case law

id : 20064

id: 20064

Polish Supreme Court ruling

dated 5–23 October 1936

Case No. C III 1875/35

Summary by arbitraz.laszczuk.pl:

In an arbitration that was subject to the former German Civil Procedure Code (in the region of Silesia), T., a builder, obtained an award in July 1930 against the municipality B. T. subsequently assigned its claim to Emanuel D., who applied to the regional court for an order enforcing the award. The regional court issued the order. The Katowice Appellate Court denied the appeal by the municipality, and the Polish Supreme Court denied the cassation appeal.

The defendant claimed that the plaintiff had no standing to seek an enforcement order, but the Supreme Court held that an assignee of a claim under an arbitration award has standing to seek enforcement of the award.

The defendant alleged that there were grounds for recusal of one of the arbitrators which it learned of only during the proceeding before the state court. The Supreme Court held that this would not be grounds for setting aside the award and therefore was not grounds to deny the enforcement order.

The defendant alleged that the award was invalid because it was originally undated. The arbitrators amended the award to add the date of the award when the enforcement proceeding was already pending before the state court. The Supreme Court held that this was proper because the arbitration proceeding was not considered closed until the close of the hearing on appeal in the state court enforcement proceeding.

Finally, the defendant alleged that it was improperly represented before the arbitration court because the officials of the municipality who took part in the arbitration proceeding were not issued a power of attorney in the form of a municipal ordinance. This objection was overruled by the Supreme Court because it was undisputed that the municipality had joined issue on the merits in the arbitration, in order to avoid a default award, and that the municipality had ratified the actions of its officials in the arbitration.

Excerpts from the text of the court’s ruling:

1. Any person against whom an arbitration award is effective within the meaning of § 1040 of the [German] Civil Procedure Code may seek a ruling on the permissibility of execution. It is true that this provision states that res judicata operates between the parties. Nonetheless, from the nature of an arbitration award as a result of an agreement the conclusion should be drawn that the scope of res judicata is defined by the agreement of the parties, and thus an assignee may assert the adjudged claim to the same extent as the assignor, and should enjoy all the effects of such claim, and should be entitled to rely on the res judicata effect awarded to the assignor.

2. An arbitration proceeding is not concluded until all of the conditions set forth in § 1039 of the [German] Civil Procedure Code have been fulfilled, and therefore it is permissible to supplement an arbitration award up until the closing of the hearing at the first level of appeal in a dispute pursuant to § 1042 of the [German] Civil Procedure Code.

3. §§ 80 ff. of the [German] Civil Procedure Code do not apply in a proceeding before an arbitration court. Thus the question is not whether the officials appearing before the arbitration court held a formally issued power of attorney, but whether the defendant endorsed their action before the arbitration court.

4. Joining issue in the dispute before the arbitration court constitutes waiver of any defences of defective proceeding as to which the party did not raise specific objections.

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