Case Law of the Courts on the Relation of Arbitration: Part A/4 (original) (raw)

Arbitration is very popular in Poland, like in almost all countries of Central and Eastern Europe. This corresponds with extensive case law of Polish courts. Polish Law on Arbitration, which is part of the Code on Civil Procedure (as amended in 2005) and which is based on UNCITRAL Model Law, provides for a high degree of autonomy in arbitration and for a broad interpretation of the arbitrability. The scope of arbitrability has been confirmed in certain Polish court decisions. For example the decision of the Polish Supreme Court of May 21st 2010 stated that The wording “may be subject to settlement” applies to disputes on both property and non-property rights. It is common ground under doctrine and case-law that the parties may seek the award of certain enforcement, a declaration of the existence of a relationship or a right (a declaration of whether or not a right exists here) or the establishment of a particular legal relationship before an arbitral tribunal. In another decision the Polish Supreme Court (decision of June 18th 2010) explained that the subject-matter of an arbitration agreement is legal relationships, not specific claims arising from such relationships. The possibility of subjecting a dispute to the jurisdiction of arbitrators is abstractly defined for legal relationships, not for the types of claims arising from such relationships (enforcement, a declaration of whether or not a legal relationship or right exists here). The [objective] arbitrability of a dispute depends on the type of legal relationship. A precondition of [objective] arbitrability is the abstract possibility of the parties to the dispute to dispose of rights arising from the legal relationship between those parties. In this regard, arbitrability is not dependent on whether the parties can reach a particular settlement. It is therefore irrelevant, whether a party itself could conclude and declare that a contract is null and void; the material factor is whether the parties can reach an amicable settlement. In Europe generally the issue of arbitrability of competition and tort claims is relatively sensitive and the doctrines of particular European countries are fairly different. Many countries of Europe did not express any clear view on this issue as of yet. The Polish Supreme Court decided on this issue by its Judgement of December 2nd 2009 expressing that a claim for unjust enrichment, as a dispute on a property right which may be disposed of by the parties, may be subject to settlement. As such, it may constitute the subject-matter of an arbitration agreement. Arbitration agreements clearly relate to disputes arising from or connected with agreements on cooperation in the purchase of goods. The respondent’s unfair competition, consisting of the receipt of additional consideration, was not connected [...] with performance under such an agreement, nor did it constitute part of any relationship to the performance thereof, but took place only in parallel to the performance of such an agreement. The claim sought by the party claims hence is not contractual in nature and is unrelated to the content of the agreement, but concerns unfair competition. The parties, upon entering into an arbitration agreement, could hardly be expected to have envisaged such conduct and entered into an arbitration agreement on that matter. It clearly follows from the content of the arbitration agreement that it concerned disputes related to the implementation of the agreement, rather than all disputes arising during the implementation thereof. Available is also new case law on effects of foreign court decisions to the recognition and enforcement of an arbitration award from the perspective of the New York Convention. This topic counts also as a hot topic in many international discussions. The Polish Supreme Court decided on November 6th 2009 that A decision on the legal relevance of a particular decision of a foreign court cannot be taken during exequatur procedure as it is impossible to predict what effects of such a decision will be claimed by any applicant (party) in the future and under what circumstances. In this respect the Polish Law on Arbitration does not form a basis to dismiss [an application for] the recognition of a decision of a foreign court merely because, in the opinion of the court adjudicating on recognition (in exequatur procedure), the decision will not induce any effects in Poland. If the applicant in exequatur procedure (i.e. the person seeking recognition of the decision) was the same party in the [main] action before the Austrian court, it has a legal interest not only in being entitled to bring proceedings in exequatur procedure in Poland, but also, if the conditions laid down in Polish Law on Arbitration are not met, in being able to claim the recognition of such a decision, i.e. the recognition of the legal effects thereof, in Poland. The decision dismissing the application for the annulment of an arbitral award by the court, from a formally procedural perspective, is a decision on the merits and not just a procedural decision. The decision on the application for the annulment of the arbitration award by the court was therefore generally eligible for recognition (it may be subject to exequatur procedure). It should be noted, however, that, from the substantive aspect, the dispute was resolved by the award of an arbitral tribunal, the basis of which was the will of the parties expressed by the arbitration agreement. In this regard, a decision on an application for the annulment of an arbitral award is only a decision by which the State exercises supervision of (control over) arbitral awards and arbitration in general. A decision rendered by a Polish court in proceedings brought by an application for the annulment of an arbitral award must be taken into account in procedure on the recognition of a foreign arbitral award only if so provided by the law applicable to such procedure. According to the Polish Code on Civil Procedure and on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), a court adjudicating on the recognition of a foreign decision shall take into account, on a motion from a party, a decision annulling an arbitral award. It does so when examining the existence of any grounds for refusal of recognition. The basis for the rendering of an arbitral award is the will of the parties. It follows from the nature of the arbitral award and from the role played by the foreign court’s decision dismissing the application for the annulment of the arbitral award that there is an insufficient legal basis for the recognition of the foreign court’s decision, which is essentially only of a supervisory, rather than a substantive, nature. The connection with an arbitral award and, consequently, not the absolutely individual nature of such a decision of a foreign court on an application for the annulment of such an arbitral award, is primarily an obstacle hindering its assessment as a decision which may be recognized in Poland under the existing Law on Arbitration. There are available also many other current decisions of Polish court related to highly interested topics, which create usually an important part of the discussions during leading international events on arbitration.