case law

id : 20092

id: 20092

Polish Supreme Court ruling

dated 17 September 1956

Case No. 3 CR 505/56

Summary by arbitraz.laszczuk.pl:

In an arbitration between one individual, Antonina N., and two other individuals, Józef and Kazimiera W., each side appointed one arbitrator. The two arbitrators did not appoint a third, presiding arbitrator, but considered the case in a panel of two arbitrators. Antonina N. regarded the panel as improperly constituted and refused to participate in the proceeding. The panel of two arbitrators issued a unanimous award in favour of Józef and Kazimiera W.

Antonina N. applied to the county court to set aside the award. The county court held that unless otherwise agreed, the Civil Procedure Code required appointment of a third, presiding arbitrator, and as that was not the case here the proceeding was invalid. The court set aside the award accordingly.

Józef and Kazimiera W. sought review by the province court, which held that it was within the discretion of the two arbitrators to decide whether to appoint a third, presiding arbitrator. The province court thus found that the proceeding was not invalid, and denied the petition to set aside the award accordingly.

The Prosecutor General sought extraordinary review by the Polish Supreme Court. The court held that appointment of a third, presiding arbitrator was mandatory unless otherwise agreed by the parties, which was not the case here. The arbitration proceeding was therefore invalid, and the award was properly set aside by the county court. The Supreme Court entered an order denying the review by the province court accordingly.

It was irrelevant that the award by the panel of two arbitrators was unanimous, because, in the opinion of the Supreme Court, “it would be impossible and erroneous to assume in advance that participation by a presiding arbitrator would have no actual influence over the course of the proceeding or the award issued in the case.”

Excerpts from the text of the court’s ruling:

1. It follows from Civil Procedure Code Art. 488 §2, which provides that each party shall appoint one arbitrator and the arbitrators so appointed “shall appoint a presiding arbitrator,” unless the arbitration clause provides otherwise, and from Art. 492, which provides that in the event of lack of agreement between the arbitrators, the presiding arbitrator shall be appointed by the state court, that the appointment of a presiding arbitrator is mandatory unless the arbitration clause provides otherwise.

2. Because as a result of failure to appoint a presiding arbitrator the arbitration court was not appointed in the prescribed composition, the award issued by an arbitration court composed of two arbitrators was made in an invalid proceeding.

3. Under applicable law, violation of regulations concerning the composition of the arbitration court constitute absolute grounds for setting aside the arbitration award in every instance.

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