Polish Supreme Court judgment
dated 21 December 1973
Case No. I CR 663/73
Summary by arbitraz.laszczuk.pl:
A charter party was concluded between a Polish enterprise and a Greek shipping company to carry a large cargo of asphalt from an Albanian port to a Polish port. The charter party contained an arbitration clause. The quantity in barrels was confirmed upon loading in Albania, and a bill of lading was issued, but when the cargo was unloaded at Gdańsk there was a shortage of several hundred barrels. The Polish enterprise presented a claim to the Polish insurer, which paid the claim and was subrogated to the rights of the insured to pursue claims against the shipper.
The Polish insurer and the Greek shipper could not reach a settlement, but agreed in a separate submission to refer the matter to arbitration. The arbitration court issued an award in Sopot, Poland, denying the claim, holding that it was time-barred under the one-year statute of limitations under the Maritime Code for claims arising out of a bill of lading, rather than the two-year statute of limitations for claims arising out of a charter party.
The claimant filed a petition with the Gdańsk Province Court to set aside the award, alleging that the arbitration court’s interpretation of the Maritime Code was so erroneous that the award violated the rule of law.
The court denied the petition, holding that there could be no violation of the rule of law based on an allegedly erroneous interpretation of substantive law, particularly where the correct interpretation was not obvious and the alleged error was doubtful.
The claimant sought review by the Polish Supreme Court, alleging that the award violated the rule of law, and also seeking clarification of which statute of limitations applied. The court denied the review, holding that the alleged erroneous interpretation involved a matter of substantive law. On the statute of limitations, the court finally agreed with the interpretation by the arbitration court, notwithstanding an earlier ruling on the issue to the contrary by the Polish Supreme Court in another case.
Excerpt from the text of the court’s ruling:
As the arbitration court is not even required to rule on the basis of provisions of substantive law, an erroneous interpretation thereof cannot be regarded as a violation of the rule of law. Nor may the arbitration court be required not to apply regulations involving the statute of limitations and preclusion. More justified would be the opposite view, that failure to apply such regulations, which were enacted primarily in the interest of protecting the legal order—not disturbing settled matters (quieta non movere)—and entering an award for time-barred claims, could justify an allegation of violation of the rule of law.