petition to set aside arbitration award

1. [S]etting a time limit for the parties to submit evidence motions within an indicated period of time under pain of disregarding late evidence and statements cannot be deemed as an infringement of a party’s right to substantiate their statements.

2. When assessing whether a party was deprived of the opportunity to defend its rights in the proceedings before an arbitral tribunal, one should consider the course of the arbitration proceedings, also bearing in mind that the court is not authorized to review the ruling made on the merits and that in making an arbitration agreement the parties consciously waived submission to the strictures in place for proceedings before a state court.

3. It is not unreasonable to state that by concluding an arbitration agreement, the parties limit their constitutional and conventional right to court.

4. A party is deprived of the opportunity to defend its rights before an arbitral tribunal when the principle of equality of the parties has been violated, one of the parties is not heard and does not have the opportunity to address the evidence or allegations presented by the opposing party. For these reasons, every instance in which an arbitral tribunal refuses to admit evidence sought by a party cannot be equated with the party being deprived of the opportunity to defend itself. This happens only when a party has no opportunity to present and argue for its position. … . An arbitral tribunal is authorized to refuse to admit evidence motions of the parties and such a procedural decision does not constitute grounds to deem that the parties have been deprived of the opportunity to defend themselves.

5. It cannot be assumed that an arbitration award is in breach of the public policy clause only because the arbitration award is not complaint with certain provisions of substantive law.

6. Possible irregularities in application by an arbitral tribunal of Art. 484 § 2 of the PCPC, not leading in themselves to the arbitration award being contrary to the fundamental principles of the legal order, cannot be relevant in proceedings initiated by a petition to set aside the arbitration award… .

1. Only in the situation when the assessment made by the state court that the effects of the arbitration award are grossly and plainly contrary to the fundamental principles of the legal order of the Republic of Poland, it is possible to find a petition to set aside an arbitration award based on the allegation of violation of Art. 1206 § 2 point 2 of the PCPC to be well-founded. In applying the public policy clause, the point is not that the ruling being reviewed is to be consistent with all of the mandatorily applicable provisions of law entering into play, but that it does not exert an effect inconsistent with the fundamental principles of the domestic legal order.

2. The Court of Appeal examining the legitimacy of a petition to set aside an arbitration award cannot change such an award, but only dismiss the petition or set aside the award.

3. [A] basis for setting aside an arbitration award may be … aggravated violations of substantive or procedural law which render the arbitration award irreconcilable with the legal standards deemed fundamental for the functioning of the legal system as such. Therefore, neither a mere misinterpretation of the substantive law nor a misapplication thereof by an arbitral tribunal justifies upholding of the petition even if mandatorily applicable provisions were violated… .

4. [A]n assessment as to whether an arbitration award violates the fundamental principles of the legal order shall be formulated narrowly and on the basis of factual circumstance of a given case.

1. In the course of proceedings initiated by a petition to set aside an arbitration award, the role of a state court is not to examine the compliance of the arbitration award with the substantive law applicable to the case. The task of the state court is only to examine whether in the case a statutory ground for setting aside of the arbitration award exists… .

2. A state court considering a petition to set aside an arbitration award examines only the circumstances indicated in Art. 1206 § 1 of the PCPC, if the petition relies on them, and ex officio, examines the circumstances specified in Art. 1206 § 2 of the PCPC… .

3. An arbitration award shall be set aside under the public policy clause, if the violation of the substantive law by the arbitral tribunal leads to consequences irreconcilable with the fundamental principles of the Polish legal system, that is, effects that are plainly and grossly contrary to such principles or to any one of them… .

1. [I]t cannot be accepted that an arbitration award violates the public policy clause solely on the ground that the award is not consistent with certain provisions of substantive law… . It should be stated that a violation of substantive law can be found to be a ground for setting aside an arbitration award only when it is contrary to the constitutional principle of the state of law (Art. 2 of the Constitution of the Republic of Poland). … a conclusion that the principles of legal order have been violated is justified, if as a result of an arbitration award the fundamental principles of the state and law are infringed (Art. 1206 § 2 point 2 of the PCPC).

2. The “public policy clause”, like any other general clause, is not precisely defined, which leaves a court seized of a particular case with a wide range of discretion, however, on the basis of this clause, review of the constitutive elements of an arbitration award may not take on the dimensions proper for a review of the merits (correctness) of the award. The prohibition of a review of the merits of an award is related to the essence of the application of the public policy clause. By application thereof, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order.

3. The procedural public policy may be the basis for assessment of an arbitration award in two aspects. Firstly, the procedure which led to the delivery of the arbitration award is assessed for its compliance with the fundamental procedural principles of the legal order. Secondly, the effects of the arbitration award are assessed from the perspective of their consistency with the procedural public policy, i.e. whether they are compatible with the procedural legal system, for example, whether they do not infringe res iudicata or the rights of third parties.

4. A state court, hearing a petition to set aside an arbitration award, does not examine the case on the merits, but only examines the circumstances indicated in Art. 1206 § 1 of the PCPC, if the petitioner relies on them and the circumstances provided for in Art. 1206 § 2 of the PCPC ex officio… .

In applying the criterion of the public policy clause, the point is not that the ruling being reviewed is to be consistent with all of the mandatorily applicable provisions of law entering into play, but that it does not exert an effect inconsistent with the fundamental principles of the domestic legal order… .

1. [A]n arbitration award may be set aside only as a result of reasons indicated in Art. 1206 of the PCPC… .

2. [A] state court cannot examine the dispute between the parties to the arbitration proceedings on the merits within the proceedings to set aside an arbitration award.

3. An assessment as to whether an arbitration award violates the fundamental principles of the legal order shall be formulated narrowly and an affirmative conclusion may be reached only if the effects of the arbitration award would result in a material violation of the aforementioned principles… .

4. [C]ompliance or non-compliance of an arbitration award with the fundamental principles of the legal order is determined by the wording thereof, it is, however, not allowed to make such an assessment on the basis of facts and evidence unknown to the arbitral tribunal.

5. [T]here is a great deal of autonomy in arbitration, which is entirely consistent with the intentions of the lawmaker, distinctly limiting the review capabilities of a state court. The fundamental objective of this regulation is to expedite the procedure for resolving civil disputes, and not to create an additional phase of pre-judicial procedure. Parties deciding to submit a dispute to arbitration must take these conditions into account, which also include scant external review of arbitration awards.

6. The procedural public policy may be the basis for assessment of an arbitration award in two aspects. Firstly, the procedure which led to the delivery of the arbitration award is assessed for its compliance with the fundamental procedural principles of the legal order, secondly, the effects of the arbitration award are assessed from the perspective of their consistency with the procedural public policy, i.e. whether they are compatible with the procedural legal system, for example, whether they do not infringe res iudicata or the rights of third parties.

7. In the case law, the fundamental principles of the legal order include, among other things, the principle of civil liability for the injury caused…, the principle of the restitutive nature of liability for damages…, the pacta sunt servanda principle…, the principle of business freedom and freedom of contract, the principle of contractual fairness…, the principle of protection of property rights…, the principle of the autonomy of the will of the parties and of the equality of entities… .

1. A petition to set aside an arbitration award is a legal remedy combining features of an extraordinary remedy at law, especially a petition for the revival of the proceedings, and an action for the formation of law or legal relationship in which the claimant (petitioner) demands a state court to render a judgment on setting aside of an existing legal relationship established by an arbitration award. A state court’s judgment granting the petition is of a quashing nature, as in such a situation the state court can only set aside the arbitration award, and only insofar as demanded by the petitioner.

2. [G]rounds for setting aside an arbitration award are provided for in Art. 1206 of the PCPC. It clearly follows from Art. 1206 of the PCPC that the list of the grounds for a petition to set aside an arbitration award contained therein is of an exhaustive character. Cognition of a state court in such a case is limited to examination whether the ground asserted in the petition, which may be one of the circumstances specified in Art. 1206 § 1 of the PCPC, exists. In addition, in the proceedings, a state court shall ex officio take into account the prerequisites set forth in Art. 1206 § 2 of the PCPC, irrespective of whether they were indicated in the petition or not.

3. The public policy clause covers both the procedural and the 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 the 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. On the other hand, a violation by an arbitral tribunal of the substantive law applicable to the resolution of the legal relationship from which the dispute referred to arbitration arose, legitimates setting aside of the award only if it is connected with a violation of the fundamental principles of the legal order.

4. According to Art. 233 § 1 of the PCPC “The court shall assess the reliability and validity of evidence at its discretion, following extensive deliberations of the available material”. The boundaries of free assessment of evidence are determined by three factors: logical, statutory and ideological. The logical factor means that a court (an arbitral tribunal as well) is obliged to draw logically correct conclusions from the evidentiary material gathered in the case.

5. A reasoning of an arbitration award does not need to meet the same requirements as a reasoning of a state court ruling…, and an arbitral tribunal is not obliged to indicate in the reasoning of an arbitration award a precise interpretation of the relevant substantive provisions, in this case provisions regarding a contract for performance of a specific work, withdrawal from a contract, a contractual penalty.

1. Deprivation of a party of the right to defend itself shall be understood strictly. A party is deprived of the ability to defend its rights, if an arbitral tribunal fails to hear the party at all or gives this party no opportunity to provide explanations and statements with reference to the claims of the opposing party… .

2. It is possible… to proceed simultaneously before a state court and an arbitral tribunal. However, if two different rulings have been rendered in the case – one by the arbitral tribunal and one by the state court, this shall be a basis for setting aside of the arbitration award pursuant to Art. 1206 § 1 point 6 of the PCPC.

1. [I]n case of doubts, one should always strive at maintaining the effectiveness of an arbitration agreement, which is hinted at by the lawmaker in Art. 1180 § 1 sentence 2 of the PCPC.

2. [T]he reasons of an arbitration award do not have to correspond to the requirements applicable to the reasons of a state court ruling, however, the content of the reasons needs to include the elements of the arbitral tribunal’s reasoning, which should indicate the correctness (soundness) of the award in the light of all materials (evidence) gathered in the case… .

3. [N]o reasons with respect to an award issued on the merits result in the award taking on the features of arbitrariness and discretion, which violates the fundamental principles of the rule of law… .

1. [B]y entering into an arbitration agreement, the parties consciously waived submission to the strictures of proceedings before a state court.

2. Therefore, it is not unreasonable to state that by concluding an arbitration agreement, the parties limit their constitutional and conventional right to court.

3. A party is deprived of the opportunity to defend its rights before an arbitral tribunal when the principle of equality of the parties has been violated, and one of the parties is not heard and does not have the opportunity to address the evidence and allegations presented by the opposing party. For these reasons, every instance in which an arbitral tribunal refuses to admit evidence sought by a party cannot be equated with that party being deprived of the right to a defense. This happens only when a party has no opportunity to present and argue for its position… .

4. [A] petition to set aside an arbitration award is not an appellate instrument, but a type of extraordinary judicial review by a state court over the activity of an arbitral tribunal. Thus in proceedings to set aside an arbitration award a state court cannot consider a dispute between the parties to the arbitration proceedings on the merits… .

1. [I]n proceedings initiated by a petition to set aside an arbitration award, a state tribunal is not authorized to examine whether an arbitral tribunal has correctly resolved the dispute in factual and legal terms… .

2. The provisions regarding the admissibility of a petition [to set aside an arbitration award – insertion added] shall be interpreted strictly and, in case of any doubts, it is preferable rather to uphold the award than to set it aside… .

1. Provisions regarding grounds of a petition to set aside an arbitration award (Art. 1206 § 1 and 2 of the PCPC) in proceedings initiated thereby constitute a basis for a substantive ruling on the merits of the case, which justifies treating them, in the context of the grounds for a cassation appeal, as a functional equivalent to substantive law provisions… .

2. [A]rbitrability of a dispute, which is one of the prerequisites of the effectiveness of an arbitration award, is subject to assessment by the court considering the petition to set aside an arbitration award, regardless of whether the petitioner has raised particular allegations in the arbitration proceedings or not, or has invoked particular allegations in the petition or not … .

3. Compliance with the requirements regarding the composition of an arbitral tribunal, including the correct appointment of arbitrators, may be … subject to assessment in the proceedings to set aside an arbitration award irrespective of whether an arbitral tribunal has decided on this matter previously.

4. Art. 1206 § 1 point 4 of the PCPC shall apply with regard to irregularities in the composition of an arbitral tribunal at all stages of the proceedings, including the stage of appointment of the arbitrators by the parties or a third party. This applies also to incorrect representation of these persons by appointment of the arbitrators.

5. Failure to comply with the requirements on composition of an arbitral tribunal constitutes a basis for setting aside an arbitration award regardless of its effect on the outcome of the case … .

6. Proceedings to set aside an arbitration award are proceedings separate from the prior arbitration proceedings and its aim is not to consider the dispute resolved by the arbitral tribunal on merits.

7. [S]pecific rules of representation of the defendant company in the proceedings regarding revocation or a declaration of invalidity of a shareholders’ resolution (art. 253 of the Commercial Companies Code) apply also in proceedings to set aside an arbitration award delivered in a dispute whose object is a claim for revocation or declaration of invalidity of a shareholders’ resolution.

8. The entity structure of the proceedings initiated by the petition to set aside the arbitration award, including the ability of the management board in corpore having special judicial capacity to act as a party is the same as in the prior arbitration proceedings, in which the arbitral tribunal ruled on potential defectiveness of a resolution, although procedural roles of the entities participating in the proceedings may change. A judgement delivered in the proceedings to set aside an arbitration award is decisive for the fact whether consideration on the merits of a resolution’s effectiveness remains in force, and indirectly, whether such consideration may acquire the same permanent legal force as a judgment of a state court (Art. 1212 § 1 of the PCPC). Therefore, the same risks regarding a conflict of interests on the side of the representatives of a company, which justify application of specific rules of representation in proceedings concerning revocation or declaration of invalidity of a shareholders’ resolution, are present in proceedings to set aside the award. In conjunction with a protective function of Art. 253 § 2 of the Commercial Companies Code, the aforementioned arguments are in favor of extending those specific rules to the proceedings to set aside an arbitration award, in which the arbitral tribunal ruled on a claim for declaration of invalidity or revocation of the shareholders’ resolution, regardless of the fact whether in such proceedings a company whose shareholders have adopted the resolution is the petitioner or the other party in the dispute.

9. The grounds of a petition to set aside an arbitration award are not of a disjunctive character; they may also be in a causal relation with respect to each other… .

10. One of the fundamental principles of arbitration is the principle of equal treatment of the parties (Art. 1183 of the PCPC). The principle is of a fundamental and axiological character in arbitration… . The principle concerns not only the equal treatment of the parties in the arbitration proceedings in the context of the right to be heard and the procedural means available to the parties, but also at the stage of formation of the arbitral tribunal. A violation thereof results, i.a. from the lack of the necessary equilibrium between the parties by appointment of the arbitrators, which may result not only from the wording of the arbitration agreement (Art. 1161 § 2 of the PCPC), but also from factual circumstances in which the appointment of arbitrators takes place.

1. [T]he state court cannot, within the proceedings to set aside an arbitration award, settle a dispute on the merits between the parties to the arbitration proceedings… .

2. Only a violation of substantive legal norms, causing an arbitration award to result in a clear violation of the overriding principles of the legal order or in a conflict with particular principles of social coexistence may constitute a violation of the principles of the rule of law.

3. [R]eview of compliance of an arbitration award with the public policy clause is not of an appeal character and cannot replace it, because it would be contrary to the essence of arbitration, would render its existence aimless, and would be contrary to the autonomy of the will of the parties who have submitted their dispute to the jurisdiction of an arbitral tribunal, resigning from the jurisdiction of a state court.

4. Violation by an arbitral tribunal of substantive law provisions, i.e. an incorrect interpretation or misapplication thereof does not per se constitute a violation of the rule of law… .

5. It is impossible to draw from the assumption that the provisions on limitation of claims serve the purpose of certainty of the conduct of legal transactions and such a certainty is within the interest of the legal order in general, a conclusion that the set of rules governing limitation of claims constitutes, as a whole, a part of the fundamental principles of the legal order and any misinterpretation thereof leads to a contradiction with the ordre public clause.

6. Violation of a mandatorily binding provision is not … tantamount to a violation of the fundamental principles of the legal order… .

7. [I]n proceedings regarding an arbitration award, the state court is not authorized to make an assessment whether the claim has been time-barred, if this has been assessed by the arbitral tribunal.

8. [G]ross disregard of the principles of interpretation of declarations of will indicated in Art.  65 of the Polish Civil Code may constitute a basis for a petition to set aside an arbitration award, if the arbitral tribunal finds that the evidence relied on to prove the parties’ intention was irrelevant and conducts only an analysis of the wording of the contract, because materialization of the principle of the autonomy of the will of the parties is not possible without the application of the appropriate criteria of assessment of declarations of will made by the parties… . However, the review of the interpretation of declarations of will of the parties made by an arbitral tribunal, in case of properly conducted evidence proceedings, cannot be subject to review in the course of proceedings initiated by a petition to set aside an arbitration award.

9. The inability to abandon a comprehensive clarification of the circumstances of the case shall be understood primarily as an obligation to conduct arbitration proceedings in a way which enables the parties to submit all statements and evidence and – under the principle of their equal treatment – to respond to the statements and evidence submitted by the opposing party. The requirements for conducting evidence proceedings by an arbitral tribunal cannot be stricter than those applicable to a state court, all the more so that an arbitral tribunal does not dispose of coercive measures which are often necessary for effective examination of evidence. The audi alterem partem principle and the availability principle apply also in arbitration. An arbitral tribunal cannot take into account facts not indicated by the parties or apply the presumption of truthfulness of the claimant’s allegations in the event of the claimant’s failure to appear at the hearing, or deem undisputed facts to be true… .

10. [T]he matter of correct application of intertemporal norms per se does not constitute a violation of the public policy clause… .

11. [T]he mere issue of the interest rate cannot constitute a violation of the public policy clause.

12. [E]xamining evidence in the form of documents contained in the arbitration files is not a sine qua non condition of assessment of allegations raised in a petition to set aside an arbitration award… . The need to request such files shall be assessed in the circumstances of a particular case.

13. Hearing a petition to set aside an arbitration award, the state court does not have an obligation to conduct evidence proceedings ex officio… .

1. In the course of proceedings initiated by a petition to set aside an arbitration award, the role of a state court is not to examine the compliance of the arbitration award with the substantive law applicable to the case. The task of the state court is only to examine whether in the case a statutory ground for setting aside of the arbitration award exists… . 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 plane. The circumstances indicated in Art. 1206 § 1 of the PCPC are examined by the state court hearing the petition to set aside an arbitration award only if the petitioner relies on them, and the circumstances provided for in Art. 1206 § 2 of the PCPC are examined ex officio… .

2. An arbitration award shall be set aside under the public policy clause, if violation of the substantive law by the arbitral tribunal leads to consequences irreconcilable with the fundamental principles of the Polish legal system, that is, effects that are plainly and grossly contrary to such principles or to any one of them… .

3. [T]he principle of the autonomous will of the parties is one of the fundamental legal principles of the legal order of the Republic of Poland… .

4. The public policy clause, like any general clause, is not precisely defined, which leaves great discretion to the court ruling on a specific case… . The application of the public policy clause remains in an inseparable relationship with the totality of circumstances of a particular case in close connection with the concrete factual state.

5. The public policy clause is… the only prerequisite for setting aside of an arbitration award enabling the state court to review the arbitration award on the merits. Nevertheless, on the basis of this clause, review of the constitutive elements of an arbitration award may not take on the dimensions proper for a review of the merits (correctness) of the award. The prohibition of a review of the merits of an award is related to the essence of the application of the public policy clause. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order… . So only in the situation when the assessment made by the state court that the effects of the arbitration award are plainly and grossly contrary to the fundamental principles of the legal order of the Republic of Poland, it is possible to find a cassation appeal based on the allegation of violation of Art. 1206 § 2 point 2 of the PCPC to be well-founded.

6. [T]here is a great deal of autonomy in arbitration, which is entirely consistent with the intentions of the lawmaker, distinctly limiting the review capabilities of a state court. The fundamental objective of this regulation is to expedite the procedure for resolving civil disputes, and not to create an additional phase of pre-judicial procedure . Parties deciding to submit a dispute to arbitration must take these conditions into account, which also include scant external review of arbitration awards… .

7. It is not unreasonable to state that by concluding an arbitration agreement, parties limit their constitutional right to court (Art. 45 (1) of the Constitution of the Republic of Poland).

8. Deprivation of the right to defense shall be understood strictly. A party is deprived of the ability to defend its rights, if an arbitral tribunal gives this party no opportunity to provide explanations and statements with reference to the claims of the opposing party. If the arbitral tribunal ignores evidence offered by a party because it deems the evidence redundant, it shall not be considered that that party has been deprived of the right to defense. State court review as to whether the arbitral tribunal correctly found evidence to be redundant would constitute an impermissible intrusion into the merits of the case. If the arbitral tribunal disregards a certain portion of the defense submitted by a party, presenting in the reasoning of the award a substantive explanation of the reasons why it has considered the defense irrelevant, the allegation of a party that the arbitral tribunal has omitted its defense is in fact directed against the substantive defense of the dispute and is, as such, inadmissible… .

9. An arbitral tribunal, not being bound by the regulations on proceedings before a state court (Art. 1184 § 2 sentence 2 of the PCPC), has greater freedom to direct the course of the proceedings, including also – to decide on the relevance and purposefulness of examining specific evidence.

10. [T]he provision of Art. 387 § 2¹ of the PCPC, and all the more so of Art. 328 § 2 of the PCPC (cf. Art. 391 § 1 of the PCPC), according to Art. 1207 § 2 of the PCPC, apply only “as relevant” in proceedings before the state court hearing a petition to set aside an arbitration award. It means that the application of this provision must take into account the specificity of arbitration proceedings.

11. The state court hearing a petition to set aside an arbitration award shall not make factual findings, potentially, with the exception of those which are necessary to assess whether there are grounds for setting aside the arbitration award (for example, regarding the notice to a party on appointment of an arbitrator or on arbitration proceedings – Art. 1206 § 1 point 2 of the PCPC). As a consequence, the requirement of “indicating a factual basis” resulting from Art. 328 § 2 of the PCPC in connection with Art. 391 § 1 of the PCPC and Art. 387 § 2¹ of the PCPC cannot apply, as a matter of principle, to the reasoning of a judgment regarding a petition to set aside an arbitration award (Art. 1207 § 2 of the PCPC).

1. [I]n case of an arbitral tribunal dismissed by a separate order, a plea raised by a party that the arbitral tribunal did not have jurisdiction in a dispute or a demand of the opposing party asserted during the course of the proceeding exceeds the scope of the arbitration agreement (Art. 1180 § 2 of the PCPC), a state court’s review of the legitimacy of this position can take place only in the manner provided for in the Art. 1180 § 3 of the PCPC… .

2. A valid state court’s order confirming jurisdiction of an arbitral tribunal, delivered in accordance with Art. 1180 § 3 of the PCPC, is binding in the proceedings regarding a petition to set aside an arbitration award… and excludes the possibility of re-examination of the issue of the arbitration agreement… . 

3. If, pursuant to Art. 1180 § 3 of the PCPC, a state court has validly dismissed a motion for declaration that the arbitral tribunal does not have jurisdiction to settle the dispute, such a ruling binds the state court in the case of setting aside of the arbitration award in such a way that if there are no new facts which may justify the expiration of the effect of the arbitration agreement after the state court has delivered its ruling pursuant to Art. 1180 § 3 of the PCPC, a party cannot effectively rely on non-existence of the arbitration agreement (Art. 1206 § 1 point 1 of the PCPC).

4. Submitting an arbitration award on lack of jurisdiction of the arbitral tribunal to review by a two-instance state court also fully satisfies the parties’ right to court and the right to have the case heard in two-instance proceedings… .

1. [P]assing an order concerning recognition or enforcement of an arbitration award does not preclude any subsequent setting aside of the award …. .

2. In proceedings regarding recognition and enforcement of a domestic arbitration award, a state court examines only the existence of the prerequisites indicated in Art. 1214 § 3 of the PCPC – they do not include the invalidity or ineffectiveness or expiration of an arbitration agreement – which corresponds only to a part of the grounds examined in a case regarding a petition to set aside an arbitration award, that is the grounds examined by a court ex officio under Art. 1206 § 2 of the PCPC. Therefore, there is a need to agree with the view that, with reference to domestic arbitration awards, proceedings regarding a petition to set aside an arbitration award primarily have a control function.

1. The grounds of a petition to set aside an arbitration award have been divided in Art. 1206 of the PCPC into two categories, to which the prerequisites set out in § 1 and § 2 of this provision correspond. In case of the grounds indicated in § 1, the state court shall take them into account only upon request of a party, so it is bound by the grounds relied upon by the petitioner. The grounds indicated in § 2 shall be taken into account ex officio.

2. The public policy clause…, like any general clause is not precisely defined and does not include an exhaustive list of principles. Therefore in each case it is necessary to consider whether the circumstances make it possible to draw the conclusion that a violation was in breach of principles that are the fundamental principles of the legal order. Pursuant to the public policy clause expressed in Art. 1206 § 2 of the PCPC, an arbitration award shall be set aside when effects determined by its content are irreconcilable with the particular norm which is one of the fundamental principles of that order, which leaves a great degree of discretion to the state court ruling in a given case.

3. [A]n arbitration award shall correspond to the wording of the statement of claim. Depending on the content of the claim, an arbitration award may establish, rule on, or shape a right or a legal relationship.

4. [A]lthough Art. 1188 § 1 of the PCPC does not indicate obligatory elements of a statement of claim in arbitration, including the exact wording of the claim…, nonetheless the necessity to specify the claim, as the element determining the subject matter of arbitration, may be derived indirectly from Art. 1202 first sentence of the PCPC; it may also be derived from the procedural rules agreed upon by the parties or defined in the rules of arbitration. Irrespective of the above, this does not mean, however, that going beyond the limits of a claim by an arbitral tribunal evades the state court review.

5. [T]he audi alterem partem principle is the fundamental principle of the legal order. The audi alterem partem principle means the parties’ right to conduct a dispute in a way designated by them and shifts to them the burden of gathering factual and evidentiary material which is necessary to resolve a case.

1. It clearly follows from Art. 1206 of the PCPC that the list of the grounds for a petition to set aside an arbitration award contained therein is of an exhaustive character. Cognition of a state court in such a case is limited to examination whether the ground asserted in the petition, which may be one of the circumstances specified in Art. 1206 § 1 of the PCPC, exists. In addition, in the proceedings, a state court shall take into account ex officio the prerequisites set forth in Art. 1206 § 2 of the PCPC, irrespective of whether they were indicated in the petition or not.

2. A reasoning of an arbitration award does not need to meet the same requirements as a reasoning of a state court ruling, and an arbitral tribunal is not obliged to indicate in the reasoning of an arbitration award a precise interpretation of the relevant substantive provisions… .

3. The public policy clause in not intended for a review of an arbitration award on the merits. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order.

4. As far as the assessment of the contested award in terms of infringement of governing norms in particular fields of substantive and procedural law is concerned, the following principles in this scope, indicated in the case-law, shall be taken into account: the right to court, understood as the right to have the case heard by an independent court within fairly conducted proceedings…, the obligation to redress damage by the party to a contract who did not perform or performed an obligation improperly, if there is a normal causal link between the conduct of the party and the damage…, and an obligation to redress a damage caused by an unlawful act…, the principle that compensation (both arising out of an unlawful act or under a contract) is only due if the aggrieved party sustained a damage…, the principle of business freedom and freedom of contract, and the principle of the autonomy of the will of the parties and equality of the parties…, the principle of stability of contracts and contractual fairness, and the principle of compensatory character of liability expressed in the prohibition of imposing sanctions in the form of pecuniary benefits that enrich one of the parties…, the principle of the binding force of final court rulings… and the prohibition of existence of two rulings between the same parties which resolve the same issue differently…, obligation to specify in the contract the essentialia negotii thereof… .

5. [T]here is a great deal of autonomy in arbitration, entirely consistent with the intention of lawmakers, distinctly limiting the availability of state court review. The basic goal of arbitration is to expedite the procedure for resolving civil disputes, not to create an additional phase of pre-judicial procedure, or a judicial procedure similar to an explanatory procedure. Parties who decide to submit a dispute to arbitration must thus take into account such conditions, including also the limited external review of arbitration awards.

6. [W]hen considering a petition to set aside an arbitration award, a state court generally does not review the ruling of the arbitral tribunal on the merits, and in particular does not review whether the award is founded on the facts cited in the reasoning or whether such facts were correctly determined.

7. [T]he only necessary elements of the reasoning of an arbitration award are findings on which the arbitral tribunal relied and the circumstances which the arbitral tribunal deemed necessary to examine in the case.

Mere demonstration of possible errors of an arbitral tribunal in the conduct of the proceedings or in the assessment of the gathered material or in the accepted legal assessment of the asserted claims is not sufficient to successfully challenge an arbitration award before a state court. It may be done only in case of existence of gross and cardinal misconducts by the arbitral tribunal causing that the acceptance of the award rendered by the arbitral tribunal would almost obviously be impossible due to a violation of the fundamental principles of procedural or substantive law.

1. [I]n proceedings initiated by a petition to set aside an arbitration award (…) a state court does not examine the accuracy of the assessment of evidence taken by an arbitral tribunal, the correctness of factual findings, the accuracy of interpretation or application of rules of the substantive law; a state court does not assess the accuracy of a specific method of resolving a litigious legal relationship by an arbitral tribunal (…).

2. The essence of a petition to set aside an arbitration award is to create a control mechanism which respects, on the one hand, the distinctiveness and autonomy of arbitration, on the other hand, prevents functioning of arbitration awards which are in breach of the rule of law in the legal order. 

3. The proceedings initiated by a petition to set aside an arbitration award do not lead to a substantive re-examination of the dispute between the parties, (…) but the aim of these proceedings is only to verify the claims of the petitioner concerning the statutory grounds for setting aside an arbitration award cited in the petition.

1. The essence of arbitration consists of three principles: (i) the non-state character of arbitration, (ii) joint will of the parties as the source of jurisdiction to resolve the dispute and (iii) equating the legal force of an arbitration award with the legal force of a state court judgment.

2. A state court ruling on recognition or enforcement of an arbitration award results in ascribing to the award the same force that rulings of state courts have, which is clearly confirmed by Art. 1212 § 1 of the PCPC. Such an award, thanks to the state court ruling connected with it, must be treated in legal dealings the same as any other ruling of a state court, i.a. it has all the features indicated in Art. 365 § 1 of the PCPC.

3. The purpose of proceedings initiated by a petition to set aside an arbitration award is only to verify the petitioner’s pleadings presented in the petition as to existence of the grounds referred to in Art. 1206 § 1 of the PCPC, and to assess if any of the prerequisites referred to in Art. 1206 § 2 of the PCPC exist.

4. [T]he validity and efficiency of an arbitration agreement shall be determined by the law in force at the time when the arbitration agreement was concluded… .

5. The agreement [arbitration agreement – insertion added] does not identify individual parties to the dispute, but the legal relationship or the object of a dispute, therefore certain claims (receivables), as a result of the arbitration agreement, have such a feature that disputes concerning them shall be resolved by an arbitral tribunal.

6. If a given legal relationship has been submitted to arbitration, the arbitral tribunal retains its jurisdiction to resolve the case, however, as a result of the assignment, the assignor, as a matter of principle, loses the ability to dispose of the claim in the substantive-law sense, in fact loses its ability to settle.

7. The public policy clause covers both the procedural and the 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 the 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. On the other hand, a violation by an arbitral tribunal of the substantive law applicable to the resolution of the legal relationship from which the dispute referred to arbitration arose, legitimates setting aside of the award, only if it is connected with a violation of the fundamental principles of the legal order. At the same time, in the event of non-compliance of an award with the fundamental principles of the legal order, the question is not whether the award is compliant with all absolutely binding provisions of law, but whether the award has had an effect which is irreconcilable with the fundamental principles of the state legal order… .

8. The principle of interpretation of declarations of will is covered by the public policy clause. … The principle of freedom of contracts is also one of the fundamental principles of the substantive legal public policy.

1. [T[he fundamental principles of legal order shall be understood not only as constitutional norms, but also as ground rules in particular fields of law, and this applies both to national regulations and regulations resulting from the EU legislation in force in Poland, both of substantive and procedural nature.

2. [P]rocedural public policy may be a ground for assessing an arbitration award in two aspects. First, the procedure which led to rendering of the 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. On the other hand, a violation by an arbitral tribunal of the substantive law applicable to the resolution of the legal relationship from which the dispute referred to arbitration arose, legitimates setting aside of the award only if it is connected with a violation of the fundamental principles of the legal order.

3. The public policy clause, like any general clause, is indeterminate, which leaves the court seized of a particular case with a wide range of discretion. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order. Substantive review of an arbitration awards is therefore limited to violation of the principles of legal order.

4. [G]rounds for setting aside an arbitration award may only include qualified violations of substantive or procedural law, which mean that an arbitration award is irreconcilable with the legal standards considered to be fundamental to the functioning of the legal system as such. This means that mere misinterpretation of the substantive law or misapplication thereof by an arbitral tribunal does not justify upholding of the petition even if there would be a violation of mandatory provisions… .

5. The broad scope of autonomy granted by the lawmaker to the arbitral tribunal, including judicial autonomy, excludes the possibility of a state court to make independent factual findings in proceedings initiated by a petition to set aside an arbitration award, or to review – beyond the aforementioned scope – the findings constituting the factual basis of an arbitration award, by which a state court is in principle bound… . A state court is neither a second-instance court with reference to arbitration awards, which excludes the possibility of rendering a reformatory ruling.

6. [A]n assessment whether an arbitration award does not violate the fundamental principles of the legal order shall be formulated carefully, narrowly and on the basis of the facts of a particular case.

7. It is permissible to seek damages on the basis of general principles with a simultaneous demand to publish a statement of appropriate content. The combination of two measures, as in the present case, cannot itself speak in favour of their excessive repressiveness, and to such an extent that would justify the setting aside of the contested award according to Art. 1206 § 2 point 2 of the PCPC.

1. A petition to set aside an arbitration award is a legal remedy combining features of an extraordinary remedy at law, especially a petition for the revival of the proceedings, and an action for the formation of law or a legal relationship in which the claimant (petitioner) demands a state court to render a judgment on setting aside an existing legal relationship established by an arbitration award. A state court’s judgment granting the petition is of quashing nature, as in such a situation the state court can only set aside the arbitration award, and only insofar as demanded by the petitioner (…).

2. A petition to set aside an arbitration award is not intended to be a remedy leading to consideration, by a state court, of the merits of the dispute resolved by an arbitral tribunal. In fact, there is considerable autonomy in arbitration procedure (…) limiting the possibilities of review by the state court. If parties decide to submit a dispute to arbitration, they need to take these circumstances into account, including also little external control of arbitration awards. This does not mean, however, that if a dispute is submitted to arbitration, the parties have to agree to all kinds of procedural and substantive shortcomings of the arbitral tribunal (…).

3. Considering a petition, a state court examines a case only on the grounds set out in the Polish Civil Procedure Code. Art. 1206 of the PCPC exhaustively lists  the grounds on which a petition to set aside an arbitration award may be based. The difference between the grounds of a petition indicated in Art. 1206 § 1 and § 2 of the PCPC is that the grounds set out in § 1 are taken into account by a state court only at the request of a party, the grounds set out in § 2 are taken into account ex officio (…).

4. [I]t is deemed that the case in which an arbitral tribunal rules ultra petita or aliu should not escape the control of the state court. This assumption shall be considered well-founded also in the light of the Polish Civil Procedure Code, with the proviso that the character of arbitration may justify an approach to the assessment of the limits of the claim being more flexible than in the case of state courts.

