case law

id : 20329

id: 20329

Polish Supreme Court order

dated 21 May 2010

Case No. II CSK 670/09

Summary by arbitraz.laszczuk.pl:

The plaintiff, D. sp. z o.o., filed a civil action against the defendant, B.B. SA, seeking a declaratory judgment that foreign currency option agreements between the parties were non-existent or invalid. The agreements in question—24 currency call options totalling EUR 9.6 million and 24 currency put options totalling EUR 4.8 million—were concluded under a 2007 framework agreement for concluding, confirming and settling payment under agreements related to several types of listed transactions on the financial markets, including currency options, subject also to the bank’s standard terms and conditions. The framework agreement provided for arbitration by the Court of Conciliation at the Polish Bank Association.

The defendant asserted the arbitration clause as a defence, and the regional court dismissed the case accordingly. The appellate court denied the plaintiff’s interlocutory appeal.

The plaintiff filed a cassation appeal with the Supreme Court, alleging that the arbitration clause could not cover an action seeking a declaration that the agreement was non-existent or invalid and that the defendant could not assert the arbitration clause as a valid defence when the dispute was not arbitrable. The Supreme Court held that the dispute was arbitrable, and denied the cassation appeal.

Excerpt from the text of the court’s ruling:

Based on a grammatical interpretation of Civil Procedure Code Art. 1157, for purposes of this provision it is essential that a given type of dispute concerning property or non-property rights may be the subject of a judicial settlement, but the issue of whether a settlement under particular terms would be permissible or not ... is irrelevant. … The condition of being capable of settlement means the abstract ability of a party to dispose of its rights (or the claims arising therefrom), not the ability for the parties to conclude a specific judicial settlement. In other words, it is irrelevant whether under the specific circumstances the parties may conclude an agreement with particular terms, as the agreement may, in an abstract sense, concern a legal relationship and rights subject to the disposition of the parties, but in its terms it might in a given instance violate applicable regulations or principles of social coexistence (Civil Code Art. 58 §§ 1 and 2). Assessment of the arbitrability of a dispute should be separated from an assessment of whether a specific settlement and the terms thereof would violate the law or whether the condition of “mutual concessions” set forth in Civil Code Art. 917 is met.

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