id: 20367

Warsaw Appellate Court order

dated 18 October 2011

Case No. I ACz 1627/11

Summary by arbitraż.laszczuk.pl:

A Danish company brought an action in the Warsaw Regional Court against a Polish company seeking enforcement of a partial arbitration award issued in 2010 by an arbitration court in Vienna. Meanwhile, an action was pending before the Vienna Commercial Court to set aside the award. In 2011, the Polish court stayed the action, pursuant to Art. VI of the New York Convention, pending final resolution of the Austrian proceeding to set aside the award.

The Danish company filed an interlocutory appeal, alleging inter alia that the mere fact that an action had been brought in Austria seeking to set aside the award did not justify staying the action for enforcement in Poland. The regional court should have considered the probability of success of the action to set aside the award. The Danish company alleged that the action to set aside the award had negligible chance of success and was brought only for the purpose of delaying enforcement. It also claimed that the regional court erred in refusing to condition grant of the stay on the respondent’s submission of security in an amount of over PLN 1.5 billion.

The Warsaw Court of Appeal denied the interlocutory appeal. The court pointed out that the grounds for the petition to set aside the award in Austria appeared serious and did not support the view that the petition was filed solely to delay enforcement. Nonetheless, the court considering the action for enforcement was not competent to consider the merits of the action to set aside the award, and staying the enforcement proceeding was justified. The court of appeal also held that it lacked jurisdiction to consider the application for security. The application for security had been rejected by the regional court and the rejection was legally final.

Excerpts from the text of the court’s ruling:

1. Although the court ruling on an application for enforcement of an arbitration award is not bound in any respect by the ruling of the Vienna Commercial Court in the action to set aside the arbitration award, it must not be ignored that the New York Convention provides grounds for the domestic court deciding on enforcement of a foreign arbitration award to consider, upon application of a party, a ruling setting aside the arbitration award as grounds to refuse enforcement of the award.

2. If a proceeding to set aside or stay enforcement of an arbitration award is only pending, that does not justify refusal to issue or confirm the enforceability of the award, but may justify postponing a decision on the matter.