5. [A]lthough Art. 1188 § 1 of the PCPC does not indicate obligatory elements of a statement of claim in arbitration proceedings, including the exact wording of the claim (cf. Art. 187 § 1 point 1 of the PCPC), nonetheless the necessity to concretize the claim as an element determining the subject matter of the arbitration proceedings may be derived indirectly from Art. 1202 first sentence of the PCPC; it may also result from the rules agreed by the parties or set out in the arbitration rules (…).

6. The principle of equal rights of the parties is a fundamental principle of arbitration proceedings indicated directly in Art. 1183 first sentence of the PCPC.

7. Procedural public policy may be a basis for assessment of an arbitration award in two aspects. First, subject to the assessment is the compliance of the procedure which led to issue of the arbitration award with the fundamental procedural principles of legal order. Second, subject to the assessment are the effects of the award from the point of view of their compliance with the procedural legal order, i.e. whether they are compatible with the procedural legal system, for example, whether they do not infringe res iudicata, the rights of third parties.

8. An arbitration award may be said to be contrary to the fundamental principles of the legal order only with respect to constitutional principles of the socio-economic system or the fundamental principles governing specific fields of substantive law (…).

9. [P]ublic policy within the meaning of Art. 1206 § 2 point 2 of the PCPC includes not only the principle of freedom of contract and the pacta sunt servanda principle, but also principles limiting the freedom of contract and stability of contracts.

10. [A]pplication by an arbitral tribunal of applicable substantive law for resolution of a dispute, which it is generally required to do under Art. 1194 § 1 of the PCPC, is thus subject to review by a state court considering a petition to set aside an arbitration award only insofar as application of such law is required by the public policy clause, which is considered by the court ex officio.

1. Generally, a state court cannot examine whether an award challenged in a petition to set aside was based on properly established facts and how and whether an arbitral tribunal correctly interpreted the norms of substantive law it applied (…).

2. By examination of the grounds and prerequisites set out in Art. 1206 § 1 point 4 of the Polish Civil Procedure Code, what is important is the presence of a failure to meet the requirements in the scope of fundamental principles of arbitration proceedings resulting from a statute or specified by the parties. One of these principles is to base the award on established facts, which takes place after hearing of evidence. (…). Thus, only if the state court found that such hearing of evidence has not been conducted at all, or has been incomplete or obviously faulty, in breach of the principles of logical reasoning, of linking facts together in a cause-and-effect chain, selective admission of evidence in the case, examination of evidence of only one party in groundless omission of the evidence requested by the other party, etc., it would be possible to find that the requirements set out in Art. 1206 § 1 point 4 of the PCPC. (…).

3. [A]n obvious discrepancy between an arbitration award and the facts of the case may demonstrate a violation of the rule of law (…). This means that not every declaration that an award is inconsistent with the factual state may result in setting aside of this award. It is assumed that a conclusion that the rule of law has been violated is justified, if as a result of the arbitration award the fundamental principles of the legal order of the state are infringed (…).

1. Going beyond the limits of the claim may … constitutes a violation of the fundamental principles of procedure before an arbitral tribunal (Art. 1206 § 1 point 4), alternatively, depending on the circumstances of a case, it may result in the defendant being deprived of the ability to defend its rights (Art. 1206 § 1 point 2 of the PCPC). There is also no doubt that a claim to set aside an arbitration award may relate to the entire award or to a part thereof only, and a state court is bound by the scope of the challenge indicated by the party, which does not mean that a state court cannot find a claim to be well-founded in part … .

2. On the other hand, the general view expressed by the adjudicating panel [in the Polish Supreme Court judgment dated 6 May 2016, Case No. I CSK 305/15 – insertion added] that a court is bound by the claim presented in the petition to set aside an arbitration award in full, and the court’s finding that the granting of a claim in part pertains to a claim of another kind that has not been raised by the petitioner, is isolated and has not been followed up in subsequent case-law, also after an amendment of the petition model procedure.

3. The proceedings to set aside an arbitration award are one-instance proceedings and a judgment may only quash or dismiss the petition, which, taking into account the principle of the state court being bound by the scope of the challenge, makes the application of Art. 384 of the PCPC in such proceedings, as a general rule, aimless.

1. [T]he fundamental principles of the legal order are the constitutional principles and the principles of other fields of law including civil, family, labour and procedural law. However, it cannot be assumed that an arbitration award violates the rule of law only on the basis of the arbitration award not being complaint with, for example, certain provisions of substantive law… .

2. Depriving a party of the ability to defend its rights before an arbitral tribunal occurs, if the arbitral tribunal fails to notify the party of the date of the hearing after which the award is announced, if it does not hear out a party at all or fails to give a party the opportunity to submit statements with respect to the matter in dispute, if the principle of equal treatment of the parties or the right of the party to be heard and submit evidence is infringed, if a party is prevented from getting familiar with the opposing party’s position, evidence submitted by the opposing party, if a party is prevented from addressing them, if a party is prevented from presenting and proving their arguments… . A party is no deprived of its defences, if evidence offered by that party is not admitted or examined… .  

3. The petitioner had… at least 3 weeks to authorize a new attorney [in the arbitration proceedings in the case – insertion added]. The fact that it decided to do so only one day before the hearing… cannot be a basis for setting aside of the arbitration award.

4. [A]pplication of Art. 1193 of the PCPC cannot be limited to shortcomings which took place in the course of arbitration proceedings, it should also cover the activities taken at the stage of appointment of the arbitrator, including at the stage of the petition set out in Art. 1206 § 1 point 2 of the PCPC submitted due to violation of the principles of arbitrator appointment.

5. [I]f, during the examination of a case by an arbitral tribunal, a party represented by a professional attorney took part in the activities of the arbitral tribunal and did not demonstrate at that time any procedural violations which were indicated by this party in the petition to set aside the arbitration award as the grounds for setting aside of the arbitration award indicated in Art. 1206 § 1 point 4 of the PCPC, the recourse to a procedural defect identified in such a way cannot take effect… .

6. In connection with the above, in the assessment of the Court of Appeal hearing the case, there are no grounds to find that the disputed arbitration award… violates the fundamental principles of the legal order of the Republic of Poland. In particular, this cannot be demonstrated by the circumstance, relied upon by the petitioner, that the Court of Arbitration recognized the activities of advocate R. D. taken before initiation of the arbitration proceedings to be the activities of an attorney-in-fact, in the situation when in the files of the case there was no power of attorney for an attorney-in-fact, granted to advocate R. D. by the petitioner, which would specify the scope of authorization of the attorney.    

7. [P]roceedings initiated by a petition to set aside an arbitration award do not lead to a substantive re-examination of the dispute between the parties, but their purpose is to verify the petitioner’s pleadings presented in the petition as to existence of the grounds referred to in Art. 1206 § 1 of the PCPC, and to assess if any of the conditions referred to in Art. 1206 § 2 of the PCPC exist, regardless of whether the petitioner relied thereon… .

8. [I]t cannot be accepted that an arbitration award violates the public policy clause solely on the ground that the award is not consistent with certain provisions of substantive law… .

9. A party cannot effectively raise [in the proceedings initiated by a petition to set aside an arbitration award – insertion added] that the composition of the arbitral tribunal was incorrect when during the proceedings before such a tribunal the party did request that a particular arbitrator be excluded… .

1. The deformalized character of arbitration manifests itself both in the manner in which a hearing is conducted, as well as in more liberal procedural rules than before a state court. What is especially important, the speed of the arbitration procedure is increased not only by the manner in which proceedings before an arbitral tribunal are conducted, but also by the limitation of judicial review of arbitration awards.

2. The fact that not all arguments and evidence were deemed by the arbitral tribunal well-founded and sufficiently significant for the outcome of the case does not mean that a party has been deprived of the possibility to defend its rights or that the principle of equality of the parties has been violated. For these reasons, every instance in which an arbitral tribunal refuses to admit evidence sought by a party cannot be equated with that party being deprived of the right to a defence… . It should be emphasized that in arbitration proceedings, an arbitral tribunal has… the right to disregard evidence motions of the parties, if the tribunal finds they are not necessary to examine the case… .

3. Setting aside of an arbitration award is justified… only by such an offence to the substantive law that it would also bring the ruling into conflict with the overriding legal principles in force in the Republic of Poland. In other words, an arbitration award may be unlawful if it results in a ruling that violates the controlling principles of the rule of law… .

4. According to the well-established case law, state court review of arbitration awards does not include the verification of the accuracy of determination of the factual state. Different perception of state court jurisdiction would lead to contestation of the independence of arbitration, distorting not only the concepts underlying its functioning, but also the intention of the lawmaker, who has limited the scope of interference of state courts to exceptional circumstances, expressly indicated in the Act. 

1. [P]rovisions in force at the time when an arbitration agreement was concluded decide on the validity and effectiveness thereof.

2. The provisions of the European Union law are a part of the Polish legal order, which is examined ex officio under Art. 1206 § 2 point 2 of the PCPC . The case law of the European Court of Justice/the Court of Justice of the European Union has determined unequivocally that the EU competition law regulations are a part of the legal order which must be taken into account by state courts in the course of their review of arbitration awards according to the principle of equivalence.

3. According to the established case-law of the European Court of Justice/the Court of Justice of the European Union, the principle of equivalence of the European Union law requires that if domestic procedural principles require a state court to grant the claim to set aside an arbitration award based on an allegation of violation of the domestic principles of the legal order, such a court is also obliged to grant the claim to set aside such an award, if it is based on an allegation of violation of the European Union principles of the same kind… .

4. [O]bligations imposed on the state court in connection with the application of Art. 108 (3) of the Treaty on the Functioning of the European Union shall also extend to arbitral tribunals.

1. [I]n 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 off 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. The essence of a petition to set aside an arbitration award is to create a control mechanism respecting, on the one hand, the separateness and autonomy of arbitration, and on the other hand, preventing non-state court rulings infringing the rule of law from functioning in the legal circulation. Proceedings concerning 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 to verify 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 only an arbitration award which fails to comply with the elementary formal requirements of dispute resolution from remaining in the legal circulation.

2. The grounds resulting from Art. 1206 § 2 point 2 of the PCPC are legitimate, if the effect of an arbitration award is contrary to the fundamental principles of the legal order of the Republic of Poland. (…) The fundamental principles of the legal order which are the basis for assessment of an arbitration award shall be understood not only as constitutional rules, but also as ground rules in particular areas of law, and examination of a case with respect to the ground for setting aside of an award under Art. 1206 § 2 point 2 PCPC shall not go beyond a qualified infringement of law. 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 issuance of an arbitration award is assessed for its compliance with the fundamental procedural 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. Then, an infringement by an arbitral tribunal of the substantive law applicable to the resolution of the legal relationship from which the dispute referred to arbitration arose, legitimates setting aside of the award, only if it is connected with an infringement of the fundamental principles of the legal order. Simultaneously, in the event of a lack of compliance of an award with the fundamental principles of the legal order, the question is not whether the award is compliant with all absolutely binding provisions of law, but whether the award has had an effect which is irreconcilable with the fundamental principles of the state legal order (…). Indeed, the application of the public policy clause does not serve to remove all irregularities and defects of arbitration awards, but is intended to protect the integrity of the public policy.

3. The right to a fair trial is a pillar of a democratic state of law and for this reason its infringement justifies the conclusion that the rule of law has been infringed. (…) such a situation will occur especially in the event of non-consideration of a set-off allegation raised by a party. The principle of the fair trial dictates consideration of a set-off allegation properly raised by the respondent.

4. [T]he Arbitral Tribunal erroneously refused to hear the set-off allegation, because the mere fact of the respondent’s liability not being covered by the arbitration agreement is not an obstacle to consider such an allegation.

Art. 1208 § 1 of the Polish Civil Procedure Code stipulates that if an application for interpretation of an award is submitted, a petition to set aside the award may be filed only within 2 months after service by the arbitral tribunal of the ruling on the application.

In the case law of the Polish Supreme Court a view prevails that an arbitration award may be set aside only for reasons listed in Art. 1206 of the Polish Civil Procedure Code. A common court cannot substantively consider a dispute between parties to arbitration proceedings in this type of proceedings, it does not examine whether the arbitration award is contrary to substantive law or whether the arbitration award is based on facts quoted therein, or whether these facts had been correctly established.

1. The essence of arbitration is the autonomy and freedom of action of the parties and an arbitration tribunal is not bound by the provisions of the Polish Civil Procedure Code on proceedings before a state court (Art. 1184 § 2 of the Polish Civil Procedure Code). It is only bound by the mandatory provisions of the Polish Civil Procedure Code which regulate the arbitration procedure (…).

2. The scope of the final resolution by an arbitration tribunal of a submitted claim shall result from the conclusion of the arbitration award and cannot be derived from the statement of reasons (…).

3. [T]he basis in Art. 1206 § 2 point 2 of the Polish Civil Procedure Code is justified, if the effect of an arbitration award is contrary to the fundamental principles of the legal order of the state. These shall be understood not only as constitutional norms of fundamental importance, but also as the ground rules governing particular areas of substantive and procedural law.

4. A court, in proceedings to set aside an arbitration award, cannot resolve a dispute between the parties of arbitration proceedings as to the merits. Consequently, the court cannot examine, whether the arbitration award is not contrary to substantive law and whether this award is based on the facts given in its statement of reasons and whether these facts have been properly established.

5. The principle of the binding force of final court rulings (Art. 365 § 1 of the Polish Civil Procedure Code) as an element of the values protected constitutionally and in the international order is a part of the fundamental principles of the legal order of the Republic of Poland. This rule also applies to arbitration awards after their recognition or enforcement by a state court. Such an award, thanks to the state court judgment related to it, has the same legal effect as a court judgment (Art. 1212 § 1 of the Polish Civil Procedure Code) (…).

6. A state court shall not allow two rulings between the same parties whose enforcement is guaranteed by the state, but which would resolve the same issue differently, to be present in the legal system, since this would undermine the authority of the justice system and the confidence in the courts, colliding with the principle of the stability of final rulings and the principle of legal certainty (…).

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.

1. [P]roceedings initiated by a petition to set aside an arbitration award do not lead to a repeated substantive consideration of the dispute, but their purpose is only to verify the applicant’s pleadings presented in the petition as to existence of grounds referred to in Art. 1206 § 1 of the Polish Civil Procedure Code, and to assess if any of the conditions referred to in Art. Art. 1206 § 2 of the Polish Civil Procedure Code exist, regardless of whether the applicant relied thereon (…).

2. Application by an arbitral tribunal of the substantive law applicable in the case is subject to control by a common court, only inasmuch as it is required to assess the award in terms of compliance with the public policy clause specified in Art. 1206 § 2 (2) of the Polish Civil Procedure Code (…).

3. An arbitration award may be set aside pursuant to the public policy clause, only if violation of substantive law by an arbitral tribunal has consequences which are impossible to be consistent with the fundamental principles of Polish legal order, i.e. which are clearly and grossly contrary to these principles (…). An ad casum assessment whether an award violates the fundamental principles of legal order shall be made with caution, with a preference for restrictive interpretation of its wording (…).

4. Abstractedly speaking, there are no doubts that an assessment of an arbitral tribunal under Art. 1206 § 1 and 2 of the Polish Civil Procedure Code requires – to a smaller or larger extent – determination of the course of broadly understood arbitration proceedings (procedural actions of the parties, procedural decisions of the arbitration tribunal, examination of evidence, factual findings and interpretation, as well as application by the arbitral tribunal of relevant provisions of substantive law (…)), which also applies to the appellate court.   

1. [V]iolation of the fundamental principles of the Polish legal system may occur in the realm of both substantive and procedural law, which leads to a distinction between the substantive legal system and the procedural legal system. The fundamental principles of the Polish legal system should be understood to mean constitutional principles as well as the prime principles applicable in other fields of substantive and procedural law; the latter undoubtedly include the principle of the equality of the parties… .

2. A failure to admit and consider evidence offered by a party does not constitute deprivation of that party of a defense, if the arbitral tribunal duly justifies that procedural decision in accordance with the accepted rules… .

3. The essence of a petition to set aside an arbitration award is to provide a review mechanism respecting, on one hand, the separateness and autonomy of arbitration, and on the other hand, preventing the functioning in legal circulation of rulings by non-state courts violating the rule of law. Proceedings to set aside an arbitration award do not lead to reconsideration of the merits of the dispute between the parties, but are intended only to verify the petitioner’s allegations of the existence of the grounds raised in the petition provided for in Art. 1206 § 1 of the PCPC and assess whether any of the grounds provided for in Art. 1206 § 2 of the PCPC exist, whether or not asserted by the petitioner… .

4. [A]n arbitration agreement, arbitration rules of a permanent court of arbitration or otherwise adopted rules of procedure cannot violate Art. 1197 [of the PCPC – insertion added]. An arbitration award may contain elements not indicated in the provision – first and foremost, a ruling on the costs of the proceedings.

5. The written form of an [arbitration – insertion added] award is obligatory. An arbitration award shall, as a matter of principle, be signed by all the arbitrators, including arbitrators voting against the majority position. However, in the event of granting an award in the composition of at least 3 arbitrators, signatures of the majority of the arbitrators with indication why there are no signatures of the remaining arbitrators, are sufficient. It is accepted in the doctrine that an award acquires legal force when it is signed.

6. Article 1197 § 2 [of the PCPC – insertion added] stipulates that an arbitration award shall state the reasons for the ruling. Indication of the reasons for a ruling, on which an arbitral tribunal has based the award, does not have to comply with the requirements for the proceedings before a state court. In particular, an arbitral tribunal is not obliged to indicate the legal basis of its ruling. However, it shall result out of the reasoning on what facts an arbitral tribunal has based its ruling and which circumstances have been found by the arbitral tribunal to be significant to resolve a dispute.

7. Article 1197 [of the PCPC – insertion added] does not require an arbitration award to contain a ruling regarding the demands of the parties. This, however, is obvious.

1. The public policy exception (…) is indeterminate, which leaves a court seized of a particular case with a wide range of discretion. If the exception is applied, the question is not whether an arbitration award is consistent with all relevant mandatory rules of the law, but whether it has caused an effect contrary to the fundamental principles of State legal order. Substantive review of arbitration awards is therefore limited to violation of the principles of legal order (…). If parties decide to submit a dispute to arbitration, they need to take these circumstances into account, including also little external control of arbitration awards (…). This does not mean, however, that if a dispute is submitted to arbitration, the parties have to agree to all kinds of procedural and substantive shortcomings of the arbitration tribunal.

2. The fundamental principles of legal order being the basis of assessment of an arbitration award shall be understood not only as constitutional norms, but also as ground rules in particular fields of law (…), and examination of a case in the scope of the grounds for setting aside an award under Art. 1206 § 2 (2) of the Polish Civil Procedure Code shall not go beyond a serious violation of law (…).

3. The public policy exception covers both the fundamental principles of procedural and substantive legal order. Public policy may procedurally be the basis for assessment of an award in two aspects. Firstly, subject to assessment is the compliance of the procedure which led to issue of an arbitration award with the fundamental procedural principles of legal order, and secondly, subject to assessment are the effects of an award from the point of view of their compliance with the procedural legal order, i.e. whether they are compatible with the procedural law system (…).  

4. Compliance or non-compliance of an arbitration award with the fundamental principles of legal order is determined by the wording thereof; it is however not allowed to make such an assessment on the basis of facts and evidence unknown to the arbitration tribunal.

5. It cannot be (…) excluded in advance that due to the consequences for the appealing party, an award adjudicating interest from a different date than the date resulting from the terms of the contract and relevant legal regulations will be in breach of the fundamental principles of legal order, especially if the time lag is significant (…).   

1. By entering into an arbitration agreement, the parties revoke the competence of state courts to adjudicate the dispute, entrusting it to a body acting as per the will of the parties. Consequently, the state court control over an arbitration award, as much as it is necessary and statutorily guaranteed, is not instance control and by its nature must be incomplete, limited to the most far-reaching shortcomings and failures of arbitration, which are relevant not only from the point of view of the parties, but also of the general interest … .

2. [I]nfringement of the provisions of substantive law shall be examined in the proceedings initiated by a petition to set aside an arbitration award only when the infringed provisions set principles of the legal order of the Republic of Poland, whereby the public policy clause shall be interpreted restrictively.

1. [T]he proceedings initiated by a petition to set aside an arbitration award is not intended at a substantive review of an award corresponding to a review provided for in civil appeal procedure. The substantive review of an arbitration award by the court is limited to the assessment whether the issued award violates the principles of the legal order. The phrase ‘fundamental principles of the legal order’ used by the lawmaker (Art. 1206 § 2 point 2 of the Polish Civil Procedure Code) indicates unequivocally that it concerns such violations of provisions of substantive law that result in violation of the principles of the rule of law, and the award infringes the fundamental legal principles in force in the Republic of Poland and is in conflict with the applicable legal order, that is, it violates the principles of the political and socio-economic system. An assessment made ad casum, whether an arbitration award violates the fundamental principles of the legal order, should be made with caution and the interpretation of the phrase contained in the law should be rather of a constrictive character.

2. [T]he pacta sunt servanda principle should be considered one of the principles of the legal order of the Republic of Poland.

1. [A] petition to set aside an arbitration award is admissible only in strictly stipulated circumstances, enumeratively specified in Art. 1206 of the Polish Civil Procedure Code. A state court cannot consider a dispute on the merits in the proceedings initiated by a petition to set aside an arbitration award between the parties to arbitration proceedings … . Therefore, a consequence of submitting a dispute to arbitration is limitation of the state courts’ impact on how a dispute is resolved.

2. [T]he aforementioned Convention (the Convention on the Contract for the International Carriage of Goods by Road (CMR) – insertion added] is a ratified international agreement, to which the Republic of Poland is also a party. According to Art. 87 (1) of the Constitution, the Convention is a source of commonly binding law in the Republic of Poland. Therefore, it should not be accepted that an application of the provision [Art. 32 (1) and (2) – insertion added] of the Convention would infringe fundamental principles of the legal order of the Republic of Poland.

3. [E]ven if one assumed (but the Court of Appeal does not do that) that the interpretation of substantive law, in this case regarding a limitation of claims, made by the arbitral tribunal turned out to be incorrect, it should not be stated that such shortcomings infringe fundamental principles of the legal order. … .  The assessment is not in any way altered by the fact that in very similar factual circumstances, in cases between the same parties, the same arbitral tribunal as in this case, rendered rulings in favor of the petitioner.

1. [B]y entering into an arbitration agreement, the parties consciously waived submission to the strictures in place for the proceedings before a state court, including some procedural guarantees in such proceedings. Therefore, it is not unreasonable to state that by concluding an arbitration agreement, the parties limit their constitutional right to court. When deciding to submit a dispute for resolution by an arbitral tribunal, the parties must be aware of both positive and negative effects of including particular statements in an arbitration agreement.

2. Unlike a state court, an arbitral tribunal considering cases does not need to strictly apply the provisions of substantive law, but may also base its ruling on principles of equity or rule on the basis of general principles of law. Consequently, review by the state court of awards made by arbitral tribunals is limited to the instances strictly defined by the law … .

3. [E]xamination of a case with respect to the grounds for setting aside an arbitration award under Art. 1206 § 2 of the Polish Civil Procedure Code may not proceed beyond aggravated violations of law, and the parties cannot challenge an arbitration award when such an award was delivered after properly conducted proceedings, but does not satisfy their expectations. A petition is possible only when it has been demonstrated that an arbitration award violates the fundamental principles of the Polish legal order … .

4. [P]ursuant to Art. 1197 § 2 of the PCPC, an arbitration award shall contain the reasons for the award, but this does not mean, however, that the reasoning shall be constructed strictly according to the rules indicated in Art. 328 § 2 of the PCPC … . This follows from the character of the proceedings before an arbitral tribunal, which are not as formalized as the proceedings in civil procedure. Without any doubt, however, the grounds of an arbitration award should be clear and reflect a reasoning analyzable in terms of the grounds to dismiss the petition … .

1. A state court… examines the legitimacy of a petition [to set aside an arbitration award – insertion added] only within the prerequisites indicated in Art. 1206 § 1 and 2 of the PCPC, but ex officio takes into account only the grounds provided for in Art. 1206 § 2 of the PCPC.

2. A violation of general provisions of civil procedure law or overriding principles of civil procedure may serve as a reasonable ground for setting aside an arbitration award only if it results in violation of fundamental principles of the legal order of the Republic of Poland or principles of social coexistence. A violation of overriding principles in force in the Republic of Poland must result – if it is to constitute a ground for setting aside an arbitration award – in an infringement of the substantive law.

3. The party would be deprived of the possibility to defend its rights if the arbitral tribunal had entirely prevented the petitioner or its ad litem attorney from making statements or taking a procedural position in writing or in speech.

4. [I]f an arbitration award is contrary to the public policy of the Republic of Poland, this does not mean that such an award could be contrary to any of the principles of the state legal order, but that it is contrary only to the fundamental principles of the legal order of the Republic of Poland, i.e., constitutional principles, but also principles resulting from the procedural civil law and substantive civil law.

5. The concept of public policy is a concept narrower than the concept of the rule of law which entails the obligation to apply, in principle, all legal standards, including absolutely binding legal standards.

1. The scope of a state court’s review and its determinations are limited to allegations raised in a petition to set aside an arbitration award. A state court has the authority only to review whether the reasons for setting aside of an award are present (…) and only in this limited scope the proceedings are similar to the proceedings before a state court of II instance.

2. [I]f a party had the possibility to raise before an arbitral tribunal an allegation of being deprived of the right to protect their rights, but they did not do that, it is inadmissible to raise a plea that the party was deprived of the ability to protect their rights before the arbitral tribunal in view of the party not being actually deprived of the ability to protect their rights.

3. [I]n 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 neither subject to a state court’s assessment (…). The essence of a petition to set aside an arbitration award is to create a control mechanism respecting, on the one hand, separateness and autonomy of arbitration, and on the other hand, preventing non-state courts’ rulings infringing the rule of law from functioning in the legal circulation.

4. Competence of the court hearing a petition to set aside an arbitration award does not – as a matter of principle – include the control of the award’s compliance with substantive law and review of correctness of factual findings, except for ruling based on obviously selective and unreliable examination of evidence.

5. [T]he proceedings concerning 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 to verify the applicant’s allegations as to the existence of the grounds raised in the application provided for in Art. 1206 § 1 of the PCPC and assess whether any of the prerequisites provided for in Art. 1206 § 2 of the PCPC exist, whether or not asserted by the applicant.

6. “The public policy clause”, like any general clause, is not precisely defined, which leaves great discretion to the court ruling on a specific case. Nevertheless, on the basis of this clause, review of the constitutive elements of an arbitration award may not take on the dimensions proper for a review of the merits (correctness) of the award. The prohibition of a review of the merits of an award is related to the essence of the application of the public policy clause. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order (…).

7. In the case-law, it is indicated that an infringement, by an arbitral tribunal, of substantive law applicable to the resolved relationship, compliance with which – as a matter of principle – is prescribed in Art. 1194 § 1 of the PCPC, may result in setting aside of an award of this tribunal only when it is connected with an infringement of the fundamental principles of the legal order (…). The primary difference between proceedings commenced by an appeal and proceedings commenced by a petition to set aside an arbitration award is demonstrated by the permitted scope of interference of a state court in the rulings of arbitral tribunals.

According to Art. 1207 § 1 and 2 of the Polish Civil Procedure Code, Art. 368 of the Polish Civil Procedure Code shall apply accordingly to a petition to set aside an arbitral award, and the provisions on appeal shall apply accordingly to the petition to set aside an arbitral award.

1. The consequence of submitting a dispute to arbitration is the limitation of the influence of common courts on how the dispute is resolved. When considering a petition to set aside an arbitration award, state courts do not examine arbitration awards on the merits. They review them only to a limited extent – only as regards the conditions provided for in Art. 1206 of the PCPC.

2. Only the absolutely binding legal standards (ius cogens) – and only those that are deemed to be of fundamental importance – may justify resorting to the public policy clause. These may be standards of a systematic, substantive or procedural nature – however, their role in the national legal system has to be significant. Application of the public policy clause is not intended to correct any and all shortcomings of an arbitration award, but rather to protect the integrity of the public order. Therefore, the assessment whether there are grounds for applying the public policy clause need to be formulated ad casum in a restrictive manner… .

3. In particular, it is not the task of the state court to inspect whether an arbitration award has been founded on the facts relied upon in the reasons for the arbitration award and whether these facts have been properly determined… .

4. The public policy clause, according to Art. 1206 § 2 of the PCPC, has the character of a general clause. Therefore, its concretization is the task of courts… . Because of the indefiniteness of the public policy clause, judges enjoy considerable discretion. Moreover, taking into account that an arbitration award is an expression of specific will of the persons competent to resolve a dispute, the clause is to be a kind of “safety valve” protecting the legal system against the unacceptable consequences of functioning, in the legal circulation, of an arbitration award delivered in violation of the fundamental principles of the legal order.

5. Only an allegation (or threat) of violation of the public policy clause may justify review of an arbitration award on merits.

6. The fundamental… principles [of the legal system of the Republic of Poland – insertion added] shall be understood to mean constitutional principles as well as the principles of other fields of law including civil law, family law, labour law and procedural law… .

7. The following principles are accepted by the doctrine and the case-law as the fundamental principles of the legal order: with regard to the procedural law, among other things: the principle of equal treatment of the parties; and with regard to the substantive law, among other things: the principle of the restitutive nature of liability for damages, the principle of the autonomy of the will of the parties and the principle of equity of the entities, the pacta sunt servanda principle, the principle of equal treatment of creditors in arrangement proceedings, the principle of economic freedom. Referring to the procedural legal order, it should be emphasized that two issues are assessed: firstly – the legal compliance of the arbitration resulting in the delivery of an arbitration award, and secondly – the effects of the arbitration award after its recognition and enforcement from the point of view of consistency with the system of procedural law, including the effects of the award on the legal position of third parties. Nevertheless, in terms of substantive legal order, review of an arbitration award should consist in comparison of the ruling contained in the arbitration award with a hypothetical ruling which should be delivered account taken of the fundamental principles of the legal order. It is then only by confronting it with the arbitrators' award that it is possible to assess whether or not there has been a breach of public policy. Any finding of contradiction is not sufficient, but only such that involves a violation of the fundamental values (principles) which are expressed or protected by specific legal standards.

8. A state court ruling on recognition (enforcement) of another award cannot overlook the fact that another state court has already delivered a ruling in the same case. Therefore, it should be found that it follows from Art. 365 § 1 of the PCPC that by the state court ruling on recognition of the second arbitration award which is bound by the previous state court ruling, should not allow for the existence of two rulings in the legal circulation which, in the same case and between the same parties, would address the same issue differently, as this would undermine the authority of the justice system and the confidence in the courts, i.e. it would be contrary to the fundamental principles of the legal order of the Republic of Poland.

Prohibition of substantive control (of legitimacy) of an arbitration award is related to the essence of the application of the public policy clause. When the clause is used, it is not the point that the award which is subject to the assessment must be consistent with all relevant absolutely binding provisions of law. The point is whether the award has had an effect contrary to the fundamental principles of the national legal order. Procedural public policy may be a basis for assessment of an award in two respects. Firstly, subject to assessment is the compliance of the procedure which has led to issue of the arbitration award with the fundamental procedural principles of legal order, and secondly, subject to assessment are the effects of the award from the point of view of their compliance with the procedural legal order, i.e. whether they are compatible with the procedural law system.   

1. If (…) a petition to set aside an arbitration award is based on the fact that the award was obtained by means of an offence or the award was issued on the basis of a forged or altered document or the petition is based on the charge of res iuducata, the petition may be filed within the time limit calculated from the day when the party learned of that ground. 

2. An arbitration agreement is a contract to which provisions of the Polish Civil Code apply.

1. Relying on objective illegality of actions of the other party to an agreement and possible concurrent grounds of liability does not override the competence of an arbitral tribunal.

2. [A]n arbitration award may be assessed in the context of procedural public order. Subject to assessment is the compliance with the fundamental procedural principles of legal order of procedure that have led to the delivery of the arbitration award (…).

3. An allegation of infringement of Art. 1183 of the Polish Civil Procedure Code may be justified, if an arbitral tribunal conducts proceedings in omission of evidence offered by a party, but only if this evidence was necessary to resolve the case (…).

4. The control of elements comprising an arbitration award cannot be of the same scope as substantive control (of validity) of such an award.

5. When hearing a case, an arbitral tribunal may be guided by legal intuition, and it does not need to – unlike a state court – strictly apply the provisions of substantive law, but may base its ruling also on the principles of equity or good faith. According to the public policy clause expressed in Art. 1206 § 2 point 2 of the Polish Civil Procedure Code, an arbitration award shall be set aside when effects determined by the award are incompatible with a specific norm which is one of the fundamental principles of this public policy (…).

6. The arbitration award that protects one of the partners encumbered with the contractual risk of failure of the business venture does not infringe upon trading certainty and the principle of trading security, in the situation when the investor (the Fund) could limit its own economic risk resulting from engagement of funds by correct, consistent with the agreement, and, above all, loyal conduct.

7. Application of the public policy clause is not aimed at verification whether the assessed arbitration award id compliant with all applicable absolutely binding provisions of law, but whether effects of such an award are contrary to the fundamental principles of national legal order.

1. The mere potential option of setting aside of a judgment dismissing a petition to set aside an arbitration award is not a ground for ex officio suspending of the proceedings initiated by a request for enforcement of the arbitration award. This could only happen at the joint request of the parties (Art. 178 of the PCPC)… .

2. A party relying on… a document as evidence in a case, should… take into account that such evidence may be used by the arbitral tribunal in order to determine the factual state or to interpret the declarations of will of the parties.

3. When it decided to rely in the arbitration proceedings on the agreement of 29 October 2014, the party relying on the agreement had to reckon with the fact that this agreement could be used by the arbitral tribunal also to its disadvantage.

4. The said agreement… The contractual provision contained therein that “the agreement may be disclosed to the Court of Arbitration in the necessary scope, but the agreement shall not be used as evidence to the advantage of any party or as a basis for interpretation of any contractual provision of the contract”… did not establish a fundamental principle of procedure that would be binding for the arbitral tribunal. The prohibition to use this document as evidence was binding only for the parties to the contract. Evidentiary agreements are not known in the Polish civil procedure. It is difficult to accept that the parties could, by means of an agreement, exclude procedural provisions relating to evidence prohibition, and with a binding effect for the court at that, with the exceptions resulting from legal regulations. Relying by a party on the agreement… as evidence in the case could be alternatively assessed as contractual disloyalty of the parties… .

5. Pursuant to Art. 1217 of the PCPC, in proceedings for enforcement of an arbitration award issued in the Republic of Poland, the court shall not examine the circumstances referred to in Art. 1214 § 3 of the PCPC (identical to those set out in Art. 1206 § 2 of the PCPC), if a petition to set aside the arbitration award was denied with legal finality. The provision of Article 1217 of the PCPC provides for a binding effect of a final judgment dismissing a petition to set aside an arbitration award other than in relation to a legal relationship (resulting from Article 365 of the PCPC). It follows from Art. 1217 of the PCPC that the state court is bound by the determination regarding admissibility of the arbitration award, and that the arbitration award is not contrary to the public policy clause, therefore the state court does not examine these issues after the petition to set aside the arbitration award was denied with legal finality.

6. [A]rt. 1210 of the PCPC. According thereto, at a closed session, a court may stay the enforcement of an arbitration award, but may condition the stay on submission of a security. It cannot be overlooked that this provision forms a part of the regulation of the proceedings initiated by a petition to set aside an arbitration award (title VII in part five in book four of the Polish Civil Procedure Code – Art. 1205-1211 of the PCPC), and its object is the stay of enforcement of an arbitration award. It does not constitute a ground for staying other rulings.

7. [I]n the present legal state, the only basis for lodging a complaint regarding the appellate court order on enforcement of an arbitration award issued in the Republic of Poland is Art. 1214 § 4 of the PCPC.

1. The phrase “fundamental principles of the legal order” used in Art. 1206 §2(2) of the Civil Procedure Code refers to such a violation of provisions of substantive law that will result in violation of the principles of the rule of law, and the award infringes the overriding legal principles in force in the Republic of Poland and conflicts with the legal order, that is, it violates principles of the political and socioeconomic system.

