § 1040 of the [German] Civil Procedure Code may seek a ruling on the permissibility of execution. It is true that this provision states that res judicata operates between the parties. Nonetheless, from the nature of an arbitration award as a result of an agreement the conclusion should be drawn that the scope of res judicata is defined by the agreement of the parties, and thus an assignee may assert the adjudged claim to the same extent as the assignor, and should enjoy all the effects of such claim, and should be entitled to rely on the res judicata effect awarded to the assignor.

2. An arbitration proceeding is not concluded until all of the conditions set forth in § 1039 of the [German] Civil Procedure Code have been fulfilled, and therefore it is permissible to supplement an arbitration award up until the closing of the hearing at the first level of appeal in a dispute pursuant to § 1042 of the [German] Civil Procedure Code.

3. §§ 80 ff. of the [German] Civil Procedure Code do not apply in a proceeding before an arbitration court. Thus the question is not whether the officials appearing before the arbitration court held a formally issued power of attorney, but whether the defendant endorsed their action before the arbitration court.

4. Joining issue in the dispute before the arbitration court constitutes waiver of any defences of defective proceeding as to which the party did not raise specific objections.

Data wydania: 23-10-1936 | Case no.: C III 1875/35

Key issues: arbitration agreement, arbitration procedure

id: 20064

Polish Supreme Court ruling dated 6 May 1936 Case No. C I 1914/35

1. Under the Civil Procedure Code, a proceeding to set aside an arbitration award is a sui generis proceeding, but, as it appears from Art. 503, it is similar to a cassation proceeding, because of the strict enumeration in this article of the grounds for setting aside an award, and then by the procedure in the courts of first and second instance, when the courts are authorized only to determine whether the arbitration award contains violations provided for in Art. 503. Thus amending and expanding the grounds for the petition cannot be permitted, and only the allegations raised in the petition may be considered.

2. An arbitration award should be justified in accordance with Civil Procedure Code Art. 498(5), but it does not follow from this provision that the justification must be issued at the same time as the operative wording of the award. … In accordance with the final paragraph of Civil Procedure Code Art. 499 §2, an award signed by a majority of the arbitrators has the same force as one signed by all of the arbitrators.

3. In Civil Procedure Code Art. 503 the Parliament provided that an arbitration award may be set aside only in exceptional circumstances, and these provisions are not subject to an expansive interpretation. Thus the state court is not authorized to enter into consideration of allegations concerning violation of provisions of substantive law or general provisions of procedural law applicable in a judicial proceeding, nor does it have a right to enter into a determination of the fairness of the award or the correctness of the factual findings or grounds on which the award was based.

Data wydania: 06-05-1936 | Case no.: C I 1914/35

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

id: 20061

Polish Supreme Court ruling dated 27 January 1936 Case No. C II 2123/35

The arbitration court is entitled to delegate one of the arbitrators to take the testimony of witnesses, and the arbitrator so delegated may take the testimony in the absence of the parties and without recording formal minutes.

Data wydania: 27-01-1936 | Case no.: C II 2123/35

Key issues: arbitration procedure

id: 20058

Polish Supreme Court ruling dated 2 May 1934 Case No. C II 161/34

The fact that one of the arbitrators served the arbitration award on the defendant in his residence, and the defendant after reading the award left it with the arbitrator without acknowledgement, promising to take the award back after payment of the fee due to the arbitrator, does not yet constitute service of the arbitration award within the meaning of § 592 of the [former Austrian] Civil Procedure Code.

Data wydania: 02-05-1934 | Case no.: C II 161/34

Key issues: arbitration procedure

id: 20042

Polish Supreme Court ruling dated 16 February 1934 Case No. C III 143/33

1. The state court could only either find the arbitration award enforceable in its entirety or refuse to find the award enforceable also in its entirety,
as it is not the place of the state court in considering a case seeking recognition of an arbitration award as enforceable to review which of the reasons behind the award are justified or unjustified, or which item in an accounting was proved or acknowledged by a party, or to enter at all into consideration of the merits of the dispute.

