Pursuant to Article 20(3) et seq of EU Regulation 2019/943, some EU countries – including Poland – had to prepare a specific roadmap for the implementation of the new electricity market's principles, which could be adapted to accommodate the social and economic realities of the given country. This article summarises the actions taken by Poland to adapt its national legal environment to the requirements of the Clean Energy for all Europeans package.
The issue of arbitral tribunals' application of EU law is not new. In the 1990s the European Court of Justice (ECJ) established that a national court which receives an application to annul an arbitration award must grant such application if it considers that the award in question is contrary to EU law. In recent years, this issue was revived in investment arbitration and the ECJ's famous (or for many, infamous) Achmea judgment. A landmark decision of the Warsaw Court of Appeals is yet another chapter in this story.
In recent weeks, information has been published concerning the draft amendment to the Act of 8 December 2017 on the Capacity Market. The amendment aims to adapt Polish regulations to reflect the new electricity market structure agreed at the EU level as part of the Clean Energy for all Europeans package. The Ministry of Climate is responsible for the draft law, the adoption of which is planned for the third quarter of 2020.
Following public consultations conducted by the minister of state assets, the Ministry of Climate has published a new version of the draft Promotion of Electricity Generation in Offshore Wind Farms Act. The structure of the draft act, as well as the basic shape of the support system, remain largely intact. However, a number of changes have been made, including with respect to the definition of an 'offshore wind farm'.
The issue of an arbitral tribunal's jurisdiction over set-off claims that are not covered by an arbitration agreement is controversial, with the rules differing from jurisdiction to jurisdiction. In a recent judgment, the Warsaw Court of Appeals held that even if a set-off claim is based on an agreement that is outside the scope of an arbitration agreement, the tribunal must determine the set-off's effects on the main claim raised in the proceedings.
The Supreme Court recently held that imposing a contractual penalty on energy consumers due to the early termination of a contract for energy supply is prohibited. This latest ruling seems to change the current interpretation of the legal provisions on the possibility of imposing a contractual penalty on acceptance in the case of early termination of a contract which was concluded for a fixed period.
A recent amendment to the Personal Income Tax Act and the Corporate Income Tax Act has introduced an income tax exemption for benefits received from the Low-Emission Transport Fund (ie, subsidies for purchasing e-vehicles). The Low-Emission Transport Fund was established in 2018 and is tasked with financing projects relating to the development of electromobility and transport based on alternative fuels.
Parties which lose in arbitration often continue to fight off a claim before a state court in post-arbitral proceedings, despite not having a strong case. This provides a double benefit for Polish arbitration practice: not only are a vast majority of these attempts defeated, but the Supreme Court also has a chance to confirm its pro-arbitration approach. One recent decision underlines that the mere fact that the reasoning of an arbitral award is concise is insufficient grounds to vacate the award.
The draft Promotion of Electricity Generation in Offshore Wind Farms Act was recently published on the Government Legislation Centre's website. Among other things, the proposed act aims to create a regulatory environment that encourages investors to carry out offshore wind farm projects. In turn, this will enable Poland to fulfil its obligations under the EU Promotion of Energy from Renewable Sources Directive.
The Supreme Court has previously opted for both a broad and a narrow understanding of res iudicata in Polish arbitration law. In a recent judgment, the court again leaned towards a narrow understanding of to what degree an arbitral tribunal is bound by a previous award. The decision should be a caveat for all participants in the Polish legal market that they should play until the whistle is blown.
The arbitrability of corporate disputes has long been a controversial issue in Poland. Recent changes in Polish law introduced by the Act of 31 July 2019 aimed to resolve the issues surrounding and give the green light to arbitrating corporate disputes. Unfortunately, it seems that these amendments have failed to solve all of the problems and have even created additional uncertainties.
The first implementing regulations of the Act of 14 December 2018 on the Promotion of Electricity from High-Efficiency Cogeneration were published on 21 August 2019. The act aims to exploit the potential of cogeneration to improve air quality in Poland and increase the efficiency of heating and cooling systems.
A recent Supreme Court case touched on the obligations of an arbitral tribunal which cannot base its award on party-appointed experts' opinions. In a controversial decision, the court clarified that in such cases, when both parties request a tribunal-appointed expert, the tribunal should allow such a motion and cannot merely decide against the motioning party, as this may cause it to violate its obligation to consider the case, which – according to the Supreme Court – is part of public policy.
The prime minister and the minister of the environment recently presented a new programme called My Electricity, which aims to promote the use of photovoltaics. The introduction of My Electricity is one way to achieve the government's renewable energy target (ie, 15% of energy from renewable sources by 2020); however, additional programmes that support renewable energy production are needed.
It is obvious to arbitration practitioners that an arbitral award cannot deal with claims not brought before a particular tribunal. However, it is also clear that vacating an award due to a violation of public policy should be an exceptional measure. The Supreme Court recently dealt with these two principles and leaned towards the former, setting aside a domestic award granted for interest for a different period than the one demanded by the claimant in the proceedings.
Maciej Bando's five-year term of office as the President of the Energy Regulatory Office recently came to an end. A new head of the regulatory body may lead to a change of method in the execution of some competences under its administrative discretion. This change of method may be particularly visible in network and supply activities, as most of the regulations in this regard are developed by the President of the Energy Regulatory Office and other administrative bodies in the European Union.
The Act on Promoting Electricity from High-Efficiency Cogeneration recently entered into force. It establishes support mechanisms for combined heat and power (CHP) installations connected to district heating networks, which will replace the previous support scheme that expired at the end of 2018 and was based essentially on certificates of origin for energy from CHP installations.
In post-arbitral proceedings, parties challenging an unfavourable award or its enforcement often argue that they were deprived of the right to present their case or that the tribunal violated the rules of procedure or committed some other procedural error and often request the state courts to order the tribunal to present the arbitral case file. A recent Supreme Court decision evaluated the usefulness and necessity of granting such requests and clarified that such measures should be granted only rarely.
Parties unhappy with an arbitration award often try to question its enforcement based on public policy, raising numerous violations of law that do not amount to public policy. However, public policy is a tool that can also protect the legal system in certain situations. Two interesting Katowice Court of Appeals decisions made on the same day by the same judge in two non-related cases demonstrate how the courts deals with collusion cases.
It is a well-established rule that the setting aside of an arbitral award or the refusal of its recognition or enforcement due to a violation of public policy can occur only as a last resort to remedy a grave error in the award. It is also well established that the state courts in post-arbitral proceedings do not reconsider the facts established by an arbitral tribunal. A recent Supreme Court decision illustrates that although these rules are clear on paper, they are less clear when applied in practice.