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Katowice Court of Appeal judgment dated 17 June 2021 Case No. I ACa 618/20

1. [I]n proceedings initiated by a petition to set aside an arbitration award, a state tribunal is not authorized to examine whether an arbitral tribunal has correctly resolved the dispute in factual and legal terms… .

2. The provisions regarding the admissibility of a petition [to set aside an arbitration award – insertion added] shall be interpreted strictly and, in case of any doubts, it is preferable rather to uphold the award than to set it aside… .

Publication date: 17-06-2021 | Case no.: I ACa 618/20

Key issues: petition to set aside arbitration award

id: 20605

Polish Supreme Court order dated 24 June 2021 Case No. IV CSK 229/21

1. [B]y entering into an arbitration agreement, the parties consciously waived submission to the strictures of proceedings before a state court.

2. Therefore, it is not unreasonable to state that by concluding an arbitration agreement, the parties limit their constitutional and conventional right to court.

3. A party is deprived of the opportunity to defend its rights before an arbitral tribunal when the principle of equality of the parties has been violated, and one of the parties is not heard and does not have the opportunity to address the evidence and allegations presented by the opposing party. For these reasons, every instance in which an arbitral tribunal refuses to admit evidence sought by a party cannot be equated with that party being deprived of the right to a defense. This happens only when a party has no opportunity to present and argue for its position… .

4. [A] petition to set aside an arbitration award is not an appellate instrument, but a type of extraordinary judicial review by a state court over the activity of an arbitral tribunal. Thus in proceedings to set aside an arbitration award a state court cannot consider a dispute between the parties to the arbitration proceedings on the merits… .

Publication date: 24-06-2021 | Case no.: IV CSK 229/21

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

id: 20604

Poznań Court of Appeal judgment dated 29 June 2021 Case No. I ACa 620/20

1. [I]n case of doubts, one should always strive at maintaining the effectiveness of an arbitration agreement, which is hinted at by the lawmaker in Art. 1180 § 1 sentence 2 of the PCPC.

2. [T]he reasons of an arbitration award do not have to correspond to the requirements applicable to the reasons of a state court ruling, however, the content of the reasons needs to include the elements of the arbitral tribunal’s reasoning, which should indicate the correctness (soundness) of the award in the light of all materials (evidence) gathered in the case… .

3. [N]o reasons with respect to an award issued on the merits result in the award taking on the features of arbitrariness and discretion, which violates the fundamental principles of the rule of law… .

Publication date: 29-06-2021 | Case no.: I ACa 620/20

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

id: 20641

Kraków Court of Appeal order dated 30 June 2021 Case No. I AGo 16/20

1. This notion (the fundamental principles of the legal order of the Republic of Poland – insertion added) is not unequivocal and is subject to interpretation. According to the well-established case-law of the Polish Supreme Court, it pertains to such violations of the provisions of substantive law that result in violation of the principles of the rule of law, and the award infringes the fundamental legal principles in force in the Republic of Poland and is in conflict with the legal order in force… .

2. [T]he fact that the Polish law excludes the possibility of stipulating contractual penalties for late performance of a pecuniary obligation does not per se make it incompatible with the Polish legal order to satisfy such a performance based on Latvian provisions of substantive law (the Civil Code) on the territory of Poland… .

Publication date: 30-06-2021 | Case no.: I AGo 16/20

Key issues: recognition and enforcement of foreign arbitration award

id: 20618

Katowice Court of Appeal order dated 8 July 2021 Case No. V AGo 15/20

1. Deprivation of a party of the right to defend itself shall be understood strictly. A party is deprived of the ability to defend its rights, if an arbitral tribunal fails to hear the party at all or gives this party no opportunity to provide explanations and statements with reference to the claims of the opposing party… .

2. It is possible… to proceed simultaneously before a state court and an arbitral tribunal. However, if two different rulings have been rendered in the case – one by the arbitral tribunal and one by the state court, this shall be a basis for setting aside of the arbitration award pursuant to Art. 1206 § 1 point 6 of the PCPC.

Publication date: 08-07-2021 | Case no.: V AGo 15/20

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

id: 20611

Gdańsk Court of Appeal judgment dated 23 July 2021 Case No. I ACa 322/21

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 legal relationship in which the claimant (petitioner) demands a state court to render a judgment on setting aside of an existing legal relationship established by an arbitration award. A state court’s judgment granting the petition is of a 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. [G]rounds for setting aside an arbitration award are provided for in Art. 1206 of the PCPC. It clearly follows from Art. 1206 of the PCPC that the list of the grounds for a petition to set aside an arbitration award contained therein is of an exhaustive character. Cognition of a state court in such a case is limited to examination whether the ground asserted in the petition, which may be one of the circumstances specified in Art. 1206 § 1 of the PCPC, exists. In addition, in the proceedings, a state court shall ex officio take into account the prerequisites set forth in Art. 1206 § 2 of the PCPC, irrespective of whether they were indicated in the petition or not.

