The International Arbitration Review: Poland
Over the past 30 years, Poland has made substantial progress in developing into a pro-arbitration jurisdiction by, inter alia, enacting arbitration-friendly legislation and developing case law that is generally pro-arbitration and pro-enforcement. Ten years ago, large and complex disputes involving Polish elements were ordinarily arbitrated at foreign seats such as London, Paris, Geneva or Vienna, while Polish lawyers typically played a somewhat limited role. However, it is less and less surprising to see Warsaw as the seat of even high-value cases, with Polish lawyers acting as lead or co-counsel on the record, or sitting as arbitrators. While Poland cannot yet be put on an equal footing with arbitration-friendly jurisdictions such as Switzerland, France or England, its position will continue to improve, and arbitration's end users – entrepreneurs doing business in Poland – will only benefit from this, as will their lawyers. The past few years have seen a number of important developments confirming that Poland is heading in the right direction arbitration-wise.
Below we provide a brief overview of Polish arbitration law, discuss its most recent amendments, and provide an overview of the main arbitral institutions in Poland and recent developments concerning arbitration case law.
i Poland's main arbitration institutions
One feature of the Polish arbitration landscape is its multiple arbitral institutions, including specialised courts of arbitration for the banking sector, the natural gas industry and even the cotton trade.2 The two main arbitral institutions are the Court of Arbitration at the Polish Chamber of Commerce (SA KIG)3 and the Court of Arbitration at the Polish Confederation Lewiatan (Lewiatan).4 Both courts have adopted rules of arbitration that follow the modern trends of international arbitration.
ii Overview of Poland's arbitration law
Polish arbitration law is primarily regulated in Part V of the Code of Civil Procedure (CCP), while certain provisions can be found in other legal acts. The current regulation was introduced in 20055 and is based on the 1985 version of the UNCITRAL Model Law on International Commercial Arbitration. The 2006 amendments of the Model Law have not been implemented yet. Polish arbitration law underwent some important, arbitration-friendly modifications in 2015, some of which are discussed further below.
Poland is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Hence, in the vast majority of cases the recognition and enforcement of foreign arbitral awards will be made on the basis of the New York Convention. Poland is also a party to the European Convention on International Commercial Arbitration of 1961 and the Energy Charter Treaty. Poland is not a party to the ICSID Convention. Poland has signed and ratified bilateral investment treaties (BITs) with approximately 60 countries. About 20 intra-EU BITs are currently in the process of being terminated. As a member of the European Union, Poland is also party to trade and investment agreements with other states, which also contain arbitration clauses.
Polish arbitration law does not distinguish between international and domestic arbitration. Consequently, Part V of the CCP applies to all arbitrations having their seat in Poland, including institutional and ad hoc arbitrations. However, Polish arbitration law treats the recognition and enforcement of foreign arbitral awards slightly differently from local awards, for example, by generally subjecting the former to the possibility of a challenge before the Supreme Court. Furthermore, some provisions of Polish arbitration law are applicable to arbitrations that have their seat outside Poland.
A large majority of the provisions of Polish arbitration law are of a non-mandatory nature, allowing the parties to depart from the regulations envisaged in the CCP (e.g., with respect to the conduct of proceedings).
Regarding arbitrability, Polish law permits very broad categories of disputes to be referred to arbitration, including civil, commercial, family (save for alimony cases), labour and social security disputes. The basic rule in this respect provides that all disputes that are suitable for settlement before a state court (i.e., all cases where the subject of the dispute concerns rights and obligations that are freely disposable by the parties or by one of them) are arbitrable. While the rule seems to be straightforward, it has given rise to divergent views as to whether a dispute concerning the validity of a legal act (e.g., a contract) can be referred to arbitration. These controversies have now been settled by the Polish courts, and, importantly, in a pro-arbitration fashion. A controversy continues to exist, however, with respect to the arbitrability of corporate disputes over the invalidity or revocation of a shareholders' resolution in joint-stock or limited liability companies. The main view is that such disputes are arbitrable, although it will likely require some diligence in drafting an arbitration agreement, as well as in the course of arbitral proceedings, to ensure that the award is binding on all the shareholders and the company (while not subject to the risk of annulment itself). While this position is well-reasoned and advocated by some of the leading scholars,6 it remains to be seen whether it will be endorsed by the Polish Supreme Court.