2. The evaluation conducted in the specific case as to whether the ruling violates fundamental principles of the legal order must be made cautiously, and the wording used in the code should be interpreted narrowly.

3. When deciding to include an arbitration clause in a contract, the parties to a civil relationship consciously waive the formal protection provided to the participants in a judicial trial by various provisions of the Civil Procedure Code…. Consequently, they also agree to procedural conditions that are subject to significant autonomy in the course of the arbitration proceeding, leading to minimal external oversight of awards by the arbitral tribunal….

4. Procedural public policy may also be grounds for review of an arbitration award, in two aspects: the evaluation of the consistency of the procedure leading to issuance of the ruling by the tribunal with the fundamental procedural principles of the legal order, and the effects of such ruling from the point of view of their compliance with procedural public policy, that is, whether they can be reconciled with the system of procedural law.

5. The notion of the “grounds” [for an award] within the meaning of Art. 1197 §2 of the Civil Procedure Code does not literally mean “justification” [of a judgment] within the meaning of the Civil Procedure Code, and this provision deliberately uses the word “grounds” and not “justification.” However, the grounds must contain the elements of reasoning of the arbitral tribunal which demonstrate the correctness (soundness) of the ruling in light of the entirety of the material gathered in the case.

6. Conduct of a fair proceeding is the task of both the state court and the arbitral tribunal. That the arbitral tribunal is not bound by regulations of procedure before a state court and under the Civil Procedure Code itself establishes the rules and method of proceeding before it, as agreed by the parties and as it deems proper, does not mean arbitrariness with respect to the principles of judicial civil procedure of an adversarial nature.

1. [I]n 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. The essence of a 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 infringing the rule of law from functioning in the legal circulation.

2. The proceedings to set aside an arbitration award do not lead to reconsideration of the merits of the dispute between the parties, but are intended only to verify the applicant’s allegations on the existence of the grounds raised in the petition provided for in Art. 1206 § 1 of the PCPC, and to assess whether any of the grounds provided for in Art. 1206 § 2 of the PCPC exist, whether asserted by the petitioner or not… .

1. A state court takes into account the grounds for setting aside an arbitration award set out in Art. 1206 § 1 of the Polish Civil Procedure Code (…) only upon a request of a party. Therefore, a state court is, in this regard, bound by the grounds cited in the petition.

2. [I]n proceedings initiated by a petition to set aside an arbitration award, a state court does not examine the accuracy of the assessment of evidence made by the arbitral tribunal, the correctness of factual findings, the accuracy of interpretation and application of the substantive law. The legitimacy of a specific method of resolving the disputed legal relationship by an arbitral tribunal is neither the subject to assessment by a state court. The essence of a petition to set aside an arbitration award is to provide a review mechanism respecting, on the one hand, the separateness and autonomy of arbitration, and, on the other hand, preventing the functioning in the legal system of rulings rendered by non-state courts in breach of the rule of law. Proceedings initiated by a petition to set aside an arbitration award do not, therefore, result in reconsideration of the merits of the dispute between the parties, but is only to verify the petitioner’s allegations concerning the existence of the grounds raised in the petition and set out in Art. 1206 § 1 of the PCPC, and provide an assessment as to whether any of the grounds provided for in Art. 1206 § 2 of the PCPC exist (…).

3. [T]he notion of the public policy clause within the meaning of Art. 1206 § 2 (2) of the PCPC is commonly identified with the fundamental constitutional principles and the prime principles of particular fields of law, including civil, family and procedural law. An arbitration award may be set aside on the basis of the public policy clause, if such an award is contrary to a specific, mandatory legal norm included in the aforementioned principles. In the case law of the Polish Supreme Court (…) it has been indicated, for example, that the fundamental principles of the Polish legal order include, among others, the principle of freedom of will in civil law, the pacta sund servanda principle and the principles setting limits of the freedom to form contracts and consequently the limits of the pacta sund servanda principle, as wells as the principle of freedom of business activity, the principle of contractual justice and the principle of compensatory nature of liability for damages (…).

4. [P]ursuant to Art. 1197 § 2 of the PCPC, an arbitration award shall contain the reasons for the award. However (…) it should be assumed that the requirement set out in Art. 1197 § 2 of the PCPC is not equivalent to the obligation of an arbitral tribunal to draw up a reasoning containing all elements provided for in Art. 328 § 2 of the PCPC. As the Polish Supreme Court indicates, to recognize that the requirements set out in Art. 1197 § 2 of the PCPC have been fulfilled, it is sufficient to be able infer from the reasons drawn up by the arbitral tribunal what premises were applied by the arbitral tribunal when the tribunal ruled on the parties’ demands (…)

5. No award with respect to capitalised interest may also justify (…) the allegation that the arbitration award violated Art. 481 § 1 of the Polish Civil Code. However, taking into account particularly the dispositive nature of this legal norm, it cannot be classified as one of the prime principles of civil law. Therefore, such a violation cannot be deemed a ground for setting aside an arbitration award on the basis of Art. 1206 § 2 (2) of the PCPC. 

1. A petition to set aside an arbitration award is not… an ordinary legal remedy (for example, an appeal) whereupon a court may reassess the merits of the case and the accuracy of the resolution of a dispute by the arbitral tribunal on the merits. Therefore the lawmaker… specified strictly defined grounds for a petition only. However, the lawmaker also specified … that only two circumstances may be taken into account ex officio, namely, that the dispute could not be resolved by the arbitral tribunal or that the arbitration award is contrary to the fundamental principles of the legal order of the Republic of Poland.

2. Experiences connected with the application of the public policy clause in international civil proceedings and private international law may be used by interpretation of the public policy clause… .

3. [I]f an arbitration award is contrary to the public policy of the Republic of Poland, this does not mean that such an award could be contrary to any of the principles of the state legal order, but that it is contrary only to the fundamental principles of the legal order of the Republic of Poland, i.e. constitutional standards, but also standards resulting from labour law, family law or procedural civil law… . Therefore, the concept of public policy is a concept narrower than the concept of the rule of law which entails the obligation to apply, in principle, all legal standards, including absolutely binding legal standards. The following principles have deemed by the doctrine to be the fundamental principles of legal order in terms of civil procedure: the principle of equal treatment of the parties to arbitration, or in terms of substantive law: the principle of freedom of the contract, the pacta sunt servanda principle.

4. It needs to be borne in mind that an arbitral tribunal enjoys much greater freedom in terms of conducting proceedings, including evidence proceedings, than a state court does. According to Art. 328 § 2 of the PCPC, reasoning of a state court’s judgment shall provide the factual basis for the ruling… However, pursuant to Art. 1197 § 2 of the PCPC, an arbitration award must only contain the reasons for the award… . Indication of the reasons which the arbitral tribunal relied upon by delivery of an award does not have to comply with the requirements of state court proceedings. In particular, an arbitral tribunal is not obliged to indicate the factual basis for its award. However, it must result from the reasoning on what facts the arbitral tribunal relied upon and which circumstances it considered necessary to resolve the dispute.

5. [T]he character of arbitration proceedings makes it possible to apply the rules indicated in Art. 322 of the PCPC.

6. The limits of the discretion of an arbitral tribunal in conducting evidentiary proceedings are determined by the requirements of thorough examination of the circumstances essential to resolve the dispute and of equal treatment of the parties to arbitration. Depriving a party of the opportunity to defend its rights should be interpreted narrowly. Arbitral tribunal’s rejection of evidence offered by a party because it finds the evidence unnecessary does not constitute depriving the party of an opportunity of a defense.

7. An arbitral tribunal has, like any other court, the power to assess a contract in terms of whether specific rights and obligations arise out of the provisions of the contract for one or both parties. If the assessment made in this respect, taking into account the joint intention of the parties and the purpose of the contract, is based on evidence gathered in the case, including the hearing of the parties, an assessment unfavourable to one of the parties cannot be regarded as a violation of the fundamental public policy principle.

8. The fundamental principles of the legal order include, among other things, the principle of civil liability for the damage caused…, the principle of the restitutive nature of liability for damages… .

1. The rules of evidence assessment provided for in Division III Chapter 1 of the PCPC, including Art. 233 of the PCPC – are not binding in arbitration proceedings, where the principle is that the parties themselves agree on the rules and the manner of conducting of the proceedings, and in the event no such arrangements have been made – the arbitral tribunal conducts the proceedings in a manner it considers appropriate (Art. 1184 of the PCPC).

2. [A] state court hearing a petition to set aside an arbitration award does not examine whether the award is based on the factual material of the case (unless the arbitration award is completely detached from it, but such a situation did not take place in the case) and does not review the correctness of the factual findings made by the arbitral tribunal, which are in principle binding, insofar as there had been no grounds for setting aside an arbitration award indicated in the petition. As regards the assessment whether an arbitration award is contrary to the fundamental principles of the legal order, which is a prerequisite of setting aside of an arbitration award provided for in Art. 1206 § 2 point 2 of the PCPC, such an assessment must take into account the content of the award, and not the correctness of the arbitration procedure.

3. The fundamental principles of the legal order being the basis of assessment of an arbitration award shall be understood as constitutional standards, but also as ground principles in particular fields of law. However, in all cases, these are supreme standards of a fundamental character. Pursuant to the public policy clause expressed in Art. 1206 § 2 point 2 of the PCPC, an arbitration award shall be set aside when effects determined by its content are irreconcilable with a particular standard being one of the fundamental principles of that legal order… .

4. Partial (or full) satisfaction of a claim covered by the  award of the Court of Arbitration is not a statutory ground indicated in Art. 1206 of the PCPC for setting aside of an arbitration award.

1. An allegation regarding shortcomings in the appointment of the arbitrator is inextricably linked with a violation of the rules of the procedure before an arbitral tribunal, including also… an infringement of equality of the parties in the proceedings.

2. Article 1193 of the PCPC expressly stipulates that there is a preclusion of allegations regarding a violation of relatively binding provisions or rules of procedure established by the parties themselves, including the rules contained in the Arbitration Rules.

3. Arbitral tribunal’s conduct of the proceedings in disregard of the evidence offered by a party may justify an allegation of violation of Art. 1183 of the PCPC, if the evidence was necessary for the resolution of the case.

4. Lack of… evidential initiative, despite the motions submitted by both parties regarding the appointment of another expert witness by the Arbitral Tribunal, needs to be assessed as a failure to examine the merits of the case and such an activity constitutes, undoubtedly, a violation of the fundamental principles of the legal order of the Republic of Poland… . As it is indicated in the doctrine, also a violation of fundamental, prime principles of procedure constitutes a violation of the fundamental principles of the legal order… .

5. [T]he contract, according to which all disputes related to or arising out of the contract or performance of works, whether during the performance of the works or after their completion, whether before the refusal to perform them or another interruption of the contract or after, including disputes regarding an opinion, an instruction, a finding, a certificate or an assessment made by the engineer are subject to arbitration… Such provisions containing an arbitration agreement… shall be treated broadly, as they cover not only the contractual claims sought directly under the contract, but also claims sought on other legal grounds, including unjust enrichment or compensation for the injury caused.

6. [I]f the Republic of Poland was the place of arbitration and the case was heard there and the final award was delivered by the Court of Arbitration, Art. 1205 § 1 of the PCPC, which justifies jurisdiction of the Polish court to consider a petition to set aside an arbitration award, shall apply… .

Redefinition of the character of a petition to set aside an arbitration award is, according to the Court of Appeal, particularly significant for the interpretation of Art. 1208 of the Polish Civil Procedure Code in its part concerning local jurisdiction of the court of appeal before which the petition is brought. It is the court of appeal whose territory includes the court that would have been proper to hear the case if the parties had not made an arbitration agreement. It should be noted here that the entity initiating the proceedings (the petitioner) was the respondent in the arbitration proceedings. Therefore, taking the view that a petition to set aside an arbitration award is not a lawsuit, but an extraordinary remedy at law, the petitioner cannot be treated as a claimant. Consequently, it is not entitled to invoke alternate jurisdiction of courts.

1. It should be noted that according to Art. 1207 § 1 and 2 of the PCPC, the provisions governing an appeal shall apply accordingly to a petition to set aside an arbitral award, with modifications resulting from title VII part V of the Polish Civil Procedure Code. Although it is a form of review, a petition is not, however, an appellate instrument, as unlike in appellate proceedings, the role of the state court is not to reconsider the case resolved by the arbitration award, applying the provisions of substantive and procedural law. In the proceedings before a state court initiated by a petition, the court does not examine whether the arbitration award is contrary to substantive law or is grounded in the facts cited in the award, or whether these facts were properly established. The state court considers the case only from the perspective of the grounds for setting aside the award and evaluates the soundness of the petition only in the light of the grounds set forth in Art. 1206 § 1 and 2 of the PCPC, considering at its own initiative only the grounds set forth in Art. 1206 § 2 of the PCPC. A violation of general provisions of civil procedure law or overriding principles of civil procedure may serve as grounds for setting aside an arbitration award only if it results in violation of fundamental principles of the legal order of the Republic of Poland or principles of social coexistence. A violation of overriding principles in force in the Republic of Poland may result – if it is to constitute grounds for setting aside an arbitration award – in an infringement of the substantive law … .

2. [B]y entering into an arbitration agreement, the parties consciously waived submission to the strictures in place for the proceedings before a state court, including some procedural guarantees in such proceedings. Unlike a state court, an arbitral tribunal considering cases does not need to strictly apply the provisions of substantive law, but may also base its ruling on the principles of equity or rule on the basis of general principles of law. Consequently, review by the state court of awards made by arbitral tribunals is limited to the instances strictly defined by the law … .

3. [E]xamination of a case with respect to the grounds for setting aside an award under Art. 1206 § 2 point 2 of the PCPC may not proceed beyond aggravated violations of law, and the parties cannot challenge an arbitration award when such an award was delivered after properly conducted proceedings, but does not satisfy their expectations. A petition is possible only when it has been demonstrated that an arbitration award violates the fundamental principles of the Polish legal order … .

4. The public policy clause on the ground of Art. 1206 § 2 point 2 is commonly identified with fundamental constitutional principles and overriding principles of specific areas of law, including civil, family and procedural law. An arbitration award may be set aside on the basis of a public policy clause if such an award is found to be contrary to a specific, absolutely binding norm which is included in the aforementioned principles. In the case-law of the Polish Supreme Court … it was for example indicated that the fundamental principles of the Polish legal order include, among other things: the principle of freedom of the will of the parties in civil law, the pacta sunt servanda principle and the principles setting limits of the freedom to form contracts and consequently the limits of the pacta sunt servanda principle, as well as the principle of freedom of business activity, the principle of contractual justice and the principle of compensatory nature of liability for damages … .

5. The principle of being bound by a state court when the court rules, expressed in Art. 321 § 1 of the PCPC, is not one of the fundamental principles of the Polish legal order within the meaning of Art. 1206 § 2 point 2 of the PCPC … . The principle of being bound by a state court when the court rules is not of an absolute character, because in the PCPC there are provisions which oblige a state court to rule on issues not covered with a prayer for relief.

6. Except for the fact that the principle expressed in Art. 321 § 1 of the PCPC is not of an absolute character, also … its limits were subject to amendments made by the legislator … . Therefore, the prohibition of ruling above a prayer cannot be deemed as one of the fundamental principles of the legal order of the Republic of Poland, because it is not an absolute, stable and permanent principle. First fulfilment of these criteria justifies inclusion among the principles of fundamental principles.

7. [The principle of adversariality], undoubtedly very essential in civil procedure, is not of an absolute character – it is limited, for example, in proceedings regarding juveniles and in proceedings in labour law matters. The model of civil suit based on the principle of adversariality was also subject to many amendments. This principle is not characterized by permanence and stability, which – as it was indicated above – is relevant for the fundamental principles of legal order … .

1. Under Civil Procedure Code Art. 1183, “In a proceeding before the arbitral tribunal the parties shall be treated equally. Each party shall have the right to be heard and to present its arguments and evidence in support thereof.” Thus, in light of this requirement of Polish law, it should be recognized that the principle of equality of the parties is an overriding principle of civil procedure, even if not expressly addressed in any other provision of the Civil Procedure Code.

2. Impartiality is maintained when the arbitrator maintains the same distance in relation to each of the parties, is neutral, does not show favour, and also does not discriminate against either of the parties and is not prejudiced against any of the parties. These circumstances involving the failure to maintain impartiality by the arbitrator deciding the case are relevant under the grounds for setting aside an arbitration award. And thus, lack of impartiality of the arbitrator is the basis for an allegation of violation of the fundamental principles of procedure before the arbitral tribunal, as well as an allegation of inconsistency with fundamental principles of the legal order of the Republic of Poland (Civil Procedure Code Art. 1206 §1(4) and 1206 §2(2)).

3. The debtor of an attached claim should tender performance to the creditor. Fulfilment of such performance results in extinguishment of the debt to the original creditor. It is irrelevant whether this performance occurred outside a judicial enforcement proceeding or during the course of such proceeding as a result of measures taken by the court bailiff. Thus including such claim in an arbitration award violated a fundamental principle of the public policy of the Republic of Poland.

1. [W]hen examining the grounds and prerequisites provided for in Art. 1206 § 1 point 4 of the PCPC, the failure to comply with the requirements with regard to the fundamental rules of procedure before an arbitral tribunal, arising under statute or specified by the parties, is of significant character. One of these principles is to base an award on the established factual state, which takes place after hearing of evidence. In this place it should be noted that an arbitrator’s (arbitral tribunal’s) freedom in assessment of the relevance of given evidence or statements for establishment of the factual state and rendering of an award is proportionately broader than the freedom referred to in Art. 233 § 1 of the PCPC, and a court “reviews” an arbitration award only with reference to the “fundamental rules” of procedure before an arbitral tribunal. Thus, only if a state court finds that hearing of evidence by an arbitral tribunal has not been conducted at all, or has been incomplete or obviously faulty, in breach of the principles of logical reasoning, of linking facts together in a cause-and-effect chain, of selective admission of evidence in the case, or that evidence of only one party has been examined in groundless omission of the evidence requested by the other party etc., it is possible to find that the requirements set out in Art. 1206 § 1 point 4 of the PCPC had not been met.

2. According to the established case law of the Polish Supreme Court developed against the background of the interpretation of Art. 328 § 2 of the PCPC, which in fact refers to reasonings of state courts, and which may be auxiliarily and accordingly applied also to assess the legitimacy of a party’s claim regarding an arbitration award, successful reliance on this plea requires a party to demonstrate that the reasoning of the ruling subject to instance review is so inherently flawed that it does not contain information which would allow the court of higher instance to carry out such a review. So it should be deemed that an infringement of this provision in a way affecting the outcome of the case is present, if the reasoning of a ruling is so flawed that it is not possible to determine, basing on an analysis of the content thereof, whether substantive law and procedural law were correctly applied by the court… .

3. [A]n arbitration award shall be set aside under the public policy clause if violation of the substantive law by the arbitral tribunal results in consequences irreconcilable with the fundamental principles of the Polish legal system, i.e. effects that are plainly and grossly contrary to such principles – at least one of them… .

4. The public policy clause, like any general clause, is not precisely defined, which leaves a great deal of discretion to the court recognising a given case, nevertheless, on the basis of this clause the review of constitutive elements of an arbitration award may not take on the dimensions proper for a review of the merits (correctness) of an award. The prohibition of a review of the merits (correctness) of an award is related to the essence of application of the public policy clause. In applying this clause, the point is not to determine whether an award is consistent with all relevant mandatorily applicable regulations of law, but to determine whether the award has had an effect contrary to the fundamental principles of the domestic legal order. The concept and meaning of the public policy clause, as a not being precisely defined, is subject to interpretation.

5. The fundamental principles of the legal order of the Republic of Poland include, for example, the right to court, understood as the right to have a case heard by an independent court in a fairly conducted procedure; a duty to redress loss by the party to a contract that failed to perform or improperly performed its obligation, if there is an ordinary causal link between the party’s actions and the loss; the principles that damages are due only when the aggrieved party has suffered a loss, the principle of economic freedom and the freedom of contracts, as well as the principles of autonomy of the will of the parties and equality of the parties; the pacta sunt servanda principle and the principle of contractual fairness; as well as the principle of compensatory character of liability, expressed in the prohibition of introducing sanctions in the form of pecuniary performances enriching one of the parties; the principle of the binding force of final court rulings; the obligation to specify the essentialia negotii of a contract in the contract. It was indicated in the case law that an infringement of the public policy clause may also constitute an obvious inconsistency of an arbitration award with the factual state… .

6. [T]he mere misinterpretation of substantive law made by the Arbitral Tribunal is not equivalent to an infringement of the rule of law and only such a misinterpretation may be a ground for finding a petition to set aside an arbitration award to be well-founded, as infringement of substantive law entails contradiction with the fundamental principles of the public order… .

1. Initiation of the proceedings to set aside an arbitration award is effected by filing of a petition and the ending of the proceedings to set aside an arbitration award means delivery of a ruling ending the proceedings in a given instance or another ruling permanently preventing the delivery of a ruling … .

2. A petition to set aside an arbitration award is not an appellate instrument, but a type of extraordinary judicial review by the state court over the activity of an arbitral tribunal. It follows that in the proceedings to set aside an arbitration award a state court cannot consider a dispute between the parties to the arbitration proceedings on the merits … . Despite introduction of Art. 1207 § 2 of the Polish Civil Procedure Code, in proceedings to set aside an arbitration award, the court of appeal exercises the control functions in a different sense – it does not rule on the merits of the case resolved by an arbitral tribunal, but it decides only whether the indicated grounds for setting aside an arbitration award exist. Therefore, many provisions concerning the appeal cannot apply at all, others seldom can apply directly … .

3. On the basis of the public policy clause expressed in Art. 1206 § 2 point 2 of the Polish Civil Procedure Code an arbitration award should be … set aside when effects determined by the award are incompatible with a specific norm which is one of the fundamental principles of this public policy. The public policy clause, like any general clause, is indefinite, which leaves to the court considering a specific case a great degree of discretion, nonetheless, review on this basis of the elements comprising the ruling of an arbitral tribunal cannot take the dimensions proper for a review of the merits (correctness) of the ruling … .

4. The autonomous position of arbitration as an alternative to the state courts means that the parties to arbitration must expect that review of the arbitral tribunal’s resolution by the state court does not and must not constitute the equivalent of appellate review typical for the state court system. Such review … must serve first and foremost to eliminate abuses of arbitration and the most far-reaching violations, relevant not only from the perspective of the parties, but also for the legal system in general … .

5. [I]t is deemed that even a misinterpretation of substantive law does not of itself result in an arbitral award being set aside as contrary to the public policy clause … .

6. [A]n arbitration agreement should be interpreted restrictively.

7. A different outcome of the assessment of the evidence than proposed by a party is not a violation of the rules of procedure before an arbitral tribunal.

1. [T]he proceedings before an arbitral tribunal do not have to consist of two instances. It depends only on the choice of the parties. So unless the parties agree otherwise, the proceedings before an arbitral tribunal consist of one instance (…).

2. [A]n arbitration award issued in the Republic of Poland may be set aside by a state court solely in proceedings initiated by filing of a petition to set aside the award. Therefore, it is not possible to control other verdicts of an arbitral tribunal, unless a special provision provides otherwise (…).

3. [O]nly such absolutely binding norms (…) which are deemed to be of fundamental (special) importance in a particular legal order, may justify a reference to the public policy clause. After all, application of the public policy clause is not intended to correct all shortcomings of an arbitration award. This results from the autonomy granted to arbitration. Certainly, a wrong settlement of the case in terms of facts or law is generally not sufficient to consider that an arbitration award is contrary to public policy clause. A state court is not entitled to examine the substantive legitimacy of an arbitration award.

4. [A]rt. 123 of the Polish Civil Code shall not be considered as a fundamental (basic) norm of the legal order. (…). Therefore, a possible infringement of Art. 123 of the Polish Civil Code cannot constitute an effective basis for a petition to set aside an arbitration award.

1. Art. 1206 of the PCPC stipulates grounds for a petition to set aside an arbitration award and this enumeration is of exhaustive character … . A state court hearing a petition is in principle bound by the grounds cited by the petitioner, however, the grounds for setting aside an award indicated in Art. 1206 § 2 of the PCPC shall be examined ex officio.

2. [A] petition [to set aside an arbitration award] is of quashing nature, as a state court can only set aside the arbitration award in full, in part or reject the petition, but the state court cannot rule on the merits of the case.

3. According to Art. 1207 of the PCPC, Art. 368 of the PCPC shall apply accordingly to a petition to set aside an arbitration award and the provisions governing an appeal shall apply accordingly to a petition to set aside an arbitration award, unless otherwise provided therein.

4. The assessment of whether an arbitration award violates the fundamental principles of the legal order should be thus conducted on a case-by-case basis, narrowly, and an affirmative conclusion may be reached only if the effects of the arbitration award would result in a material violation of the aforementioned principles. However, it should be emphasized that there is a great deal of autonomy of arbitration, essentially limiting the possibilities for review by the state court.

5. In the case law, the fundamental principles of the legal order include, among other things: the principle of civil liability for the injury caused …, the principle of the restitutive nature of liability for damages …, the pacta sunt servanda principle …, the principle of business freedom and freedom of contract, the principle of contractual fairness …, the principle of protection of property rights …, the principle of the autonomy of the will of the parties and the equality of entities … . The aforementioned enumeration is, naturally, only of an exemplary character, because the assessment regarding inconsistency of an arbitration award with the fundamental principles of legal order may be determined based on the analysis of a given case, however, with the proviso that it must be a discrepancy of obvious, general and fundamental character, i.e. a discrepancy which is incompatible with the principles of a democratic state of law, when an arbitration award infringes the governing legal principles in force in the Republic of Poland.

6. [P]ursuant to Art. 1197 § 2 of the PCPC, an arbitration award shall contain the reasons for the award, but this does not mean, however, that the reasoning shall be constructed strictly according to the rules indicated in Art. 328 of the PCPC, which stipulates necessary elements of the state court reasoning. This follows from the character of arbitration proceedings, which are not as formalized as civil law proceedings. However, without any doubt, the grounds of an arbitration award should be clear and reflect a reasoning analyzable in terms of the grounds to reject the petition, but in the properly formulated reasoning an arbitral tribunal is not obliged to refer to all the arguments and arguments presented by a party at any stage of the arbitration proceedings and in any form … . It is sufficient for the arbitral tribunal to consider all factual circumstances and arguments of a judicial nature, significant from the point of view of the award and the examined legal relationship.

7. The circumstance … that not all arguments and evidence were deemed well-founded and sufficiently significant for the outcome of the arbitral award does not mean that a party has been deprived of the possibility to defend its rights or that the principle of equality has been infringed.

8. [I]n arbitration proceedings, the tribunal may also disregard evidence motions of the parties, if the tribunal finds they are not necessary to examine the case or examination of the evidence encounters significant obstacles … .

1. [T]here is a great deal of autonomy in arbitration procedure, which is entirely consistent with the intentions of the lawmaker, distinctly limiting the review capabilities of a state court. The basic goal of this law is the rapidity of the procedure for resolving civil-law disputes, and not creation of an additional phase of pre-litigation proceedings. Parties deciding to submit a dispute to arbitration must take these conditions into account, which also include scant external review of arbitration awards.

2. [P]arties limit their constitutional right to court on their own by entering into an arbitration agreement … .

3. [A]n arbitration award may be set aside only on the grounds listed in Art. 1206 of the Polish Civil Procedure Code.

4. The arbitration tribunal’s violation of the substantive law governing the case, which is generally connected with Art. 1194 § 1 of the Polish Civil Procedure Code, is subject to review by the state court considering a petition to set aside an arbitration award only in terms of application of the public policy clause – ex officio or on the basis of a petition. Mere misinterpretation of the substantive law or misapplication thereof by the arbitral tribunal does not justify upholding of the petition. Infringement of the substantive law shall constitute a basis for setting aside of an arbitration award only insofar as its effects are contrary to the fundamental principles of the legal order. … interpretation of this term shall be restrictive and, as it is argued in the case law …, an assessment made ad casum whether an award violates the fundamental principles of the legal order should be made with caution.

5. Procedural public order may be a ground for assessing of an arbitration award in two aspects. First, the procedure which led to issuance of the arbitration award is assessed for its compliance with fundamental principles of the legal order. Second, the effects of the arbitration award are assessed from the perspective of their consistency with procedural public order, i.e. whether they are reconcilable with the system of procedural law, for example, whether they do not violate the principle of res iudicata or the rights of third parties.

6. In the case law, the fundamental principles of the legal order in terms of substantive law include, among other things: the principle of civil liability for the injury caused …, the principle of the restitutive nature of liability for damages …, the pacta sunt servanda principle …, the principle of business freedom and freedom of contract, the principle of contractual fairness …, the principle of protection of property rights …, the principle of the autonomy of the will of the parties and the equality of entities … .

7. Depriving a party of the possibility to defend its rights, within the meaning of Art. 1206 § 1 point 2 of the Polish Civil Procedure Code shall be equated with the party being objectively prevented from taking such actions which in fact change its procedural position … . A party is deprived of the possibility to take actions only when it was completely deprived of the possibility to defend its rights, i.e. when it was in a situation which prevented, and not only impeded or restricted, the pursuit of the claims before the tribunal … . The assessment whether a party was deprived of the possibility to defend its rights should be made in the light of specific circumstances of the case and the analysis whether a party was deprived of the possibility to take actions should start from consideration, whether procedural provisions were infringed and then it should be determined whether the infringement affected the party’s ability to take actions in the proceedings; finally, it should be assessed if despite these circumstances the party could defend its rights in the legal proceedings. When all these prerequisites are fulfilled cumulatively, it should be assumed that the party was deprived of the possibility to take actions … .  

8. The public policy clause, like any general clause, is not precisely defined, which leaves a great deal of discretion to the court adjudicating a given case, but nonetheless on the basis of this clause, the review of constitutive elements of an arbitration award may not take on the dimensions proper to a review of the merits (correctness) of an award. The prohibition of a review of the merits (correctness) of an award is tied to the essence of application of the public policy clause. In applying the clause, the point is not to determine whether an award is consistent with all relevant mandatorily applicable regulations of law, but only to determine whether the award has had an effect contrary to the fundamental principles of the domestic legal order … .

1. Between the arbitral tribunal ruling again on the basis of the same arbitration clause (Civil Procedure Code Art. 1211) following setting aside of the previous award under Civil Procedure Code Art. 1205 et seq., and the court that granted the application to set aside the award, there is not a relation analogous to that between the courts of first and second instance in the structure of the state courts. The Civil Procedure Code does not adopt the construction encountered in some legal systems in which a state court granting an application to set aside an arbitration award can remand the case to the arbitral tribunal for reconsideration. The arbitrators’ duties generally last until issuance of the arbitration award (Civil Procedure Code Art. 1199); granting of the application results in setting aside the award, while the further proceedings depend on the decisions of the parties, provided however that the arbitration clause remains in force unless the parties agreed otherwise (Civil Procedure Code Art. 1211). A consequence of this is that there is no room for the arbitral tribunal to be bound by the legal evaluation or directions as to the further proceedings, in line with the rule adopted in Civil Procedure Code Art. 386 §6, and this state of affairs was not changed by the amendment of Civil Procedure Code Art. 1207 made by the Act of 10 September 2015 Amending Certain Acts to Support Amicable Dispute Resolution Methods (Journal of Laws Dz.U. 2015 item 1595), calling for application by analogy of regulations on appeals in proceedings on an application to set aside an arbitration award.

2. The fact that the legal evaluation is not binding as it would be in the model of appellate review does not mean that the findings and legal views expressed in the judgment of the state court granting an application to set aside an arbitration award are irrelevant to the arbitral tribunal considering the case anew; the arbitral tribunal must take the judgment into account and draw the relevant conclusions from it within its general obligation to seek an award that will not be subject to being set aside pursuant to review by the state court. The possibility of indirectly instructing the arbitral tribunal by the court considering an application to set aside an arbitration award is provided for only in Civil Procedure Code Art. 1209, but this provision is exceptional, and considering the autonomy of arbitration it cannot serve as the source of generalizations.

3. Guided by the assumption of the complementarity and equal importance of both aspects of substantive legal finality, as well as purposive considerations, the position should be approved that [Civil Procedure Code Art. 1206 §1(6)] also covers the case where an arbitration award is issued in violation of the binding legal finality of a court judgment. Leaving aside the question of whether in this state of affairs the conflict between the arbitration award and the judgment of a state court can be reviewed pursuant to the public policy clause or must be pleaded in the grounds for cassation as a violation of Civil Procedure Code Art. 1206 §1(6), such a conflict can be said to exist only when the arbitration award substantially interferes with the findings covered by the binding force of the state court judgment.

4. Submission of a case to the jurisdiction of an arbitration court removes the dispute between the parties from the jurisdiction of the state courts. The competence of the arbitral tribunal in this respect is not merely in the nature of a preliminary jurisdiction; to the contrary, pursuant to the parties’ intentions, the arbitral tribunal takes the place of the state court with the purpose of independent and complete resolution of the dispute between the parties. The autonomous position of arbitration as an alternative to the state courts means that the parties to the arbitration must expect that review of the arbitral tribunal’s resolution by the state court does not, and must not, constitute the equivalent of appellate review typical for the state court system. Such review, while necessary and universal in a comparative-law context, must serve first and foremost to eliminate abuses of arbitration and the most far-reaching violations, relevant not only from the perspective of the parties but also for the legal system in general.

5. The nature of the review exercised by the state courts over rulings by arbitral tribunals means that a possible error in interpretation of substantive law cannot per se lead to setting aside the arbitration award, unless the error would result in violation of a fundamental principle of the legal order.

6. One element of public policy is the general assumption of the need for stability of long-term states of facts, while the consequences of application of regulations realizing this assumption in specific situations essentially affect the individual interests of the parties, and possible errors in this respect are generally errors in interpretation, escaping the review of the state courts. This is how the view already expressed in the case law of the Supreme Court that an erroneous interpretation of regulations on the limitation on claims does not make an arbitration award inconsistent with fundamental principles of the legal order, should be understood.

7. Violation of a regulation of mandatory applicability is not tantamount to violation of fundamental principles of the legal order.

1. The difference between ruling on the basis of the principles of equity and application of Art. 5 of the Polish Civil Code lies is the scope of the interference. Resolution of a dispute on the basis of the principles of equity allows an arbitral tribunal to substitute positive law with social norms and to assess all circumstances of the disputed relationship according to this criterion, whereas application of Art. 5 of the Polish Civil Code is limited to assessment of compliance of the exercise of a subjective right with social norms.

2. [T]he public policy clause makes it possible to eliminate systemically defective arbitration awards that grossly transgress against the foundations of the Polish legal order.

3. [A]ssessment whether the principle of pacta sunt servanda has been infringed as a result of a restriction arising out of a contractual subjective right, especially in the case when an arbitral tribunal rules on the basis of legal provisions (Art. 1194 § 1 of the PCPC) must include an examination of the grounds of applying Art. 5 of the Polish Civil Code, because only this way it may be assessed whether the foundations of the legal order have been violated or not.

1. That an arbitrator has knowledge about a given legal institution and presents it, evaluates specific legal institutions and financial instruments, conducts lectures and writes publications, does not constitute a circumstance raising doubts, let alone justified doubts, as to his impartiality and independence.

2. Publication of comments of an expert nature on specific subjects, analyzing them, preparing private opinions for other entities resulting from a broader analysis of practices on the foreign exchange market, reflecting all of the market participants and their intentions, does not constitute a circumstance disqualifying an arbitrator.

3. Under Civil Procedure Code Art. 1173 §1, an arbitrator must be an independent and impartial person. These are fundamental characteristics required of an arbitrator, as an element of the right to a fair trial is the party’s right to consideration of its case by an impartial and independent court. This has to do with the absence of relations between the arbitrator and the parties to the dispute that could affect the substance of the award.

