id: 20371

Warsaw Appellate Court judgment

dated 21 April 2009

Case No. VI ACa 1421/08

Summary by arbitraz.laszczuk.pl:

In 2003, professional football player C.K. entered into a contract with J.K., a players’ agent licensed by the Polish Football Association (PZPN). Under the contract, J.K. would receive an annual fee for his services as the player’s agent equal to 10% of the player’s gross pay each year. The contract included a clause providing that, pursuant to Art. 22 of the Regulations of the International Federation of Association Football (FIFA), any disputes between the parties shall be resolved by PZPN, but in the absence of a decision by PZPN or failure by a party to perform the decision within the period provided in the statutes and regulations of PZPN and FIFA, the dispute may be submitted to the competent state court for resolution.

In 2005, PZPN adopted a resolution establishing the Football Arbitration Court at the Polish Football Association.

The agent J.K. subsequently filed a claim with the PZPN Football Arbitration Court against the player C.K. for a fee of about PLN 265,000. In 2007, the Football Arbitration Court issued an award in favour of the agent for about PLN 209,000 of the claim. In the justification for the award, the arbitration court found that the appointment of PZPN to resolve disputes under the contract was sufficient to establish the jurisdiction of the Football Arbitration Court subsequently established by PZPN. C.K. sought reconsideration of the award on the grounds that the dispute resolution clause in the contract with the agent did not constitute an arbitration clause. Reconsideration was denied and the award was upheld.

C.K. then applied to the Warsaw Regional Court to set aside the award on the grounds that there was no arbitration clause in force. The court held that the body appointed in the contract to consider disputes, PZPN, is not an arbitration court, and moreover the clause did not authorize the body to resolve disputes. The court set aside the award accordingly.

On appeal, the Warsaw Appellate Court held that the clause in question did not authorize PZPN to resolve disputes under the contract because a party could still resort to the state court. As the parties did not undertake to comply with the determination by PZPN (not to mention the Football Arbitration Court, which was not established by PZPN until after the contract was concluded by the player and the agent in this case), the court construed this as a mediation clause rather than an arbitration clause. The court denied the appeal accordingly.

Excerpts from the text of the court’s ruling:

1. The provisions of the agreement do not contain an arbitration clause because they do not provide a dispute resolution function for the arbitration court. The essence of the institution of the arbitration clause is the limitation of the role of the state courts in resolving disputes arising out of the legal relationship identified by the parties. Such limitation consists of submission of the arbitration award to review by the state court through the institution of the petition to set aside the arbitration award under the grounds set forth exhaustively in the code.

2. The essence of the institution of the arbitration clause is submission of a dispute for resolution by the arbitration court. If the agreement does not provide a dispute resolution function for the arbitration court, such a clause does not constitute an arbitration clause.