Prior to the 2005 amendment of the CCP, there had been contradictory case law rulings concerning the question of entering into an arbitration agreement by proxy, which happens very often in practice. Polish courts usually considered that a general power of attorney to represent a principal was insufficient, and that a more specific authorisation in this respect was required.7 This was an unsatisfactory conclusion for practitioners. Today, Article 1167 of the CCP provides that a power of attorney given by an entrepreneur to a proxy to enter into a transaction encompasses the power to execute an arbitration agreement concerning disputes that may arise from that transaction.
Until recently, a peculiar feature of Polish arbitration law were its provisions concerning the effects of bankruptcy on an arbitration agreement. Here, the arbitral agreement was to lose its effect and, as a result, all pending arbitral proceedings were to be discontinued (Articles 142 and 147 of the Polish Bankruptcy and Restructuring Act). Fortunately, these regulations were abolished by the 2015 amendments, as discussed further below.
Pursuant to Article 1159 Section 1 of the CCP, Polish courts may intervene in arbitral proceedings only in limited instances and when the law explicitly so provides. The practice of the Polish courts shows that this principle is observed. An illustration of this can be found in a recent decision of the Court of Appeals in Krakow declining an anti-arbitration injunction on the grounds that the CCP does not envisage such an intervention of state courts in arbitral proceedings.8
As indicated above, Poland is a party to the New York and Geneva Conventions. To the extent the New York Convention does not apply, the CCP establishes a framework for the recognition and enforcement of foreign arbitral awards that mirrors that of the Convention. Recognition and enforcement are facilitated even more with respect to domestic awards. Here, Polish courts examine only whether a dispute is arbitrable under Polish law, and whether the recognition or enforcement of an award would be contrary to Polish public policy. The Supreme Court emphasises that this procedure is incidental, and that its function is to ensure fast and effective enforcement of an award.9
Importantly, Polish courts consistently demonstrate a pro-enforcement approach, so they refuse to enforce or annul arbitral awards only very rarely. It is worth noting that the public policy ground in particular is construed very narrowly. For example, even when it was established that a case turned on an arbitral tribunal's erroneous interpretation of the statutory provisions on the statute of limitation, which are of a mandatory nature, this was not considered a breach of public policy.10 On the other hand, an arbitral award ordering punitive damages was held to run foul of public policy.11
That said, the Polish procedure made the enforcement process unnecessarily lengthy, even when the resisting party's claims had little merit. This was mostly because annulment proceedings and the enforcement of foreign arbitral awards were subject to the standard procedure with two instances, followed by extraordinary recourse to the Supreme Court,12 coupled with the general lengthiness of Polish court proceedings, in particular before the first instance courts. The end result was that enforcement proceedings could prove to be more time-consuming than an arbitration itself. In addition, a losing party is required to reimburse the legal costs of the winning party only within the statutory limits, which means only marginal amounts. This effectively created an incentive for award-debtors to derail enforcement proceedings so as to postpone enforcement and to force a creditor to agree on some concessions. The procedural deficiencies of the enforcement process were largely dealt with in the amendments to the Polish arbitration law adopted in 2015, as discussed below.
The year in review
i 2015 amendments
In 2015, Parliament enacted a number of important amendments to the Polish arbitration law, which entered into force on 1 January 2016.
First, a set of changes concerning post-arbitration proceedings was promulgated, which included the following:
- applications for setting aside and the recognition and enforcement of arbitral awards are now to be adjudicated by the competent courts of appeal (within their territorial jurisdiction);
- appeals against court of appeals decisions on recognition or enforcement of arbitral awards are to be adjudicated by different panels of the same courts. Cassations to the Supreme Court remain possible only with respect to foreign arbitral awards;
- court of appeals judgments in relation to setting aside applications are subject to a cassation appeal to the Supreme Court;
- the time period for the commencement of setting aside proceedings has been cut to two months;
- setting aside applications must now meet the requirements for an appeal, and not for a statement of claim, as was the case under the old regulations; and
- within two weeks after receiving an application for recognition or enforcement of an award, the opposite party may submit its position to the court.