4. The IBA Guidelines on Conflicts of Interest in International Arbitration … are designed to assist in the practice of determining the circumstances that may generate justified doubts as to an arbitrator’s impartiality and independence, which circumstances are subject under applicable national law to mandatory disclosure by a candidate for arbitrator, and which are justified by the open-ended nature of the concepts of “impartiality” and “independence.” The guidelines are not of normative relevance, but establish certain standards on how to evaluate specific situations from the point of view of the requirement for the arbitrator’s impartiality and independence. They are commonly recognized in arbitration practice as a document in the nature of best practice, indicating circumstances that enable an assessment, particularly in ambiguous situations. The document sets forth general standards concerning impartiality, independence and disclosure, and a detailed section with examples of conflict of interest, classifying them in terms of the possible occurrence of justified doubts as to an arbitrator’s impartiality and independence.

5. Civil Procedure Code Art. 1174 §2 is devoted to the issue of removal of an arbitrator, providing that an arbitrator may be removed only when circumstances exist generating justified doubts as to his impartiality or independence, although there is a sound argument that the circumstances involving a state court judge can help interpret this section by analogy. When evaluating this condition, objective criteria of assessment are relevant, not the subjective beliefs of the party filing the challenge.

6. In a situation where a party aware of circumstances that could give rise to justified doubts as to an arbitrator’s impartiality or independence does not exercise its rights, it forfeits the right to reserve them until filing an application to set aside the arbitration award (Civil Procedure Code Art. 1193). A party aware of a given circumstance cannot passively wait to see what kind of award is issued in the case and then condition its actions with respect to challenging the arbitrator on the result. What is relevant is that the circumstances relied on by the party were known to the party, and when they were known.

7. Whether a party exercised its right to present to the state court the ruling on the issue of the existence of grounds to remove an arbitrator is relevant to the further course of the proceedings. In a situation where the party did not challenge the arbitrator before the state court pursuant to Civil Procedure Code Art. 1176 §2, the party forfeits this basis for subsequent challenge to the arbitration award using an application to set aside the award relying on the grounds concerning the arbitrator which were previously existing and known to the party.

1. Although it is a form of review, a petition [to set aside an arbitration award] is not an appellate instrument, as unlike in an appellate proceeding, the role of the state court is not to reconsider the case resolved by the arbitration award, applying provisions of substantive and procedural law. In the proceeding before the state court initiated by the petition, the court does not examine whether the arbitration award is contrary to substantive law or is grounded in the facts cited in the award, or whether these facts were properly established. The state court considers the case only from the perspective of the grounds for setting aside the award and evaluates the soundness of the petition only in light of the grounds set forth in Civil Procedure Code Art. 1206 §§ 1 and 2, considering at its own initiative only the grounds set forth in Art. 1206 §2.

2. By adopting an arbitration clause, the parties limit their own constitutional right to resort to the courts. When deciding to submit a potential dispute to an arbitration court for resolution, they must be aware of both the positive and negative consequences of including relevant provisions in the arbitration clause. Unlike a state court, an arbitration court considering cases need not strictly apply provisions of substantive law, but may also base its ruling on principles of equity, or rule on the basis of general principles of law. Consequently, review by the state court of rulings by arbitration courts is limited to the instances strictly defined by law.

3. Ruling under principles of equity (ex aequo et bono) consists of seeking a resolution to a dispute in accordance with the directives of fairness and justice, as understood by the arbitrators, regardless of the legal norms in force. This does not mean arbitrariness in the assessment of the case or the ability to ignore the state of facts, and thus the arbitrators must also admit evidence, analyze the collected material, and take into consideration the provisions of the contract in force between the parties.

1. A petition [to set aside an arbitration award] in the current shape, maintaining its distinct character with all its limitations, in particular concerning the grounds of the petition, is similar to an appeal. If a petition is well-founded, a state court may only revoke an arbitration award, which does not lead to expiration of the arbitration agreement (Art. 1211 of the PCPC) and should not be treated as consideration of the merits of the case submitted to arbitration. A ruling of a state court frustrates the effects of an arbitration award if any of the grounds indicated in Art. 1206 of the PCPC occurred, however, a ruling of a state court does not resolve, as a matter of principle, the legal dispute between the parties which was referred to arbitration with the exception of determining that an arbitration agreement does not exist, is invalid, ineffective or lost its legal power according to the applicable law.

2. Commencement of proceedings to remove an arbitrator before the conclusion of the proceedings before an arbitral tribunal results in the proceedings regulated in Art. 1176 of the PCPC being the proper procedure to consider the application and the assessment whether there were grounds to remove an arbitrator. However, in the situation of conclusion of proceedings before an arbitral tribunal, the only way to challenge the composition of the arbitral tribunal delivering the award in the case are proceedings initiated by a petition to set aside an arbitration award.

3. In evaluating whether an arbitration award in inconsistent with the fundamental principles of the legal order, the content of the award should be considered, and not the correctness of the procedure before the arbitral tribunal or the correctness of the composition thereof.

4. Because of the fact that the relationships between the arbitral tribunal and the claimant are of institutional and permanent character and the mere arbitration agreement concerns purely and simply one relevant arbitral tribunal, it should be deemed consequently that the arbitration agreement of such content is at least ineffective, i.e. it does not bring any legal effects. It is also reasonable to assume that the arbitration agreement is invalid because the dispute cannot be adjudicated by the indicated arbitral tribunal, i.e. the arbitration award has no relevant content.

1. The fundamental principles of the legal order… should be understood to mean the fundamental principles of the socio-political system and the ground principles governing specific fields of law… .

2. [A]pplication by the arbitral tribunal of the substantive law applicable in the case is subject to review by the common court only insofar as required by the evaluation of the arbitration award, made by the court on its initiative, under the public policy clause set forth in Art. 1206 § 2 point 2 of the PCPC, in terms of the award’s possible inconsistency with the fundamental principles of the Polish legal system… .

3. The failure by the arbitral tribunal to reduce the contractual penalty could constitute justified grounds for setting aside an arbitration award, if the award resulted in a resolution that clearly conflicts with the principles of social coexistence… .

4. [T]he fundamental principles of the legal order include the constitutional requirement of proportionality of civil-law measures against the perpetrator of the damage… and if no damage has not been inflicted, it would be contrary to the fundamental principles of the legal order of the Republic of Poland to award damages, which justifies the setting aside of the arbitration award. Such an action is in fact a ground for applying of the so-called public policy clause… .

5. [I]t is irreconcilable with the fundamental principles of the legal order of the Republic of Poland to order the appellants to award a performance whose existence and amount have not been proved in any way.

Filing of a petition to set aside an arbitration award is an action immediately aimed at enforcement of a claim and consequently interrupts the running of the statute of limitations on the claim.

1. The scope of review of an arbitration award is limited only to the prerequisites indicated in Art. 1206 of the Polish Civil Procedure Code and the defectiveness of such an award in terms of facts or law is not generally examined in the proceedings initiated by a petition to set aside an arbitration award. Limitation of the cognition of the state court in such proceedings has its source in the voluntary resignation from the constitutional right to court by the parties to the arbitration agreement… . … the state court is not bound by the grounds for setting aside of an arbitration award invoked in the petition, so ex officio it shall examine only … the prerequisites enumerated in Art. 1206 § 2 of the PCPC … .

2. [A]rt. 365 § 1 of the PCPC is one of the fundamental systemic principles of the Polish law and the violation of this provision shall be assessed as a violation of the fundamental procedural principles of the legal order … .

3. Submission to an arbitral tribunal of disputes under a contractual relationship means in other words that the jurisdiction of the arbitral tribunal includes any and all claims for performance of the contract, claims arising in the event of non-performance or improper performance of the contract, claims to restore undue consideration arising in the event of invalidity of the contract or rescission of the contract, as well as tort claims if they arise out of an event that also constitutes non-performance or improper performance of the contract … .

4. A violation of the provisions of substantive law by an arbitral tribunal only exceptionally may be a basis for setting aside of an arbitration award, namely, when the infringed norm is of ius cogens character and a special role in the domestic legal system is attributed to it, usually in the context of certain constitutional principles. The assessment whether there are grounds for applying the public policy clause shall, however, be formulated ad casum and thus in a restrictive manner … .

5. [T]he arbitration court’s erroneous interpretation or incorrect application of the provisions regarding the limitation periods or preclusion shall not be regarded as violation of fundamental principles of the legal order … .

6. [T]he requirements in terms of the reasons for the arbitration award feature, with reference to the reasoning of the state court’s judgment, some minimalism and to find them fulfilled it is sufficient if it is possible to deduce from them what grounds the arbitral tribunal has based on.

1. The set of fundamental principles of procedure before the arbitral tribunal includes only the rules arising under the Civil Procedure Code and the rules agreed by the parties, which does not include the custom [under §9(3) of the Code of Best Practice for Permanent Arbitration Courts, providing that a party applying for default appointment of an arbitrator subject to nomination by both parties or by the previously appointed arbitrators should notify the appointment authority of all candidacies considered and rejected by the parties or the arbitrators and none of those persons should be appointed in the default procedure].

2. The legal classification of a contract by the arbitral tribunal is not subject to review on a petition to set aside an arbitration award.

1. The essence of an action to set aside an arbitration award is to provide a review mechanism respecting on one hand the separateness and autonomy of arbitration, and on the other hand preventing the functioning in legal circulation of rulings by non-state courts infringing the rule of law. A proceeding to set aside an arbitration award does not lead to reconsideration of the merits of the dispute between the parties, but is intended only to verify the applicant’s allegations of the existence of the grounds raised in the application provided for in Civil Procedure Code Art. 1206 §1, and assess whether any of the grounds provided for in Civil Procedure Code Art. 1206 §2 exist, whether or not asserted by the applicant.

2. Depriving a party of the ability to defend its rights before the arbitral tribunal occurs when the arbitral tribunal for example failed to notify the party of the date of the hearing after which the award was announced, when it did not hear out the party at all or give the party the opportunity to submit statements with respect to the matter in dispute. It does not constitute depriving a party of a defence to fail to admit and consider evidence offered by the party, if the arbitral tribunal justifies that procedural decision duly and in accordance with the accepted rules.

 3. Violation of the fundamental principles of the Polish legal system may occur in the realm of both substantive law and procedural law, which leads to a distinction between the substantive legal system and the procedural legal system. The fundamental principles of the Polish legal system should be understood to mean constitutional principles as well as the leading principles of other fields of substantive and procedural law; the latter undoubtedly include the principle of the equality of the parties.

1. Art. 9 of [the Act of 10 September 2015 Amending Certain Acts to Encourage Amicable Methods of Dispute Resolution] ensures the continuity of application of the prior regulations of procedural law in cases pursuant to a petition to set an arbitration award which were commenced before the state courts prior to 1 January 2016. In cases in which a petition to set aside an arbitration award is filed with the state court after 31 December 2015, the new regulations apply.

2. Compliance with the deadline for filing a petition to set aside an arbitration award, filed with a state court not authorized to consider cases of this type, is determined by the date on which the unauthorized court (not having subject-matter jurisdiction) forwarded the case to the proper court.

1. The defectiveness of an arbitration award consisting of violation of the fundamental principles of the legal order (formerly, the rule of law) must be evident from the substance of the ruling. In evaluating whether an arbitration award is inconsistent with fundamental principles of the legal order, the content of the award should be considered, and not the correctness of the procedure before the arbitral tribunal.

2. The principles of civil liability for redress of injury are among the fundamental principles of the legal order in Poland. Under the civil law, and thus in private-law relations, where as a result of various events, particularly actions that are hazardous, or arise out of economic activity or vehicular traffic, as well as transactions, the occurrence of injury is universal in nature and requires legal regulations guaranteeing liability for damages. The regulations in this area are included in the fundamental norms of the law of obligations, and under tort or contract liability may be regarded as making up some of the fundamental principles of the legal order in the state.

1. A petition to set aside an arbitration award is a claim to establish a legal relationship, in which the plaintiff (the petitioner) demands that the state court issue a judgment setting aside (vacating) the existing legal relationship established by the arbitration award. A judgment by the state court granting the petition is of a quashing nature, as in such situation the state court can only set aside the arbitration award, and only insofar as demanded by the petitioner.

2. Even though the relief stated in a petition to set aside an arbitration award may involve setting aside the entirety of the arbitration award or part of the award, the state court is bound by the scope of the petition against by the award by the petitioner, and thus the bounds of the petitioner’s application.

3. Exceptionally, it is possible to grant a demand to set aside an arbitration court in part, but only when the challenged part of the ruling can be entirely separated from the rest of the award.

1. An arbitration court cannot be regarded as a body of the justice system to which Art. 45 of the Constitution applies directly.

2. Pursuant to Art. 1184 §2 of the Civil Procedure Code, the arbitration court is not bound by regulations on procedure before the state court, and thus in particular Art. 328 §2 of the Civil Procedure Code, setting forth the requirements for the justification of a judgment.

3. Even an erroneous interpretation of regulations of substantive law of fundamental importance for the resolution, made by the arbitral tribunal, does not necessarily mean violation of the public policy clause. The assessment of whether the ruling violates fundamental principles of the legal order should thus be conducted on a case-by-case basis, narrowly, and an affirmative conclusion may be reached only if the effects of the ruling of the arbitral tribunal would result in a material violation of the fundamental principles covered by the public policy clause.

Examination of the case with respect to the grounds for setting aside an award under Civil Procedure Code Art. 1206 §2(2) may not proceed beyond aggravated violations of law. This position results directly from the wording of this provision, which authorizes the state court to set aside an arbitration award if it finds that it is contrary to fundamental principles of the legal order of the Republic of Poland, and not if it is inconsistent with just any regulation in force in that system.

1. An arbitration clause, which is an agreement to submit a dispute to an arbitration court for resolution, may be limited in time; that is, it may be in force only until a certain time, at the end of which it ceases to be in force; it may also be made under a condition applicable to the clause itself or the manner of proceeding and resolution by the arbitral tribunal.

2. Civil Procedure Code Art. 1168 governs situations in which the arbitration clause may cease to be in force (if the parties have not agreed on other legal consequences of events covered by the clause). The list set forth in this provision is therefore only exemplary, and the parties may also indicate other situations which will result in expiration (loss of force) of the arbitration clause. This is not changed by the fact that the current law does not regulate the loss of force of an arbitration clause in a situation where the time agreed by the parties in which the arbitral tribunal was required to issue an award expired, because the parties can provide otherwise. In the case considered here, the contractual specification of the deadline for completion of the proceeding before the arbitral tribunal with an award exerts the effect of expiration of the arbitration clause. Therefore this is not an instructive deadline whose only purpose was to encourage all of the participants in the arbitration proceeding, including also the arbitral tribunal, to seek a quick and effective resolution of the dispute.

3. Even when specifying its own rules for proceeding before the arbitral tribunal, the arbitral tribunal is not authorized to modify the mutual position of the parties with respect to the deadline set by them for resolution of the case. Such modification may be made by the parties themselves, but not by the arbitral tribunal.

4. In the event of doubt with respect to the scope of the arbitration clause, a restrictive interpretation should prevail. In interpreting the arbitration clause, it is not permissible to employ any presumptions which would indicate broader application of the arbitration clause. The declarations of will in the arbitration clause may not be supplemented by way of interpretation to include further external elements, events or occurrences.

1. In light of the formalized nature of proceedings on a petition to set aside an arbitration award, as expressed in the exhaustive list of grounds for the petition and the fact that the court is bound by the grounds asserted in the petition, the mere fact that the bounds of the petition extend to the entire arbitration award is insufficient to consider during the appellate proceeding an allegation that was not asserted in the petition.  

2. It is accepted that an arbitration award is subject to being set aside under the public policy clause if an infringement of substantive law by the arbitration court leads to consequences irreconcilable with the fundamental principles of the Polish legal system, that is, effects that are plainly and grossly contrary to such principles or any one of them.

3. The principle of the freedom of economic activity is one of the fundamental principles of the Polish legal system.

1. Parties who have submitted a dispute to a permanent arbitration court for resolution in accordance with its rules may in provisions accompanying the arbitration clause or by later agreement modify the provisions of the rules. … Acceptance by the permanent arbitration court (or its authorities) of changes to the rules made by the parties is another issue. The arbitration court may consent to conduct the proceeding in compliance with the rules as modified by the parties, or not accept the changes. However, if it does not accept the changes, the permanent arbitration court can only refuse to accept the case for consideration (Civil Procedure Code Art. 1168 §2), but it cannot conduct the proceeding according to the rules in the version that does not reflect the changes made by the parties if they refuse to give up those changes. If the permanent arbitration court has accepted the case for consideration, then it is required to respect the intent of the parties as manifest in the changes they have made to the rules of the arbitration court.

2. The priority of the intent of the parties over the rules of the permanent arbitration court applies as well when the parties have agreed that the arbitration proceeding is to include two instances, while the rules provide that the proceeding has one instance.

3. If the parties agree that the proceeding before the arbitration court is to include more than one instance (Civil Procedure Code Art. 1205 §2), then the arbitration regulations of the Civil Procedure Code and the principles and rules resulting therefrom also apply to the appellate arbitral tribunal, including establishment of the rules and manner of proceeding before that tribunal and ruling by that tribunal.

4. The rule specified by the parties that the arbitration proceeding is to include the possibility of appealing against the arbitration award issued at the first instance undoubtedly falls within the group of fundamental rules for purposes of Civil Procedure Code Art. 1206 §1(4). Violation of that rule by resolving the dispute at only one instance is a violation that could affect the result in the case, because the appeal could result in a different resolution.

5. Under the circumstances of the case, there was a violation of Civil Procedure Code Art. 1206 §1(4) by considering the dispute and issuing an arbitration award at only one instance, contrary to the rule agreed by the parties of arbitration proceedings at two instances.

1. The FIDIC conditions are a set of procedures and conditions describing the course of construction projects. Among other things, they describe the rights and obligations of the participants in the construction process, including in clause 20 the procedure for disputes and arbitration. … Interpretation of the provisions included in the FIDIC conditions included in the contract in force between the parties is made in accordance with the principles of interpretation of declarations of will (contracts) set forth in Art. 56 and Art. 65 §§ 1 and 2 of the Civil Code.

2. Pursuant to FIDIC clause 20.4, “If a dispute (of any kind whatsoever) arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works, … either Party may refer the dispute in writing to the DAB [dispute adjudication board]”. The use of the word “may” in this clause should be understood only to mean that pursuit of claims is a right and not an obligation of a party. But if the party does decide to pursue the claim, according to FIDIC clause 20 it must submit the claim to a dispute adjudication board.

3. Pursuant to FIDIC clause 20.8, “If a dispute arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works and there is no DAB [dispute adjudication board] in place, whether by reason of the expiry of the DAB’s appointment or otherwise: Sub-Clause 20.4 [Obtaining Dispute Adjudication Board’s Decision] and Sub-Clause 20.5 [Amicable Settlement] shall not apply, and the dispute may be referred directly to arbitration under Sub-Clause 20.6 [Arbitration].” Under the circumstances of this case, the possibility of referring the dispute directly to arbitration arose “otherwise,” i.e. by the parties’ failure to agree on the composition of the dispute adjudication board and failure by either of them to apply to the appointing authority to appoint the DAB.

4. The fundamental principles of the legal order are fundamental constitutional principles and the leading principles governing specific fields of substantive and procedural law.

1. It is permissible to seek to set aside an arbitration award in part, if the challenged resolution can be separated from the remaining part of the award.

2. In a proceeding to set aside an arbitration award, the court cannot set aside the award in part if the petitioner applied to set aside the award in its entirety and there are grounds to grant the petition. This is because a demand to set aside an arbitration award in part is not a lesser included demand in a demand to set aside the award in its entirety; it is a different type of demand. Moreover, if the particular parts of the award interlock so that none of the parts can be separated from the other parts without materially deforming the entirety, it is impermissible to set aside the award in part.

3. Informing a party only in the justification of the award that (despite denying the claim in its entirety) one of the party’s demands was not considered because the fee for that claim was not paid, when that demand was the subject of examination during the evidentiary proceeding and was the subject of the response to the statement of claim and pleadings by both parties, while at the same time granting the demands of the opposing party in their entirety, which resolution was dependent on the resolution of the plaintiff’s demands, indicates that the arbitration award is contrary to the public policy clause, depriving the party of the ability to exercise the rights provided by regulations of substantive law and also indirectly depriving the party of a defence against the counterclaims of the opposing party. This method of proceeding before the arbitration court violates the party’s right to a fair and honest trial.

4. Resolving the respondent’s demands in their entirety before resolving the claimant’s complete demand, regardless of whether or not the party could apply for supplementation of the award, is also contrary to fundamental principles of the legal order, including violation of the principle of equal treatment of the parties. Moreover, the arbitration court would already be bound by the award issued by it in the part concerning the counterclaim, and thus it could not issue a ruling with different substantive legal consequences. Undoubtedly the principles of a fair trial require that the party be informed prior to issuance of an award of the possible taking of a procedural decision as to one of the party’s claims, regardless of whether the claimant’s claim is deemed to be an alternative claim (as it was worded, in the event that the main claim is not upheld) or as a separate procedural claim in an accumulation of claims.

5. The defence of the ineffectiveness of an arbitration clause may be asserted not only by the respondent, but also by the claimant. However, it is indicated in the legal literature that in such case, the claimant, as the party initiating the proceeding before the arbitration court, should make a thorough analysis of the factual and legal state of the case, including issues connected with the grounds for commencement of the proceeding before the arbitration court, and if it concludes that the clause is ineffective, it should file the case with the state court, which upon the objection of the respondent will resolve the issue of the effectiveness of the clause. As indicated in the literature, asserting the ineffectiveness of the clause only at this stage violates the principle of due diligence which a professional participant in commercial dealings is required to comply with.

6. An arbitration clause may cease to be in force in the instances set forth in Civil Procedure Code Art. 1168 and 1195 §4 or in the bankruptcy law, or in the occurrence of certain substantive legal events (e.g. repudiation of the legal consequences of a declaration of will), including those indicated by the parties as the reasons for the clause ceasing to be in force. The mere change in the rules of the arbitration court does not result in loss of force of the clause, either under the regulations currently in force or in accordance with the regulations in force on the date of conclusion of the clause.

7. The mere fact that one of the parties to the arbitration participated in creation of the list of arbitrators by nominating candidates for arbitrators from among persons who are authorities in the given field does not mean that there is dependency between the arbitrator and the party or that the party has greater rights. Despite the indirect influence of the banks over a portion of some panels of arbitrators, the rules of the Court of Arbitration at [the Polish Bank Association] ensure the impartially of the arbitration court and do not violate the principle of the equality of the parties in the arbitration proceeding. Because there are numerous arbitrators [on the list], and the party does not know which of them will hear the case and does not select a specific person as presiding arbitrator, it cannot be found that the party had greater rights than its opponent.

8. A petition to set aside an arbitration award may concern issues of the procedure followed only if fundamental principles of procedure before the arbitration court, arising out of a statute or specified by the parties, were not complied with (Civil Procedure Code Art. 1206 §1(4)). In essence this has to do with failure to comply with fundamental principles of civil procedure, but it was not demonstrated that the arbitration court failed to comply with such principles.

1. The arbitration court’s ignoring evidence offered by a party because it deemed the evidence to be unnecessary cannot be regarded as depriving the party of the possibility of defending its rights, and examination of the correctness of ignoring of the evidence by the arbitration court is impermissible because that would encroach on the merits of the case. … A party is deprived of the possibility of acting only when it has been totally deprived of the ability to defend its rights, and thus when it has found itself in a situation that prevents, and not only hinders or limits the support before the arbitration court of the demands asserted by the party.

2. Since the parties voluntarily submitted disputes arising out of the contract agreed between them to the judgment of the arbitral tribunal, aware of the limitations flowing therefrom, the petitioner cannot effective accuse the arbitral tribunal of not admitting evidence it raised, particularly in a situation where the arbitral tribunal exhaustively explained the reasons for denying the application.

3. Denial of an evidentiary application cannot be grounds for alleging that an award is inconsistent with the fundamental principles of the legal order of the Republic of Poland. It should be stressed that the public policy clause, like any general clause, is indefinite, which leaves to the court considering a specific case a great degree of discretion; nonetheless, review on this basis of the elements comprising the ruling of the arbitral tribunal cannot assume the dimensions proper to a review of the merits (correctness) of the ruling. The prohibition of the review of the merits (correctness) of such ruling is connected with the essence of application of the public policy clause. In applying the clause, the point is not that the ruling being evaluated was consistent with all of the mandatorily applicable provisions of law entering into play, but that it did not exert an effect inconsistent with the fundamental principles of the national legal order.

1. It cannot be concluded from the principle of the autonomous will of the parties that the parties may freely depart from their earlier arrangements concerning the conditions for effective conclusion of transactions. This conclusion would actually result in violation of the autonomy of the parties and failure to respect their will. … A finding that currency hedging transactions were effectively concluded despite violation of the telephone identification procedure established by the parties’ contract could in fact violate another fundamental principle of civil law, namely the principle of the enforceability of contracts.

2. A petition to set aside an arbitration award is not an appellate instrument, but a type of extraordinary judicial review by the state court of the activity of the arbitration court. It follows that in the proceeding to set aside an arbitration award the state court cannot consider the dispute between the parties to the arbitration proceeding on the merits.

3. Violation of provisions of substantive law are subject to review in the proceeding initiated by a petition to set aside an arbitration award only the provisions violated establish principles of the public policy of the Republic of Poland, and the public policy clause should be interpreted narrowly.

1. The subject of a ruling ending the proceedings in the case is the resolution of the dispute defined by the statement of claim or the conclusion of the proceedings with respect to that dispute. The dispute pending before the arbitration court in which an application was filed to remove an arbitrator will end before the state court with a ruling on the petition to set aside the arbitration award. It thus cannot be said that the route to consideration of the application was closed as a result of rejection of the applicant’s cassation appeal.

2. Issuance of an award by the arbitration court does not render moot a proceeding before the state court to remove an arbitrator, which proceeding will continue until the application is decided. Granting of the application could provide possible grounds for setting aside the arbitration award. Even if the application to remove an arbitrator has not been ruled on, a party which complied with the deadline for filing such application does not lose the right to rely on the existence of grounds to remove the arbitrator in the petition to set aside the award.

1. The state court considering a case seeking to set aside an arbitration award cannot re-examine the merits of the dispute. … Treating the scope of review by the state court differently would undermine the autonomy of arbitration, which would place it in a kind of protectorate of the state court system, thus distorting not only the ideals on which the functioning of arbitration is based but also the intention of the Parliament, which in modifying the rules for its functioning limits the scope of intervention by the state court system to exceptional instances expressly stated in the law.

2. The state court is not entitled to review whether the arbitration court properly determined the facts and properly evaluated the evidence. This falls within the bounds of the resolution on the merits of the asserted claims.

1. A petition to set aside an arbitration award is an extraordinary measure of judicial review by the state court of the activity of the arbitration court. It is a special legal measure combining the features of extraordinary review (against an arbitration award that is legally final, at least formally) and a claim seeking to modify the legal status brought about by the arbitration award. However, it is not an appellate measure, and the state court reviewing the petition generally will not examine the resolution of the arbitration court on the merits, and in particular will not review whether there is a foundation for the award under the cited facts or whether the facts were properly established.

2. Civil Procedure Code Art. 1206 §1(4) refers to the fundamental rules of procedure before the arbitration court, which should be understood as limiting the possibility to set aside an arbitration award only to those instances which resulted in violation of the principles of a fair trial or procedural violations important enough that they could have influenced the arbitration award, for example violation of the principle of the equality of the parties, or a complete failure to admit evidence. This situation did not occur in the proceeding before the arbitration court, as the objection by the petition referred to the arbitrators’ failure to comply with the 30-day limit for closing the proceeding in the case, late issuance of the award and service on the petitioner, and failure to comply with informational obligations with respect to the petitioner.

3. Fundamental principles of the legal order should be understood as fundamental constitutional principles concerning the socio-economic system, as well as the leading principles governing specific areas of substantive and procedural law. Thus only norms that are mandatorily binding and to which fundamental importance is ascribed may justify reliance on the public policy clause. This clause is not applied to correct all irregularities and defects in arbitration awards, but should protect the integrity of public policy.

1. [I]n case of an ad hoc arbitral tribunal, there is no requirement that the same panel of arbitrators has to consider all cases arising out of a specific legal relationship. Under one contract – if the parties have different claims, there is no obstacle for each claim to be examined by different arbitrators, for example due to the fact that they can specialize in different categories of cases or have the expertise necessary to properly assess only one of the claims. It should be emphasized that a specific agreement (so-called receptum arbitrii) is concluded between a person entitled to appoint an arbitrator and the arbitrator. Such an agreement bounds each of the arbitrators with both parties and obliges: the arbitrators to resolve the dispute impartially and the parties to pay the remuneration… . A person appointed to be an arbitrator is not obliged to accept the position of the arbitrator. Since it is an agreement, both the person entitled to appoint an arbitrator and the appointed arbitrator need to know the scope of the agreement – in this case, the subject of the dispute.

2. There is a dispute in the doctrine of civil law as to what character – procedural or substantive – the choice of arbitrators has. The Court of Appeal shared the view that it is only a substantive legal statement. This character of the statement is not only supported by the fact that it is a part of a civil law agreement, but also by the specific limitation of the possibility of its revocation. Currently, both the doctrine and the case law provide that procedural statements are revocable by nature and substantive elements are revocable only when relevant statutory prerequisites exist. In the situation of appointment of an arbitrator, the law-maker in a significant way, by enumeration in the statutory law, has limited a party’s unilateral right to remove an arbitrator once selected by the party. It is commonly accepted that Art. 61 of the Polish Civil Code applies to this statement, i.e. a norm reserved for substantive law statements. The lack of a substantive law power of attorney and the lack of confirmation of this activity by the company being the respondent results in the statement not having the expected legal effects, i.e. it does not lead to appointment of an arbitrator or conclusion of an agreement between the parties and the person appointed to be an arbitrator.

3. [A]n arbitration award may be said to be contrary to the fundamental principles of the legal order only with respect to constitutional principles of the socio-economic system or the fundamental principles governing specific fields of substantive law. The fundamental principles of the legal order being the basis of an assessment of an arbitration award shall be understood not only as constitutional norms, but also as ground norms in particular fields of law. It has been recognized in the case law that such principles include, among other things, the principle of economic freedom and freedom of contracts…, the principle of the autonomy of the will of the parties and the equality of the parties and the principle of social justice… .

4.  [T]he procedural public policy may be the basis for assessment of an arbitration award in two aspects. Firstly, the procedure which led to the delivery of an arbitration award is assessed for its compliance with the fundamental procedural principles of the legal order, secondly, the effects of the arbitration award are assessed from the perspective of their consistency with the procedural public policy, i.e. whether they are compatible with the procedural legal system, for example, whether they do not infringe res iudicata or the rights of third parties.

5. The public policy clause is not intended for a review of the merits (correctness) of an arbitration award. The prohibition of a review of the merits of an arbitration award is related to the essence of the application of the public policy clause. By application of this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable legal regulations, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order.

6. A violation, by an arbitral tribunal, of substantive law applicable to the considered relationship, compliance with which is prescribed in Art. 1194 § 1 of the PCPC, may result in setting aside of an award of this tribunal only when it is connected with an infringement of the fundamental principles of the legal order.

7. An allegation of infringement of Art. 1183 of the PCPC may be justified when an arbitral tribunal conducts proceedings in omission of evidence offered by a party, if this evidence was necessary to resolve the case.

1. The fact that two arbitrators, constituting a majority of the panel, had already signed drafts of the awards was certainly not valid grounds for the presiding arbitrator to refuse to continue deliberations over the awards. This was not equivalent to the act of voting, not to mention equivalent to deliberations on the resolution and the grounds for the resolution. Refusal to continue the deliberations in order to discuss the comments means that it cannot be said that the deliberations were completed and voting was held on the awards. … As pointed out in the legal literature, the list of examples of violations with respect to regulations on voting, removal of an arbitrator and the award which were set forth in Civil Procedure Code Art. 712 §1(3) (in force through 16 October 2005) were not expressly carried over to the wording of Civil Procedure Code Art. 1206 §1(4). There is no doubt, however, that a violation of these rules should generally be treated as a violation of fundamental rules of procedure.

2. Ignoring evidence offered by a party because the arbitration court found the evidence to be unnecessary will not qualify as depriving the party of the ability to present a defence. Examination by the state court of whether the arbitration court correctly found such evidence to be unnecessary would constitute impermissible encroachment into the merits of the case. If the arbitration court ignored a certain portion of the defence presented by the party, while including in the grounds for the award a substantive explanation of the reasons it found the defence to be irrelevant, then the party’s allegation with respect to ignoring its defence is in reality directed against the substantive defence of the dispute and as such is impermissible.

1. [A]n arbitral tribunal is not authorized to apply coercive measures towards witnesses or to draw consequences (therefore also instructing on an obligation to tell the truth) from the fact that a witness is at odds with the truth in his/her testimony. Some representatives of the doctrine think that such a possibility exists when the parties equipped the arbitral tribunal with this type of competence in a way of concordant statements. It is difficult to agree with such a stance… .

2. There can be no doubt that lack of impartiality of the arbitral tribunal resolving a dispute in arbitration constitutes such kind of violation that leads to setting aside of an arbitration award irrespective of the allegations invoked in the petition by a party.

1. The issue of the consistency of the resolution by the arbitration court with the determined state of facts is beyond cassation review in connection with Civil Procedure Code Art. 398³ § 3.

2. The arbitration court’s violation of the substantive law governing the case, which generally is connected with Civil Procedure Code Art. 1194 § 1, is subject to review by the state court considering a petition to set aside an arbitration award only in terms of application of the public policy clause—at the court’s own initiative or on the basis of an allegation in the petition.

3. The circumstances separately listed in Civil Procedure Code Art. 1206 § 1 as grounds for setting aside an arbitration award, proof of which lies primarily in the interests of the party, are excluded from the scope of application of the public policy clause.

4. The arbitration court’s conduct of the proceeding ignoring evidence offered by a party may justify an allegation of violation of Civil Procedure Code Art. 1183 if the evidence was necessary to the resolution of the case.

5. If the evidence raised by the party was ignored as a result of the arbitration court’s interpretation of substantive law, the mere fact that the interpretation may be regarded as erroneous cannot justify granting a petition to set aside the award unless the award also violates fundamental principles of the legal order.

6. The arbitration court’s application of regulations on the limitations period or preclusion may not be regarded as a violation of fundamental principles of the legal order even if this occurred on the basis of an erroneous interpretation of the regulations.

1. Application by the arbitration court of the substantive law applicable in the case is subject to review by the common court only insofar as required by the evaluation of the arbitration award, made by the court on its initiative, under the public policy clause set forth in Civil Procedure Code Art. 1206 §2(2), in terms of the award’s possible inconsistency with fundamental principles of the Polish legal system.

2. Alongside the principles of freedom of contract and the enforceability of contracts, the fundamental principles of the Polish legal system also include principles setting the boundaries of the freedom of contract and, in consequence, the limits of application of the principle of enforceability of contracts. These are more specifically the principle of business freedom, the principle of contractual fairness, and the principle of the compensatory nature of liability in damages, interpreted in compliance with the constitutional requirement of proportionality (Constitution Art. 31(3)), opposing inclusion in contracts of monetary consideration as a sanction for violation of an obligation in an amount far removed from the dimension of the loss, so that it becomes primarily a quasi-penal measure and leads to enrichment of the other party.

3. The reduction of the agreed contractual penalty by the arbitration court did not display the features of an arbitrary limitation of the legal consequences of providing for the contractual penalty, but fell within the bounds of statutory authority.

4. Any irregularities in application of Civil Code Art. 484 §2 by the arbitration court not resulting in the inconsistency of the award issued by it with the fundamental principles of the legal system could not be relevant in proceedings to set aside the award.