2. The arbitration court may apply § 319 of the [former German] Civil Procedure Code, i.e. correct obvious errors of calculation, typographical errors or the like. It may not, however, amend its material content after service
of the award on the parties, unless both parties consent to such amendment.

3. Resignation of appointment is a declaration by arbitrators that they refuse to perform their duties, that they renounce the agreement with the parties obliging them to resolve the dispute.

4. In light of the declaration by the arbitrators in the presence of the parties that they resign their appointments, and thus renounce the agreement to perform the duty of arbitrators, pursuant to § 1033 of the [former German] Civil Procedure Code the arbitration agreement ceased to be in force, and expired.

5. In light of expiration of the arbitration agreement, the arbitrators who resigned their appointments had no legal basis to take up their rights and obligations again upon the unilateral request of the plaintiff without the consent of the defendant, as they did.

Data wydania: 16-02-1934 | Case no.: C III 143/33

Key issues: arbitrator, arbitration agreement, arbitration procedure, recognition and enforcement of domestic arbitration award

id: 20040

Polish Supreme Court ruling dated 1 September 1932 Case No. I C 1018/32

1. In the event of the death of the claimant or the defendant, the actions of the arbitration court cease, and thus the arbitration court ceases to exist, and any act taken by the arbitrators after the death of a party cannot be regarded as an act of the arbitration court.

2. Cessation of the action of the arbitration court pursuant to Art. 1384(2) of the [former Russian] Civil Procedure Code also occurs when one of several claimants or defendants dies.

Data wydania: 01-09-1932 | Case no.: I C 1018/32

Key issues: arbitration procedure

id: 20033

Polish Supreme Court ruling dated 22 December 1931 Case No. III 1 Rw 1931/31

The task of the arbitration court is to hear the parties in order to develop a proper view of the whole case, and it is not necessary to hear the parties when they both present or for them to present mutual testimony, because apart from §§ 598–599 of the [former] Austrian Civil Procedure Code the arbitration court is not bound by civil procedure regulations. It may be persuaded of the truth or falsity of the parties’ claims and allegations according to its own free conviction and does not need to present the parties with their mutual testimony or hear them when they are both present.

Data wydania: 22-12-1931 | Case no.: III 1 Rw 1931/31

Key issues: arbitration procedure

id: 20313

Polish Supreme Court ruling dated 30 September 1931 Case No. III 1 Rw 1159/31

The issue raised in the review of what will happen if the Land Office refuses permission to acquire the real estate identified in the arbitration award does not fall within the purview of the courts in this dispute, as it concerns the correctness of the arbitration award on the merits, and comprises an allegation of the erroneous assessment of the award, and therefore it cannot justify any of the grounds of ineffectiveness from §595 of the [former] Austrian Civil Procedure Code.

Data wydania: 30-09-1931 | Case no.: III 1 Rw 1159/31

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

id: 20312

Polish Supreme Court ruling dated 21 January 1931 Case No. III 1 Rw 1931/30

1. §577 of the [former Austrian] Civil Procedure Code, stating that the arbitration clause is legally effective if the parties are competent to conclude a settlement with respect to the matter in dispute, does not exclude at all the possibility of a third party joining the dispute before the arbitration court, when the parties who prepared the given arbitration clause consent thereto—even if only implicitly—and express their trust in the third party in such implicit manner.

2. The plaintiff’s challenge to the procedure followed by the arbitration court, specifically that despite a change in the composition of the panel because of a new presiding arbitrator, the arbitration court failed to conduct the entire hearing again before the new panel, that it did not hear the witnesses or the parties but limited itself to using the evidence admitted previously, is ineffective, because unless otherwise agreed by the parties the procedure before the arbitration court is designated by the arbitrators themselves, within their free discretion (§587 par. 1 of the [former Austrian] Civil Procedure Code).

3. A ruling on the costs of the dispute does not violate §595(5) of the [former Austrian] Civil Procedure Code because the issue of costs is closely connected with the principal claim and should be covered by the award, and the party on which to impose the obligation to pay the costs depended on the arbitration court’s discretion.

