1. One of the fundamental principles of the legal order, provided for in Art. 45 (1) of the Constitution of the Republic of Poland, is the right to court, an element of which is a party’s right to have its case heard by an independent court, in a fairly conducted procedure. The indicated principle of the legal order applies to all court proceedings, including arbitration proceedings.

2. In the light of Art. 1173 § 1 of the PCPC, an arbitrator shall be an independent and impartial person. … . This refers to the absence of such relations between an arbitrator and parties to a dispute which could affect the content of the award.

3. [I]t is indicated in the case law that it is only exceptionally permissible to invoke circumstances previously known to a party concerning an arbitrator and to invoke non-operation of the preclusion of the grounds for exclusion of the arbitrator in a situation when it comes to the circumstances of such a kind in which the arbitrator’s participation in rendering an award by an arbitral tribunal could be found to be justifying that the award is contrary to the fundamental principles of the public policy… .

Mere demonstration of possible errors of an arbitral tribunal in the conduct of the proceedings or in the assessment of the gathered material or in the accepted legal assessment of the asserted claims is not sufficient to successfully challenge an arbitration award before a state court. It may be done only in case of existence of gross and cardinal misconducts by the arbitral tribunal causing that the acceptance of the award rendered by the arbitral tribunal would almost obviously be impossible due to a violation of the fundamental principles of procedural or substantive law.

1. [I]n proceedings initiated by a petition to set aside an arbitration award (…) a state court does not examine the accuracy of the assessment of evidence taken by an arbitral tribunal, the correctness of factual findings, the accuracy of interpretation or application of rules of the substantive law; a state court does not assess the accuracy of a specific method of resolving a litigious legal relationship by an arbitral tribunal (…).

2. The essence of a petition to set aside an arbitration award is to create a control mechanism which respects, on the one hand, the distinctiveness and autonomy of arbitration, on the other hand, prevents functioning of arbitration awards which are in breach of the rule of law in the legal order. 

3. The proceedings initiated by a petition to set aside an arbitration award do not lead to a substantive re-examination of the dispute between the parties, (…) but the aim of these proceedings is only to verify the claims of the petitioner concerning the statutory grounds for setting aside an arbitration award cited in the petition.

1. The essence of arbitration consists of three principles: (i) the non-state character of arbitration, (ii) joint will of the parties as the source of jurisdiction to resolve the dispute and (iii) equating the legal force of an arbitration award with the legal force of a state court judgment.

2. A state court ruling 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 Art. 1212 § 1 of the PCPC. Such an award, 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, i.a. it has all the features indicated in Art. 365 § 1 of the PCPC.

3. The purpose of proceedings initiated by a petition to set aside an arbitration award is only to verify the petitioner’s pleadings presented in the petition as to existence of the grounds referred to in Art. 1206 § 1 of the PCPC, and to assess if any of the prerequisites referred to in Art. 1206 § 2 of the PCPC exist.

4. [T]he validity and efficiency of an arbitration agreement shall be determined by the law in force at the time when the arbitration agreement was concluded… .

5. The agreement [arbitration agreement – insertion added] does not identify individual parties to the dispute, but the legal relationship or the object of a dispute, therefore certain claims (receivables), as a result of the arbitration agreement, have such a feature that disputes concerning them shall be resolved by an arbitral tribunal.

6. If a given legal relationship has been submitted to arbitration, the arbitral tribunal retains its jurisdiction to resolve the case, however, as a result of the assignment, the assignor, as a matter of principle, loses the ability to dispose of the claim in the substantive-law sense, in fact loses its ability to settle.

7. The public policy clause covers both the procedural and the substantive fundamental principles of the legal order. Procedural public policy may be a ground for assessing an arbitration award in two aspects. First, the procedure which led to rendering of the arbitration award is assessed for its compliance with the fundamental principles of the legal order, second, the effects of the arbitration award are assessed from the perspective of their consistency with the procedural public policy, i.e. whether they are reconcilable with the system of procedural law. On the other hand, a violation by an arbitral tribunal of the substantive law applicable to the resolution of the legal relationship from which the dispute referred to arbitration arose, legitimates setting aside of the award, only if it is connected with a violation of the fundamental principles of the legal order. At the same time, in the event of non-compliance of an award with the fundamental principles of the legal order, the question is not whether the award is compliant with all absolutely binding provisions of law, but whether the award has had an effect which is irreconcilable with the fundamental principles of the state legal order… .