The state court hearing a petition to set aside an arbitration award may consider whether in the specific case there were valid grounds justifying a departure [by the arbitration court] from the rule of being bound by a legally final judgment, and reference to the circumstances permitting reopening of proceedings before a state court should be helpful in this respect. … From the point of view of the grounds for reopening proceedings, there is nothing preventing new factual circumstances from being disclosed as a result of actions conducted by an expert in a different case, after the end of the proceeding that would be reopened. It is essential that they be circumstances that already existed during the course of the completed proceeding.

1. An arbitrator must not be connected to any of the parties to the proceeding; he should be free of any obligations and pressures, and in performing the duties of arbitrator should decide solely in accordance with his own determination, based on the material gathered in the case. Disclosure of such circumstances must be made promptly after the person is appointed as arbitrator or the circumstances arise. [Civil Procedure Code Art. 1174 § 1] also refers to circumstances that could raise doubts as to the impartiality or independence of the arbitrator, not circumstances that do raise doubts.

2. The opposing party, and the not the arbitrator, is given the right to make an assessment of whether the circumstances disclosed by the arbitrator raise doubts or not, and potentially to initiate the procedure pursuant to Civil Procedure Code Art. 1176 § 3 and 4, including filing of an application to the state court to remove the arbitrator. It must be clearly stressed, however, that the existence of circumstances that could raise a doubt as to the independence or impartiality of an arbitrator is not equivalent to a finding of a lack of impartiality or independence of the person appointed as arbitrator.

3. The right to make a setoff is a subjective right of the holder and cannot be limited in its realization. Asserting this objection is also a procedural form of the respondent’s defence against the claimant, which it cannot be deprived of. In considering the defence of setoff asserted by the respondent as part of the examination of the justification for the principal claim, the arbitration court did not have to condition this examination on the existence of an arbitration clause in this respect.

4. The jurisdiction of the court considering a petition to set aside an arbitration award generally does not include review of the consistency of the award with substantive law or an examination of the correctness of the factual findings, other than a ruling based on a clearly selective and unobjective assessment of the evidence. Here, the grounds for the arbitration award are extensive, multifaceted and based on the indicated evidence, and explain the basis for the finding by the arbitration court that the claim for damages by the principal respondent asserted as a setoff to the claim of the principal claimant existed in the specified amount and the effectiveness of the setoff made, which resulted in denial of the principal claim. Examination of the justification for the petition is therefore not equivalent to substantive review of the award. Moreover, the appellant must remember that in deciding to submit the dispute for resolution by an arbitration court, it must be aware of both the positive and negative consequences. On one hand, the contracting parties are not exposed to the risk of lengthy proceedings, but on the other hand they waive certain procedural guarantees which apply in proceedings before the state court. Nor was there any barrier to the proceedings before the arbitration court being conducted in two instances (Civil Procedure Code Art. 1205 § 2).

1. The legal grounds of setting aside an arbitration award are exhaustively specified in Art. 1206 of the Polish Civil Procedure Code. A court hearing a petition to set aside an arbitration award is bound by the grounds raised by the petitioner, so the court may set aside an arbitration award due to existence of a ground indicated in Art. 1206 only inasmuch as this ground was indicated in the petition.

2. The Polish Supreme Court ex officio, that is even without them being raised in the petition, takes into account only two legal grounds of setting aside an arbitration award indicated in Art. 1206 of the Polish Civil Procedure Code: the statutory inability of the arbitral tribunal to resolve the dispute (Art. 1206 § 2 point 1 of the Polish Civil Procedure Code) and inconsistency of the arbitration award with the fundamental principles of the legal order of the Republic of Poland (Art. 1206 § 2 point 2 of the Polish Civil Procedure Code).

1. Arbitrability of a dispute means that the character of the case makes it possible to be referred to arbitration by the parties, i.e. to be referred to the jurisdiction of an arbitral tribunal as a result of conclusion of an arbitration agreement.

2. Arbitration may… include a demand for awarding a claim, a demand for establishment of a legal relationship or a right, as well as a demand for shaping of a legal relationship indicated in the content of an arbitration agreement (for example, a demand to dissolve of a company).

3. In the current legal state, an allegation of lack of jurisdiction of an arbitral tribunal is a matter of preclusion, if it is not raised within a deadline referred to in Art. 1180 § 2 of the PCPC. In such a situation, a petition to set aside an arbitration award cannot be effectively based on the grounds indicated in Art. 1206 § 1 point 1 of the PCPC. All the more so if, on the basis of this allegation, it is impossible to refuse to rule on recognition or enforcement of an arbitration award or a settlement reached before the arbitration tribunal… .

4. An arbitration award may be said to be contrary to the fundamental principles of the legal order only with respect to constitutional principles of the socioeconomic system or the fundamental principles governing specific fields of substantive law… . [T]he phrase “fundamental principles of the legal order” used in Art. 1206 § 2 of the PCPC refers to such a violation of provisions of substantive law that results in violation of the principles of the rule of law, and the award infringes the overriding principles in force in the Republic of Poland and is in conflict with the legal order, i.e. it violates the principles of the political and socioeconomic system. The non-compliance of an arbitration award with a public policy clause does not consist in its non-compliance with the provisions of law, even the imperative ones, but in the inconsistency of the effects of recognition and enforcement of the arbitration award with the fundamental principles of the legal order.

5. [V]iolation of a [public policy – insertion added] clause is not… justified by an allegation that a performance, awarded in the arbitration award, results from a contract which was effectively terminated. Termination of a contract does not result in annulment of the legal effects which had arose earlier, at the time when the terminated contract was in force, and, furthermore, is not equivalent to the loss of the binding force by the arbitration agreement.

6. In the proceedings for enforcement of an arbitration award, a state court neither re-examines the case resolved by an arbitration award ex novo, nor examines the legitimacy of a substantive law claim raised by the claimant in the arbitration proceedings. The activity of the court is limited to examination whether there are prerequisites to refuse recognition of the arbitration award, which are a condition for the arbitration award to obtain, after its recognition or declaration of enforceability by the court, the same legal force as is enjoyed by state court judgements… .

7. Filing of a petition (Art. 1206 § 1 of the PCPC) is not a obstacle for issuing of a clause under Art. 1214 of the PCPC. If the parties have not established an appealing instance, an arbitration award is final. It becomes formally final – in a situation when there is no right to appeal against it – as soon as it is issued, and if the appeal is allowed – as soon as a tribunal of second instance renders its award. 

8. [T]he fact that a state court grants an enforcement clause to an arbitration award does not affect by any means the possibility of filing a petition to set aside the arbitration award… .

1. In a situation where the parties did not reach agreement on establishing the rules for the appellate proceedings and how they would be conducted, the arbitration court, in light of the parties’ intent clearly expressed in the arbitration clause, inconsistent with the rules in force at the arbitration court, should have either refused to accept the case for consideration or, pursuant to Civil Procedure Code Art. 1184 § 2, conducted the appellate proceedings in the manner it saw fit.

2. In a situation of inconsistency between the arbitration agreement calling for two instances of arbitration proceedings and the rules of the arbitration court calling for one instance, priority should be accorded to the intention of the parties, and thus the arbitration clause. As the parties first mutually agreed on the rule of two instances before the arbitration court they selected, and second, failed only to agree on the rules for procedure at the second instance, the arbitration court was obligated to establish these rules itself.

3. As the parties referred to proceedings at two instances in the arbitration clause, failure to comply with this requirement by the arbitration court must be regarded as a violation of fundamental rules of procedure before the arbitration court (Civil Procedure Code Art. 1206 § 1), resulting in granting the petition and setting aside the challenged award.

1. Taking into consideration the additional argument related to the decisive influence of the parties on the choice of the arbitrator and its significance for the proper appointment of the arbitrator within the meaning of Art. 1206 § 1 point 4 of the PCPC, it shall not be questionable that in a situation when the person of an arbitrator was known to the petitioner before the rendering of the arbitration award, admissibility of filing of a petition to set aside an arbitration award on this basis shall be limited to the situation when an appropriate allegation has been made first, as well as that the omission, indirectly indicating acceptance of the person of the arbitrator, even if appointed in breach of the rules regarding his/her appointment laid down by the parties or provided for in the Arbitration Rules of a permanent court of arbitration, who was mutually appointed by the parties to resolve the dispute between them, shall result in non-admissibility of a petition based on such an allegation, since such a solution has been adopted in Art. 1193 of the PCPC.

2. [I]t unequivocally follows from this provision [Art. 1189 § 1 of the PCPC – insertion added], especially from the beginning of the second sentence, that a hearing before an arbitral tribunal is not obligatory and that the parties’ arrangements, which also means acceptance of the Arbitration Rules in force chosen by the parties to resolve a given case, are of essential significance.

3. It is also unjustified to find that the public policy clause is infringed by an omission of making a written declaration regarding impartiality by an arbitrator when no specific circumstances justifying the exclusion of the arbitrator were given and demonstrated, also in proceedings initiated by a petition [to set aside an arbitration award – insertion added] by the party who has not filed such a petition… .

4. [R]endering an award in disregard of the fact that a final ruling has been rendered in the case regarding the same claim and between the same parties before an arbitration award covered by the petition is rendered or infringement of third parties’ rights may advocate in favour of application of Art. 1206 § 2 point 2 of the PCPC for the benefit for the party filing the petition… .

1. Because an arbitration award may be set aside only for grounds set forth in the law which are generally considered at the court’s own motion, while, with the exception of the invalidity of the proceedings before the court of second instance, a cassation appeal is considered within the bounds of the grounds stated for the cassation appeal, a cassation appeal in a proceeding seeking to set aside an arbitration award may — apart from the instance of invalidity of the proceedings before the court of second instance — be granted only if one of the grounds asserted in the cassation appeal is upheld containing an allegation which justifies or may justify a finding of grounds for setting aside the arbitration award asserted in the petition to set aside the award or considered at the court’s own motion.

2. The separate listing of the circumstances [in Civil Procedure Code Art. 1206 § 1 (2), (4) and (5)] as grounds for setting aside an arbitration award leads to the conclusion that they are excluded from the scope of application of the public policy clause.

3. For the arbitration court to conduct the proceeding ignoring the proffer of evidence, when the party has not given up introduction of the evidence and the evidence was necessary for resolution of the case, will constitute a violation of [the second sentence of Civil Procedure Code Art. 1183], setting forth one of the fundamental principles of arbitration procedure.

1. The view cannot be shared that in connection with the dispute that had arisen the contractor should have brought about the appointment of a dispute adjudication board and presented the dispute to it, and the consequence of failure to take such actions is the loss of the possibility of effectively pursuing the claim. The section [of the FIDIC contract conditions] on Claims, Disputes and Arbitration does not provide for such sanctions.

2. In proceedings before the arbitration court the arbitrators are not bound by decisions of the [FIDIC] dispute adjudication board, whose decisions should be treated as evidence in the case. The decision by the dispute adjudication board cannot be treated analogously to an arbitration award, nor is the proceeding before the board a part of the proceeding before the arbitration court.

3. The contracting entity was properly informed of the need to perform additional works and did not dispute the need to perform them. It thus may not effectively allege that payment for such works violates fundamental principles of the legal order because public monies were involved in financing the works.

1. Participation in a judicial proceeding by entities lacking judicial capacity would result in the invalidity of the proceeding, while issuance of an arbitration award with respect to such entities would be regarded as a violation of the fundamental principles of the legal order of the Republic of Poland, because it would violate one of the fundamental procedural rules that only a party vested with judicial capacity can be a party to proceedings. Moreover, such an award would also violate the fundamental principle of civil law that only entities vested with legal capacity can be the subject of civil-law rights and obligations.

2. If a party raises the objection that the arbitration court lacks jurisdiction or the objection that a demand asserted by the opposing party exceeds the bounds of the arbitration clause (Civil Procedure Code Art. 1180 § 2), and the arbitration court deems these objections unfounded, the arbitration court may issue an award, stating therein that it deemed the objections raised to be unfounded, or overrule the objections in a separate order. In the first instance, the correctness of the position of the arbitration court on the objection raised by the party may be reviewed in a petition to set aside the arbitration award. However, if the arbitration court issues an order overruling the objection, review of the correctness of this position by the state court may occur only under the procedure provided for in Civil Procedure Code Art. 1180 § 3, i.e. by the party who raised the objection applying to the state court for a ruling within two weeks after service of the order on the party. The party’s failure to initiate such procedure for review of the order issued by the arbitration court deprives the party of the possibility of effectively basing a petition to set aside the arbitration award on the same objections constituting grounds for a petition to set aside an arbitration award under Civil Procedure Code Art. 1206 § 1 (1) and (3).

3. The arbitration court’s violation of regulations of law, even regulations that are mandatorily applicable, does not necessarily mean violation of fundamental principles of the legal order, even if the arbitration court resolves the dispute according to the law governing the given relationship, when under Civil Procedure Code Art. 1194 § 1 the parties did not authorize it to decide on the basis of general principles of law or equity.

4. The intervention by the arbitration court with respect to the demand presented concerned … the method of fulfilment of the performance demanded. In procedural law there are no more specific rules of a fundamental nature referring to ruling on the manner of fulfilling the performance demanded in the statement of claim by several persons. The case law permits a certain intervention by the court here, e.g. awarding the demanded amount in solidum instead of jointly and severally, and vice versa. … From the point of view of the principle that it is up to the parties to frame their demands [dyspozytywność] it is essential that the identity of the subject of the demand be maintained, and the scope and factual grounds justifying upholding the demand. With respect to the demand that was asserted, the arbitration award maintained the identity of the debtor and the creditor, the type of relief, its amount and indivisibility, and also the factual grounds justifying granting the relief.

5. The essence of this agreement [a consortium] is at least similar to the agreement of an ordinary partnership [spółka cywilna], and sometimes contains the essential elements thereof, which justifies application of the regulations governing ordinary partnerships as relevant to the relations between members of the consortium, including the regulations concerning joint commonality [wspólność łączna]. … It does not violate the public policy clause for the arbitration court to award damages to three entities “jointly” despite the lack of a legal relationship among these entities creating joint commonality among them.

6. The arbitration court’s ruling on the basis of the regulations of applicable law, if the parties do not provide otherwise (Civil Procedure Code Art. 1194 § 1), is one of the fundamental principles of procedure before the arbitration court. Therefore violation of this principle by the arbitration court may be asserted as an allegation of violation of Civil Procedure Code Art. 1206 § 1 (4). Under this allegation, however, the state court cannot be expected to review the substantive correctness of the award issued by the arbitration court.

7. The position that suffering injury as a result of non-performance or improper performance of an obligation arising out of a contract does not justify wilful satisfaction of the claim for damages out of the established security, contrary to the conditions agreed with the counterparty, does not violate fundamental principles of the legal order, i.e. the principles of the rule of law (Constitution Art. 2), protection of property rights and equality of counterparties cooperating with one another (Constitution Art. 20), economic liberty (Constitution Art. 22), and equality before the law (Constitution Art. 32(2)).

1. The mere filing of a petition to set aside an arbitration award (Civil Procedure Code Art. 1206 §1) is not a barrier to issuance of an [enforcement] clause under Civil Procedure Code Art. 1214, but may lead to postponement of consideration of the case seeking enforcement by way of issuance of an [enforcement] clause (Civil Procedure Code Art. 1216 §1). Similarly, issuance of an enforcement clause for an arbitration award is not a barrier to subsequent setting aside of the award through a petition, as under Civil Procedure Code Art. 1210 the court in closed session may stay enforcement of the arbitration award.

2. In a proceeding for recognition or enforcement of an arbitration award, the subject of examination is not the correctness of the claim or the substantive basis for its existence, or formal issues concerning the course of the arbitration proceeding. But this does not mean that the proceeding on the petition to set aside the arbitration award is a predicate in relation to the proceeding for recognition or enforcement of the arbitration award. On the contrary, both of these proceedings are independent of one another and based on different grounds. If the proceedings on the petition to set aside the arbitration award and on the application for recognition or enforcement of the award coincide, the consequences of this coincidence for the latter proceeding are governed by Civil Procedure Code Art. 1216.

3. The fact of issuance of an enforcement clause by the state court for a ruling by an arbitration court does not affect in any way the ability to file a petition to set aside the arbitration award. After all, stay of enforcement of the arbitration award as a result of filing of the petition to set aside the award may occur if and only if the award was also held to be enforceable under Civil Procedure Code Art. 1212 and following. Before that the arbitration award does not have legal force and is not subject to enforcement. … Therefore, considering that both proceedings are regulated in Part Five of the Civil Procedure Code, and the legal situation of the coincidence of the two proceedings, application of Civil Procedure Code Art. 177 §1(1) should be approached cautiously, as pursuant to Civil Procedure Code Art. 13 §2 this provision is applicable to both of these proceedings only by analogy.

1. [N]ot every violation of the rules of procedure before an arbitral tribunal, but only such a violation which comes down to a violation of the fundamental rules of procedure may be a ground for setting aside of an arbitration award.

2. [A] petition to set aside an arbitration award is an extraordinary measure of judicial review by the state court of the activity of the arbitral tribunal. The aim of the proceedings initiated by a petition to set aside an arbitration award is not to resolve the case on the merits, but only to make an assessment of the soundness of the petition in the light of the prerequisites indicated in Art. 1206 of the PCPC. However, it is not an appellate measure.

3. [I]n applying the public policy clause referred to in Art. 1206 § 2 point 2 of the PCPC, the point is not that the ruling being evaluated is to be consistent with all of the mandatorily applicable provisions of law entering into play, but that that it does not exert an effect inconsistent with the fundamental principles of the Polish legal order.

1. [I]t is only possible to admit as evidence certain documents contained in the files of a case, because Art. 244 et seq. of the PCPC only provide for evidence in the form of documents, not evidence in the form of files of another case. Without a violation of the principle of directness indicated in Art. 235 of the PCPC, it is only possible to admit evidence in the form of specific, well-defined documents… . This view holds true also in the case of documents attached to the files of the Court of Arbitration.

2. A court considering a petition [to set aside an arbitration award – insertion added] is bound by the grounds alleged by the petitioner, and thus may set aside an arbitration award because of the existence of one of the grounds listed in Art. 1206 of the PCPC only if the ground was alleged in the petition. However, the circumstances provided for in Art. 1206 § 2 of the PCPC are examined by the court ex officio.

3. [T]he public policy clause is not intended for substantive review (the correctness) of the arbitration award. The prohibition of a review of the merits (correctness) of an award is related to the essence of the application of the public policy clause. In applying this clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable regulations of law, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order.

1. The proceeding on a petition to set aside an arbitration award is not a “review” proceeding, by instances, of a state court. No ordinary means of appeal lies against an arbitration award, but only a petition to set aside the arbitration award. Such petition, as stressed in the literature, is not a means of appeal but an extraordinary means of judicial oversight by the state court of the activity of the arbitration court.

 2. It does not appear warranted to conclude from the wording of Art. 1213 of the Civil Procedure Code (referring to a proceeding for recognition or enforcement of an arbitration award) that it is necessary to present the original of the [arbitration agreement] or a certified copy thereof in the arbitration proceeding. This is primarily because it would extend the grounds for the petition under Art. 1206 of the Civil Procedure Code.

3. Art. 1197 §§ 1 and 2 of the Civil Procedure Code should be read together, meaning that the arbitration award must contain both the operative wording and the grounds, as necessary elements; the award must be signed and then served on the parties (Civil Procedure Code Art. 1197 §4).

4. Violation of the public policy clause must refer to the operative wording of [the award], which will function in legal circulation, and not to the level of the grounds.

5. Only if the state court finds that the [evidentiary] procedure was not conducted at all, or was conducted incompletely, or in an obviously defective way, violating principles of logical reasoning connecting facts in a chain of cause and effect, selective admission of evidence in the case, admitting evidence only from one party, unjustifiably ignoring evidence submitted by the opposing party, and the like, can it be found that the requirements referred to in Art. 1206 §1(4) of the Civil Procedure Code were not met.

1. It clearly follows from the wording of Art. 1206 of the PCPC that the enumeration contained therein of the grounds for setting aside of an arbitration award is of exhaustive character… .

2. On the basis of the public policy clause expressed in Art. 1206 § 2 point 2 of the PCPC, an arbitration award shall be set aside when effects determined by its content are irreconcilable with the particular norm which is one of the fundamental principles of that order.

3. When an arbitration award is based on one of the opposing views presented in the case law and the doctrine, it is impossible to say that this clause [the public policy clause – insertion added] has been violated.

There is a great deal of autonomy in arbitration procedure, entirely consistent with the intentions of the Parliament, distinctly limiting the possibilities for review by the state court. The basic goal of this law is the speed of the procedure for resolving civil disputes, and not creation of an additional phase of pre-litigation proceedings. Parties deciding to submit a dispute to an arbitration court must count on these conditions, including minimal external review of its awards. The jurisdiction of the court considering a petition to set aside an arbitration award generally does not include review of the consistency of the award with substantive law or the correctness of the factual findings, apart from a ruling based on an obviously selective, unfair evaluation of the evidence.

1. The regulations of the Civil Procedure Code governing arbitration are not uniform in character. The provisions governing issues involving the permissibility of a petition to set aside an award and the formal requirements and procedure for the petition are strictly procedural in nature, but the provisions setting forth the grounds for the petition, constituting the basis for the court’s ruling on the merits of the dispute and the justification for the petition, are the functional equivalent of provisions of substantive law.

2. Assertion of new grounds for the petition to set aside an arbitration award after the deadline for filing of the petition is impermissible. … The court ruling on a case seeking to set aside an arbitration award may not consider on its own motion the ground set forth in Civil Procedure Code Art. 1206 §1(1) which was not asserted in the petition and was precluded.

3. Recognizing as binding an agreement which does not specify the essential terms of the contract would be irreconcilable with the fundamental principles of the legal order of the Republic of Poland.

1. Even though (if the parties did not agree otherwise) the arbitral tribunal shall resolve a dispute applying the regulations of substantive law applicable to the legal relationship, violation of substantive law by the arbitral tribunal is grounds for a petition to set aside the award only if as a result of the violation, the award is contrary to fundamental principles of the legal order of the Republic of Poland. In other words, if despite a violation of substantive law the award cannot be said to be contrary to fundamental principles of the legal order, the mere violation cannot constitute an effective basis for demanding that the award be set aside.

2. The construction of a petition to set aside an arbitration award indicates that this measure is not used to conduct substantive review by the state court of the correctness of the resolution by the arbitral tribunal, similar to appellate review in judicial proceedings.

3. An award is contrary to fundamental principles of the legal order when this concerns constitutional principles of the socio-economic system or leading principles governing specific fields of substantive law. The fundamental principles of the legal order constituting the basis for evaluation of an arbitration award should be understood not only as constitutional norms, but also the leading norms in specific fields of law. … The procedural legal order may be the basis for evaluation of an arbitration award in two aspects. First, the compliance of the procedure which led to issuance of the arbitration award with fundamental procedural principles of the legal order is subject to evaluation. Second, the consequences of the arbitration award from the point of view of their compliance with the procedural public order are subject to evaluation, i.e., whether they are reconcilable with the system of procedural law, e.g. whether they violate res judicata or the rights of third parties.

4. A party forfeits the right to challenge an arbitration award through a petition to set aside the award due to failure to raise objections to an arbitrator subject, in the party’s view, to removal, if the party did not demand removal in the proceeding before the arbitral tribunal.

5. The requirements established for persons serving as arbitrator should be combined with the entitlement of a party to the proceeding to obtain knowledge about any potential ties between the arbitrator and the entities appearing in the proceeding. Generally it is left to the party to evaluate whether the circumstances constitute grounds for a decision whether to select an arbitrator or a decision to challenge the arbitrator. In this sense, the arbitrator’s own assessment is irrelevant, as the essence of the fairness of the procedure is connected with external evaluations made by others.

6. Indeed, the right to a fair trial provided in Art. 45(1) of the Polish Constitution, an element of which is consideration of the case by an independent court in a fairly conducted proceeding, does fall within the fundamental principles of the legal order whose violation the state court must examine at its own initiative. However, it is indicated in the case law and the legal literature that Art. 45 of the Constitution does not apply at all to arbitration, only the state courts.

7. The institution of recusal of a judge is provided for by the Civil Procedure Code both in proceedings before the state court and in proceedings before an arbitration court. The fundamental difference in the regulation of this institution is that in a proceeding before an arbitration court, the code does not provide for removal of the arbitrator or presiding arbitrator by operation of law, as is the case with respect to a judge in proceedings before the state court (Civil Procedure Code Art. 48). The grounds for challenging an arbitrator indicated in Civil Procedure Code Art. 1174 §2 are circumstances raising justified doubts as to his impartiality or independence, as well as lack of qualifications specified in the parties’ agreement. The grounds for recusal of a judge listed in Art. 48 and 49 do not apply to challenge of an arbitrator, but in interpreting the concept of circumstances raising justified doubts as to impartiality or independence Art. 48 and 49 may have auxiliary application. In a proceeding before a state court, under Civil Procedure Code Art. 379(4), participation by a judge recused by operation of law becomes grounds for the invalidity of the proceeding and constitutes grounds to vacate the judgment by the appellate court, as well as by the Supreme Court, and this ground shall be considered by both of these courts at their own initiative (Civil Procedure Code Art. 378 §2 and 39311). … The Civil Procedure Code does not provide for such absolute invalidity in proceedings before an arbitration court. If a party did not challenge an arbitrator or presiding arbitrator despite possessing knowledge of the grounds for challenge, there are no legal grounds to challenge the arbitration award. As an exception only, participation in an arbitration panel by an arbitrator or presiding arbitrator whose rights and obligations could be affected by the result in the case could constitute grounds for setting aside the award, which did not occur in this case. This is because violation of the principle that no one can be a judge in his own case (nemo in re sua judex) would undoubtedly conflict with the fundamental principles of the legal order of the Republic of Poland.

1. A proceeding on a petition to set aside an arbitration award is not an appellate review proceeding by the state court. No ordinary means of appeal lies against an arbitration award, but only a petition to set aside the award. As stressed in the legal literature, such a petition is not an appellate measure but an extraordinary means of judicial oversight by the state court over the activity of the arbitration court. This has the fundamental consequence that the state court generally does not examine the resolution by the arbitration court, and in particular does not review whether it is founded on the facts cited in the justification for the award, or whether the appropriate provisions of substantive law were applied. The state court may set aside an arbitration award only in exceptional instances, indicated in narrowly interpreted provisions of the code. Consequently, in the event of doubt the award should be upheld rather than set aside.

2. In examining the grounds and conditions set forth in Civil Procedure Code Art. 1206 §1(4), what is essential is failure to comply with the requirements for the fundamental rules of procedure before the [arbitration] court arising out of statute or specified by the parties. Such rules include basing the award on the established state of facts, which occurs after considering evidence.

3. The judicial discretion (of the arbitration court) in evaluating the relevance of specific evidence or allegations for making factual findings and issuing a ruling is appropriately broader than that referred to in Civil Procedure Code Art. 233 §1, and the state court “reviews” it only in terms of the “fundamental principles” of procedure before the arbitration court. Thus only if the state court finds that such procedure was not conducted at all or was conducted incompletely, or was obviously conducted defectively, violating the rules of logical understanding, connecting of facts in a chain of cause and effect, selective admission of evidence in the case, taking evidence only from one party, unjustifiably ignoring evidence offered by the opposing party, and so on, can it be found that the requirements referred to in Civil Procedure Art. 1206 §1(4) were not met. The cited provision should be interpreted narrowly, limiting the possibility of setting aside an arbitration award to the principles of a fair trial and procedural violations which could have had an impact on the arbitration award.

4. Violation of substantive law may be grounds for setting aside an arbitration award only when the substance of the award violates fundamental principles of the legal order. It should be borne in mind that the arbitration court is not bound not only by civil procedure regulations (Civil Procedure Code Art. 1184 §2), but also regulations of substantive civil law.

5. The rules establishing the obligation to pay damages may be regarded as comprising one of the fundamental principles of the legal order in the state; in other words, if anyone suffers an injury and the grounds for liability under any of the civil liability regimes are met, then within the bounds provided by law (Civil Code Art. 361 §§ 1 and 2) damages should be awarded against the person responsible.

In assessing the factual situation in terms of error, it cannot be accepted that the arbitral tribunal committed a violation of the constitutional principle of economic freedom (Polish Constitution Art. 20) or the constitutional principle that courts are bound by statute (Polish Constitution Art. 178(1)).

1. [T]he purpose of proceedings for setting aside of an arbitration award is to examine the prerequisites of rendering of the award, not determine the existence or non-existence of the claim awarded by the arbitral tribunal.

2. An arbitration agreement is an agreement…, therefore, conclusion of an arbitration agreement by an attorney outside of the limits of their authorization results in the so-called suspended ineffectiveness.

3. Curing of an agreement has an ex tunc effect and thus makes the agreement valid from the time of its conclusion. Thus, even if one assumes that the confirmation of the arbitration agreement took place after the arbitration proceedings, such confirmation makes the arbitration agreement effective also at the time of the arbitration proceedings.

4. An arbitration award may be set aside on this basis (on the basis of a possible violation of the fundamental principles of the legal order by the Court of Arbitration – insertion added] when it is determined that the effects included in the content of the award are not consistent with a specific norm which is regarded as one of the fundamental principles of the Polish legal order. These principles include not only constitutional standards, but also the overriding standards in specific fields of law… . However, a state court examining the case for setting aside of an arbitration award cannot re-examine a dispute on the merits… . So not every violation of substantive law will violate the principle of the rule of law referred to in Art. 1206 § 2 of the PCPC.

5. A state court is not entitled to review whether an arbitral tribunal has properly determined the facts and properly evaluated evidence, because this falls within the limits of the resolution on the merits of the claim.

6. Since… the lawmaker itself has introduced formal restrictions into the system for ascertaining the truth, it is not possible to find that restrictions of this kind contained in the Rules of a court of arbitration and their application in a specific case would be contrary to the fundamental principles of the legal order of the Republic of Poland.

1. Proceedings before a state court are not aimed at review, which is the case with courts of the second instance. The task of a state court in proceedings initiated by a petition to set aside an arbitration award is to assess the correctness of the petition solely in the light of the prerequisites indicated in Art. 1206 § 1 and 2 of the PCPC.

2. A party is deprived of the ability to defend its rights before an arbitral tribunal, if the principle of equal treatment of the parties or the right of the party to be heard and submit evidence is violated, which… happens if a party is prevented from getting familiar with the opposing party’s position or evidence submitted by the opposing party, if the party is prevented from addressing them, if the party is prevented from the presenting and proving their arguments… .

3. Art. 1206 § 1 point 4 of the PCPC… needs to be interpreted narrowly, limiting the possibility of setting aside of an arbitration award to violations of the rules of a fair trial and to procedural violations which could have an impact on the arbitration award. Overruling of a question regarding the legal basis of a claim that the arbitral tribunal is not bound by does not constitute such a violation.

4. Violation by an arbitral tribunal of substantive law applicable to the examined legal relationship may result in setting aside of the award rendered by this tribunal only if the award violates the fundamental principles of the legal order. … the circumstance whether the prerequisites of joint and several liability have been proven… arising out of Art. 647¹ § 5 of the Polish Civil Code and the matter of interpretation of this provision by the arbitral tribunal cannot be the subject of the ruling in this case.

1. Review of an arbitration award by the state court cannot turn into a full consideration of the merits of the dispute submitted to arbitration for resolution. Nonetheless, the obligation to examine whether the challenged award violates fundamental principles of the legal order usually cannot be conducted properly without the state court’s reference to the case file. Sticking only to the wording of the arbitration award itself would render such review illusory.

2. Unlike the state court, the arbitration court is not bound to apply the law strictly, even if the parties have not authorized it to resolve the dispute under principles of equity. The only limitation on the arbitration court in this respect is the fundamental principles of the legal order (for example the principle of the compensatory nature of liability in damages and the principle of protection of property rights). Not every violation of substantive law by an arbitration court, nor every erroneous interpretation or improper application or failure to apply a legal norm may be held to be a violation of fundamental principles of the legal order.

3. The rule expressed in Civil Code Art. 379 §1 of the separateness of performance is not one of the rules whose violation would conflict with the foundations of the legal order of the Republic of Poland. It suffices to point out that the parties to the agreement may exclude this rule by providing for solidarity among the creditors (Civil Code Art. 369 in connection with Art. 367 §1).

4. An objection of the lack of jurisdiction of the arbitration court is subject to preclusion if it is not asserted within the time indicated in Civil Procedure Code Art. 1180 §2. In that case, a petition to set aside the arbitration award can no longer effectively rely on the basis set forth in Civil Procedure Code Art. 1206 §1(1). In the event of assertion of the objection of lack of jurisdiction, the arbitration court may rule on its own jurisdiction in a separate order, but that is left to its discretion. If the arbitration court is convinced of the existence of a valid arbitration agreement, it may also consider the case on the merits without first issuing an order concerning the asserted objections to its jurisdiction. In the latter case, it is obvious that a party may base its petition to set aside the arbitration award on the allegation of violation of Civil Procedure Code Art. 1206 §1(1), because it did not previously have any possibility of presenting this objection to the state court for its review. It is different in the case of issuance by the arbitration court of an order overruling the objection of its lack of jurisdiction. Then the parties may seek a ruling by the state court within 14 days after service of the order on them. The judicial proceedings in this respect are at two instances (Civil Procedure Code Art. 1180 §3).

5. A party which has exhausted the procedure specified in Civil Procedure Code Art. 1180 §3 cannot later, in a petition to set aside the award, again assert the objection of the absence of an arbitration agreement or its invalidity or ineffectiveness. This conclusion may be drawn from Civil Procedure Code Art. 365 §1 in connection with Art. 1207 §2 or in connection with Art. 13 §2. … Referring the order of the arbitration court to the court of first instance, and then the party’s failure to file an interlocutory appeal against an order against it, also closes the path to reassertion of the objection of the lack of jurisdiction of the arbitration court on the grounds indicated in Civil Procedure Code Art. 1206 §1(1). There are no grounds for distinguishing the litigation stance of a party which exhausted the recourse to both instances and a party which did not file an interlocutory appeal against the order of the court of first instance, and in consequence the order obtained finality. In both cases the legally final orders are binding on the parties and the courts pursuant to Civil Procedure Code Art. 365 §1.

6. A party that sought a ruling on jurisdiction pursuant to Civil Procedure Code Art. 1180 §3 and obtained an unfavourable order from the state court cannot assert the same objections under Civil Procedure Code Art. 1206 §1(1), regardless of whether the state court ruled at one or both instances.

7. The law essentially equalizes—in terms of legal consequences—the failure to assert the objection of lack of jurisdiction of the arbitration court within the time indicated in Civil Procedure Code Art. 1180 §2 with the respondent’s inclination (consent) to consideration of the case by the arbitration court. An interpretation accepting the preclusion specified in Art. 1180 §2 but at the same time permitting non-recourse to the procedure for judicial review set forth in Art. 1180 §3 and accepting the possibility of not disputing the jurisdictional order of the arbitration court until the petition to set aside the award would be an inconsistent interpretation and largely eliminate the benefits for both parties to the arbitration proceeding flowing from the 2005 amendment to the Civil Procedure Code.

8. In its review, the state court cannot re-evaluate the evidence to determine whether it would have made the same factual findings as those presented in the arbitration award under review. Disputing the arbitration award in this respect would be possibly only if the defects founds were so fundamental that they would qualify as a violation of fundamental principles of civil procedure. Evaluation of the award in terms of the fundamental principles of substantive law must not be turned into appellate review.

1. A petition to set aside an arbitration award is a legal instrument combining the features of extraordinary means of review, i.e. a petition to reopen the proceedings, and a proceeding to determine a right or legal relationship. The petition is not a means leading to substantive consideration by the state court of the dispute resolved by the arbitration court.

2. Pursuant to §32(3) of the Rules [of the Court of Arbitration at the Polish Chamber of Commerce] signatures are placed on the ruling by the panel and by the President and the Secretary of the Court of Arbitration. This provision does not specify that it must be the Secretary’s personal signature, but only requires signing by the Secretary, and thus as well by his Deputy duly authorized for temporary performance of his duties. Interpreting this provision otherwise would lead to the absurd conclusion that the Court of Arbitration could not issue rulings at all during the temporary absence of the Secretary General due to illness or holiday.

