Warsaw Court of Appeal judgment
dated 27 August 2018
Case No. VII Aga 386/18
Summary by arbitraz.laszczuk.pl:
The (…) Association (…) is a Polish sports association established, among other things, to organise rivalry in motor sports, including motorcycle speedway. Its organisation is regulated by the Bylaws of the Association. The Tribunal of the Association (the ‘Tribunal’) is one of the authorities of the Association. According to the Bylaws of the Association, the Tribunal is a permanent arbitral tribunal and parties may refer disputes concerning their activity in the Association to arbitration. What is more, it is entitled to recognize appeals against punishments imposed by main commissions, commissions and teams.
The (…) Sports Club (…), a joint-stock company, in T. is a sports club and conduct a sports activity in the field of motorcycle speedway. This club is a member of the Association and takes part in competitions organising within the Speedway Extraligue.
The Sports Club was punished for disciplinary infringements by a relevant authority of the Association. The Sports Club did not file a petition to set aside the award and obeyed it. As a consequence, the Sports Club stated that it suffered a damage. On 25 February 2014 the Sports Club filed a lawsuit against (…) Association (…) to the Regional Court. The Regional Court found that the action was meritless.
The claimant brought an appeal to the Court of Appeal. It alleged that Art. 1165 of the Polish Civil Procedure Code (the ‘PCPC’) in connection with Art. 1161 § 3 of the PCPC had been infringed, because the Regional Court incorrectly found that the Tribunal was an arbitral tribunal against whose awards a petition to set aside an arbitration award may be filed.
The Court of Appeal found that the appeal was meritless. In the stance of this Court, an arbitration agreement was not effectively created in the Bylaws of the Association. The award delivered by the Tribunal could not be an arbitration award within the meaning of Art. 1205 § 1 of the PCPC, because the Tribunal operated as an appellate disciplinary body in the field of disciplinary disputes. Within the scope of these activities, the Tribunal did not operate as an arbitral tribunal. However, depending on the circumstances, the Tribunal may operate either as an disciplinary body or as an arbitral tribunal. This results from the Bylaws of the Association.
Excerpts from the text of the court’s ruling:
1. Under the current legislation, it is assumed that pursuant to Art. 1161 § 1 of the Polish Civil Procedure Code in each case an arbitration agreement is required to refer a dispute to arbitration. An arbitral tribunal to resolve disputes may, in particular be the Sports Arbitral Tribunal at the Polish Olympic Committee established in the Sports Act of 25 June 2010.
2. [B]y stipulating the institution of an arbitral tribunal in the bylaws of a sports association, the parties are assured the possibility to subject an award to judicial review in the form of a petition to set aside an arbitration award. Therefore, it needs to be assumed that a state court may review an arbitration award.
3. [S]ince the lawmaker has not stipulated an express legal ground which would ensure jurisdiction of state courts in case of disputes, there are no grounds to question the ability of arbitral tribunals established by internal bodies of sports organisations to resolve such kind of disputes.
4. Admissibility of referring a dispute to arbitration is contingent upon prior establishment of an arbitral tribunal and conclusion of an effective arbitration agreement in interior regulations, which in the scope of disputes arising from the association relationship may be included in the bylaws. This also applies to Polish sports associations. (…). An arbitration agreement contained in the bylaws of Polish sports associations, sports associations or sports clubs covers only disputes arising out of an association or company relationship. However, an arbitration agreement does not cover disputes between sports clubs and players. (…). It should be added that such an agreement is binding to the limited extent of issues arising from a membership relationship.
5. An arbitration agreement should unequivocally and precisely indicate that the parties covenant to refer specified disputes to arbitration.