These changes aim at reducing the duration of recognition and enforcement proceedings, and also to ensure even more stable and consistent jurisprudence concerning arbitration. Indeed, experience shows that appeal court judges are less prone to arrive at surprising outcomes or to accept procedural tricks that can derail the proceedings. Our recent experience may serve as a case in point in a case that concerned the enforcement of a foreign arbitral award against three respondents. Two of the respondents were special purpose vehicles (SPVs) controlled by the third respondent (an individual). Shortly after the closing submission by the applicant, the respondents informed the court of first instance that the third respondent had just resigned from his position as the sole board member of the second respondent (one of the SPVs). This led the court to suspend the proceedings on the grounds that one of the respondents had no management board, notwithstanding the fact that it was clear on the record that the sole purpose of the resignation was to derail the enforcement of the award.
The court of first instance declined to analyse the relevant facts surrounding the resignation, holding that even if it had been carried out in bad faith, it was an internal affair of the company that in no circumstances could be examined. This view was rejected by the Warsaw Court of Appeals, which held that the resignation was effectuated with a view to derail the enforcement process, and as such must be considered as carried out in bad faith and so invalid under Polish law.13 On this basis, the decision on the suspension of the enforcement proceedings was cancelled.
Secondly, the peculiar and heavily criticised provisions of the previous version of the Polish Bankruptcy and Restructuring Act whereby, upon a declaration of bankruptcy, whether encompassing liquidation of a debtor's assets or an arrangement with creditors, an arbitration agreement shall lose its effects, were repealed. Under the new regulations of Articles 14714 and 147a15 of the (newly titled) Bankruptcy Act, an arbitration agreement continues to be binding after bankruptcy proceedings are declared. Although a receiver may rescind an arbitration agreement, this is possible only when:
- pursuing a claim in arbitration would impede the liquidation of the bankruptcy estate, in particular if the latter does not consist of assets that would fund the costs of commencing and continuing arbitral proceedings;
- a consent of the judge commissioner authorising the rescission is issued; and
- no arbitral proceedings were commenced as of the date of a declaration of bankruptcy.
As regards pending arbitrations, these have been put on the same footing as pending court or administrative proceedings. This means that pending arbitral proceedings will be suspended, and a receiver will be called to act in the proceedings and to replace the bankrupt entity. In instances when the latter acted as a respondent party, the proceedings will be suspended pending resolution of a creditor's claims in the course of bankruptcy proceedings. Therefore, arbitral proceedings can be resumed only if a creditor's claim is not entered into a schedule of claims.
Thirdly, new Article 1174 Section 1 of the CCP states that an arbitrator 'shall provide a written statement on his or her impartiality and independence, together with disclosing all circumstances that could have raised any doubts in this respect'. This provision merely transposed into the Polish arbitration law statements of independence and impartiality, which are commonplace in international arbitration and are also required by arbitral institutions in Poland.
The 2015 amendments were rightly positively welcomed by the Polish arbitration community.
ii Recent developments at SA KIG
SA KIG is the oldest arbitral institution in Poland, and the largest in terms of caseload. The current SA KIG Rules entered into force on 1 January 2015,16 replacing the previous version of the Rules adopted in 2007. A summary of the most important innovations is presented below.17
A feature of many arbitral institutions in Central and Eastern Europe is the list system, whereby parties' choice for the selection of arbitrators is limited to candidates present on a list of arbitrators, which is drawn up by an arbitral institution. The new SA KIG Rules have not fully abandoned this system, but provide for its significant relaxation. While under the old SA KIG Rules a presiding arbitrator and a sole arbitrator were to be selected from the SA KIG's list in all cases without exception, the new regulation allows a person from outside the list to be appointed on the joint request of the parties and with the consent of the SA KIG's Arbitral Council (which is to take into account the specifics of the dispute and the qualifications of the candidate). The list system does not apply to party-appointed arbitrators, who may be selected from outside the list. In their case, the list of arbitrators serves merely as a roster of recommended arbitrators (Section 16).