Data wydania: 21-01-1931 | Case no.: III 1 Rw 1931/30

Key issues: arbitrability of dispute, arbitration procedure

id: 20023

Polish Supreme Court ruling dated 13 January 1931 Case No. III 1 Rw 2277/30

As pursuant to §577 par. 3 of the [former Austrian] Civil Procedure Code an arbitration agreement must be concluded in writing, the prior oral appointment of arbitrators has no legal significance whatsoever, and no intent of the parties can shift the effectiveness of the written agreement back
to an earlier date. Prior to the written agreement, neither the arbitration court nor the arbitrators exist, and even express waiver of the objection
of the invalidity of the arbitration award on these grounds would be ineffective (§§ 595 and 598 of the [former Austrian] Civil Procedure Code).

Data wydania: 13-01-1931 | Case no.: III 1 Rw 2277/30

Key issues: arbitration agreement, arbitration procedure

id: 20309

Polish Supreme Court ruling dated 21 November 1930 Case No. C 291/30

Use of a default procedure patterned on the Civil Procedure Code is impermissible before the arbitration court. Notwithstanding a party’s failure to join issue in the dispute, the arbitration court has a duty to determine and assess the state of facts, and only within those limits may it use the party’s failure to proceed as grounds for accepting disputed facts to be admitted to be true.

Data wydania: 21-11-1930 | Case no.: C 291/30

Key issues: arbitration procedure

id: 20022

Polish Supreme Court ruling dated 30 May 1930 Case No. III 1 Rw 2368/29

1. The Supreme Court does not share the legal view that because of dispatch and service of a copy of the arbitration award on the plaintiff after 10 May 1927, the award in question should be regarded as not having been issued during the period specified in the submission to arbitration, and thus invalid. Because the award was adopted by all three arbitrators and signed by them prior to 10 May 1927, the award must be regarded as issued on time, regardless of when it was served on the parties.

2. The award in question is invalid because the plaintiff was not heard by all three arbitrators prior to resolution of the case covered by the submission to arbitration.

Data wydania: 30-05-1930 | Case no.: III 1 Rw 2368/29

Key issues: arbitration procedure, arbitration award

id: 20311

Polish Supreme Court ruling dated 5 July 1929 Case No. III. 2. C. 222/29

1. It cannot be assumed that the parties, when not only certain of their rights and obligations arising out of the legal act in question are challenged, but the legal act as such, did not intend to make use of the assistance of the arbitration court. Therefore, despite the invalidity (not to mention the ineffectiveness) of the deed itself, the arbitration clause, only mechanically connected to the deed, remains in force.

2. Unless otherwise provided by the parties, the arbitration court is not bound by procedural regulations, particularly the provisions of the [former German] Civil Procedure Code, when hearing the case submitted to it.

3. An arbitration award must set forth the reasons; that is, it must contain an objective justification for the operative wording of the award issued. Whether such justification is accurate, exhaustive or consistent with the state of facts cannot be reviewed by the common court under §1041 of the [former German] Civil Procedure Code, because it is not an appellate instance with respect to the arbitration court.

Data wydania: 05-07-1929 | Case no.: III. 2. C. 222/29

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

id: 20018

Polish Supreme Court ruling dated 13 November 1928 Case No. III Rw 1956/28

1. While the arbitration court is not bound in its procedure by civil procedure regulations ([former Austrian] Civil Procedure Code § 587), nonetheless the bounds of the task of the arbitration court must be designated (see [former Austrian] Civil Procedure Code § 595(5)).

 2. In the absence of the defendant (in an arbitration court) the relief sought may not be amended and arbitrarily determined relief granted against the defendant without notice to the defendant. … Such procedure violates the mandatorily applicable rule of [former Austrian] Civil Procedure Code § 587 of the necessity to hear out the parties or give them at least the opportunity of a defence, and renders the arbitration award ineffective ([former Austrian] Civil Procedure Code § 595 (2) and (5)).