3. It indisputably follows from §32(2) of the Rules [of the Court of Arbitration at the Polish Chamber of Commerce] that the ruling of the arbitration court consists of the resolution (operative wording) and the justification, which constitutes an integral part of the award. Similarly, Art. 1197 §2 of the Civil Procedure Code indicates that an arbitration award must contain the grounds for the resolution. Thus an award without such justification will not be introduced into legal circulation. Since that is the case, the resolution by itself would have no reason for being and for this reason the resolution and the justification should be treated as a formal and substantive whole. … Thus there are no reasons to deem the absence of the signatures of the arbitration panel under the operative wording of the award to mean the non-existence of the ruling and to raise arguments applicable only to the state courts.

4. The requirement to indicate an [arbitration] agreement in writing is also fulfilled when the party presents a certified copy of the document in which the agreement was concluded. A written copy in the form of a certified transcript from the document, i.e. the agreement, indicates that the original of the document constitutes a document referred to in Art. 1162 §1 of the Civil Procedure Code. The form of the [arbitration] agreement indicated by this provision means that the agreement must be made in writing. … Subsequent destruction or other loss of the document as the medium in which the agreement was recorded does not eliminate the relevance of the fact that it was previously made in written form. It should be indicated in this respect that the Parliament did not use the phrase “in written form” here but only “in writing,” which suggests that this may be any confirmation of the agreement made in writing, including a copy of the document containing the agreement, somehow referring to it in its content.

5. The state court considering a petition to set aside an arbitration award does not have the competence for a substantive assessment of the findings made by the arbitration court. This means that the state court cannot make its own findings on classification of an agreement, but can only assess the propriety, logical argumentation and conclusions dawn, and in this context confirm that it does or does not suffer from errors of logical reasoning.

1. Under the wording of Civil Procedure Code Art. 1158 §1, the court proper to hear a petition to set aside an arbitration award will be the court that would have been proper to hear the case if the parties had not made an arbitration clause. This rule should be understood to mean that any court could be proper, without any limitations, and thus proper based on general venue or alternative venue, at the election of the petitioner, of course under the condition that exercise of such election is possible at all in the given case.

2. Under Civil Procedure Code Art. 204 §2, a counterclaim is filed with the court of the main statement of claim, and thus it should be found that the election by the defendant (the petitioner) to file a counterclaim during the course of the proceeding before the arbitration court, and not a separate claim in a separate proceeding, determines its current litigation stance and means that the court proper to hear a petition to set aside the arbitration award will be the same court that would have been proper to hear the main claim (Civil Procedure Code Art. 1158 §1 in connection with Art. 204 §2), and not the court proper for a claim asserted … in a separate proceeding rather than as a counterclaim.

1. The regional made an erroneous interpretation of Civil Procedure Code Art. 1206 §1(5) by incorrectly assuming that demonstration of the statutory ground for setting aside an arbitration award in the form of issuance of the award on the basis of a forged or altered document requires proof of this fact through a legally final conviction for commission of a criminal offence. The ground for setting aside an arbitration award consisting of the fact that the arbitration award was obtained through a criminal offence or that the basis for issuance of the award was a forged or altered document is the same as the basis for reopening a civil proceeding set forth in Civil Procedure Code Art. 403 §1(1). However, Art. 1206 §1(5) does not expressly require that the criminal act underlying obtaining of the arbitration award be established by a legally final criminal judgment, which means that such fact may be the subject of independent findings by the regional court.

2. There is great autonomy in arbitration procedure, entirely consistent with the legislative intent, significantly limiting the opportunities for review by the state court. The basic purpose of this legal regulation is to expedite the procedure for resolution of civil disputes, and not to create an additional phase of pre-judicial procedure. When the parties decide to submit a dispute to an arbitration court, they therefore must take into account such conditions, also including the minimal external review of its awards.

3. For the state court to conduct a proceeding concerning alteration of documents, which the petitioner did not attempt to demonstrate in the arbitration proceeding, would essentially involve the state court replacing the juridical activity of the arbitration court, which is not provided for by the civil procedure regulations.

4. Because the petitioner did not seek to correct or supplement the record [before the arbitration court], failure to exercise this special measure means that it lost the right to assert irregularities in preparation of such document. Pursuant to §13 of the Rules [of the Court of Arbitration at the Polish Chamber of Commerce in force from 1 January 2007], if the provisions of the Rules or the procedure agreed by the parties is not followed, a party who knew of such violation but failed to assert an objection promptly or within another time determined by the parties is deemed to waive the opportunity to raise such allegation in the proceeding before the arbitration court.

5. The limits of the discretion of the arbitration court in conducting the evidentiary procedure are established by the requirements of thorough examination of the circumstances essential to resolve the matter and equal treatment of the parties to the proceeding. Depriving a party of the opportunity to defend its rights should be interpreted narrowly. The arbitration court’s rejection of evidence offered by a party because it finds the evidence unnecessary does not constitute depriving the party of an opportunity of a defence.

1. The rule of the binding force of legally final judicial rulings, as an element of the values protected under the Constitution and in the international order making up a state governed by the rule of law, which the Republic of Poland is, is included among the fundamental principles of the legal order of the Republic of Poland.

2. The state judicial system and arbitration are not identical. The lack of identity does not mean, however, that arbitration courts, and particularly their rulings, are irrelevant for the judicial system. While it is true that under Art. 175 of the Constitution, justice is dispensed by the state courts, it should be clearly stressed that as part of the dispensation of justice, the state courts oversee the activity of arbitration courts, and more precisely the rulings issued by them.

3. A ruling by a state court on recognition or enforcement of an arbitration award results in ascribing to the award the same force that rulings of state courts have, which is clearly confirmed by Civil Procedure Code Art. 1212 §1. This means that such a ruling, thanks to the state court ruling connected with it, must be treated in legal dealings the same as any other ruling of a state court. ... If an arbitration ruling has the same force as a ruling of a state court, this means that Civil Procedure Code Art. 365 §1 [i.e. preclusive effect] applies to it. Civil Procedure Code Art. 1212 does not provide for any exceptions from the equivalence of the effects of the arbitration court ruling to a state court ruling.

4. If the parties and the arbitration court appointed by them wish the ruling of the arbitration court to be equivalent in its effects to a state court ruling, they must take into consideration that the arbitration court has already ruled preclusively in the same matter between the same parties. If the prior ruling by the arbitration court has already been recognized or enforced by the state court, this has fundamental significance for the ability to recognize a further ruling issued between the same parties. A state court which is ruling on recognition or enforcement of a further ruling may not ignore the fact that the state court has already spoken on the same matter. In other words, the court will be bound by the ruling of the state court that recognized or enforced the prior arbitration court ruling.

5. It follows from Civil Procedure Code Art. 365 §1 that a court ruling on recognition of a second arbitration ruling, being bound by the prior ruling also by a state court, should not permit two rulings to be found in legal circulation which decided the same preclusive issue differently in the same matter between the same parties.

6. The lack of a basis to apply the regulations on a proceeding upon a petition to reopen [a legally final judgment] directly to assessment of an arbitration award, and on the other hand the lack in Polish law of a regulation for reopening a proceeding with respect to arbitration awards, cannot result in the unfettered discretion of an arbitration court in determining whether to take into consideration an earlier award in which a certain issue was already preclusively ruled on between the same parties. … If the arbitration court expects its award to be recognized, it should take into consideration the prior resolution of the preclusive issue in the award that was already recognized with legal finality by the state court. When examining the permissibility of a departure from this rule, the court in a proceeding to set aside an arbitration award may not rely on the mere assertion by the arbitration court that new facts or evidence has appeared in the case, but should determine, applying as relevant the criteria for assessment developed in the context of the legal regulations for reopening of a proceeding concluded in a legally final judgment, whether they are truly new facts and evidence, and whether the party could have asserted them in the prior proceeding.

1. Under Civil Procedure Code Art. 1158, the court proper to hear a case under a petition to set aside an arbitration award is the court that would be proper to hear the case if the parties had not made an arbitration clause. This would thus be the court indicated by the regulations on exclusive geographical jurisdiction, or if there are no grounds to apply such regulations, the regulations on general venue.

2. Assertion of alternative venue—even assuming that such possibility is permissible—must be made in the first pleading, i.e. the response to the petition [to set aside the arbitration award], under pain of loss of such option.

1. Factual findings by the arbitration court are generally binding on the state court hearing a petition by a party dissatisfied with the resolution of the case by the arbitration court. The proceeding before the state court is not in the nature of the review proper to a common court of second instance, however, but is limited to the grounds expressly stated by the regulations, which are the permissible legal grounds for a petition to set aside an arbitration award (Civil Procedure Code Art. 1206 §§ 1 and 2).

2. Only if the state court finds that the [evidentiary] procedure was not conducted at all or was conducted incompletely, or was clearly conducted defectively, in violation of the rules of logical understanding and linking of facts in a chain of cause and effect, with selective admission of evidence in the case, admitting evidence only from one side, excluding without justification evidence offered by the opposing side, and the like, may it be found that the requirements referred to in Civil Procedure Code Art. 1206 §1(4) were not met. ... This provision should be interpreted narrowly, limiting the possibility of upsetting an arbitration award to the principles of a fair trial and procedural violations that could have an effect on the arbitration award.

3. The defendant’s argument that the principles of civil liability for injury do not belong to the fundamental principles of the legal order in Poland cannot be sustained. Under the civil law, and thus in private legal relationships, as a result of various events—particularly dangerous acts, acts arising out of commercial activity, vehicular traffic, as well as legal acts—the occurrence of injury is of universal dimensions and requires legal regulations guaranteeing liability in damages. Regulations in this respect belong to the fundamental norms of the law of obligations, and under tort liability and contractual liability may be regarded as forming some of the fundamental principles of the legal order of the state.

4. Art. 45 of the Polish Constitution does not refer at all to arbitration, but only to the state courts.

1. In the view of the appellant, it was allegedly deprived of the opportunity to defend its rights before the arbitration court (Civil Procedure Code Art. 1206 §1(2)) because the arbitration court upheld a claim as to liability which had never been raised. … As the appellant ... does not allege that it was stipulated otherwise between the parties, it may be assumed that under the rule set forth in Civil Procedure Code Art. 1188 §2 the arbitration court regarded the claim for damages set forth in a pleading as effectively asserted.

2. The principle of the equal rights of the parties was respected in the proceeding before the arbitration court, as each of the parties was provided an opportunity to present its position on the matter at each stage of the proceeding.

3. The public policy clause, like any general clause, is not precisely defined, which leaves great discretion to the court ruling on a specific case, but nonetheless, on the basis of this clause, the review of the constitutive elements of an arbitration award may not take on the dimensions proper to a review of the merits (correctness) of the award. ... The prohibition of a review of the merits (correctness) of an award is tied to the essence of application of the public policy clause. In applying the clause, the point is not to determine whether the award is consistent with all relevant mandatorily applicable regulations of law, but only to determine whether the award effected a result contrary to the fundamental principles of the domestic legal order.

4. The fundamental principles of the legal order are the fundamental constitutional rules concerning the socio-economic system and the overriding principles governing specific fields of substantive and procedural law. It has been recognized in the case law that such principles include economic freedom and the freedom of contract, ... the principle of the autonomy of the will of the parties and the equality of entities, ... and the principle of social justice.

5. Procedural public policy ... may be grounds for assessing an arbitration award in two aspects. First, the procedure which led to issuance of the arbitration award is assessed for its compliance with fundamental procedural principles of the legal order. Second, the effects of the arbitration award are assessed from the perspective of their consistency with procedural public policy, i.e. whether they are reconcilable with the system of procedural law, e.g. whether they violate the principle of res judicata or the rights of third parties.

1. An arbitration award may be said to be contrary to the fundamental principles of the legal order … only with respect to constitutional principles of the socio-economic system or the leading principles governing specific fields of substantive law.

2. The defectiveness of an arbitration award consisting of violation of fundamental principles of the legal order must appear from the wording of the ruling as such, and not from violation of the regulations for procedure before the arbitration court.

3. The fundamental principles of the legal order, constituting the basis for assessment of an arbitration award, should be understood to include not only constitutional norms, but also the leading norms in specific fields of law.

4. Consideration of a petition [to set aside an arbitration award] generally does not include a review of the consistency of the arbitration award with substantive law, a review of whether the award is supported by the facts cited in the justification for the award, or whether such facts were properly established, although of course a ruling based on a selective, unreliable assessment of the evidence does violate the rule of law.

The applicant withdrew with prejudice the application for enforcement of a foreign arbitration award and issuance of an enforcement clause. ... The respondent consented to withdrawal of the application and discontinuance of the proceeding. ... It appears from the evidence that withdrawal of the application is not inconsistent with the law or principles of social coexistence and is not intended to circumvent the law.

1. Although the court ruling on an application for enforcement of an arbitration award is not bound in any respect by the ruling of the Vienna Commercial Court in the action to set aside the arbitration award, it must not be ignored that the New York Convention provides grounds for the domestic court deciding on enforcement of a foreign arbitration award to consider, upon application of a party, a ruling setting aside the arbitration award as grounds to refuse enforcement of the award.

2. If a proceeding to set aside or stay enforcement of an arbitration award is only pending, that does not justify refusal to issue or confirm the enforceability of the award, but may justify postponing a decision on the matter.

Because the arbitration award was set aside, issuance of an order on recognition of the award became moot.

1. A petition to set aside an arbitration award is an extraordinary means of review of arbitration rulings by the state court. It is not an appeal, but combines the features of an extraordinary means of challenge with a claim to establish a right or legal relationship. But it cannot be agreed that it is a type of appeal or means of challenge.

2. The list of grounds for a petition to set aside an arbitration award provided in Civil Procedure Code Art. 1206 §§ 1 and 2 are exhaustive in nature; that is, the court may not set aside an arbitration award for reasons other than those set forth in this provision. It should nonetheless be pointed out that one of the grounds for the petition—the public policy clause—is in the nature of a general clause, which means that the list of circumstances which may justify setting aside an award is not closed.

3. Not every violation of the rules for procedure before the arbitration court established by the parties or arising under the code should result in setting aside an arbitration award. It is justified to accept by way of interpretation that the fundamental rules of procedure are those whose violation could have an effect on the result in the proceeding before the arbitration court in the specific case.

4. With respect to review of arbitration awards, the purpose of the public policy clause is to protect the national legal system against resolutions that are incompatible with the system. The resolution by the arbitration court, understood as an individual and concrete norm expressed in the arbitration award, as well as the method by which it was issued, is subject to assessment from the point of view of compatibility with the fundamental principles of the legal system.

5. The state court does not review the correctness of the arbitrators’ resolution, but it must examine and assess it in order to review the compatibility of the resolution with public policy. In other words, the state court should—at least insofar as the allegation of incompatibility [with public policy] arises—create a model of the ruling which in its opinion is correct, and then compare that to the arbitrators’ resolution, in order to determine whether the nature and scale of the inconsistency justifies the allegation of violation of public policy.

6. A gross and obvious discrepancy between the facts appearing from the arbitration case file (or facts that are commonly known or known to the state court in its official capacity) and the facts assumed as the basis for the award may not remain entirely beyond the scope of interest of the state court.

7. In the meaning of consistency with the fundamental principles of the legal system of the Republic of Poland, the point of the Parliament was not that a ruling be consistent with all regulations of Polish law, but only that there be consistency with the fundamental principles of the legal system of the Republic of Poland.

8. The principle of the enforceability of contracts belongs to the group of fundamental principles of the Polish legal system. It is not absolute in nature, however, and is subject to a number of statutory exceptions. One of them is Civil Code Art. 5, setting forth the notion of abuse of a subjective right.

9. The principle of estoppel (venire contra factum proprium) and the clean-hands doctrine are not counted among the fundamental principles of arbitration court procedure and are not recognized as a part of the legal system of the Republic of Poland.

10. The rule of impartiality leads the arbitrators to maintain an impartial attitude toward the case and the participants in the proceeding. In turn, the formal equality of the parties is manifest in the right to be heard and equal procedural measures. The principle of equality in the proceeding before the arbitration court has two aspects: hearing out the parties by the arbitration court, and the opportunity to present their allegations and evidence to support them (the opportunity to use the same procedural measures). The principle of directness requires that evidence be taken before the full panel of the arbitration court.

11. If no injury was caused, awarding damages should be regarded as inconsistent with the fundamental principles of the legal system of the Republic of Poland.

1. Final refusal to issue an order enforcing an arbitration award definitively eliminates the possibility of treating the award as equivalent to a state court judgment, and thus eliminates the result of the proceeding up to that point before the arbitration court.

2. Without doubt, the debtor has standing to file a petition to set aside an arbitration award. The creditor is deprived of such possibility, however. A party satisfied with the resolution may only commence a proceeding provided for in Civil Procedure Code Art. 1212 §2. In the situation of the creditor, the proceeding for recognition or enforcement of the award is the only procedure available to such entity for review of the propriety and legality of the determination by a domestic arbitration court.

3. The Civil Procedure Code provides for two forms of review of the rulings of the arbitration court. Alongside the proceeding for enforcement of the rbitration award is the petition to set aside the arbitration award. ... These are independent proceedings, based on independent grounds. ... From the point of view of the proceeding before the state court, the case is definitively ended only by the proceeding on the petition to set aside the arbitration award.

4. An order on recognition or enforcement of an arbitration award issued abroad—unlike an order on recognition or enforcement of a domestic arbitration award—is analogous to rulings issued in the main proceedings on the merits of the case.

5. A cassation appeal on recognition or enforcement of a domestic arbitration award is impermissible.

1. Under Civil Procedure Code Art. 1162, the fact that a party to an arbitration clause has the status of a consumer is irrelevant.

2. An arbitration clause is subject to interpretation. Notwithstanding the essentially procedural nature of an arbitration clause, it should be interpreted in accordance with Civil Code Art. 65, applied by analogy, and thus, inter alia, in accordance with the directives requiring consideration of the intent of the parties to the agreement concerning the arbitration clause and its purpose.

3. Violation of the substantive law applicable to assessment of the relationship being resolved may lead to setting aside of an arbitration award only when the effects of the award, as determined by the content of the ruling, are contrary to the fundamental principles of the legal order.

4. The fundamental principles of the legal order of the Republic of Poland … include the constitutional principle of protection of property rights (Polish Constitution Art. 64(2)). By granting protection to one party to an agreement at the cost of the other, by awarding high consideration against the latter in favour of the other contracting party despite a clear lack of grounds therefor, the arbitration court violated this constitutional principle.

1. An arbitration court may rule on its own jurisdiction in a proceeding in which a claim has been filed (Civil Procedure Code Art. 1180 §1), including also in a separate order. In the regulations concerning procedure before the arbitration court, the Parliament did not provide a basis for issuance of an award dismissing a statement of claim commencing a proceeding before the arbitration court, including in a situation where the arbitration court finds that it has no jurisdiction to decide the dispute. It follows from these provisions that in instances indicated in Civil Procedure Code Art. 1190 §1, 1196 §1 and 1198, the arbitration court shall issue an order discontinuing the proceeding. It should thus be accepted that the arbitration court shall issue such an order also when, after beginning to receive evidence in the matter, it finds that the proceeding cannot continue because of the lack of an arbitration clause or the invalidity of such agreement. Conducting the proceeding and issuing an award then becomes impossible for a reason other than that stated in Civil Procedure Code Art. 1198 (1) and the beginning of (2).

2. The nature of a ruling issued by a court, including by an arbitration court, is decided by the substance of the ruling, and not the name or external form which the court gave to the ruling .... The ruling challenged by the claimant in the petition to set aside the arbitration award ... was not—contrary to the name used—an arbitration award, but in light of the nature of the determination made therein, an order.

3. An order discontinuing the proceedings before the arbitration court because of the lack of a valid arbitration clause, or an order dismissing the statement of claim for this reason, is a ruling ending the proceeding before the arbitration court, in which the court rules on its own lack of jurisdiction in the matter. While an order by the arbitration court in which the arbitration court denies a defence of the lack of the arbitration court’s jurisdiction may be challenged before the common court by either of the parties within two weeks (Civil Procedure Code Art. 1180 §3), the Parliament did not provide for the opportunity to challenge before the common court an order by the arbitration court in which the arbitration court rules that it lacks jurisdiction in the matter. Upon issuance of such ruling, a proceeding before the common courts is open to the parties interested in resolution of the dispute, and they may exercise their right of access to the courts in such proceeding.

4. A negative determination by the arbitration court as to its own jurisdiction in a matter is a final ruling and is not subject to review by the common court. A ruling by the arbitration court finding that it lacks jurisdiction in the matter may thus not be challenged by a petition to set aside an arbitration award as provided by Civil Procedure Code Art. 1205 ff.

1. The grounds for setting aside an arbitration award in the form of failure to comply with fundamental rules of procedure cannot be equated with the grounds set forth in Civil Procedure Code Art. 1206 §2(2) arising out of the public policy clause, and the latter constitute separate grounds for setting aside an award.

2. The mandatorily applicable Civil Procedure Code Art. 1197 §2 provides that the statement of the reasons which guided the arbitral tribunal in issuing the award constitutes an inseparable part of the award. The reasons stated essentially constitute an integral part of the award. … The reasons for the resolution included in the justification may also prove relevant for determining the binding force of the legally final award, and thus the bounds of its substantive legal finality, even though this generally involves the binding force of the operative wording of the award. The reasons for the resolution are also covered by res judicata in situations where they must be referred to in order to determine precisely the substance of the resolution.

1. In a petition to set aside an arbitration award, review of the merits of the case decided by the arbitration court is excluded.

2. Fundamental principles of the legal order should be understood to mean not only fundamental principles of the social and political system, reflected in constitutional principles, but also the overriding principles governing specific fields of law. … Examples that have been held to be violations of the fundamental principles of the legal order within the meaning of Civil Procedure Code Art. 1206 §2(2) include violation of the principle of the autonomy of civil-law entities and the principle of economic liberty, awarding damages where no injury has been suffered, or accepting the effectiveness of setoff under conditions in which specific regulations exclude such possibility.

1. A petition to set aside an arbitration award is an extraordinary means of review intended to set aside the award if at least one of the grounds exhaustively set forth in Civil Procedure Code Art. 1206 is justified.

2. When considering a petition [to set aside an arbitration award], the state court is bound by the grounds alleged by the petitioner. Only two of the grounds set forth in Civil Procedure Code Art. 1206 §2 are considered on the court’s motion: the non-arbitrability if the dispute and inconsistency of the arbitration award with the fundamental principles of the legal order of the Republic of Poland.

3. The assessment of whether an arbitration award is contrary to fundamental principles of the legal order is addressed to the content of the award, and not the correctness of the procedure before the arbitration court or the composition of the panel. … An arbitration award may be set aside under the public policy clause if it is found that the results included in the content of the award are not consistent with a specific norm which is regarded as one of the fundamental principles of the legal order in force in Poland. ... These principles include not only constitutional norms, but also the overriding norms in specific fields of law.

4. The requirements made of persons serving as arbitrators should be combined with a party’s right to learn about any ties the arbitrator may have to entities appearing in the proceeding. It is up to the party to evaluate such circumstances as grounds for a decision to select an arbitrator or to seek removal of an arbitrator. The arbitrator’s self-assessment is irrelevant, because the essence of a fair procedure is tied to objective judgment by others. ... The fundamental principles of the legal order include the right to a court as provided in Art. 45(1) of the Polish Constitution, an element of which is a party’s right to have its case heard by an independent court, in a fairly conducted procedure.

The court hearing a petition to set aside an arbitration award does not reconsider the case in which the arbitration court issued the award. The review by the court in such case is limited only to an examination of whether the ground asserted in the petition, which may be one of the circumstances listed in Civil Procedure Code Art. 712 §1, exists, and the court will take into consideration at its own initiative only whether the arbitration award violates the rule of law or principles of social coexistence (Civil Procedure Code Art. 714). Not only the proceeding before the court of first instance, but also the proceeding before the court of second instance, is subject to these rules.

1. Whether a given ruling of a foreign court may be legally relevant cannot be determined in advance at the time of recognition. Thus it cannot be anticipated what effects the ruling might have or in what circumstances a given entity might rely on it in the future. Thus the petitioner is right in asserting that Civil Procedure Code Art. 1145 §1 does not provide grounds to refuse recognition of a ruling by a foreign court only because in the view of the court where recognition is sought it will not exert legal effects in Poland.

2. If the petitioner [seeking recognition] appeared as a party in a proceeding before an Austrian court, it not only has a legal interest to have standing in the recognition proceeding before the Polish court, but such interest also means that if the grounds set forth in Civil Procedure Code Art. 1146 do not exist, it may obtain recognition of the award as effective in Poland.

3. A ruling denying a petition to set aside an arbitration award, formally speaking, is a merits decision and not only procedural. Such rulings thus, as a rule, are capable of recognition. It should be pointed out, however, that the dispute between the parties on the merits was resolved by the arbitration court, acting on the basis of the intent of the parties as expressed in the arbitration clause. The judgment in a proceeding to set aside an arbitration award is therefore only a resolution with respect to the state’s exercise of oversight of arbitration rulings.

4. A judgment by a domestic court issued in a proceeding upon a petition to set aside an arbitration award must be taken into consideration in a proceeding seeking recognition of a foreign arbitration award only when permitted by the provisions governing such proceeding. As grounds for denial of recognition, the Civil Procedure Code and the New York Convention provide only for the court in the country deciding on recognition of a foreign arbitration award to consider, upon motion of a party, a judgment setting aside the arbitration award.

5. Given the specific nature of an arbitration award, which is issued based on the intent of the parties, and the function performed by a foreign court that denies a petition to set aside an arbitration award, there is no legal basis for recognition of such judgment by the foreign court, which essentially involves only oversight and not the merits. The connection between such judgment by a foreign court and the arbitration award, and thus the not entirely independent nature of the judgment, is primarily a barrier to treating the judgment as a ruling that may be recognized in Poland under Civil Procedure Code Art. 1145 §1.

1. A proceeding upon petition to set aside an arbitration award may ... be conducted even in the event of the absence of an arbitration clause, or invalidity or ineffectiveness of such clause, or if the clause is no longer in force under applicable law (Civil Procedure Code Art. 1206 §1(1)). The parties may demand that an arbitration award be set aside for these reasons.

2. The issue of loss of force of an [arbitration] clause, as with the issue of the non-existence, invalidity, ineffectiveness or unenforceability of the clause, may be examined in a proceeding upon a petition to set aside an arbitration award only if the petitioner asserts the relevant allegation. The rule applicable in a proceeding before a state court is that the court is bound by the grounds of the petition and the limits of the motions made by the parties. Only grounds indicated in Civil Procedure Code Art. 1206 §2 may be considered by the court on its own motion.

1. The task of the state court considering a petition to set aside an arbitration award is to examine whether there is a basis for setting aside the award as set forth in the act. This generally does not extend to a review of the arbitration award’s compliance with substantive law, or a review of whether it is supported by the facts cited in the justification for the award or whether such facts were correctly established.

2. Civil Procedure Code Art. 1206 sets forth an exhaustive list of the grounds for setting aside an arbitration award. As a rule, the court considering the petition is bound by the grounds alleged by the petitioner, and thus may set aside an arbitration award because of the existence of one of the grounds listed in Art. 1206 only if it was asserted in the petition. Only two of the grounds listed in Art. 1206 for setting aside an arbitration may be considered on the court’s own motion, whether or not asserted in the petition: if the dispute is non-arbitrable pursuant to statute (Art. 1206 §2(1)) or if the arbitration award is contrary to the principles of the legal order of the Republic of Poland (Art. 1206 §2(2)).

3. Under the public policy clause set forth in Civil Procedure Code Art. 1206 §2(2), an arbitration award is subject to being set aside if the effects determined by the wording of the award are incompatible with a specific norm that is held to be a fundamental principle of public policy.

4. Application by the arbitration court of the proper substantive law for resolution of a dispute, which it is generally required to do under Civil Procedure Code Art. 1194 §1, is thus subject to review by the state court considering a petition to set aside an arbitration award only insofar as application of such law is required by the public policy clause, which is considered by the court on its own motion.

1. By adopting an arbitration clause, the parties voluntarily restrict their own constitutional ... right to resort to the courts.... Matters are most often entrusted to arbitrators for resolution because of their specialized knowledge, e.g. in the field of construction (in construction cases) or concerning commercial practices (in matters related to international transactions), where specialized knowledge is more important than knowledge of the substantive legal norms of a given legal system. In cases of this type, the arbitrators’ legal intuition may be sufficient. In such instances, it should be accepted that the arbitration court is not bound by regulations of substantive law, given the nature of the matters submitted to the jurisdiction of the arbitration court.

2. Pursuant to Civil Procedure Code Art. 714, the court is bound by the grounds for the petition to set aside the arbitration award, and additionally will consider on its own motion whether the award violates the rule of law or good practice. The allegation that the arbitration award violates the rule of law essentially concerns the issue of the permissible scope of review of the determination by the arbitration court by the common courts. ... Such review authority does not concern the issue of the correctness of the determination in terms of compliance with substantive law, or compliance with procedural regulations. The only basis for such review may be aggravated violations, of particular seriousness and weight, such that they also constitute a violation of the rule of law. The grounds for setting aside an arbitration award are formal in nature, as it is impermissible to examine whether the arbitration court resolved the dispute correctly in factual and legal terms, but only whether there was a violation of the public policy clause.

3. Violation of the rule of law should be understood to mean an offence against fundamental legal institutions. A determination violating the rule of law would include one that offends overriding legal principles and is contrary to the commonly accepted legal order in force in the Republic of Poland. An arbitration award may violate the rule of law if it results in a determination violating the applicable principles of a state governed by the rule of law. It is essential in this respect that when considering the case and ruling, the arbitration court is not bound by provisions of substantive law, but only may not violate the applicable principles of a state governed by the rule of law.

4. There is no catalogue of fundamental principles of the legal order, but they must be inferred from the entirety of legal norms in force.

5. It is a general principle of civil law that damages are due only when the injured party has suffered a loss, the function of damages is to compensate for loss, and damages may not exceed the amount of the loss. It should thus be recognized that an arbitration award violates the public policy clause if the damages awarded do not correspond to the loss suffered.

6. In a situation where the parties failed to specify the rules of procedure, under Civil Procedure Code Art. 705 §2 the arbitration court will apply the rules of procedure it deems appropriate. It is generally not bound by the provisions of the Civil Procedure Code in this respect. For this reason as well, the arbitration court need not lay down a procedure in advance, i.e. at the outset of the proceeding. It may thus do so during the course of the proceeding, including by issuance of separate orders with respect to successive activities. This extensive discretion of the arbitration court is limited, however, by Civil Procedure Code Art. 705 §2, third sentence, by the requirement to thoroughly explore the circumstances necessary to resolve the case. It is clear in this respect that the arbitration court may not violate the principles of the rule of law or social coexistence.

7. The adversary principle, and the principle of the parties’ availability, also apply in a proceeding before an arbitration court, and such court may not omit a thorough exploration of the circumstances necessary to resolve the case. … The “inability to omit a thorough exploration of the circumstances of the case,” as referred to in Civil Procedure Code Art. 705 §2, third sentence, should be understood primarily as a duty to conduct the proceeding before the arbitration court in a manner that assures the parties themselves of the ability to present any allegations and evidence, and, as an aspect of the equal treatment of the parties, to address the allegations and evidence presented by the opposing side.

8. The fundamental principles in force under Polish law with respect to liability for loss caused by non-performance or improper performance of an obligation, as expressed by the Civil Code provisions concerning the effects of non-performance of obligations, are a duty to redress loss by the party to a contract that failed to perform or improperly performed its obligation, and, significantly, an ordinary causal relationship between the party’s action and the loss. The duty to redress loss in this respect may not be determined randomly or arbitrarily, but must correspond to the extent of the loss suffered (even if based on a consideration of all of the circumstances of the case), and default interest is due from the day following the date on which the debtor fell into delay. An arbitration award that was issued in violation of these principles is an award that violates the rule of law.

Under [former] Civil Procedure Code Art. 715 applicable in this case, whose current counterpart is [former] Art. 1207 §2, a proceeding upon a petition ... to set aside an arbitration award should be governed by provisions concerning an adversarial proceeding at the first instance. Thus the provisions that should be applied include Civil Procedure Code Art. 23, which provides that in cases seeking delivery or return of property for lease or tenancy, the amount in dispute in the case of agreements for a definite period is the rent for the period in dispute, but no more than one year; and for agreements for an indefinite period, the rent for a period of three months.

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.

1. The grounds for permissibility of a cassation appeal from a judgment in a case seeking to set aside an arbitration award are the same as those from other judgments by the court of second instance, except that classification of the case in this respect is a two-step process, in the sense that determination of the subject of the ruling and the appeal requires resort to the arbitration award. A cassation appeal is thus permissible in cases: 1) in which the subject of the ruling by the arbitration court was property/financial rights [majątkowe] of a value no less than that specified in Civil Procedure Code Art. 398² §1 (unless the scope of the challenge to the arbitration award was for a lesser amount), and 2) in which the subject of the ruling by the arbitration court was (also) non-property/financial rights; the latter may now be the subject of an arbitration clause within the scope provided by Civil Procedure Code Art. 1157.

2. If a party moves to set aside an arbitration award in its entirety and the petition is denied in its entirety by the court, the subject of the appeal from the judgment of the court of first instance and the judgment of the court of second instance denying the appeal will be the same as the subject of the arbitration award.

1. The provisions of the Civil Procedure Code governing arbitration are not all of the same nature, but are divided into two main groups. One set of provisions governs issues related to the permissibility of a petition [to set aside an award], the formal requirements for the petition and the course of the proceeding, and thus are strictly procedural provisions. The other set of provisions includes those specifying the grounds of a petition to set aside an arbitration award, functionally analogous to provisions of substantive law and setting forth the grounds for the substantive determination by the court on the merits of the dispute and the justification for the petition. The differentiation among provisions of the Civil Procedure Code concerning a petition to set aside an arbitration award is reflected by the fact that in the event of filing of a cassation appeal in such a case, allegations of violation by the court of provisions of the Civil Procedure Code governing the permissibility of a petition and the course of the proceeding on the petition should be asserted as part of the second basis for a cassation appeal, that is, violation of procedural regulations, while allegations with respect to the grounds of the petition should be asserted as part of the first basis for a cassation appeal, that is, violation of substantive law.

2. The provisions of the Civil Procedure Code governing the grounds for a petition to set aside an arbitration award should thus be treated as analogous to provisions of substantive law, which is also essential for interpretation of interim provisions. From the point of view of principles for interim law, provisions governing the grounds for a petition to set aside an arbitration award should be treated analogously to provisions of substantive law, and are thus subject to the interim rules for substantive law and not procedural law.

3. The literal wording of Art. 2 of the amending act should be understood to mean that the regulation refers only to provisions concerning arbitration that are strictly procedural in nature, and thus concern the proceeding in a case upon a petition [to set aside an arbitration award]. It does not include provisions specifying the grounds for the petition, which should be governed by interim rules for provisions of substantive law.

4. Where an arbitration award was issued under the prior regulations of the Civil Procedure Code, but the case seeking to set aside the award was commenced under a petition filed after entry into force of the amending act, under Art. 2 of the amending act the new provisions should apply to the proceeding pursuant to the petition with respect to permissibility of the petition and the course of the proceeding, but the grounds for the petition to set aside the arbitration award should be determined and assessed in accordance with the former provisions in force prior to 17 October 2005.

5. In a case pursuant to a petition to set aside an arbitration award issued prior to the effective date of the Act of 28 July 2005 Amending the Civil Procedure Code (Journal of Laws Dz.U. No. 178 item 1478), commenced after the effective date of the act, the prior regulations of the Civil Procedure Code apply to an allegation of lack or invalidity of an arbitration clause stated as the grounds for the petition. The petitioner may assert such grounds for the petition even if it did not raise such objection in the proceeding before the arbitration court.