The SA KIG Rules also include new provisions concerning multiparty arbitration. As regards the appointment of an arbitral tribunal in multiparty scenarios, the Rules provide that, absent a joint appointment by multiple claimants or respondents, the arbitrator for this party will be appointed by the SA KIG's Arbitral Council. This does not affect the right of the other party to appoint its arbitrator (Section 19(5)). Consolidation is generally possible when parties to the proceedings and arbitral tribunals are the same in all the proceedings to be consolidated, and the disputes arise from the same arbitration agreement, or are related to them even though they arise from different arbitration agreements (Section 9(1)). Furthermore, the consolidation of arbitral proceedings may also take place when the parties to the proceedings are not the same provided that the arbitral tribunals are the same, the disputes arise from the same arbitration agreements or are related to them, even though they arise from different arbitration agreements, and all the parties agree to such consolidation (Section 9.2).
It is also worth mentioning the new rule envisaged in Section 6(2), whereby an adjudication of a dispute cannot be made on the basis of a legal theory that was not invoked by any of the parties unless the parties are so notified and are provided with opportunity to present their positions on the new legal theory. This solution strikes a proper balance between adjudicating the correct award and ensuring the parties have justified interests; the right to present their respective cases is thereby respected. It therefore addresses the risk that the award could be set aside or refused recognition or enforcement on the ground that a party was deprived of this right and surprised by the arbitrators' reasoning that underlies the award.
Further amendments concern the organisation of proceedings and include, inter alia, an arbitral tribunal's obligation to prepare, in consultation with the parties, a detailed procedural timetable of the proceedings (Section 31). Time limits of nine months starting from the commencement of proceedings, and 30 days after closing the hearing, were also set for arbitral tribunals to issue final awards (Section 40 Section 2), which is one of a few amendments aimed at expediting arbitral proceedings.
On 1 June 2018, an expedited procedure entered into effect as part of the SA KIG Rules (Section 53).18 It applies by default to disputes valued at under 80,000 zlotys, unless the parties to a dispute opt out if it. Parties may also opt in to the fast-track procedure for disputes above that value. The SA KIG Rules applicable to this procedure are simplified and the dispute is resolved by a sole arbitrator. A case management meeting is mandatory, and an award should be issued within six months after its minutes have been approved. Unless mandated by circumstances there is no hearing, and the award is based on a written record of the case.
iii Recent developments at the Lewiatan
Since its establishment almost 15 years ago, the Lewiatan Court of Arbitration became the second-largest arbitral institution in Poland. Its current rules of arbitration, the Lewiatan Rules, have been in force since 2012. The Lewiatan Rules mirror the modern arbitration rules of the leading arbitral institutions. Among other things, they provide for emergency arbitrators and expedited proceedings for smaller cases (an opt-out mechanism for proceedings with an amount in dispute lower than 50,000 zlotys; there is also an opt-in mechanism for bigger cases).19
The most recent amendment to the Lewiatan Rules concerns the introduction in 2015 of second instance proceedings.20 This solution is very rare in arbitral institutions. Moreover, it is at odds with one of the important characteristics and advantages of arbitration, which is the one-step dispute resolution mechanism, with all the benefits regarding time frames and costs. However, some Polish arbitration users have been concerned with the finality of awards, which cannot be reviewed on the merits by Polish courts, and have expressed their preference to have an appellate mechanism introduced. The Lewiatan Rules have responded to these concerns, but importantly did so on an opt-in basis. Therefore, the appellate mechanism is available only in cases where the arbitration clause expressly so provides (Section 1 of Appendix V to the Lewiatan Rules). Evidentiary proceedings should be of very limited scope (Section 8), and the new tribunal is to adjudicate only the appeal charges. It remains to be seen how popular this solution will become among parties opting for arbitration at the Lewiatan.
iv Recent case law developments
Limited control of arbitral awards by state courts
The Polish courts continue to follow the well-established line of jurisprudence that the public policy ground for annulment is interpreted narrowly. This is illustrated by two recent judgments of courts of appeals.
In a judgment of 25 October 2018,21 the Katowice Court of Appeals reviewed the alleged infringement of the pacta sunt servanda ((contractual) promises must be kept) rule. The Court noted that that public policy grounds for annulment refer only to infringements that result in a breach of the basic tenets of the political and socioeconomic systems of Poland. Although the state court enjoys broad discretion when applying the public policy ground, it does so carefully and applies this ground rather narrowly. No serious infringement of such basic tenets was found in the award under review, and the Court refused to annul it.