Data wydania: 13-11-1928 | Case no.: III Rw 1956/28

Key issues: arbitration procedure, arbitration award

id: 20013

Polish Supreme Court ruling dated 18 January 1928 Case No. III Rw 253/27

The fact that the procedure under provisions concerning arbitration courts does not contain an express provision on the costs of the dispute does not justify a finding that the arbitration court is not authorized to rule on the costs
of the dispute. In any event, such provisions do not contain a prohibition in this respect, and [former Austrian] Civil Procedure Code § 577, which provides that a private law claim may be submitted to an arbitration court for resolution, also includes the authority to rule on the costs of the dispute as an auxiliary element combined with the resolution itself.

Data wydania: 18-01-1928 | Case no.: III Rw 253/27

Key issues: arbitration procedure, jurisdiction of arbitral tribunal

id: 20010

Polish Supreme Court ruling dated 18 May 1927 Case No. C 90/26

1. An arbitration court is not a state institution, but operates on the basis of an agreement by the parties ([former Russian] Civil Procedure Code Art. 1367), and thus the regulations on the official language, in force in state offices, do not apply there.

2. For an award written by the arbitration court in a foreign language, in order to obtain a writ of enforcement, which must be issued only in Polish, it is necessary to submit a duly certified translation, which will serve as the basis for the judicial actions connected with issuance of a writ of enforcement and enforcement of the award.

Data wydania: 18-05-1927 | Case no.: C 90/26

Key issues: arbitration procedure, arbitration award, recognition and enforcement of domestic arbitration award

id: 20007

Polish Supreme Court ruling dated 1 June 1926 Case No. R 263/26

1. Only the arbitration court, and not a party, is authorized to submit a demand for legal assistance.

2. With respect to the form of the award and evidentiary measures, the arbitration court is not bound by civil procedure regulations.

Data wydania: 01-06-1926 | Case no.: R 263/26

Key issues: state court assistance, arbitration procedure

id: 20003

Polish Supreme Court ruling dated 13 November 1923 Case No. Rw 510/23

An arbitration award may be served on a party who has departed to a place unknown after issuance of the award, via a guardian for an absent person, appointed by the court for this purpose.

Data wydania: 13-11-1923 | Case no.: Rw 510/23

Key issues: arbitration procedure, arbitration award

id: 20304

Warsaw Court of Appeal judgment dated 24 September 2014 Case No. I ACa 348/14

1. A petition to set aside an arbitration award is an extraordinary measure of judicial review by the state court of the activity of the arbitration court. It is a special legal measure combining the features of extraordinary review (against an arbitration award that is legally final, at least formally) and a claim seeking to modify the legal status brought about by the arbitration award. However, it is not an appellate measure, and the state court reviewing the petition generally will not examine the resolution of the arbitration court on the merits, and in particular will not review whether there is a foundation for the award under the cited facts or whether the facts were properly established.

2. Civil Procedure Code Art. 1206 §1(4) refers to the fundamental rules of procedure before the arbitration court, which should be understood as limiting the possibility to set aside an arbitration award only to those instances which resulted in violation of the principles of a fair trial or procedural violations important enough that they could have influenced the arbitration award, for example violation of the principle of the equality of the parties, or a complete failure to admit evidence. This situation did not occur in the proceeding before the arbitration court, as the objection by the petition referred to the arbitrators’ failure to comply with the 30-day limit for closing the proceeding in the case, late issuance of the award and service on the petitioner, and failure to comply with informational obligations with respect to the petitioner.

3. Fundamental principles of the legal order should be understood as fundamental constitutional principles concerning the socio-economic system, as well as the leading principles governing specific areas of substantive and procedural law. Thus only norms that are mandatorily binding and to which fundamental importance is ascribed may justify reliance on the public policy clause. This clause is not applied to correct all irregularities and defects in arbitration awards, but should protect the integrity of public policy.

Data wydania: 24-09-201 | Case no.: I ACa 348/14

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

id: 20391

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