Warsaw Court of Appeal judgment

dated 12 December 2019

Case No. VII AGa 1503/18

Summary by arbitraz.laszczuk.pl:

On 3 July 2017 a foreign company filed a lawsuit with the Internet Domains Arbitration Court at the Polish Chamber of Information Technology and Telecommunications (the “Arbitration Court”) against a limited liability company. The foreign company stated that the Polish company infringed the claimant’s rights as a result of entering into a domain name maintenance contract.

The Arbitration Court found the lawsuit meritless. It stated that as of the date of conclusion of the proceedings, there were no websites located at the relevant internet addresses or any redirections to websites located at other domains. The Court stressed that, according to the relevant Arbitration Rules, its jurisdiction was limited to the assessment whether the respondent infringed the claimant’s rights on the date of conclusion of the proceedings.

The foreign company filed a petition to set aside the arbitration award. The Court of Appeal in Warsaw found the petition well-founded due to the fact that the fundamental rules of procedure before the Arbitration Court, arising under statutory law or specified by the parties, had not been observed (Art. 1206 § 1 point 4 of the Polish Civil Procedure Code), and that the arbitration award was contrary to the fundamental principles of the legal order of the Republic of Poland (Art. 1206 § 2 point 2 of the PCPC). In the stance of the Court of Appeal, there were no grounds for limiting the jurisdiction of the Court of Arbitration in the scope of the assessment whether the claimant’s rights were infringed only at the time of conclusion of the proceedings. In addition, the Court of Appeal stressed that in the proceedings commenced as a result of a petition to set aside an arbitration award, a state court does not examine the arbitral tribunal’s assessment of the accuracy of evidence, the correctness of factual findings or interpretation and application of substantive law. The legitimacy of particular means by way of which an arbitral tribunal has resolved the disputed legal relationship is not subject to a state court’s assessment either.

It is worth noting that in this judgment the Court of Appeal in Warsaw made a reference to, among other things, the following rulings of the Polish Supreme Court: dated 27 May 1998, Case No. I CKN 709/97, dated 8 December 2006, Case No. V CSK 321/06, dated 11 May 2007, Case No. I CSK 82/07, dated 12 September 2007, Case No. I CSK 192/07, dated 3 September 2009, Case No. I CSK 53/09, dated 9 March 2012, Case No. I CSK 312/11, dated 15 March 2012, Case No. I CSK 286/11, dated 15 May 2014, Case No. II CSK 557/13, dated 9 January 2019, Case No. I CSK 743/17.

Excerpts from the text of the court ruling:

1. The essence of the petition to set aside an arbitration award is to create a review mechanism respecting, on the one hand, the separateness and autonomy of arbitration, and on the other hand, preventing non-state court rulings violating the rule of law from functioning in the legal circulation. Proceedings initiated by a petition to set aside an arbitration award do not result in reconsideration of the merits of the dispute between the parties, but are intended only at verification of the petitioner’s allegations as to the existence of the grounds raised in the petition, as provided for in Art. 1206 § 1 of the PCPC. The aim of the petition is to prevent an arbitration award that is non-compliant the elementary formal requirements of dispute resolution from remaining in the legal circulation… .

2. [The legal doctrine – insertion added] raises that the possibility of conducting arbitration proceedings [before the Internet Domains Arbitration Court at the Polish Chamber of Information Technology and Telecommunications – insertion added] is not excluded by the fact that after filing of the lawsuit, in order to avoid liability for infringements, the content of the website in the disputed domain has been changed in a way which does not allow to determine whether there is an infringement of a third party’s rights at the time.

3. Purposive, functional and comparative interpretation confirms that Art. 2 of the Arbitration Rules of the Internet Domains Arbitration Court at the Polish Chamber of Information Technology and Telecommunications should be interpreted in such a way that the jurisdiction of the Arbitration Court includes examining of legal effects connected with the fact of registration, as well as the effects of registration occurring after the conclusion of the domain maintenance contract, with the proviso that the way in which the domain is used, not the mere fact of registration, usually allows for the assessment whether there has been such an infringement… .

4. The public policy clause covers both the procedural and substantive fundamental principles of the legal order. Procedural public policy may be a ground for assessing an arbitration award in two aspects. First, the procedure which led to rendering of an arbitration award is assessed for its compliance with the fundamental principles of the legal order, second, the effects of the arbitration award are assessed from the perspective of their consistency with the procedural public policy, i.e. whether they are reconcilable with the system of procedural law.

5. [A]rbitration awards after their recognition or enforcement enjoy also the substantive legal finality within the meaning of Art. 365 and 366 of the PCPC… .

6. Submission of a dispute existing between the parties to arbitration does not justify the conclusion that the parties have resigned from the right to reliable and insightful procedure ensuring the possibility of satisfaction of the legal interest of the parties that deserves to be protected.