case law

id : 20377

id: 20377

Warsaw Appellate Court judgment

dated 4 April 2006

Case No. VI ACa 1138/05

Summary by arbitraż.laszczuk.pl:

In July 2002, a football club entered into a one-year contract with a player, J.P., to play professional football for the club for the 2002/2003 season. Under the contract, the player would receive a nominal monthly salary of PLN 2,000, plus a total of PLN 420,000 in “bonuses for athletic achievement,” payable in four instalments of PLN 105,000 each. The player was required to participate in matches and practice and to comply with the club’s rules, instructions from the coach and the like. The contract included a clause calling for arbitration before the Football Arbitration Court at the Polish Football Association. The first instalment of the bonus was paid shortly after signing. In September 2002, the club refused to pay the second instalment due to the player’s absence from matches and practice and his poor attitude. In December 2002, the club terminated the player’s contract.

In arbitration, the player sought PLN 105,000 for the unpaid bonus. A panel of three arbitrators found that the “bonus for athletic achievement” was not in fact a bonus but a part of the player’s salary which the club could not change, but nonetheless ruled on the basis of equity, in light of the player’s absences from matches and practice, that he was entitled to only half of the unpaid bonus, and in August 2004 issued an award for PLN 52,500. The player and the club both sought reconsideration by a panel of five arbitrators, which was denied in October 2004.

The club applied to the Płock Regional Court to set aside the award, alleging that it violated public policy, specifically the constitutionally protected freedom of contract, through arbitrary application of contract law. In June 2005, the regional court denied the petition, holding that the award did not violate the freedom of contract and that the arbitration court had sufficiently justified its award.

On appeal, the Warsaw Appellate Court held that the award was proper. The arbitration court had not ignored the wording of the contract, but had interpreted it differently than the club. Even if the interpretation were erroneous, it would not justify setting aside the award. The court denied the appeal accordingly.

Excerpts from the text of the court’s ruling:

1. The state court may not be accused of violating provisions of substantive law—Civil Code Art. 3531 and Art. 65 §2—because, under the view established for years in the case law … its role was not to reconsider the merits of the case previously resolved by the arbitration court, but to assess the justification for the petition under the grounds from Civil Procedure Code Art. 712 §1(4) set forth in the petition.

2. Assertion by the petitioner of the grounds under Civil Procedure Code Art. 712 §1(4), i.e. violation of the rule of law, requires a showing that the substantive law was violated by the arbitration court, and moreover that the violations are so numerous and of such importance that it conflicts with the overriding principles of law.

3. Without a doubt the overriding principles of civil law include the principle of freedom of contract expressed in Civil Code Art. 3531, providing the parties the ability to establish a legal relationship in accordance with their own discretion, so long as the substance or purpose thereof is not contrary to the nature of the relationship, a statute, or principles of social coexistence.

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