3. 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.

4. According to Art. 233 § 1 of the PCPC “The court shall assess the reliability and validity of evidence at its discretion, following extensive deliberations of the available material”. The boundaries of free assessment of evidence are determined by three factors: logical, statutory and ideological. The logical factor means that a court (an arbitral tribunal as well) is obliged to draw logically correct conclusions from the evidentiary material gathered in the case.

5. A reasoning of an arbitration award does not need to meet the same requirements as a reasoning of a state court ruling…, and an arbitral tribunal is not obliged to indicate in the reasoning of an arbitration award a precise interpretation of the relevant substantive provisions, in this case provisions regarding a contract for performance of a specific work, withdrawal from a contract, a contractual penalty.

Publication date: 23-07-2021 | Case no.: I ACa 322/21

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

id: 20632

Judgment of the Court of Justice of 2 September 2021, C-741/19, Republic of Moldova v Komstroy LLC

1. [I]n relation to commercial arbitration (…) the requirements of efficient arbitration proceedings justify the review of arbitral awards by the courts of the Member States being limited in scope, provided that the fundamental provisions of EU law can be examined in the course of that review and they can, if necessary, be the subject of a reference to the Court for a preliminary ruling (…).

2. [I]t must be concluded that Article 26(2)(c) ECT must be interpreted as not being applicable to disputes between a Member State and an investor of another Member State concerning an investment made by the latter in the first Member State.

Publication date: 02-09-2021 | Case no.: C-741/19

Key issues: general works, investment arbitration

id: 20624

Katowice Court of Appeal judgment dated 24 September 2021 Case No. V AGa 408/20

1. [A]n arbitration award may be set aside only as a result of reasons indicated in Art. 1206 of the PCPC… .

2. [A] state court cannot examine the dispute between the parties to the arbitration proceedings on the merits within the proceedings to set aside an arbitration award.

3. An assessment as to whether an arbitration award violates the fundamental principles of the legal order shall be formulated narrowly and an affirmative conclusion may be reached only if the effects of the arbitration award would result in a material violation of the aforementioned principles… .

4. [C]ompliance or non-compliance of an arbitration award with the fundamental principles of the legal order is determined by the wording thereof, it is, however, not allowed to make such an assessment on the basis of facts and evidence unknown to the arbitral tribunal.

5. [T]here is a great deal of autonomy in arbitration, which is entirely consistent with the intentions of the lawmaker, distinctly limiting the review capabilities of a state court. The fundamental objective of this regulation is to expedite the procedure for resolving civil disputes, and not to create an additional phase of pre-judicial procedure. Parties deciding to submit a dispute to arbitration must take these conditions into account, which also include scant external review of arbitration awards.

6. The procedural public policy may be the basis for assessment of an arbitration award in two aspects. Firstly, the procedure which led to the delivery of the arbitration award is assessed for its compliance with the fundamental procedural principles of the legal order, secondly, the effects of the arbitration award are assessed from the perspective of their consistency with the procedural public policy, i.e. whether they are compatible with the procedural legal system, for example, whether they do not infringe res iudicata or the rights of third parties.

7. In the case law, the fundamental principles of the legal order include, among other things, the principle of civil liability for the injury caused…, the principle of the restitutive nature of liability for damages…, the pacta sunt servanda principle…, the principle of business freedom and freedom of contract, the principle of contractual fairness…, the principle of protection of property rights…, the principle of the autonomy of the will of the parties and of the equality of entities… .

Publication date: 24-09-2021 | Case no.: V AGa 408/20

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

id: 20606

Judgment of the Court of Justice of 26 October 2021, C-109/20, Republic of Poland v PL Holdings Sarl

Articles 267 and 344 TFEU must be interpreted as precluding national legislation which allows a Member State to conclude an ad hoc arbitration agreement with an investor from another Member State that makes it possible to continue arbitration proceedings initiated on the basis of an arbitration clause whose content is identical to that agreement, where that clause is contained in an international agreement concluded between those two Member States and is invalid on the ground that it is contrary to those articles.

Publication date: 26-10-2021 | Case no.: C-109/20

Key issues: arbitration agreement

id: 20607

Judgment of the Court of Justice of 25 January 2022, C-638/19 P

[A]rticles 267 and 344 TFEU must be interpreted as precluding a provision contained in an international agreement concluded between two Member States under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept… .

Publication date: 25-01-2022 | Case no.: C-638/19 P

Key issues: arbitration agreement, investment arbitration, jurisdiction of arbitral tribunal

id: 20623

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