case law

id : 20309

id: 20309

Polish Supreme Court ruling

dated 13 January 1931

Case No. III 1 Rw 2277/30

Summary by arbitraz.laszczuk.pl:

The parties to a dispute agreed orally on arbitration of the dispute and selected persons to serve as arbitrators. These persons conducted hearings. Between the end of the hearings and issuance of an award, the parties entered into a written arbitration agreement which was to be effective retroactively to the time of commencement of the proceeding and appointment of the arbitrators. The arbitrators then issued an award.

The party dissatisfied with the award filed a petition with the state court to set aside the award on the grounds that it had been denied a right to be heard by the arbitrators, whose appointment was effective only upon signing of the written arbitration agreement, after the hearings were already held. The lower court denied the petition.

On review by the Supreme Court of Poland, the court held that the requirement to conclude an arbitration agreement in writing was mandatory. A written arbitration agreement could not be made effective retroactively, and the right to object on this ground could not be waived. Thus, the court held that the appointment of persons as arbitrators and the hearings they conducted prior to conclusion of the arbitration agreement in writing were a legal nullity. Because the arbitrators did not hold any hearings between the time they were legally empanelled and the time they issued the award, the petitioner had been denied the right to be heard, and consequently, the arbitration award was ineffective.

Excerpt from the text of the court’s ruling:

As pursuant to §577 par. 3 of the [former Austrian] Civil Procedure Code an arbitration agreement must be concluded in writing, the prior oral appointment of arbitrators has no legal significance whatsoever, and no intent of the parties can shift the effectiveness of the written agreement back to an earlier date. Prior to the written agreement, neither the arbitration court nor the arbitrators exist, and even express waiver of the objection of the invalidity of the arbitration award on these grounds would be ineffective (§§ 595 and 598 of the [former Austrian] Civil Procedure Code).

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