Parties that negotiate a contract for sale when they are based in different countries are not always aware of the legal nature of their negotiations and the possible legal consequences. As such, it is advisable that parties choose the law applicable to the contract being negotiated and the negotiations themselves as soon as discussions begin. In the event of a dispute, this will enable them to avoid the potential risk of the courts finding that the contract in question has already been concluded.
A recent Supreme Court case found that an arbitral tribunal did not violate public policy by reducing an agent's claim for commission against a football club. In addition to setting a precedent in the field of sports law, the decision is important for arbitration practitioners as it confirms that intervention in the arbitral process on the grounds of public policy is limited to the most severe violations of Polish law.
International contracts are often concluded via email. This practice requires a more liberal approach to the form of arbitration agreements under the New York Convention. However, the convention is silent on the form in which an agent's authorisation (ie, power of attorney) to enter into an arbitration agreement must be made. A recent Supreme Court decision confirms that under Polish law, such authorisation is required and should be made in an equal manner to that required to conclude the agreement itself.
Mass contracts are usually drafted favourably only for the stronger party in the contractual relationship. This particularly pertains to dispute resolution (eg, its method or place). The Supreme Court recently ruled strongly in favour of the weaker parties in a contract and found that an arbitration clause in the contract between a Polish franchisee and a Dutch franchisor that opted for New York as the place of arbitration was invalid, as it was grossly unfair to the Polish party.
Significant changes to the regulation of arbitration in Poland were recently introduced. The changes will have a profound effect on business practice and lawyers nationwide, modifying a wide range of rules – from the form of an arbitration agreement to the preconditions for the enforcement of awards. However, the act aims not only to support consumers in arbitration, but also to provide a new impetus for the development and expansion of arbitration in Poland.
Anti-suit and anti-arbitration injunctions are useful instruments for enabling efficient dispute resolution and preventing forum shopping. However, these instruments are not favoured in some legal systems. Poland is one of the jurisdictions that was said to exclude the use of anti-suit and anti-arbitration injunctions. The Krakow Court of Appeals recently confirmed that Polish courts cannot prohibit a party from initiating or continuing arbitration.
Parties sometimes believe that the recognition and enforcement of an arbitral award is a mere formality, as the substantive proceedings are already over. However, the enforcement stage can prove formal and parties should be careful not to overlook certain requirements of a motion. A recent Supreme Court decision demonstrates the serious consequences that can stem from parties' errors in this regard.
A recent Supreme Court judgment confirms that there is no possibility of obtaining a declaratory decision regarding the validity and effectiveness of an arbitration agreement. According to the court, a party that is uncertain of the validity of an arbitration agreement must initiate a substantive case before either a state court or an arbitral tribunal. Only then can the jurisdiction of the tribunal be determined.
A recent Supreme Court judgment contributed to the debate on the res judicata of arbitral awards on other cases. Arbitration practitioners engaging in a res judicata argument before an arbitral tribunal that must take Polish public policy into account or acting before Polish state courts in arbitration-linked matters should be aware that there is flexibility in that regard.
A recent Warsaw Court of Appeals decision made a clear distinction between the jurisdictions of state courts and arbitral tribunals regarding the enforcement of claims. The court also discussed the defence of set-off raised after an award has been made and clarified when a claim covered by a valid and enforceable arbitration agreement can be examined only by a state court.
The effective interruption of a limitation period of a claim can be crucial to the final success of arbitration. However, it is unclear whether a party can interrupt a limitation period by bringing a case before an improper forum or by initiating conciliatory proceedings before a state court for a claim covered by an arbitration agreement. This update examines the risks relating to attempts to interrupt the limitation period in both instances.
High thresholds for proceedings set in arbitration agreements, such as short time limits, can have serious consequences, including the loss of an agreement's legal effect. Parties must also choose their arguments carefully, as they may be used against them later on. These issues were present in a recent Warsaw Court of Appeal judgment made in post-arbitral proceedings.
Parliament recently adopted amendments to arbitral law. The changes allow the period for enforcing claims in arbitration to be shortened by reducing the period for filing a motion to set aside an award as well as reducing the number of instances in which post-arbitral cases will be heard. The amendments mark a step forward in making Poland a more arbitration-friendly jurisdiction.
A Law on Restructuring was recently signed that derogates from the controversial provisions under which a declaration of bankruptcy rendered arbitration agreements concluded by an insolvent company ineffective. In future, a declaration of bankruptcy will not impede ongoing arbitration. The new provisions require a closer look by foreign parties that have an arbitration agreement with a Polish company.
The Supreme Court recently issued a judgment relating to a provision of the law regarding the expiration of an arbitration clause. Pursuant to this provision, if an arbitrator or presiding arbitrator refuses to perform that function or if it is otherwise impossible for him or her to perform that function, the arbitration clause will lose its effect, unless the parties decide otherwise.
A recent Supreme Court ruling has confirmed that the principle of the compensatory function of penalty clauses is a basic rule of Polish public order. The key issue from a commercial arbitration viewpoint relates to the requirements for the enforcement of a foreign award in Poland and the limits of the public order clause.