polish

case law

id : 20558

id: 20558

Kraków Court of Appeal order

dated 24 January 2018

Case No. I AGz 48/18

Summary by arbitraz.laszczuk.pl:

Between the parties, that is D. A. …, a general partnership in Z. and … D., a limited liability company in T., arose a dispute concerning 2 mandate contracts concluded by the parties. D. A. filed a lawsuit to a district court.        

The District Court found that the pleading of existence of an arbitration agreement raised before the case had been up for consideration on the merits of the case should be accepted. Thus, the lawsuit was rejected.

In a complaint the order of the District Court was challenged in its entirety and it was requested that it was set aside. The claimant argued that the district court had infringed procedural principles, i.e. Art. 1162 § 2 of the Polish Civil Procedure Code (the “PCPC”), Art. 1165 § 1 and § 2 of the PCPC, by assuming that the agreement stating “all disputes arising out of a mandate contract shall be resolved amicably” contained obligatory elements of an arbitration agreement, constituted an arbitration agreement of the parties and was an enforceable arbitration agreement.

The Court of Appeal in Kraków found the complaint well-founded in the aforementioned scope. According to Art. 65 § 2 of the Polish Civil Code in contract the common intention of the parties and the aim of the contract shall be examined rather than its literal meaning. However, it is not possible to deduce from the provisions of the mandate contracts that the parties of the proceedings intended to refer disputes arising out of the performance of the contracts in question to arbitration. The Court of Appeal also stated that, in this case, interpretation of declaration of will of both the mandator and the mandatary led to the conclusion that the intention of the parties of the contracts had been to resolve any disputes arising between them amicably before filing a lawsuit with a common court, but without involving any arbitral tribunal in the dispute. Therefore, the parties had agreed to conduct negotiations involving mutual concessions which could lead to an amicable settlement of disputes, meaning reaching an understanding.

Due to the fact that the provisions of the mandate contracts dated 15 and 17 March 2017 do not contain arbitration agreements, the pleading of existence of an arbitration agreement could not be a basis for rejecting the lawsuit on the grounds of unavailability of the court route.

Excerpts from the text of the court ruling:

1. According to Art. 1161 § 1 of the Polish Civil Procedure Code, submission of a dispute to arbitration requires an agreement between the parties defining the subject of the dispute or the legal relationship under which the dispute has arisen or may arise. An obligatory element of such an agreement is indication that resolution of the dispute has been referred to an arbitral tribunal. It should be stressed that an agreement which does not contain the aforementioned statement is not an arbitration agreement … .

2. In the case, both mandate contracts contained a provision stating “all disputes arising out of a mandate contract shall be resolved amicably”. Such a provision does not contain at all any submission of disputes arising between the parties to resolution by an arbitral tribunal, irrespective of whether it would be a permanent arbitral tribunal or an ad hoc arbitral tribunal, that is established in the event of a specific dispute.

3. [A]micable dispute resolution is not equivalent to the institution of arbitration to which the parties submit the resolution of a dispute from a particular legal relationship. Art. 1161 of the Polish Civil Procedure Code stipulates a requirement of indicating jurisdiction of an arbitral tribunal directly, in a separate contract or in a so-called arbitration clause, which is one of the provisions of the main contract.

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