6. The rule set forth in Civil Procedure Code Art. 712 §2 clearly demonstrates that the legislative intent was to limit preclusion to an objection of exceeding the scope of an arbitration clause, and the intent was not to introduce such preclusion for an objection of lack of an arbitration clause.

1. Violation by the arbitration court of regulations of substantive law or erroneous interpretation thereof, even if resulting in an erroneous ruling, does not in itself—even if it really did occur—constitute a violation of the fundamental principles of the legal system.

2. Civil Procedure Code Art. 1185 indicates that the consultation among the arbitrators may occur at any place (and thus even in a hospital).

3. Drawing up and signing the award is not an act that requires the preparation of minutes. As provided in §31 of the Rules [of the Court of Arbitration at the Polish Chamber of Commerce], minutes are prepared of a hearing and any act of the arbitration court. The mere physical drawing up of the text of the award is not an act of the arbitration court; it is a technical, auxiliary act, which may be performed by only one person at a time. Signing of the award, which is an act addressed to the members of the panel of arbitrators, should be analyzed similarly. Placement of a signature by each of the arbitrators is the act of the arbitrator alone, not of the panel of arbitrators. It thus does not require the preparation of minutes, which is reserved for an act of the entire arbitration court.

4. Only a violation of the “fundamental” rules of procedure before the arbitration court (Civil Procedure Code Art. 1206 §1(4)) may be grounds for setting aside an arbitration award. … Issues connected with drawing up the minutes of the consultation among the arbitrators and issuance of the award cannot be regarded as belonging to this group. Even if minutes of these actions actually should have been prepared, the lack thereof would not mean that a “fundamental” rule of procedure had been violated, but only a rule of order.

1. An arbitration clause is an agreement which is governed by the Civil Code, including Art. 58 § 2. … Such agreement requires a specific power of attorney, and thus the power of attorney granted to the other partner—and that only to arrange banking formalities—was not sufficient for conclusion of an arbitration clause, and thus the clause was invalid.

2. It is clear from Civil Procedure Code Art. 714 that in a proceeding to set aside an arbitration award the court will consider on its own initiative only one of the grounds for the petition, namely that provided in Civil Procedure Code Art. 712 §1(4), i.e. whether the arbitration award violates the rule of law or principles of social coexistence. This means that all other grounds for the petition, including that there was no arbitration clause or that the clause was invalid or ceased to be in force (Art. 712 §1(1)), will be considered by the court only if they were asserted in the petition to set aside the arbitration award.

3. There is no catalogue of the rule of law, but such principles are shaped by the case law. Merits review of an arbitration award by the state court is thus limited to an assessment of whether the award violates such principles. ... This has to do with such violations of regulations of substantive law that result in violation of the principles of the rule of law, and the arbitration award violates the leading legal principles in force in the Republic of Poland, conflicts with the legal system, or violates the principles of the political and socio-economic order.

4. Conducting an evidentiary proceeding is intended to determine a state of facts, and it is not the task of the state court to conduct a new merits assessment of the correctness of the claims pursued before the arbitration court.

5. An arbitration award holding effective a setoff in violation of Civil Code Art. 505(1), or awarding damages in a situation in which no loss was suffered, violates the principles of the rule of law.

6. Whether the assessment by the arbitration court was correct is unreviewable by the state court, but without a doubt ruling on the basis of a selective, unobjective assessment of the evidence violates the principles of the rule of law.

1. While it is true that Civil Procedure Code Art. 697–711, in the wording in force through 16 October 2005, do not contain a provision that includes the content of Art. 1185, currently in force, which provides that the arbitrators’ deliberations may occur at any place, there should be no doubt that the arbitration court also had such authority under the regulations previously in force. … The arbitrators may meet for joint discussion, conduct a telephone conference, or consult with one another through an exchange of written correspondence.

2. An arbitrator’s duty to maintain confidentiality with respect to both the content and the course of the arbitrators’ deliberations is regarded as extremely important, which is why the view should be adopted, as stated in the literature, that the obligation to maintain confidentiality excludes an arbitrator from testifying before the court as to circumstances the arbitrator learned of while performing such function.

3. Under Civil Procedure Code Art. 1206 §1(2), a demand to set aside an arbitration award may be regarded as justified if the party demonstrates that it was deprived of the ability to defend its rights in the proceeding before the arbitration court. This provision refers to the necessity in the arbitration proceeding to observe requirements concerning the principle of the equality of the parties, hearing out the parties, and the ability for a party to address evidence and allegations presented by the opposing party. … The right to equal treatment of the parties extends further than the right to be heard. This principle requires the arbitration court more specifically to assure that the parties are treated equally during the course of the entire proceeding, which means identical treatment of the parties in a similar situation. The prohibition on discrimination against either of the parties applies to the entire proceeding before the arbitration court, but in practice it applies first and foremost to the evidentiary procedure.

4. It should be regarded as a violation of the principle of equal treatment of the parties to conduct an evidentiary procedure essentially limited to the evidence presented by the claimant, including all evidence from the testimony of witnesses, while at the same time refusing to hear the witnesses indicated by the respondent, in a situation where it clearly appears from the allegations of the respondent that the witnesses will testify as to circumstances highly relevant to resolution of the case.

5. In the arbitration clause, the parties are required to identify the subject of the dispute or the legal relationship out of which the dispute has arisen or may arise. Thus as the parties in the agreement submitted to the Court of Arbitration at the Polish Chamber of Commerce disputes arising in connection with the agreement, it should be found that they had in mind not any and all disputes that might exist between them, including disputes with respect to claims for unjust enrichment, but only disputes concerning claims arising on the basis of the agreement as concluded, that is, contractual claims.

1. A judicial proceeding to set aside an arbitration award should be conducted through to the end in accordance with the provisions in force upon commencement of the proceeding, that is, applying Civil Procedure Code Art. 165 §1, at the time of filing of the petition to set aside the award with the proper court. Thus if the petition was filed prior to 17 October 2005 [when the law was amended], the proceeding thereby initiated should be conducted thereafter in accordance with Civil Procedure Code Art. 712–715, but a proceeding commenced by a petition filed on that date or later, in accordance with Civil Procedure Code Art. 1205–1211. Similarly, a proceeding before an arbitration court should be conducted through to the end in accordance with provisions in force upon commencement of the proceeding. However, in light of the rule set forth in Civil Procedure Code Art. 1186, the date of commencement of a proceeding before an arbitration court will generally be the date of service on the respondent of the document containing the demand for arbitration.

2. In instances in which arbitrators are appointed by each party independently, a new arbitrator appointed by one of the parties has the same status as the former arbitrator. Since the former arbitrator was unable to reach agreement on selection of a super-arbitrator and it was necessary for the super-arbitrator to be appointed by the court, the decision of the court in this respect could hardly be questioned just because of the appearance of a new arbitrator. There is no need to assure him an influence over appointment of the super-arbitrator, since his predecessor with an analogous status failed to make use of his opportunity in this respect.

3. There may be various reasons for loss of force of an arbitration clause. In addition to the procedural grounds listed in Civil Procedure Code Art. 1168 (previously Art. 702 §1) and Art. 1195 §4 (previously Art. 707 §2), it could also involve such events as dissolution of the arbitration agreement, occurrence of a suspensory condition, or lapse of the deadline by which an arbitration award should have been issued. Termination of the agreement containing the clause does not in and of itself constitute such grounds, however. This rule is now stated clearly by Civil Procedure Code Art. 1180, but should not have been in doubt prior to adoption of that provision.

1. The provisions of the rules of the arbitration court cannot be relevant for determining whether the parties made an arbitration clause in accordance with the rules set forth in the Civil Procedure Code. ... In assessing the validity of an arbitration agreement as a legal act, the common court considers the circumstances resulting in invalidity of legal acts according to the regulations in force, that is, whether actions were taken without complying with requirements as to form provided for by statute or by the parties under pain of invalidity, and whether the substance of the action is contrary to or intended to circumvent a statute, or contrary to principles of social coexistence, and whether there were defects in the declarations of will.

2. A thorough analysis of the substantive justification of the determination by an arbitration court exceeds the bounds of a proceeding commenced upon a petition referred to in Civil Procedure Code Art. 1205 ff. ... The view is stated in the case law that determinations by an arbitration court are binding, and the common court has no right to conduct substantive review of a case concluded in a ruling of an arbitration court, apart from exceptions provided by statute.

There is a great deal of autonomy in arbitration procedure, entirely consistent with the intention of lawmakers, distinctly limiting the availability of review by the state court. The basic goal of this legal regulation is to expedite the procedure for resolving civil disputes, not create an additional phase of pre-judicial procedure. Parties who decide to submit a dispute to an arbitration court must thus count on such conditions, including also minimal external review of arbitration awards.

1. Review of the merits of an arbitration award by the state court is limited to a determination of whether the award violates public policy. The phrase used by the Parliament, “fundamental principles of the legal order” (Civil Procedure Code Art. 1206 §2(2)), clearly demonstrates that this has to do with violation of provisions of substantive law that would infringe on the principles of the rule of law, and the arbitration award infringes the guiding legal principles in force in Poland, conflicts with the legal order in force, i.e. violates the principles of the political and socioeconomic system.

2. Redress of injury should be regarded as a fundamental principle of the legal order. Damages should clearly correspond to the injury.

3. Carrying out a legal act intended to circumvent the statutory prohibition on setoff of claims covered by an arrangement violates public policy.

1. The schedule of fees for actions of the arbitration court constituting an annex to the rules of the court in force from 1 January 2000, which does not require payment of an arbitration fee on a defence of setoff, was applicable to the case decided by the arbitration court. … As the arbitration court failed to consider the defence of setoff because of failure to pay the arbitration fee, the allegation in the appeal that the procedure before the arbitration court was not observed in the arbitration proceeding is correct. … In consequence, it should be held that the petition to set aside the arbitration award on the basis of Civil Procedure Code Art. 712 §1(3) is justified by the wording of this provision.

2. Submission of the dispute existing between the parties for resolution by the arbitration court does not justify the conclusion that the parties waive the right to a fair and thorough procedure assuring the ability to satisfy the legal interests of the parties which are worthy of protection. The right to a fair procedure is a pillar of a democratic state governed by the rule of law, and for these reasons violation of such right justifies the conclusion that the rule of law was violated. This will be the case more specifically in the event of failure to consider the defence of setoff asserted by the party as a result of the arbitration court’s application of a regulation that was not in force with respect to payment of a fee as a condition for consideration of the motion. The principle of fair procedure requires consideration of the defence of setoff duly asserted by the respondent.

1. The issue of the scope of an arbitration clause involves interpretation of the declarations of will of the parties expressed in the document, where the main role is played by rules of linguistic meaning.

2. When considering a petition to set aside an arbitration award, the state court will examine the case only with respect to the grounds listed in Civil Procedure Code Art. 712 §§ 1 and 2. The ruling by the state court is limited in this case either to setting aside the arbitration award in whole or part, or denying the petition. ... The task of the court in a proceeding initiated by a petition to set aside an arbitration award is not to determine the merits of the matter that was previously resolved by the arbitration court, applying provisions of substantive and procedural law, but only to assess the justification for the petition under the grounds set forth in Civil Procedure Code Art. 712 §§ 1 and 2. The court with which a petition to set aside an arbitration award has been filed does not act as a court of second instance, authorized to review the merits of the case applying provisions of substantive law, but reviews the challenged award only from the perspective of the violations indicated in Civil Procedure Code Art. 712 §§ 1 and 2.

3. [Civil Procedure Code Art. 712 §1(2)] refers to the necessity to comply with the principle of the equality of the parties before the arbitration court, to hear them out, and the possibility for a party to address the evidence and allegations presented by the opposing party. As stated by the Supreme Court, only if the arbitration court did not hear the party at all or did not allow it to submit its allegations can it be said that the party was deprived of the opportunity to defend its rights.

4. Pursuant to the rule set forth in Civil Procedure Code Art. 705, in a proceeding before an arbitration court the parties have the right to establish the rules of procedure themselves. Their determination of the procedure may occur in the arbitration agreement or in an additional agreement, but no later than the time the proceeding is commenced. Lack of agreement by the parties means that the right to select the arbitration procedure passes to the arbitrators, as if they were assuming the rights of the parties.

5. A ruling by an arbitration court may not be challenged because of erroneous decision of the case in legal or factual terms. Violation of the law may be grounds for setting aside an arbitration award only if the content of the ruling violates the rule of law or principles of social coexistence. Assessment of whether the ruling violates the rule of law or principles of social coexistence is formulated narrowly, and such conclusion may be reached only if the arbitration award would result in a material violation of such principles.

1. It should be borne in mind that the arbitration court, which is not bound by provisions on procedure before the court (Civil Procedure Code Art. 1184 §2), has greater discretion than in a civil proceeding shaped by the Civil Procedure Code.

2. The arbitration court ... took evidence on its own initiative from the review of the websites and a review of the search capabilities of the Google Internet search engine with respect to the words in dispute ..., without being requested to do by the parties to the proceeding and without citing specific circumstances of the case justifying such initiative by the court, but in the view of the Appellate Court this does not constitute a serious violation of the adversary principle.

3. Taking evidence not in compliance with the rules set forth in Civil Procedure Code Art. 235–237 ... is not equivalent to violation of fundamental rules of procedure within the meaning of Civil Procedure Code Art. 1206 §1(4), which limits the ability to set aside an arbitration award to the principles of a fair trial and procedural violations material enough that they could influence the arbitration award.

4. An arbitration award will also be set aside if the award is contrary to fundamental principles of the legal order of the Republic of Poland. … This does not have to do with internal inconsistency of the form of the ruling, i.e. inconsistency between the specific parts of the ruling. This provision, which is an exception to the rule that when considering a petition to set aside an arbitration award, the state court generally does not review the resolution by the arbitration court on the merits, and in particular does not review whether the award is founded on the facts cited in the justification or whether such facts were correctly determined (as it is undisputed that arbitrators should have greater discretion than a state court in interpreting and applying the law), restricts substantive review of arbitration court rulings only to instances of violation of the principles of the legal order, i.e. instances where the effects of the arbitration court ruling would cause a material violation of such principles, which should be understood to mean the principles of the political and socioeconomic system. This means that the state court proper to consider the petition may not consider the substantive side of the dispute..., and an allegation of violation of specific provisions of substantive law may be effective only insofar as the violation of specific norms also violates the principles of the legal order.

1. An allegation under Civil Procedure Code Art. 712 §1(2) refers to deprivation of a party’s right to a defence only before the arbitration court, and thus it could not serve in this respect as independent and effective grounds for a cassation appeal, which may involve a challenge to the correctness of the proceeding before the state appellate court, but not in an arbitration proceeding.

2. There is a consensus that the authority to review [a ruling of an arbitration court by a state court] does not involve the issue of the correctness of the ruling in terms of its compliance with substantive law, or compliance with procedural regulations. The basis for such review may only be an aggravated violated of particular importance and weight—of the sort that also constitutes a violation of the rule of law. By no means may such review turn into a form of appellate review of the merits.

3. A petition to set aside an arbitration award is in ... the nature of an extraordinary legal instrument based on very narrowly defined grounds, which do not include undue explanation of the circumstances necessary to resolve the matter. Thus it must be concluded that violation of Civil Procedure Code Art. 705 §2, third sentence, may also provide grounds for a petition under Civil Procedure Code Art. 712 §1(4) only when it is of an extreme nature, and thus when it takes the form of complete omission of an explanation of the circumstances of the case or ignoring the evidence as a whole.

4. An arbitration court may not take into consideration facts not cited by the parties, or presume that the claimant’s allegations are true if the claimant fails to appear at the hearing, or assume facts to be true if they are not denied.

1. The subject of a proceeding [upon a petition to set aside an arbitration award] is a petition through which a party challenges the ruling of an arbitration court. The state court does not reconsider the case that was submitted to the arbitration court for decision and does not review the correctness of the award in terms of its compliance with provisions of substantive law or the correctness of the factual findings serving as the basis for the ruling. The proceeding does not have to do with a claim to be tried in the sense of an adversary proceeding, but rather with setting aside an award determining a specific legal status between the parties, and the petition shall contain a justification of the statutory ground the existence of which will result in setting aside the arbitration award.

2. The legal nature of a petition to set aside an arbitration award, framed in this way, means that the claim submitted to the arbitration court for decision is irrelevant to the petition and to the proceeding commenced as a result of filing the petition. Beyond the issue of the jurisdiction of the court (Civil Procedure Code Art. 696), it is irrelevant whom the dispute is between and over what, whether the matter submitted to the arbitration court for decision is in the nature of a commercial case, or an employment case, within the meaning of the Civil Procedure Code, or whether, if the case had been filed in a proceeding before the state court, it would be heard in a proceeding for order of payment, or under a summary or simplified proceeding. In consequence, the claim which the arbitration court ruled on in the award being challenged cannot determine what regulations are applicable in the proceeding upon a petition to set aside the award.

3. Regulations concerning separate procedures in commercial cases do not apply in a proceeding upon petition to set aside an arbitration award.

1. Arbitration is a procedure for resolving civil disputes by a decision-making body that is not a state court, but its jurisdiction is based on an agreement of the parties. For this reason, Art. 45 of the Polish Constitution, which refers to state bodies of the justice system identified in Constitution Art. 175(1), does not apply directly to arbitration.

2. When considering a case, an arbitration court is not bound by general regulations of procedural law applicable in a judicial proceeding, if the parties or the arbitration court have not otherwise provided for the procedure.

3. The indication in the second sentence of Civil Procedure Code Art. 1184 §2 that an arbitration court is not bound by judicial procedure regulations does not refer to mandatorily applicable provisions of the Civil Procedure Code governing procedure before the arbitration court. … Unless otherwise agreed by the parties, the arbitration court may conduct the proceeding as it deems fit, but subject to the provisions of the act. The rule of the priority of the intent of the parties in establishing the arbitration procedure, under Civil Procedure Code Art. 1184 §1, is subject to a limitation in that their selected manner of proceeding before the arbitration court may not be contrary to provisions of the law of the state which they selected that are in force in such a proceeding. The wording of Art. 1184 §1 (“if not otherwise provided by the act”) means that the parties may not, by their intent, change or exclude such provisions, and thus they are regulations of mandatory applicability [juris cogentis].

4. A state court considering a case upon a petition to set aside an arbitration award does not decide the dispute between the parties, and thus does not assess whether the arbitration court decided the case correctly in factual or legal terms, but only examines it from the point of view of grounds to set aside the award set forth in Civil Procedure Code Art. 1206.

5. Violation by the arbitration court of rules and regulations of the Civil Procedure Code binding on it governing arbitration procedure may provide grounds for a petition to set aside the arbitration award on the basis of failure to comply with fundamental rules of procedure before such court, arising under the act referred to in Civil Procedure Code Art. 1206 §1(4).

1. The arbitration court’s “replacement” of the parties in submitting declarations of will to extend tenancy agreements must be regarded as an action contrary to the rule of law. This type of ruling, absent a very clear contractual provision authorizing a ruling in this respect, conflicts with one of the fundamental principles of civil law: the principle of the autonomy of persons under the civil law, and included therein, the principle of freedom of contract.

2. Violation of the rule of law need not ... involve violation of principles arising under the Polish Constitution. The same result occurs if the arbitration court violates a fundamental principle of civil law.

3. Issuance of an enforcement clause for an arbitration award or confirmation of its effectiveness does not exclude the possibility to review whether the award violates the rule of law or principles of social coexistence in a proceeding to set aside the award.

1. It is accepted in the literature and in the precedent that res judicata effect, governed by Civil Procedure Code Art. 366, is ascribed only to rulings on the merits. … An order dismissing a petition to set aside an arbitration award, which does not belong to the category of listed merits determinations, does not enjoy res judicata effect and cannot justify an allegation of the invalidity of the proceeding based on Civil Procedure Code Art. 379(3).

2. Given that the petition to set aside the arbitration award was not based on Civil Procedure Code Art. 712 §1(1), it was impermissible for the court to consider sua sponte the issue of the invalidity of the arbitration clause.

1. Under Civil Procedure Code Art. 1206, in a case seeking to set aside an arbitration award, the court’s jurisdiction leads to consideration of the petition within the grounds asserted by the petitioner (which may be the circumstances listed in Art. 1206 §1), and beyond that, as provided in Art. 1206 §2, the court will set aside an arbitration award only if it finds that 1) under the law, the dispute may not be resolved by an arbitration court, or 2) the arbitration award is contrary to fundamental principles of the legal order of the Republic of Poland (the public policy clause).

2. The grounds for a petition to renew a proceeding to set aside an arbitration award may concern only this proceeding and no other proceeding, and more specifically may not apply to a proceeding for enforcement of an arbitration award and issuance of an enforcement clause, or a proceeding before an arbitration court.

3. Allowing the court to assess the compliance of an arbitration award with the fundamental principles of the legal order on the basis of facts or evidence which the arbitration court was not aware of would impermissibly expand the narrowly defined limits set by the law for the court’s review of an arbitration award. The opportunity to bring up new facts or evidence in a proceeding to set aside an arbitration award that could affect the decision on the dispute resolved by the award (as a result of its assessment under the public policy clause) would turn the proceeding into a proceeding not recognized by the Civil Procedure Code, comparable to a proceeding to renew the proceeding that ended in the arbitration award.

1. The construction of the petition to set aside an arbitration award shows that this instrument is not intended for substantive review of the correctness of the decision of the arbitration court by the state court, as in the case of appellate review within a judicial proceeding.

2. The assessment of a decision by an arbitration court in substantive terms involves an assessment of whether it violates the rule of law or principles of social coexistence.

1. When assessing whether a party was truly deprived of the opportunity to defend its rights in a proceeding before an arbitration court, the course of the arbitration proceeding should be considered scrupulously, also bearing in mind that the court is not authorized to review the decision made on the merits and that in making an arbitration agreement the parties consciously waived submission to the strictures in place for a proceeding before a [state] court.

2. A party is deprived of the opportunity to defend its rights before the arbitration court when the principle of equality of the parties is violated, and one of the parties is not heard and does not have the opportunity to address the evidence and allegations presented by the opposing party. For these reasons, every instance in which the arbitration court refuses to admit evidence sought by a party cannot be equated with depriving the party of a defence, because this happens only when the party has no opportunity to present and argue for its position.

3. Substantive review of an arbitration award by the court is limited to an assessment of whether the award that was issued violates principles of the legal order. The term used in the law, “fundamental principles of the legal order” (Civil Procedure Code Art. 1206 §2(2)) clearly indicates that this refers to such violations of substantive regulations that would result in violation of the principles of the rule of law, and the award violates the leading legal principles in force in the Republic of Poland and conflicts with the legal order in force, that is, violates the principles of the political and socio-economic system.

4. When deciding to submit a dispute for resolution by an arbitration court, the parties must be aware of both the positive and the negative effects of entering into the relevant clause in an agreement: on one hand they avoid a long-lasting proceeding, but on the other hand they waive certain procedural guarantees in force in a judicial proceeding.

Determination of whether an arbitration award violates fundamental principles of public order must be formulated narrowly, which means that the public policy clause may be successfully invoked only when the arbitration award would result in serious violation of such principles. This is thus an exceptional basis for setting aside an arbitration award and may be applied only in special circumstances, where the effects of the arbitration award would be incompatible with fundamental principles of the legal system. Mere inconsistency of the award with such principles is thus insufficient.

1. The arbitration court is subject only to the provisions of the Civil Procedure Code that govern procedure before the arbitration court. For this reason, a violation of general provisions of civil procedure law or overriding principles of civil procedure may serve as grounds for setting aside an arbitration award only if it results in violation of fundamental principles of the legal order of the Republic of Poland or principles of social coexistence.

2. A violation of the rule of law or principles of social coexistence as referred to in Civil Procedure Code Art. 712 §1(4) must be part of the content of the ruling itself, and thus it is insufficient if the violation occurred in the proceeding before the arbitration court.

3. If the arbitration court ignores evidence offered by a party because the arbitration court deemed the evidence unnecessary, that will not be regarded as depriving the party of a defence. The state court’s review of whether the arbitration court correctly found the evidence to be unnecessary would constitute impermissible intrusion into the merits of the case.

1. Setting aside an arbitration award is justified ... only by such an offence to substantive law that it would result in a determination that undermines the rule of law. A violation of the rule of law should be understood to mean an offence against fundamental legal institutions. Thus a ruling that violates the rule of law would be one, for example, that contradicts overriding legal principles and is contrary to the generally accepted legal order in force in the Republic of Poland. In other words, an arbitration award may violate the rule of law if it results in a ruling that violates the principles of the rule of law in force.

2. The state court thus does not examine whether an arbitration award is contrary to substantive law or is founded on the facts determined in the award, or whether the facts were properly determined. The state court considers the case only from the point of view of the grounds for setting aside an award, which are exhaustively set forth in Civil Procedure Code Art. 712 (now Art. 1206 §2).

1. An essential difference between proceedings before a state court and an arbitration court is that the arbitration court is not bound by provisions of civil law. Thus mere failure to apply a particular provision of substantive law, or defective application, is insufficient to set aside an arbitration award. Violation of substantive law is grounds to set aside an arbitration award only if it results in a decision violating overriding legal principles in force in the Republic of Poland.

2. In a proceeding upon petition to set aside an arbitration award it is impermissible to review whether the arbitration court decided the case correctly in factual and legal terms.

3. An allegation that an arbitration award violated principles of social coexistence and good practice, or that it violated the principle of confidence in public authorities, is misplaced. An arbitration court is not a public authority.

1. As a rule, the right to a defence in a proceeding before an arbitration court may also be violated by preventing proof of allegations or defences. Mere submission of statements and expression of a position is primarily relevant to explanation and interpretation of legal issues, and may be insufficient for establishing the factual grounds for a decision which is after all not subject to appellate review. It should be added that this has to do with proof of circumstances that in the view of the arbitration court are highly relevant to the decision.

2. The rules of the arbitration court did not provide for expansion of the statement of claim, nor did they prohibit it. In such case, the inability to repeat the procedure for selection of arbitrators should, in the view of the Appellate Court, be assessed in light of the type of demand. If this really had to do with a claim not related to the existing claim, but requiring special qualifications of the panel, it could be concluded that there was an infringement of fundamental rules of procedure resulting in setting aside of the award in such part.

3. An untrue statement in a document later offered in evidence by a party is not ... grounds for a petition to set aside an arbitration award under Civil Procedure Code Art. 1206 §1(5).

4. An arbitration court is not bound by provisions of substantive law. This means that arbitration awards may be reviewed only within a limited scope. Setting aside an arbitration award is thus justified only by an infringement of substantive law that would also bring the decision into conflict with the overriding legal principles in force in the Republic of Poland. In other words, an arbitration award may be unlawful if it results in a decision that violates controlling principles of the rule of law.

5. Existence of the grounds set forth in Civil Procedure Code Art. 1206 §2(2) is not determined by the number of provisions violated but by the relation between a specific violation of law to the narrowly defined principles of the legal order of the Republic of Poland.

Council Directive 93/13 on unfair terms in consumer contracts must be interpreted as meaning that a national court seised of an action for annulment of an arbitration award must determine whether the arbitration agreement is void and annul that award where that agreement contains an unfair term, even though the consumer has not pleaded that invalidity in the course of the arbitration proceedings, but only in that of the action for annulment.

The fundamental principles in force under Polish law with respect to liability for loss caused by non-performance or improper performance of an obligation, which are expressed in provisions of the Civil Code concerning the effects of failure to perform obligations, [are] ... the duty to redress loss by the party to an agreement which failed to perform or improperly performed an obligation, and an ordinary causal relationship between the behaviour and the loss. The duty to redress loss in this respect may not be determined arbitrarily or at will, but must correspond to the extent of the loss suffered (even as the result of an assessment based on consideration of all the circumstances of the case), and default interest is due from the date that the debtor falls into arrears. An arbitration award that was issued in violation of these principles is an award violating the rule of law.

An arbitration award that is clearly inconsistent with a legal norm established by the parliament in the social interest violates the rule of law within the meaning of Civil Procedure Code Art. 712 §1(4).

1. The constitutive elements of an arbitration award are defined by Civil Procedure Code Art. 708 §1, which is a regulation of mandatory applicability. One of these elements is a resolution of the demands of the parties (Art. 708 §1(4)). Thus it should be accepted that any ruling by the arbitration court containing the indicated elements, including a resolution of the demands of the parties, constitutes an arbitration award within the meaning of Book Three of the Civil Procedure Code, regardless of the form given to the ruling by the arbitration court.

2. In its case law, the Supreme Court has stressed on numerous occasions that the type of appellate instrument must be determined by the subject of the resolution, and not the form which the court gave to the ruling. ... This view applies also to rulings by an arbitration court.

1. The state court may not be accused of violating provisions of substantive law—Civil Code Art. 353¹ and Art. 65 §2—because, under the view established for years in the case law … its role was not to reconsider the merits of the case previously resolved by the arbitration court, but to assess the justification for the petition under the grounds from Civil Procedure Code Art. 712 §1(4) set forth in the petition.

2. Assertion by the petitioner of the grounds under Civil Procedure Code Art. 712 §1(4), i.e. violation of the rule of law, requires a showing that the substantive law was violated by the arbitration court, and moreover that the violations are so numerous and of such importance that it conflicts with the overriding principles of law.

3. Without a doubt the overriding principles of civil law include the principle of freedom of contract expressed in Civil Code Art. 353¹, providing the parties the ability to establish a legal relationship in accordance with their own discretion, so long as the substance or purpose thereof is not contrary to the nature of the relationship, a statute, or principles of social coexistence.

1. The defectiveness of an arbitration award in violating the rule of law must appear from the very wording of the ruling, and not from violation of regulations concerning proceedings before such court. Procedural violations might justify only some other ground for setting aside the arbitration award.

2. The minimum requirements that must be met by the justification for an arbitration award are set forth in Civil Procedure Code Art. 708 §1(5). If the grounds by which the arbitration court was guided when ruling on the demands of the parties may be deduced from the justification, that is sufficient for these requirements to be deemed to be satisfied.

3. The view cannot be accepted ... that the duty to conduct a thorough investigation of the circumstances necessary to resolve the case (Civil Procedure Code Art. 705 §2, third sentence) is performed by assessing the allegations of the parties and indicating why some of them are found to be valid and others not. Such assessment is made at the stage of making the ruling, and is expressed in the justification for the ruling made. Investigation of the circumstances that are relevant (essential) to the case occurs at an earlier phase of the proceeding and consists of hearing the parties, permitting them to submit statements with respect to the motions and allegations of the opposing party and the result of the evidentiary proceedings, and finally receiving evidence necessary to illuminate the circumstances essential to resolve the case.

The task of the court in a proceeding upon a petition to set aside an arbitration award is not to decide the merits of the case already decided by the arbitration court, applying provisions of substantive and procedural law, but only to conduct a review of the grounds for the petition under Civil Procedure Code Art. 712 §§ 1 and 2. The court where a petition to set aside an arbitration award is filed does not act as a court of second instance, authorized to review the case on the merits applying provisions of substantive law, but assesses the challenged award only in terms of the violations indicated in Civil Procedure Code Art. 712 §§ 1 and 2, and in the case considered here, Art. 712 §1(4).

An arbitration award issued in violation of Civil Code Art. 64 and 65 §§ 1 and 2 infringes the rule of law because it forces the defendant to conclude a specific, unfavourable contract even though there is no duty to conclude such contract either under provisions of law or under the obligations undertaken by the defendant. This is a violation of the principle of commercial freedom, manifest among other things in the freedom to establish the terms of agreements and in the freedom to choose commercial partners.

When considering the petition, the court is authorized only to assess whether the arbitration award being challenged is affected by the violations set forth in Civil Procedure Code Art. 712 §1, and thus, in this case, violation of the rule of law or principles of social coexistence. Only then may an allegation of violation of substantive law provide a valid basis for setting aside an arbitration award, if such violation also constitutes an infringement of the principles of the rule of law.

1. The limitation of the scope of review of an arbitration award to the grounds set forth in the act, but also those on which the petition to set aside the arbitration award is based, is subject to the exception of the duty of the [state] court, expressly provided in Civil Procedure Code Art. 714, to review on its own motion whether a violation of law by the arbitration court resulted in issuance of an award that violates the legal order or principles of social coexistence.

2. In a proceeding to set aside an arbitration award, the subject of the case is clearly the review of the award within the grounds of the mandatory provisions of the Civil Procedure Code, and the subject of the proceeding may not be regarded as falling within the scope of the business activity of any business entities.

3. A proceeding to set aside an arbitration award is a distinct type of proceeding, containing elements of a cassation proceeding, but the reference set forth in the mandatorily applicable rule of Civil Procedure Code Art. 715 does not justify application, even only as relevant, of the code provisions concerning the procedure in commercial cases, because the subject matter and function of the two types of proceedings are completely different.

In a case seeking to set aside an arbitration award, the court will consider on its own motion only one of the grounds for the petition, namely that provided by Civil Procedure Code Art. 712 §1(4), i.e. whether the arbitration award violates the legal order or principles of social coexistence. This means that all other grounds for the petition, including that there was no arbitration clause or the clause was invalid or expired (Civil Procedure Code Art. 712 §1(1)), will be considered by the court only if asserted in the petition (the petition was based on such grounds).

1. The court where a petition to set aside an arbitration award is filed does not act as a court of second instance, authorized to review the case on the merits applying provisions of substantive law, but assesses the challenged award only in terms of the violations indicated in Civil Procedure Code Art. 712 §§ 1 and 2.

2. There can be no violation of the rule of law where the arbitration award complies with substantive law in force and was not issued in violation of provisions of substantive law, let alone gross violation. Only a gross violation would warrant a finding that the arbitration award violated the rule of law.

The relative nature of Civil Code Art. 740, relied on by the appellant, ... means that even if this provision served as the substantive legal grounds for considering the claim that is the subject of the dispute, it cannot be treated as a fundamental provision, essential to the legal order.

When a petition [to set aside an arbitration award] is based on allegations of violation of substantive law, it is necessary to demonstrate one of the aggravating aspects of such violation that constitutes violation of the legal order or principles of social coexistence in the Republic of Poland (Civil Procedure Code Art. 712 §1(4)). A showing of violation of substantive law is not legally sufficient grounds for granting a petition to set aside an arbitration award.

A finding that an award is inconsistent with the facts does not always result in setting aside the award. It is accepted that an application alleging violation of the rule of law is justified when the effect of an arbitration award conflicts with fundamental principles of the legal order of the state.

1. Arbitration awards may be reviewed only to a limited extent. Setting aside an arbitration award is thus justified only by such an abuse of substantive law that it also constitutes a decision that violates the leading principles of law in force in the Republic of Poland. In other words, an arbitration award may violate the rule of law only if it results in a resolution violating the principles of a state governed by the rule of law.

2. An arbitration award also requires examination in terms of whether it violates the principle of the freedom of economic activity, enshrined in Art. 20 of the Constitution. Under Art. 5 of the Economic Activity Law dated 19 November 1999 (Journal of Laws Dz.U. 1999 No. 101 item 1178, as amended), this constitutional principle is manifest in the rule that taking up and conducting economic activity shall be free for all persons, under equal rights, and compliance with conditions defined by law is a statutory requirement for limiting the application of this principle.

3. A finding cannot be upheld … that an arbitration court did not violate principles of social coexistence without an attempt to address specific principles more closely. In the context of contractual relations, these principles are manifest in the existence of the universally accepted rules of decent behaviour, with respect to a potential counterparty as well. With respect to commercial relations, of particular relevance are the principles of fair dealing and commercial honesty, which may be demanded of a business entity—a professional on the market—namely observance of good practice, fair dealing, honest treatment, loyalty and trust.

1. It follows from the nature of a petition to set aside an arbitration award that the state court with jurisdiction to hear the petition may not consider the merits of the dispute, because in deciding the case and issuing its ruling, the arbitration court is not bound by substantive or procedural law, so long as it does not violate the rule of law or principles of [social] coexistence. This means that the state court will not examine whether the arbitration award is consistent with substantive law or is justified by the facts found in the award, or whether such facts were correctly determined. The state court considers the case only in terms of the grounds for setting aside the award, which are exhaustively listed in Civil Procedure Code Art. 712.