8. The principle of interpretation of declarations of will is covered by the public policy clause. … The principle of freedom of contracts is also one of the fundamental principles of the substantive legal public policy.

1. [T[he fundamental principles of legal order shall be understood not only as constitutional norms, but also as ground rules in particular fields of law, and this applies both to national regulations and regulations resulting from the EU legislation in force in Poland, both of substantive and procedural nature.

2. [P]rocedural public policy may be a ground for assessing an arbitration award in two aspects. First, the procedure which led to rendering of the arbitration award is assessed for its compliance with the fundamental principles of the legal order, second, the effects of the arbitration award are assessed from the perspective of their consistency with the procedural public policy, i.e. whether they are reconcilable with the system of procedural law. On the other hand, a violation by an arbitral tribunal of the substantive law applicable to the resolution of the legal relationship from which the dispute referred to arbitration arose, legitimates setting aside of the award only if it is connected with a violation of the fundamental principles of the legal order.

3. The public policy clause, like any general clause, is indeterminate, which leaves the court seized of a particular case with a wide range of discretion. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order. Substantive review of an arbitration awards is therefore limited to violation of the principles of legal order.

4. [G]rounds for setting aside an arbitration award may only include qualified violations of substantive or procedural law, which mean that an arbitration award is irreconcilable with the legal standards considered to be fundamental to the functioning of the legal system as such. This means that mere misinterpretation of the substantive law or misapplication thereof by an arbitral tribunal does not justify upholding of the petition even if there would be a violation of mandatory provisions… .

5. The broad scope of autonomy granted by the lawmaker to the arbitral tribunal, including judicial autonomy, excludes the possibility of a state court to make independent factual findings in proceedings initiated by a petition to set aside an arbitration award, or to review – beyond the aforementioned scope – the findings constituting the factual basis of an arbitration award, by which a state court is in principle bound… . A state court is neither a second-instance court with reference to arbitration awards, which excludes the possibility of rendering a reformatory ruling.

6. [A]n assessment whether an arbitration award does not violate the fundamental principles of the legal order shall be formulated carefully, narrowly and on the basis of the facts of a particular case.

7. It is permissible to seek damages on the basis of general principles with a simultaneous demand to publish a statement of appropriate content. The combination of two measures, as in the present case, cannot itself speak in favour of their excessive repressiveness, and to such an extent that would justify the setting aside of the contested award according to Art. 1206 § 2 point 2 of the PCPC.

1. A petition to set aside an arbitration award is a legal remedy combining features of an extraordinary remedy at law, especially a petition for the revival of the proceedings, and an action for the formation of law or a legal relationship in which the claimant (petitioner) demands a state court to render a judgment on setting aside an existing legal relationship established by an arbitration award. A state court’s judgment granting the petition is of quashing nature, as in such a situation the state court can only set aside the arbitration award, and only insofar as demanded by the petitioner (…).

2. A petition to set aside an arbitration award is not intended to be a remedy leading to consideration, by a state court, of the merits of the dispute resolved by an arbitral tribunal. In fact, there is considerable autonomy in arbitration procedure (…) limiting the possibilities of review by the state court. If parties decide to submit a dispute to arbitration, they need to take these circumstances into account, including also little external control of arbitration awards. This does not mean, however, that if a dispute is submitted to arbitration, the parties have to agree to all kinds of procedural and substantive shortcomings of the arbitral tribunal (…).

3. Considering a petition, a state court examines a case only on the grounds set out in the Polish Civil Procedure Code. Art. 1206 of the PCPC exhaustively lists  the grounds on which a petition to set aside an arbitration award may be based. The difference between the grounds of a petition indicated in Art. 1206 § 1 and § 2 of the PCPC is that the grounds set out in § 1 are taken into account by a state court only at the request of a party, the grounds set out in § 2 are taken into account ex officio (…).