It a judgment of 27 June 2018,22 the Poznań Court of Appeals reviewed an alleged infringement of the res judicata rule. It reiterated that the public policy ground refers only to the most fundamental mandatory principles and aims at protecting the integrity of the Polish legal system. There were multiple proceedings between the parties to arbitration before various state courts. The courts made incidental assessments of a contract that was also the subject of the arbitral award. The Court of Appeals found no infringement of res judicata where the arbitrators' legal assessment of the contract was consistent with assessments made by some of the state courts but not the others.
Validity of shareholders' resolution non-arbitrable
In a judgment of 30 November 2018,23 the Katowice Court of Appeals confirmed that disputes about the validity of corporate resolutions are non-arbitrable. The case is a good illustration of the controversial nature of arbitrability of such disputes because of potential conflicts of interest.
The dispute concerned the validity of a resolution dismissing a member of the company's management board. The dismissed management board member appointed an arbitrator on behalf of the claimant company. Because he was also the management board member of the respondent, and had de facto control over it, he also appointed the arbitrator on behalf of the respondent. These two arbitrators then selected the presiding arbitrator.
The Court of Appeals found these circumstances justified the annulment of the award due to the improper constitution of the arbitral tribunal. Specifically, the Court found an infringement of the constitutional right to having the case heard before an impartial and independent court. This constitutional principle is not limited to state courts and applies to arbitral tribunals. Showing that an arbitrator was in fact biased or impartial is not required for the finding that this principle is breached.
Consequently, the award was set aside due to the non-arbitrability of the subject matter of the dispute and due to the infringement of the constitutional right to court.
Assignee bound by arbitration agreement
In a judgment of 1 December 2017,24 the Polish Supreme Court decided that an arbitration clause in a contract for the assignment of debts binds an assignee that substituted the party to such a contract who later became bankrupt.
The dispute emerged after the defendants in the case, a consortium of Irish companies, contracted with a Polish company to build a motorway. The contract contained an arbitration agreement. The Polish company later secured a credit line with a Polish bank; as collateral, it assigned to the bank its rights under the construction contract with the Irish consortium.
The bank decided to pursue these claims against the consortium leader before a local Polish court. The defendants argued that the proceedings should be dismissed on the grounds of an existing valid arbitration agreement in the contract to which the bank was now an assignee.
The Supreme Court ruled that an arbitration agreement is binding on the bank as an assignee, which is an important step in Polish law to clarify the issue of legal effect of an assignment on an arbitration clause. The Court reasoned that assignment is fiduciary in nature and the events subsequent to its conclusion – here, the assignor's insolvency – do not affect the validity of the arbitration agreement that covers the assigned claims, pursued later by the assignee. Consequently, the bank was unable to proceed with the assigned claims before the state courts and had to commence arbitration proceedings.
Autonomous meaning of 'agreement in writing' under the New York Convention
On 23 January 2015, the Polish Supreme Court issued a judgment concerning the autonomous construction of the New York Convention, in particular the expression 'agreement in writing'.25 This question arose in a case where the court of first instance decided to enforce an arbitration award despite the fact that the claimant submitted an uncertified copy of the arbitration agreement. On appeal, the Court of Appeals declined to enforce the arbitration award on the grounds that an uncertified copy of an arbitration agreement does not fulfil the requirement set in Article IV of the New York Convention. This decision was challenged to the Supreme Court, which held that a proper interpretation of Article IV of the New York Convention should take into account the provision of Article II Section 2 of the Convention, which determines what may be regarded as an agreement in writing in the case of arbitration agreements. In this respect, the jurisprudence of the Supreme Court as well as Polish doctrine are consistent in considering that an agreement in writing under the New York Convention has an autonomous meaning that is more liberal than the one under Polish law. On this basis, the Supreme Court decided that the claimant did meet the requirement of submitting the original of the arbitration agreement in writing. It went a step further in holding that Article IV of the Convention does not require an applicant to present an arbitration agreement, but only to prove its existence. Here, the Court relied on its previous judgment to the effect that a defendant who did not challenge the existence of an arbitration agreement before an arbitration tribunal cannot raise such a defence in enforcement proceedings before the Polish courts, as this would be against the principle of venire contra factum proprium.
