id: 20524

Polish Supreme Court order

 dated 19 June 2019

Case No. I CSK 23/19

Summary by arbitraz.laszczuk.pl:

D. sp. z o. o., a limited liability company, based in C., submitted to the Court of Appeal a petition to set aside an arbitration award of the Arbitration Court at the Chamber of Industry and Commerce in C. B. sp. z o. o., a limited liability company, was the respondent in the proceedings.

The claimant filed a cassation appeal to the Polish Supreme Court. D. sp. z o. o., a limited liability company, stated that there had been important legal problems in the proceedings which were presented in questions concerning the public policy clause as a basis for setting aside the arbitration award (Art. 1206 § 2 point 2 of the Polish Civil Procedure Code) (the ‘PCPC’), as well as the requirements which should have been satisfied by the reasoning of the award. D. sp. z o. o. also claimed that the Appeal Court had interpreted the provisions of the agreement without regards to their wording and purpose, and had also found – according to D., incorrectly – that there had been no infringement of the principle of freedom of will of the parties, the principle of freedom of contract and the pacta sunt servanda principle, which are fundamental principles of the legal order within the meaning of Art. 1206 § 2 point 2 of the PCPC.

The Polish Supreme Court refused to hear the cassation appeal and, among other things, ruled that D. sp. z o. o., a limited liability company, should pay the opponent of the complaint PLN 1,800 as a reimbursement of the costs of the cassation appeal proceedings. 

The Polish Supreme Court found that the argumentation of D. sp. z o. o., a limited liability company, although extensive and insightful, was limited to presentation of its own viewpoint on relevant (according to the claimant) legal issues and to subjecting it to the assessment of the Polish Supreme Court in the form of questions. Such activity cannot be used to properly demonstrate the basis for a cassation appeal. This applies in particular to the question of admissibility of qualifying the necessity of granting consent (authorisation) for a payment transaction as a fundamental principle of legal order. In this context, additional attention should be given to the ordre public provision, which ex definitione includes the fundamental principles of the legal order of Republic of Poland, in particular in the private law, and cannot be instrumentalised by attempts to define detailed “principles”, which, if included into the public order clause, would in fact serve only to demonstrate the legitimacy of a petition to set aside an arbitration award, in a particular case or a particular group of cases.

It was also found that the parties had not agreed to the arbitration court resolving the dispute in accordance with general principles of equity  and the arbitration court had resolved the dispute in accordance with the law applicable to the given relationship (Art. 1194 § 1 of the PCPC).

Excerpts from the text of the court’s ruling:

1. It was no accident that the lawmaker has used the word “reasons” in Art. 1197 § 2 of the Polish Civil Procedure Code, emphasizing that an arbitration award does not have to fully comply with the requirements of a justification of a state court ruling. As it has already been explained in the case law, if it is possible to infer from an arbitration award what prerequisites guided the arbitration court when it ruled on the demands of the parties, it can be deemed that these requirements have been fulfilled (…).

2. [J]urisdiction of an arbitral tribunal derived from an arbitration agreement does not have the character of a specific pre-jurisdiction – an arbitral resolves a case independently, instead of a state court, therefore it is the arbitral tribunal that is obliged to determine the factual basis and to legally assess the dispute. Control exercised over arbitration by a state court is not tantamount to resolution of a case ex novo, either on the factual or on the legal neveau (…).

3. [A] state court considering a petition to set aside an arbitration award does not interpret the agreement made by a parties to the dispute, and therefore it does not apply the aforementioned provision independently, but it only (…) examines the circumstances indicated in Art. 1206 § 1 of the Polish Civil Procedure Code, if the petitioner relies on them, and ex officio examines the circumstances specified in Art. 1206 § 2 of the Polish Civil Procedure Code.