4. [I]t is deemed that the case in which an arbitral tribunal rules ultra petita or aliu should not escape the control of the state court. This assumption shall be considered well-founded also in the light of the Polish Civil Procedure Code, with the proviso that the character of arbitration may justify an approach to the assessment of the limits of the claim being more flexible than in the case of state courts.

5. [A]lthough Art. 1188 § 1 of the PCPC does not indicate obligatory elements of a statement of claim in arbitration proceedings, including the exact wording of the claim (cf. Art. 187 § 1 point 1 of the PCPC), nonetheless the necessity to concretize the claim as an element determining the subject matter of the arbitration proceedings may be derived indirectly from Art. 1202 first sentence of the PCPC; it may also result from the rules agreed by the parties or set out in the arbitration rules (…).

6. The principle of equal rights of the parties is a fundamental principle of arbitration proceedings indicated directly in Art. 1183 first sentence of the PCPC.

7. Procedural public policy may be a basis for assessment of an arbitration award in two aspects. First, subject to the assessment is the compliance of the procedure which led to issue of the arbitration award with the fundamental procedural principles of legal order. Second, subject to the assessment are the effects of the award from the point of view of their compliance with the procedural legal order, i.e. whether they are compatible with the procedural legal system, for example, whether they do not infringe res iudicata, the rights of third parties.

8. An arbitration award may be said to be contrary to the fundamental principles of the legal order only with respect to constitutional principles of the socio-economic system or the fundamental principles governing specific fields of substantive law (…).

9. [P]ublic policy within the meaning of Art. 1206 § 2 point 2 of the PCPC includes not only the principle of freedom of contract and the pacta sunt servanda principle, but also principles limiting the freedom of contract and stability of contracts.

10. [A]pplication by an arbitral tribunal of applicable substantive law for resolution of a dispute, which it is generally required to do under Art. 1194 § 1 of the PCPC, is thus subject to review by a state court considering a petition to set aside an arbitration award only insofar as application of such law is required by the public policy clause, which is considered by the court ex officio.

1. Generally, a state court cannot examine whether an award challenged in a petition to set aside was based on properly established facts and how and whether an arbitral tribunal correctly interpreted the norms of substantive law it applied (…).

2. By examination of the grounds and prerequisites set out in Art. 1206 § 1 point 4 of the Polish Civil Procedure Code, what is important is the presence of a failure to meet the requirements in the scope of fundamental principles of arbitration proceedings resulting from a statute or specified by the parties. One of these principles is to base the award on established facts, which takes place after hearing of evidence. (…). Thus, only if the state court found that such hearing of evidence has not been conducted at all, or has been incomplete or obviously faulty, in breach of the principles of logical reasoning, of linking facts together in a cause-and-effect chain, selective admission of evidence in the case, examination of evidence of only one party in groundless omission of the evidence requested by the other party, etc., it would be possible to find that the requirements set out in Art. 1206 § 1 point 4 of the PCPC. (…).

3. [A]n obvious discrepancy between an arbitration award and the facts of the case may demonstrate a violation of the rule of law (…). This means that not every declaration that an award is inconsistent with the factual state may result in setting aside of this award. It is assumed that a conclusion that the rule of law has been violated is justified, if as a result of the arbitration award the fundamental principles of the legal order of the state are infringed (…).

1. Going beyond the limits of the claim may … constitutes a violation of the fundamental principles of procedure before an arbitral tribunal (Art. 1206 § 1 point 4), alternatively, depending on the circumstances of a case, it may result in the defendant being deprived of the ability to defend its rights (Art. 1206 § 1 point 2 of the PCPC). There is also no doubt that a claim to set aside an arbitration award may relate to the entire award or to a part thereof only, and a state court is bound by the scope of the challenge indicated by the party, which does not mean that a state court cannot find a claim to be well-founded in part … .

2. On the other hand, the general view expressed by the adjudicating panel [in the Polish Supreme Court judgment dated 6 May 2016, Case No. I CSK 305/15 – insertion added] that a court is bound by the claim presented in the petition to set aside an arbitration award in full, and the court’s finding that the granting of a claim in part pertains to a claim of another kind that has not been raised by the petitioner, is isolated and has not been followed up in subsequent case-law, also after an amendment of the petition model procedure.