2. The failure by the arbitration court to reduce a contractual penalty, in violation of Civil Code Art. 484 §2, may constitute justified grounds for setting aside an arbitration award, if the awards results in a resolution that clearly conflicts with principles of social coexistence. An arbitration award assessing a clearly grossly excessive contractual penalty violates such principles.

1. A proceeding before the state court pursuant to a petition to set aside an arbitration award is formal in nature, which is evident among other aspects from the limitation of the grounds for the petition (Civil Procedure Code Art. 712 §1) and the deadline for filing it (Civil Procedure Code Art. 713 §§1 and 2), and by the court’s being bound by the grounds for the petition for renewal, while it is permissible for the court to consider on its own motion whether the award violates the rule of law or principles of social coexistence (Civil Procedure Code Art. 714). In consequence, these regulations must be interpreted strictly.

2. A petition to set aside an award is a specific pleading in the nature of appellate review. It must meet the formal requirements of a pleading (Civil Procedure Code Art. 126) and provide the grounds and justification (Civil Procedure Code Art. 714 a contrario). The existence of any of the grounds may not be presumed. Action by the court consisting of interpretation of the grounds for the petition in order to ascribe grounds other than those expressly stated would usurp the role of the party to perform its procedural duties, and would also threaten arbitrary interpretation not necessarily consistent with the position taken by the petitioner. Thus it should be regarded as impermissible.

3. The concepts of the rule of law and principles of social coexistence are not the same. Lumping them into one normative category of general clauses does not mean it is permissible to apply them interchangeably and ascribe the same substance to the two concepts.

The essence of an arbitration clause is submission of a dispute to the arbitration court for resolution. If the agreement does not provide the arbitration court with a dispute-resolution function, then it does not contain an arbitration clause.

1. Pursuant to Civil Procedure Code Art. 712 §1(4), an arbitration award may be set aside if the ruling on the demands of the parties violates the rule of law or principles of social coexistence. This provision enacts a general clause representing the principle of domestic public policy. This means that violation or incorrect interpretation of substantive law, and the resulting defect of the ruling, in and of itself does not constitute a violation of the rule of law. A violation of substantive law must be such that it would result in issuance of a ruling that would by its content violate fundamental principles of the rule of law, particularly situations where a ruling is issued using an institution that is impermissible by operation of law.

2. Incorrect interpretation of substantive law and other violations not rising to such level cannot lead to a finding that the grounds for the petition set forth in Civil Procedure Code Art. 712 §1(4) have been met.

1. After the period indicated in Civil Procedure Code Art. 713 §1 expires, the ability to supplement the grounds for a petition to set aside an arbitration award is precluded.

2. It cannot be accepted ... that an award violates the rule of law solely on the grounds that the ruling is not consistent with certain provisions of substantive law. The arbitration court is generally not bound at all by provisions of substantive law. It is bound to apply mandatorily applicable provisions of law whose violation would be tantamount to violation of the rule of law or principles of social coexistence.

If under Art. 87 of the Public Procurement Law the appellate proceeding is governed by the arbitration provisions of the Civil Procedure Code (unless otherwise provided by statute), the petition to set aside must be dismissed if the deadline to file the petition is not met.

1. A petition to set aside an arbitration award constitutes a special form of state court supervision over the arbitration court. Avenues of appeal will lie from the judgment by the court issued as a result of consideration of the petition, under general rules, not excluding a cassation appeal.

2. For the parties to an arbitration proceeding, the opportunity to file a petition to set aside the arbitration award constitutes a specific means of review of the award issued in the proceeding, and the ruling by the state court concluding the proceeding on the petition to set aside the arbitration award definitively concludes the proceeding before the state court. Thus only such a ruling may be characterized as “concluding the proceeding in the matter.” ... Thus also such characterization may be not be ascribed to an order on enforcement of an arbitration award.

The arbitration court’s violation or incorrect interpretation of substantive law, and the resulting defect of the ruling, in and of itself does not constitute a violation of the rule of law. A violation of substantive law must be such that it would result in issuance of a ruling that would by its content violate fundamental principles of the rule of law. The fact that the case concerns public procurement paid for out of public funds does not change this assessment and does not mean that violation of any of the provisions of [the Public Procurement Law] constitutes a violation of the rule of law.

1. Mere incorrect interpretation of substantive law by the arbitration court may not justify granting a petition to set aside the arbitration award. It will be otherwise if the arbitration award, in violating specific norms of substantive law, at the same time violates the rule of law. This has to do with an instance in which ... the violation of substantive law by the arbitration court results in a resolution that violates the leading legal principles in force in the Republic of Poland.

2. The arbitration court’s not being bound by provisions of substantive law derives primarily from the fact that resolution of a matter is typically entrusted to arbitrators because of their special knowledge, e.g. in the field of construction (in construction cases) or concerning commercial practices (in cases related to international transactions)—where such specialized knowledge is more important than knowledge of the substantive legal norms of a specific legal system. In such cases, the arbitrators’ legal intuition may be sufficient.

1. A petition to set aside an arbitration award cannot be regarded as an avenue of appeal. A petition to set aside an arbitration award and the proceeding initiated by filing the petition is of a specific nature. It combines features of an extraordinary avenue of appeal and an independent claim, understood in a specific manner, seeking to establish a right or a legal relationship. This is because the petition is intended to change the legal situation governed by the ruling by the arbitration court, and seeks to set aside the legally final award of the arbitration court.

2. The deadline of one month to file a petition to set aside an arbitration award (Civil Procedure Code Art. 713 §1) is also met if by that time the petition is filed with a court other than the one that would have been competent to decide the dispute if the parties had not made an arbitration clause (Civil Procedure Code Art. 696 §1).

1. For the parties to an arbitration proceeding, the opportunity to file a petition to set aside the arbitration award constitutes a specific means of review of the award issued in the proceeding, and the ruling by the state court concluding the proceeding on the petition to set aside the arbitration award definitively concludes the proceeding before the state court. Thus only such a ruling may be characterized as “concluding the proceeding in the matter.” ... Therefore such characterization may be not be ascribed to an order on enforcement of an arbitration award.

2. No cassation appeal will lie from an order by the court of second instance denying an interlocutory appeal from an order on enforcement of an arbitration award, because it is not a ruling concluding the proceeding in the matter within the meaning of Civil Procedure Code Art. 392 §1.

1. Where domestic rules of procedure require a national court to grant an application for annulment of an arbitration award where such an application is founded on failure to observe national rules of public policy, it must also grant such an application where it is founded on failure to comply with the prohibition laid down in Article 85 of the Treaty (now Article 81 EC). That provision constitutes a fundamental provision which is essential for the accomplishment of the tasks entrusted to the Community and, in particular, for the functioning of the internal market. Also, Community law requires that questions concerning the interpretation of the prohibition laid down in Article 85 should be open to examination by national courts when they are asked to determine the validity of an arbitration award and that it should be possible for those questions to be referred, if necessary, to the Court of Justice for a preliminary ruling.

2. Community law does not require a national court to refrain from applying domestic rules of procedure according to which an interim arbitration award which is in the nature of a final award and in respect of which no application for annulment has been made within the prescribed time-limit acquires the force of res judicata and may no longer be called in question by a subsequent arbitration award, even if this is necessary in order to examine, in proceedings for annulment of a subsequent arbitration award, whether an agreement which the interim award held to be valid in law is nevertheless void under Article 85 of the Treaty (now Article 81 EC), where the time-limit prescribed does not render excessively difficult or virtually impossible the exercise of rights conferred by Community law.

1. An assignee enters into the legal position of the assignor. The flip side of this rule, as it were, is the permissibility of the debtor’s asserting against the assignee any defences that it had against the assignor as of the time it received notice of the assignment (Civil Code Art. 513 §1). The debtor of a claim under an agreement containing an arbitration clause who is sued before the state court may thus assert the arbitration clause as a defence (Civil Procedure Code Art. 697 §2 in connection with Art. 202) against the assignee as well.

2. The effectiveness of an arbitration clause against an assignee excludes assertion of the lack of an arbitration clause, as the plaintiff appears as an assignee who acquired the claim subject to the clause.

3. It is accepted that a conclusion of violation of the rule of law is justified when the result of the arbitration award conflicts with fundamental principles of the legal order of the state..., for example, the ruling by the arbitration court is clearly inconsistent with the established facts.

4. With respect to the criterion indicated in Civil Procedure Code Art. 712 §1(4) of principles of social coexistence, it is necessary to indicate specific principles of social coexistence that are irreconcilable with which the effects of the arbitration award.

The arbitration court is not bound by regulations of substantive law in force, as the one criterion for assessing the correctness of the award provided by the code is the requirement of lawfulness and principles of social coexistence. This means ... that a petition to set aside an arbitration award may not be granted only because the award is found to have legal or factual defects.

1. Civil Procedure Code Art. 705 §2 specifies the procedure only before the arbitration court, as demonstrated at least by its placement in Chapter 3, Title 3 of the Civil Procedure Code, containing regulations governing the procedure before the arbitration court. Thus because Art. 705 §2 imposes specific duties only on the arbitration court, it could not be violated by the court of second instance, which is a state court.

2. Civil Procedure Code Art. 714 defines the bounds of action by the common court hearing a petition to set aside an arbitration award, based on the grounds listed in Art. 712 §1. It is thus clear that Art. 714 defines the bounds of the action of the common court, but it is the court hearing the case in the first instance. Thus the allegation of violation of Art. 714 cannot be addressed directly to the court of appeal, which is a court of second instance.

3. The regulations of the Civil Procedure Code concerning the procedure before the arbitration court do not contain a requirement that the arbitration court is absolutely bound by the rules of substantive law when it considers the merits of the dispute. Art. 712 §1(4) and a linguistic interpretation thereof justify the conclusion that it is the duty of the arbitration court to apply imperative legal norms whose violation would also violate the rule of law or principles of social coexistence.

4. Even violation of norms of substantive law by the arbitration court will not always be tantamount to violation of the rule of law or principles of social coexistence, because it will depend on the circumstances of the specific case.

5. Civil Procedure Code Art. 712 §1(4) will be met only by a violation of substantive legal norms, even those of a peremptory nature, made by the arbitration award, as a result of which the ruling by the arbitration court will also cause a clear violation of the overriding principles of the legal order in force in the Republic of Poland, or conflict with clearly defined principles of social coexistence.

6. There may be said to be a violation of systemic statutes having such effect with respect to statutes governing the system and principles for functioning of the State as a whole or its highest bodies, but not the functioning of one specific local governmental unit.

1. Recusal of an entire court may not be demanded, but only recusal of specific judges (one or more of them), identified by name, but this does not mean that in this case the arbitration court itself could determine that the motion by the defendant should not be granted. The province court correctly stated that the arbitration court may not decide a motion to recuse an arbitrator, either on the merits or on procedural grounds, even if the motion was clearly unjustified or late.

2. The ruling issued as a result of a petition to set aside an arbitration award is in the nature of cassation, and thus the state court may only set aside the award or deny the petition, and may not rule on the merits. In consequence, when the state court sets aside an arbitration award by granting a petition under Civil Procedure Code Art. 712 §1(2)–(5), the arbitration court retains its jurisdiction to decide the dispute.

1. An essential difference in comparison with the procedure before the state court is that the arbitration court is not bound either by civil procedure regulations (Civil Procedure Code Art. 705) or by provisions of substantive civil law. While it is true in the latter case that there is no express provision to this effect, a conclusion of this kind follows clearly from an analysis of Civil Procedure Code Art. 711 §3 and Art. 712 §1(4), which provide that violation of the rule of law or principles of social coexistence is the only criterion for assessment of the correctness of an arbitration award.

2. Under Civil Procedure Code Art. 712 §1(4), assertion of the objection that an arbitration award violates specific provisions of substantive law may be effective only insofar as the violation of specific norms also violates the principles of the rule of law in the state of Poland, which requires a demonstration firstly that the substantive law was violated, and moreover that the violations are so numerous that it conflicts with the very rule of the prevailing legal order as seen from the perspective of systemic, political and socio-economic principles.

A national court which, in a case provided for by law, determines an appeal against an arbitration award must be regarded as a court or tribunal within the meaning of Article 177 of the Treaty, even if under the terms of the arbitration agreement made between the parties that court must give judgment according to what appears fair and reasonable.

The Polish state court has jurisdiction in a proceeding to set aside an arbitration award if the award in a dispute of an international character was rendered in Poland, even if none of the links referred to in Civil Procedure Code Art. 1103 would justify such jurisdiction. And conversely, it should be found that the Polish court does not have jurisdiction in a proceeding to set aside an arbitration award rendered abroad, even if one of the links referred to in Civil Procedure Code Art. 1103 could have justified such jurisdiction.

In the context of Civil Procedure Code Art. 712(4), violation of the principles of social coexistence is equated with conditions disqualifying an arbitration award to a degree depriving it of value as the basis for resolution of the dispute (violation of the rule of law, unintelligibility or inconsistency), and thus highly exceptional.

1. A petition to set aside an arbitration award is not ... an appeal, but a procedural measure with a nature similar to a petition to reopen a proceeding.

2. The statement in the second sentence of Civil Procedure Code Art. 705 §2 that an arbitration court is not bound by civil procedure regulations does not refer to mandatorily applicable regulations set forth in Book Three of the code. Civil Procedure Code Art. 712–715, which have this character, apply in every arbitration proceeding. The lack of any indication to this effect in the rules defining the procedure before the arbitration court therefore does not exclude the permissibility of filing a petition with the state court to set aside an award issued by a permanent arbitration court (Civil Procedure Code Art. 695).

The scope of the challenge is set by the party and is binding on the court (Civil Procedure Code Art. 696) when considering an action commenced by a petition to set aside an arbitration award (Civil Procedure Code Art. 712–715).

[In an action to set aside an arbitration award] a link that could justify domestic jurisdiction is issuance of the award in Poland, as such a ruling, when legally final, would become a domestic Polish ruling equivalent to a judgment of a Polish state court (Civil Procedure Code Art. 711 §2). However, the seat of an international arbitration court which may hear cases in the territory of other countries for which it was established will not serve as such a link.

1. A creditor’s application to the state court for confirmation of the enforceability of an arbitration award, as well as an application for issuance of an enforcement clause for the award, do not interrupt the running of the statute of limitations on the claims covered by the arbitration award.

2. The state court’s confirmation of the enforceability of an arbitration award and issuance of an enforcement clause for the award are two distinct actions by the court, made under separate procedures: namely, confirmation of enforceability occurs in a proceeding provided for in Part One, Book Three of the Civil Procedure Code, which governs the procedure before the arbitration court and before the state court in matters concerning arbitration awards, while issuance of an enforcement clause for an arbitration award occurs in an execution proceeding (Part Two, Book One of the Civil Procedure Code). Moreover, an enforcement clause may be issued only for an arbitration award as to which a legally final order of the state court confirming its enforceability has been issued pursuant to Civil Procedure Code Art. 711.

3. Arbitration, based on the agreement of the parties and carried out by arbitrators, persons trusted by the parties, who in performance of their voluntarily assumed obligations are generally constrained by procedural regulations to only a small degree, must of necessity be overseen by the state courts. Such oversight has to do on one hand with the correctness of the appointment of the arbitration court and the parties’ selection of the arbitrators, and on the other hand with the substance of the actual ruling by the arbitration court. By its nature, the review of the substance of the award cannot includes the very correctness or justice of the resolution, but is limited to whether the ruling was issued under conditions assuring the parties protection of their rights, and whether the resolution violates the rule of law or principles of social coexistence. Review of an arbitration award in the broadest sense is performed by a state court only upon request of a party, asserted in the form of a petition to set aside the arbitration award, as provided in Civil Procedure Code Art. 712 ff, limited in time and in the scope of grounds for challenging the award. However, review of the consistency of the award with principles of the rule of law and principles of social coexistence is made by the state court on its own motion, and the institution of confirmation of enforceability of the award serves this purpose.

4. An order confirming the enforceability of an arbitration award, although a necessary condition for permitting enforcement of the award through state compulsion, does not in itself constitute an act seeking to enforce the award. Thus asserting a demand for confirmation of enforceability is not among the acts undertaken “with the immediate purpose of enforcement, declaration or security” of the claim adjudged by the award within the meaning of Civil Code Art. 123 §1(1).

As the arbitration court is not even required to rule on the basis of provisions of substantive law, an erroneous interpretation thereof cannot be regarded as a violation of the rule of law. Nor may the arbitration court be required not to apply regulations involving the statute of limitations and preclusion. More justified would be the opposite view, that failure to apply such regulations, which were enacted primarily in the interest of protecting the legal order—not disturbing settled matters (quieta non movere)—and entering an award for time-barred claims, could justify an allegation of violation of the rule of law.

A petition to set aside an arbitration award may be based on the same grounds that provide the basis for reopening a proceeding. Under Civil Procedure Code Art. 403 §1, reopening of a proceeding may be sought on the grounds that the judgment was based on a forged or altered document. However, this does not apply to a situation in which the allegation of forgery of the document was raised in the earlier proceeding and found by the court to be groundless. In such situation, a petition to reopen the proceeding may be based on newly discovered facts or evidence (Civil Procedure Code Art. 403 §2) demonstrating that the court’s conclusion as to the authenticity of the document was erroneous, or upon discovery of a legally final criminal conviction for forging or altering the document.

1. Because when considering and ruling on a dispute the arbitration court is not bound by provisions of substantive or procedural law, so long as it does not violate the rule of law or principles of social coexistence, it thus also follows from the essence of a petition to set aside an arbitration award that the state court with jurisdiction to consider the petition may not review the merits of the dispute. This means that the state court will not examine whether the arbitration award is contrary to substantive law or is based on the facts stated in the award, or whether such facts were properly determined. The state court will consider the case only from the perspective of the grounds for setting aside the award, exhaustively listed in Civil Procedure Code Art. 712.

2. Attention should be paid to the fundamental distinction between consideration of a case on the basis of Civil Procedure Code Art. 711 §3 and Art. 712. It is clear from a comparison of these two provisions that when ruling pursuant to Art. 711 §3, the state court relies only on the file of the arbitration court and does not admit any evidence in order to determine the factual circumstances necessary to assess whether the substance of the arbitration award violates the rule of law or principles of social coexistence, and thus this provision authorizes the court to find that the substance of the arbitration award violates the rule of law or principles of social coexistence only when this appears from the arbitration file submitted to the court. However, pursuant to a petition to set aside an arbitration award, a normal adversarial proceeding is held (Civil Procedure Code Art. 715), in the course of which it is possible to conduct an evidentiary proceeding under general rules, and thus to admit evidence in order to determine the factual circumstances necessary for an assessment of the grounds asserted in the petition.

3. In the event of the legally final setting aside of an arbitration award, the way is open to the parties to assert a claim on the same subject matter before the state court, or for the parties to conclude a new clause and again submit the matter to a designated arbitration court for resolution.

1. The arbitration award in this case could be considered only under Civil Procedure Code Art. 510, and more precisely—given the lack of other allegations—from the point of view of whether the award in its substance violates the rule of law or principles of social coexistence.

2. The arbitration court considered the case as if the agreement between the parties had not been performed at all, which is clearly contrary to the state of facts..., and if that is so, the ruling by the court of first instance results in ... grossly privileging the defendant, to the detriment of the State Treasury. Such a grossly erroneous ruling violates the rule of law (Civil Procedure Code Art. 510 §1(4)).

1. A petition [to set aside an arbitration award] must state specifically what allegations the petitioner is asserting against the arbitration award, and must be filed within the time provided in Civil Procedure Code Art. 511. Upon expiration of such period, the right to file the petition lapses, and if a petition was filed on time, the ability to extend the petition to include other grounds also lapses.

2. If a petition [to set aside an arbitration award] was filed on time (Civil Procedure Code Art. 511 §1), the issue of whether the arbitration award violates the rule of law or principles of social coexistence in the People’s State must be taken into consideration by the court at its own initiative, and thus also when the petition does not include an allegation in this respect or if the petitioner in raising such allegation perceives such defectiveness of the arbitration award in some respect other than that in which it actually occurred.

3. If in a proceeding pursuant to a petition to set aside an arbitration award a party raises further allegations against the arbitration award after the deadline under Civil Procedure Code Art. 511, such new allegations, because they are precluded, may not constitute additional grounds for the petition, but nonetheless must be considered by the court at its own initiative insofar as they are relevant to a determination which the court must make at its own initiative, namely a determination of whether the arbitration award violates the rule of law or principles of social coexistence in the People’s State.

4. It follows from the fact that the code lists exhaustively the grounds for the petition [to set aside an arbitration award] (Civil Procedure Code Art. 510 §1) that the scope of such grounds may not be interrelated logically in such a manner that some of them are controlling and others are subordinate to them. If the grounds were interrelated in that way, the code would not have listed one of the grounds separately if all of it could be subsumed under another of the grounds.

5. The fact that the code permits arbitration (Civil Procedure Code Art. 8) and ascribes legal force to arbitration awards equal to state court judgments (Civil Procedure Code Art. 508 §2) even though arbitration awards may not be consistent with provisions of substantive law excludes acceptance of the position that any inconsistency with provisions of substantive law in and of itself disqualifies an arbitration award. As long as the substance of the award does not violate the rule of law or principles of social coexistence (Civil Procedure Code Art. 509 and 510 §1(4)), the issue of whether the award is consistent with provisions of substantive law is not subject to any review.

Erroneous interpretation or improper application of substantive law does not in and of itself constitute sufficient grounds for a petition to set aside an arbitration award, defined by Civil Procedure Code Art. 510 §1(4) as violation of the rule of law or principles of social coexistence in the People’s State. Violation of substantive law may constitute sufficient grounds to set aside an arbitration award if it would result in a determination that clearly violates the overriding principles of the legal system in the People’s State or violates principles of social coexistence. Such principles must also be respected in arbitration.

1. No review [by the province court] will lie against an order by the county court appointing an arbitrator pursuant to Civil Procedure Code Art. 492.

2. An interested party will be able to assert its allegations connected with appointment of an arbitrator under Civil Procedure Code Art. 492 in an eventual petition to set aside the arbitration award, which may be filed with the state court in the event of the existence of the defects referred to in Civil Procedure Code Art. 510 §1.

1. It follows from Civil Procedure Code Art. 488 §2, which provides that each party shall appoint one arbitrator and the arbitrators so appointed “shall appoint a presiding arbitrator,” unless the arbitration clause provides otherwise, and from Art. 492, which provides that in the event of lack of agreement between the arbitrators, the presiding arbitrator shall be appointed by the state court, that the appointment of a presiding arbitrator is mandatory unless the arbitration clause provides otherwise.

2. Because as a result of failure to appoint a presiding arbitrator the arbitration court was not appointed in the prescribed composition, the award issued by an arbitration court composed of two arbitrators was made in an invalid proceeding.

3. Under applicable law, violation of regulations concerning the composition of the arbitration court constitute absolute grounds for setting aside the arbitration award in every instance.

1. It follows from the title of Book III and from the first sentence of Civil Procedure Code Art. 510 that the petition provided for in this chapter is applicable only to arbitration awards, and via such petition it is possible only to seek to set aside an award. Such petition cannot be extended by analogy to apply also to a settlement, as the role of the arbitration court in conclusion of a settlement is limited to accepting and documenting the settlement, and thus the settlement does not contain any of the elements constituting the essence of a judicial determination.

2. A party rightly disputing the validity of a settlement is not in any respect bound by the settlement, but should assert such invalidity not by relying on Civil Procedure Code Art. 510, but by other means. An action for a declaration of the invalidity of the settlement will serve this end, or an action based on Civil Procedure Code Art. 573 if the party wishes to restrict itself to depriving the settlement of its enforceability, although in such instance the time limits provided in Art. 573 §1(2) will not apply because they are strictly tied to the res judicata effect of a judgment, which settlements do not have.

3. Absolute invalidity, which would deprive an award or settlement of the character of a judicial act even without the need to challenge the award, would come into play if persons were sitting as arbitrators who had not actually been appointed as such.

4. Under Civil Procedure Code Art. 508 §1, arbitration awards as well as settlements concluded before an arbitration court are equivalent to state court judgments. Thus with respect to an undertaking to make declarations of will, they exert the same effects as state court judgments.

1. A proceeding upon a petition to set aside an arbitration award is not an appeal against the award. In the proceeding upon a petition to set aside an arbitration [award], the state court does not judge the case anew, nor does it conduct full review of the award, but its task is only to determine whether the grounds to set aside the award alleged in the petition exist.

2. An arbitration court rules within its discretion, but the bounds of such discretion are set by Civil Procedure Code Art. 510 §1.

3. An arbitration clause is also a type of disposition by the parties, an effect of which is the possibility of the arbitration court to resolve the dispute in a manner that violates substantive law but is nonetheless binding on the party.

4. As the challenged arbitration award does not in its substance violate the rule of law, even if it violated substantive law, the Supreme Court has no basis for ruling on whether the award is consistent or inconsistent with substantive law.

1. [Civil Procedure Code] Art. 503 §1(4) regards it as sufficient grounds for a petition to set aside an arbitration award if in its substance the award violates public policy or fair practices, but Art. 502 authorizes the court to take notice of the inconsistency between the substance of the award and public policy and fair practices only when such appears from the arbitration record submitted to the court.

2. Pursuant to a petition to set aside an arbitration award, a normal adversarial proceeding is held (Civil Procedure Code Art. 505), during the course of which evidence may be admitted in accordance with general rules.

3. By its nature, a proceeding for issuance of an enforcement clause should be short and simple, and this could not be achieved if it were necessary to admit evidence in proof of the factual circumstances necessary to determine whether in its substance the arbitration award violates public policy or fair practices. For this reason as well, the Parliament restricted the state court to just one source of information, namely the arbitration record, i.e. written documents whose consideration and assessment generally do not entail any difficulties which could prolong the proceeding. If there were no such restriction, with respect to defects in an arbitration award as discussed here, there would be no difference between the two types of proceedings in the state court, which would be inconsistent with the one-track nature of the proceeding, which is consistently implemented in Polish procedural law.

1. Civil Procedure Code Art. 150, which permits service at night only upon prior order by the director of the court, does not apply to arbitration procedure, where the general regulation of Civil Procedure Code Art. 500 §1 provides only that the arbitration court shall serve copies of the award on the parties, against written proof of service, but does not prescribe the manner of service.

2. Obligations Code Art. 82 permits an agreement to pay a specific sum of money in the event of failure to perform an obligation, and thus the arbitration court did not violate public policy by ruling on a monetary penalty....

3. The allegation that the arbitration award does not explain the grounds for monetary obligations is unjustified, because the parties released the arbitration court from the duty to provide a justification for the award.

1. There are grounds for setting aside the arbitration award under Civil Procedure Code Art. 503 §1(4) because the award issued without enclosing the map for partition of the plot was unintelligible, and because it exceeds the bounds of the arbitration clause....

2. The allegation in the cassation appeal that because of exceeding the bounds of the arbitration clause the arbitration award should be set aside only in part cannot be upheld, because all of the orders issued in the given case by the arbitration court are closely interconnected, and they cannot be distinguished without intruding into the consideration of the case on the merits, and the state courts have no authority to review arbitration awards on the merits.

1. Arbitrators are not bound by provisions of procedural law, as they may specify the procedure to be followed within their own discretion (Civil Procedure Code Art. 494 §2), nor are they bound by provisions of substantive law in deciding the case.

2. An arbitration court rules in accordance with general principles of equity and fair commercial practice, and may not be constrained by provisions of substantive or procedural law, and thus the Parliament provides in Civil Procedure Code Art. 503 for the ability to set aside an arbitration award only in exceptional instances, and such provisions are subject to a strict interpretation, not an expansive interpretation.

3. The state court is not competent to delve into allegations of violation of provisions of substantive law or general provisions of procedural law applicable in a judicial proceeding, nor does it have the right to enter into the merits of the resolution by the arbitration court....

1. Civil Procedure Code Art. 503 §1 is limited to an enumeration of the grounds for setting aside an arbitration award, while Art. 505 requires the regulations concerning a proceeding initiated by a statement of claim to be applied in a proceeding upon a petition to set aside an arbitration award. It follows from this that Civil Procedure Code Art. 408 §2 and Art. 437 concerning partial setting aside of a judgment are also applicable to arbitration awards.

2. The substance of the arbitration award determines whether in the given instance it may be set aside in part and to what extent, obviously within the bounds of Civil Procedure Code Art. 503 §1. Partial setting aside of an award will not be permissible if the specific parts of the award are interconnected in such a way that none of them may be removed from the others without materially deforming the whole. If, however, the arbitration court exceeded the bounds of the arbitration clause (Civil Procedure Code Art. 503 §1(4)), and the ruling in this regard may without harm be separated from the rest of the award, there is no barrier preventing partial setting aside of the award.

3. The parties could supplement the arbitration clause during the hearing before the arbitration court, but because of the requirement for written form of the clause (Civil Procedure Code Art. 480 §2), such supplementation would also have to be made in that form, and thus in the minutes signed by the parties.

4. The state court is competent to consider only formal grounds for setting aside an arbitration award, except that it will also consider in substantive terms whether the award violates public policy or good practice (Civil Procedure Code Art. 503 §1(4)).

5. Waiver of the right to challenge the award would have to be express in order to be effective, and the plaintiff’s statement that it accepts the award does not satisfy this requirement, and in any event was made to the arbitration court and not to the defendant.

1. Under the Civil Procedure Code, a proceeding to set aside an arbitration award is a sui generis proceeding, but, as it appears from Art. 503, it is similar to a cassation proceeding, because of the strict enumeration in this article of the grounds for setting aside an award, and then by the procedure in the courts of first and second instance, when the courts are authorized only to determine whether the arbitration award contains violations provided for in Art. 503. Thus amending and expanding the grounds for the petition cannot be permitted, and only the allegations raised in the petition may be considered.

2. An arbitration award should be justified in accordance with Civil Procedure Code Art. 498(5), but it does not follow from this provision that the justification must be issued at the same time as the operative wording of the award. … In accordance with the final paragraph of Civil Procedure Code Art. 499 §2, an award signed by a majority of the arbitrators has the same force as one signed by all of the arbitrators.

3. In Civil Procedure Code Art. 503 the Parliament provided that an arbitration award may be set aside only in exceptional circumstances, and these provisions are not subject to an expansive interpretation. Thus the state court is not authorized to enter into consideration of allegations concerning violation of provisions of substantive law or general provisions of procedural law applicable in a judicial proceeding, nor does it have a right to enter into a determination of the fairness of the award or the correctness of the factual findings or grounds on which the award was based.

1. Civil Procedure Code Art. 503 provides for the ability to set aside an arbitration award only in exceptional circumstances, and such provisions are subject to strict rather than expansive interpretation. As a result, in case of doubt, the award should be maintained in force rather than set aside.

2. It follows from the concept of “resolution” that an award by an arbitration court should be of a type that definitively ends the dispute, and from which it will be apparent in what manner the dispute was resolved, so that any doubts or potential further disputes in this respect are excluded.

1. Award of the costs of the proceeding by the arbitration court, even though not mentioned in the arbitration clause, does not invalidate the award if it was made at the request of both parties, expressed in writings submitted to the arbitration court, as in this way the clause was supplemented in compliance with the requirements as to form in Civil Procedure Code Art. 480.

2. Determination of the amount of the costs of the proceeding before the arbitration court rests with the arbitration court and lies outside the bounds of review by the state court (Civil Procedure Code Art. 502 and 503).

3. Discovery of the forgery of a document may be grounds for setting aside an arbitration award. ... The view that forgery of a document must be evidenced by a judgment is not founded on any provision of law, and more specifically is contrary to Civil Procedure Code Art. 445 §1(1) and thus contrary to Art. 503 §1(5).

A petition under Civil Procedure Code Art. 504 filed with an improper court does not interrupt preclusion, even if the deadline of one week following dismissal is essentially met, if the one-month period for filing the petition expired prior to filing of the petition with the proper court. Civil Procedure Code Art. 505 refers to the proceeding upon a properly filed petition, not the period for filing a petition to set aside an arbitration award and preclusion of such period.

1. The violations referred to in Civil Procedure Code Art. 503 may occur with respect to only a portion of the claims considered by the arbitration court, and in such case they will also justify only partial setting aside, because in order to exert such effect the defects mentioned in Art. 503 must affect the issuance of the ruling. Thus, as partial setting aside is generally permissible, it must be left to the discretion of the party whether it wishes to exercise the right arising under Art. 503 in full or in part. Exclusion of a certain portion of the ruling in the petition may not be undertaken solely in such a manner that partial setting aside of the arbitration award cannot be dictated by considerations of litigation defence.

2. Because in the dispute before the arbitration court, the defendant [i.e. the claimant in the arbitration case] could have standing only under the principle of an assignment for collection, Civil Code § 404 is applicable. Because under this provision the debtor may assert the arbitration clause also against the new creditor, the clause must be binding also on the new creditor.

3. Depriving a party of the ability to defend its rights is not absolute grounds for setting aside an arbitration award, but such violation will result in setting aside the award only if it affected the issuance of the award.

1. From the perspective of Austrian civil procedure regulations, failure to submit the original arbitration clause to the arbitration court does not justify ineffectiveness of the arbitration award, as this result follows under § 595(1) of the [former Austrian] Civil Procedure Code only from lack of an arbitration clause.

2. The state court is not a higher instance with respect to the arbitration court, and thus determinations made by the arbitration court within its discretion may not be appealed against.

3. The lack of justification of an arbitration award is not included in § 595 of the [former Austrian] Civil Procedure Code as grounds for ineffectiveness of the arbitration award.

If the parties do not appear at the time set for announcement of the arbitration award, or if the award was not announced to the parties, the award is deemed to be announced on the last day of the period set for issuance of the award.

The issue raised in the review of what will happen if the Land Office refuses permission to acquire the real estate identified in the arbitration award does not fall within the purview of the courts in this dispute, as it concerns the correctness of the arbitration award on the merits, and comprises an allegation of the erroneous assessment of the award, and therefore it cannot justify any of the grounds of ineffectiveness from §595 of the [former] Austrian Civil Procedure Code.

The deadline under §596 par. 2 of the [former Austrian] Civil Procedure Code for challenging an arbitration award is undoubtedly a preclusive deadline, which is even stricter than a statute of limitations. If in the case of the latter the limitations period is interrupted by filing a petition that is duly supported (Civil Code §1497), then it follows from the nature of a preclusive deadline that failure to support the petition (in the given case) within a period of 3 months results in loss of the right to challenge the award.

1. It cannot be assumed that the parties, when not only certain of their rights and obligations arising out of the legal act in question are challenged, but the legal act as such, did not intend to make use of the assistance of the arbitration court. Therefore, despite the invalidity (not to mention the ineffectiveness) of the deed itself, the arbitration clause, only mechanically connected to the deed, remains in force.

2. Unless otherwise provided by the parties, the arbitration court is not bound by procedural regulations, particularly the provisions of the [former German] Civil Procedure Code, when hearing the case submitted to it.

3. An arbitration award must set forth the reasons; that is, it must contain an objective justification for the operative wording of the award issued. Whether such justification is accurate, exhaustive or consistent with the state of facts cannot be reviewed by the common court under §1041 of the [former German] Civil Procedure Code, because it is not an appellate instance with respect to the arbitration court.

In a petition referred to as an “invalidity petition”..., the petitioner asserted grounds for ineffectiveness of an arbitration award under [former Austrian] Civil Procedure Code § 595(2), but did not seek to set aside the award but demanded statutorily impermissible amendment of the award on the merits. It follows that he did not assert at that time a petition to set aside the arbitration award (§ 596(1)), for which the code provides a period of three months from service of the arbitration award (§ 596(2)). … Thus if it was not until the hearing that the petitioner amended the relief sought and demanded that the award be set aside, it was only then, long after three months from service, that he asserted a proper petition to set aside the award. At that time he had already lost the right to assert the petition.