Arbitrability of disputes on the exclusion of a member of a limited liability company
Another interesting case involved an application for the exclusion of a member of a limited liability company by a Polish court.26 The implicated shareholder objected to the court's jurisdiction due to a valid and binding arbitration agreement contained in the company's articles of association, and requested the court to reject the claim on this basis. The court of first instance agreed with the defendant and rejected the claim. The claimant appealed this decision, arguing that such dispute lacked arbitrability (on the grounds that only disputes that are capable of being resolved by court-approved settlement may be referred to arbitration, and that a dispute concerning the exclusion of a shareholder is not capable of such resolution). The Court of Appeals rejected technical arguments advanced by the other side, and held that arbitrability depends on whether the parties can freely dispose their rights and obligations in respect of the legal relation that gives rise to the dispute. This straightforward reasoning led the Court of Appeals to uphold the judgment of the court of first instance and, in consequence, reject the claim in its entirety without looking at its substance.
Arbitration agreements may be conditional or limited in time
A final decision involved an arbitration clause that required an arbitral tribunal to issue its award within two weeks from the commencement of the arbitration proceedings.27 The arbitration tribunal did not meet this deadline, issuing its award later than prescribed in the arbitration agreement. When the claimant initiated enforcement proceedings, the defendant alleged that the arbitration agreement expired upon the lapse of the two-week period for the award to be issued. In consequence, the defendant argued, at the time the award was issued there was no longer a binding arbitration agreement between the parties. The Court of Appeals somewhat surprisingly agreed that the arbitration agreement had expired, and that this prevented state courts from enforcing the arbitration award that was issued on the basis of this now-expired arbitration agreement. The Court considered that parties drafting arbitration agreements are free to decide what situations, other than those listed in the CCP, could also result in the expiry of an arbitration agreement. This means that under Polish law, arbitration agreements may be conditional or limited in time. The Court of Appeals emphasised in this context that this was, on its interpretation, what the parties had agreed. In the circumstances of the case, this meant that the arbitrators could not change the two-week period for issuing the award specified in the arbitration agreement without the parties' consent.
v General Counsel representation of state and state-owned companies
According to legislation from December 2016, the state and state-owned entitles are now represented in most litigation and arbitration proceedings by the General Counsel of the Republic of Poland (PGRP). As a result of this important development, the state and state-owned companies no longer rely on external counsel in large international arbitrations (commercial and investment treaty alike). However, they do instruct local counsel in proceedings before foreign courts, such as setting aside proceedings. The change representation by PGRP is partly explained by an attempt to limit the legal costs of arbitrations by taking them in house.
vi Online arbitration courts
Another recent development in arbitration services available on the Polish market are online arbitration courts. The first such court, the Online Arbitration Court, became active in February 2019. Another, Ultima Ratio, which was set up by Association of Polish Notaries, commenced operations in April 2019. These new institutions operate entirely online, and their founders hope to offer low-cost and expedient venues for resolving small civil and commercial claims. Due to their recent launch, it is not yet possible to judge their success. However, the development itself reflects the need for reliable, fast and affordable alternatives to state courts in smaller disputes.
vii Investor–state disputes
Poland has a mixed track record in investment cases. While so far it has prevailed in most of the investment treaty arbitrations it has been involved in, it has recently lost a number of cases. During the past two decades, Poland has seen a number of claims filed against it by foreign investors. In 2015, the government confirmed that there were 11 arbitration proceedings in which Poland was the respondent state. Since then, several more claims have been filed against Poland, notably in the energy and mining sectors, and there is a possibility of further investment disputes.
In January 2017, a special interdepartmental committee was set up that was tasked with assessing the legal effects of the BITs and recommending further steps to the Prime Minister. The result of its work is a policy of terminating BITs with other EU Member States, which commenced in mid-2017. Since then, the Parliament has enacted a number of statutes terminating over 20 intra-European BITs. The termination process of each BIT is different, as will be the expiry date of their respective arbitration clause. The terminations cover the countries that are the main sources of foreign capital investment in Poland: the Netherlands, Germany, Luxembourg and France. Moreover, Poland is also terminating its BIT with the UK, which may have an impact on investment decisions in the event of a no-deal Brexit.
