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settlement before arbitral tribunal | case-law

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Supreme Court of Poland order dated 13 October 2017, Case No. I CSK 33/17

1. The provisions of the Civil Code may be applied to an arbitration agreement only on issues not covered by a separate procedural regulation, and taking into account the specific nature of an arbitration agreement as an institution of procedural law. In other words, reference to substantive law in the event of a gap in the procedural regulation must be preceded in each instance by a consideration of whether the provisions of substantive law are appropriate in this case, given the procedural nature of an arbitration agreement, and if so, in what shape they should be applied.

2. [Art. 1161 §2 of the Civil Procedure Code] excludes framing an arbitration clause so that it violates the principle of equality, in particular by entitling only one of the parties to elect between commencing a case before the state court or the arbitral tribunal. This therefore applies to the wording of the clause and does not bar a situation in which one of the parties to the arbitration agreement, as a consequence of making of the clause by a falsus procurator, obtains the power to ratify it, and in consequence to be bound by the clause. If ratification occurs, both parties will be bound by the clause, and the assessment of its content will be governed inter alia by Civil Procedure Code Art. 1161 §2. This situation does not differ from instances in which ratification under Civil Code Art. 103 would involve an agreement of substantive law.

3. Civil Procedure Code Art. 1167 establishes the rule that a power of attorney to make a legal act granted by a business, regardless of the nature of the act, also empowers the holder to enter into an arbitration agreement. The legislature thus accepted that empowerment to make a transaction also implies empowerment to select arbitration as the procedure for resolving disputes arising out of the transaction, unless otherwise provided in the power of attorney. This provision erases the distinction between authority to enter into a legal act and authority to enter into an arbitration clause with respect to disputes involving that act. The type of power of attorney necessary to make the legal act is determined by statute (Civil Code Art. 98), and if the power of attorney is effectively granted, empowerment to make an arbitration clause is a derivative of that power of attorney.

4. Civil Procedure Code Art. 1167 should be regarded as the legislature’s response to the interpretation adopted in the case law, regarded as rigorous, with respect to the requirements for empowerment to conclude an arbitration clause. Considering that the scope of application of this solution is limited to businesses, this argues for giving it broader meaning than being limited to a power of attorney of a specific nature.

5. Civil Procedure Code Art. 1167 detaches the effectiveness of authority to conclude an arbitration agreement from its autonomous classification as an act that is or is not within the ordinary course of business, making it dependent only on the existence of effective authorization to make a legal act.

Data wydania: 13-09-2017 | Case no.: I CSK 33/17

Key issues: jurisdiction of arbitral tribunal, settlement before arbitral tribunal

id: 20519

Supreme Court of Poland judgment of 14 June 2017, case no. IV CSK 482/16

The Supreme Court is authorized to interpret the content of the arbitration clause, as the scope of its application is subject to examination by the court on its own initiative because it may result in dismissal of the claim (Art. 1165 §1 of the Civil Procedure Code). In making such interpretation, it must be assumed that the principal route for pursuing claims is through the courts. The interpretation of the arbitration clause thus may not extend so far that the competence of the arbitral tribunal is accepted contrary to the express intention of the parties as set forth in the agreement.

Data wydania: 14-06-2017 | Case no.: IV CSK 482/16

Key issues: jurisdiction of arbitral tribunal, settlement before arbitral tribunal

id: 20518

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

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

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

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

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

Data wydania: 14-02-1956 | Case no.: IV CO 29/55

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

id: 20091

Polish Supreme Court ruling dated 26 October 1936 Case No. C II 1371/36

1. A settlement concluded before an arbitration court is equivalent to a state court judgment, but only with respect to its enforceability and effectiveness as an executable writ (Civil Procedure Code Art. 501 §2 and Art. 527(3)). It does not have res judicata effect with respect to the issues determined therein, as the act expressly gives such effect only to legally final judgments, and such effect may not be extended to other writs of enforcement (Civil Procedure Code Art. 382).

2. As the case submitted to the arbitration court for resolution was resolved by settlement, the arbitration clause was exhausted and only the settlement exists.

Data wydania: 26-10-1936 | Case no.: C II 1371/36

Key issues: arbitration agreement, settlement before arbitral tribunal

id: 20065

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