3. The proceedings to set aside an arbitration award are one-instance proceedings and a judgment may only quash or dismiss the petition, which, taking into account the principle of the state court being bound by the scope of the challenge, makes the application of Art. 384 of the PCPC in such proceedings, as a general rule, aimless.

1. There is no provision of law directly providing for expiration of an arbitration agreement if the financial situation of a party has been so deteriorated that they are not able to incur the costs of arbitration proceedings.

2. According to well-established views expressed in the doctrine, other reasons of expiration of an arbitration agreement include, as provided for in Art. 1168 § 2 of the PCPC, first of all, the following situations directly provided for in the Polish Civil Procedure Code: refusal to act as an arbitrator by the arbitrator indicated directly in an agreement, but the refusal to act as an arbitrator may also take place in the course of the proceedings on the part of persons who have performed the function of an arbitrator so far. As other reasons preventing an arbitrator to act as such, the following reasons, in particular, are indicated: death of an arbitrator, their long-term illness, deprivation of liberty (Art. 1168 § 1 of the PCPC), as well as refusal by a particular arbitration institution and the impossibility to perform an arbitration agreement (Art. 1168 § 2 of the PCPC) and, moreover, a situation when the unanimity or majority of voices required by the agreement cannot be obtained, if the case is heard by an arbitral tribunal in a composition of more than one arbitrator (Art. 1195 § 4 of the PCPC). Another instance of the inability of an arbitration tribunal to hear a case, which is not directly indicated in Art. 1168 § 2 of the PCPC, is for example, the situation of liquidation of the permanent court of arbitration indicated in the arbitration agreement… or if it is impossible to compose the arbitral tribunal in the proceedings in a manner that is required for the resolution of the case. Their common feature is that the obstacle to perform the arbitration agreement pertains to the arbitrator or the arbitral institution indicated by the parties, and not to an external reason, in particular, relating to one of the parties of the arbitration agreement. Moreover, these are all objective circumstances of a permanent nature. Such circumstances cannot include the deterioration of the claimant’s financial situation, for example due to the fact that it may change in the future.

3. Art. 1168 § 2 of the PCPC specifies the reason for an arbitration agreement to cease to be in effect as the circumstance that the hearing of the case by an arbitral tribunal from this Court of Arbitration emerged to be impossible for other reasons, which means that this regulation puts emphasis on the occurrence of a reason of this impossibility relating to the arbitral tribunal. What is more, although the Polish Civil Procedure Code does not stipulate expressly the reasons of expiration of the legal force of an arbitration agreement, they also include granting of a final ruling by a state court in the dispute which can be decided by the arbitral tribunal, and the lapse of the time limit with the reservation of which the arbitration agreement was concluded or fulfilment of a condition subsequent stipulated in the arbitration agreement.

4. Art. 1168 of the PCPC stipulates the situation when an arbitration agreement may cease to be in effect (unless the parties have stipulated other legal consequences of occurrences covered by this provision). The enumeration contained therein is therefore purely exemplary, in this sense that the parties may indicate other situations which will result in expiration of the arbitration agreement (the arbitration agreement ceasing to be in effect). Loss of the legal force by an arbitration agreement may also take place under other circumstances than those mentioned above, in particular in the event of conclusion of a written agreement terminating the arbitration agreement. There are also other reasons related to the content of the parties’ agreement and of the arbitration agreement related thereto…, for example non-fulfilment of a condition precedent or fulfilment of a condition subsequent (Art. 89-94 of the Polish Civil Code), as well as evasion of legal consequences due to an error, deception or threat (Art. 84-87) or other events specified by the parties as reasons for the arbitration agreement to cease to be in effect.

5. There is view presented in the doctrine that that the reasons for an arbitration agreement to cease to be in effect may sometimes include termination for an important reason or withdrawal from an arbitration agreement. It is, however, impossible to share this view, because it would be pointless to conclude an arbitration agreement, if each party were to be able to evade the consequences thereof by an unilateral legal act, so without the need to cooperate with or to obtain a consent of the second party.

