Warsaw Court of Appeal judgment dated 2 August 2018 Case No. VII AGa 1162/18
1. The scope of a state court’s review and its determinations are limited to allegations raised in a petition to set aside an arbitration award. A state court has the authority only to review whether the reasons for setting aside of an award are present (…) and only in this limited scope the proceedings are similar to the proceedings before a state court of II instance.
2. [I]f a party had the possibility to raise before an arbitral tribunal an allegation of being deprived of the right to protect their rights, but they did not do that, it is inadmissible to raise a plea that the party was deprived of the ability to protect their rights before the arbitral tribunal in view of the party not being actually deprived of the ability to protect their rights.
3. [I]n the proceedings commenced as a result of a petition to set aside an arbitration award, a state court does not examine the arbitral tribunal’s assessment of the accuracy of evidence, the correctness of factual findings or interpretation and application of substantive law. The legitimacy of particular means by way of which an arbitral tribunal has resolved the disputed legal relationship is neither subject to a state court’s assessment (…). The essence of a petition to set aside an arbitration award is to create a control mechanism respecting, on the one hand, separateness and autonomy of arbitration, and on the other hand, preventing non-state courts’ rulings infringing the rule of law from functioning in the legal circulation.
4. Competence of the court hearing a petition to set aside an arbitration award does not – as a matter of principle – include the control of the award’s compliance with substantive law and review of correctness of factual findings, except for ruling based on obviously selective and unreliable examination of evidence.
5. [T]he proceedings concerning a petition to set aside an arbitration award do not result in reconsideration of the merits of the dispute between the parties, but are intended only to verify the applicant’s allegations as to the existence of the grounds raised in the application provided for in Art. 1206 § 1 of the PCPC and assess whether any of the prerequisites provided for in Art. 1206 § 2 of the PCPC exist, whether or not asserted by the applicant.
6. “The public policy clause”, like any general clause, is not precisely defined, which leaves great discretion to the court ruling on a specific case. Nevertheless, on the basis of this clause, review of the constitutive elements of an arbitration award may not take on the dimensions proper for a review of the merits (correctness) of the award. The prohibition of a review of the merits of an award is related to the essence of the application of the public policy clause. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order (…).
7. In the case-law, it is indicated that an infringement, by an arbitral tribunal, of substantive law applicable to the resolved relationship, compliance with which – as a matter of principle – is prescribed in Art. 1194 § 1 of the PCPC, may result in setting aside of an award of this tribunal only when it is connected with an infringement of the fundamental principles of the legal order (…). The primary difference between proceedings commenced by an appeal and proceedings commenced by a petition to set aside an arbitration award is demonstrated by the permitted scope of interference of a state court in the rulings of arbitral tribunals.
Publication date: 02-08-2018 | Case no.: VII AGa 1162/18Key issues: arbitration procedure, petition to set aside arbitration award