6. The principles arising out of the Constitution of the Republic of Poland regarding the state judiciary, including Art. 45 of the Constitution, cannot be applied to arbitration which derives its competence to resolve a dispute from a free, independent decision made by the parties themselves as to the way of exercising of their private rights… .

7. [I]t follows from Art. 147a of the Bankruptcy Law that not a mere lack of funds, but making of a declaration of will on withdrawal from an arbitration agreement results in expiration thereof.

8. Unenforceability (the inability to perform) of an arbitration agreement refers to arbitration agreements which do not infringe any mandatory provision of law and are, in fact, valid, but they present virtually insurmountable difficulties in conducting arbitration proceedings on their basis. Expiration of an arbitration agreement means a definitive discontinuation of the effects made by the agreement due to the circumstances which occurred after the agreement was made.

9. An arbitration agreement is unenforceable, if it stipulates requirements towards persons who are to be arbitrators that in fact it is impossible for an arbitral tribunal to be constituted, since it is impossible to indicate any persons who meet such requirements. An arbitration agreement is also unenforceable, if commencement of arbitration proceedings is not possible at all for other reasons, with the exception of the reasons leading to the expiration of the arbitration agreement. An arbitration agreement shall be deemed unenforceable, if it indicates, as the place of arbitration, a state in which, for obvious reasons, it is impossible to conduct arbitration proceedings (for example, due to a war in that state). An arbitration agreement that has been formulated so vaguely that it is impossible to determine its content may also be deemed unenforceable. Another example of such a situation is when the parties have concluded an arbitration agreement indicating a permanent court of arbitration at an institution which has been liquidated or the parties have concluded an arbitration agreement indicating the jurisdiction of a permanent court of arbitration which is impossible to be identified by reasonable interpretation of that indication… .

10. [I]nterpretation of Art. 1165 § 2 of the PCPC, in the scope of a prerequisite of unenforceability of an arbitration agreement, should also take into account objective and permanent prerequisites of impossibility of initiating and conducting of proceedings before this court of arbitration. Such prerequisites also include, according to the Court of Appeal, the existence of objective and permanent reasons which realistically prevent a party from covering the costs of commencement and conducting of arbitration proceedings and such objective and permanent inability absolutely results out of the evidentiary material collected in the case… .

11. There are many arguments in favour of the substantive-law nature of the arbitration agreement. For example, the fact that an arbitration agreement remains binding also for the legal successors of the parties both in terms of general and specific succession, because it is the legal relation or the object of a dispute, and not the specific parties to the dispute that are submitted to arbitration, or the fact that there are no obstacles to apply substantive law provisions regarding the capacity for legal acts, nullity of legal acts and defects of declaration of will by the assessment of the effectiveness of the arbitration award. The fact that conclusion of an arbitration agreement does not interrupt the limitation period is also in favour of the substantive nature of the arbitration agreement. Also the character of the power of attorney necessary to effectively enter into an arbitration agreement on behalf of a principal unequivocally indicates the substantive-law character of the arbitration agreement.

12. The pleading of the existence of an arbitration agreement raised by the respondent, which is consistent with the provisions of law and the purpose of the institution of the pleading of the existence of an arbitration agreement, i.e. with having the case heard before the relevant adjudicative forum, as agreed by the parties, cannot be considered a procedural abuse within the meaning of Art. 3 of the PCPC.

13. Abuse of an individual right is not a procedural activity of raising a plea of an arbitration agreement.

[I]n accordance with the principle of the procedural autonomy of the Member States, the national legislature may give the competent authority, in the complaints and penalty procedures referred to in Articles 80 to 82 of Directive 2007/64, as amended by Directive 2009/111, the power to take into account the existence and contents of an arbitration ruling settling a dispute between a user and provider of payment services concerned by those procedures, provided that the probative value given to that ruling in those procedures is not liable to undermine the purpose or specific objectives of the procedures, the rights of defence of the persons concerned or the independent exercise of the powers and competencies conferred on that authority, which is a matter for the referring court to ascertain.