Generally, Poland's policy of terminating its intra-EU BITs is in line with the European Commission's recommendations to phase out such BITs due to their potential incompatibility with EU law. This approach was boosted by the landmark CJEU judgment of March 2018 in Slovak Republic v. Achmea,28 in which the Court found that arbitration clauses in intra-EU BITs have an adverse effect on the autonomy of EU legal order. Moreover, the Achmea judgment provided Member States with an instrument to resist the enforcement of unfavourable investment treaty awards based on intra-EU BITs. However, cases involving Poland show that this does not work in every case: a Swedish court of appeals recently upheld two awards of the Arbitration Institute at the Stockholm Chamber of Commerce against Poland based on intra-EU BITs. The fining was partly based on the fact that during arbitration Poland did not contest the validity of the arbitration agreement.29 Although Poland's appeal of this judgment is pending, this decision already demonstrates that the Achmea-based defence may not always be effective.
Outlook and conclusions
1 Michal Jochemczak is a partner and Tomasz Sychowicz and Lucja Nowak are senior associates at Dentons. The information in this chapter was accurate as at June 2019.
5 Code of Civil Procedure, Act of 17 November 1964, Official Journal 1964, No. 43, Item 296 with further amendments; Part V was by the Act of 28 July 2005, Official Journal No. 178, Item 1778 with further amendments. An unofficial English translation of Part V of the CCP can be found at www.sadarbitrazowy.org.pl/repository/Part-V-of-the-Polish-Code-of-Civil-Procedure-Arbitration.pdf.
6 See in particular A W Wisniewski, 'System of Commercial Law', Commercial Arbitration, Volume 8, edited by A Szumanski, second edition 2015.
7 See Supreme Court resolution dated 8 March 2002, III CZP 8/02; see also the Supreme Court decision dated 25 August 2004, IV CSK 144/04.
8 See Krakow Court of Appeals judgment dated 22 November 2016, I ACz 1997/1.
9 See Supreme Court decision dated 20 May 2011, IV CZ 18/11.
10 See Supreme Court judgment dated 26 May 2017, I CSK 464/16, Supreme Court judgment dated 15 May 2014, II CSK 557/13 and Supreme Court judgment dated 16 May 1997, I CKN 205/97.
11 See Warsaw Court of Appeals decision dated 26 January 2012, I ACz 2059/11; see also Supreme Court decision dated 11 October 2013, I CSK 697/12 – while the case concerned a foreign judgment, not an arbitral award, the interpretation of the public order clause is also relevant for the latter.
12 Generally, court proceedings in Poland comprise two instances, but when the value in dispute exceeds 50,000 zlotys, and a gross violation of material or procedural law, or both, is in question, a party may file a cassation appeal to the Supreme Court.
13 See Court of Appeals in Warsaw decision dated 27 March 2017, VI ACz 358/17, unpublished.
14 Article 147: '[t]he provisions of Article 174 Section 1 items 4 and 5 and Article 180 Section 1 item 5 of the Code of Civil Proceedings as well as Article 144 and Article 145 shall apply respectively to arbitration proceedings.'
15 Article 147a:
Section 1 If arbitration proceedings have not been initiated as at the date of the declaration of bankruptcy, the receiver, with the approval of a judge commissioner, may rescind an arbitration agreement if pursuing a claim in arbitration will hinder liquidation of bankruptcy assets, in particular if the bankruptcy assets are insufficient to cover the costs of instigation and conducting of arbitration proceedings.
Section 2 Upon a written request of the other party, a receiver shall, within thirty days, provide a written declaration as to whether he is rescinding the arbitration agreement. Failure to provide such declaration within this deadline is deemed tantamount to the rescission of the arbitration agreement.
Section 3 The other party may rescind the arbitration agreement if the receiver, even though he had not rescinded the arbitration agreement, refuses to participate in covering the costs of arbitration.
Section 4 Upon its rescission, an arbitration agreement shall be voided of effect.
17 For a full analysis of the new SA KIG Arbitration Rules see the commentary to the Rules: M Laszczuk, A Szumanski (editors); Regulamin Arbitrazowy Sadu Arbitrazowego przy KIG; Komentarz, CH Beck 2017 (in Polish).
18 The new Section is available at https://sakig.pl/wp-content/uploads/2019/01/Procedura_przyspieszona-_ENG.pdf.
19 A comprehensive analysis of the Lewiatan Rules can be found in B Gessel-Kalinowska vel Kalisz (editor), Postepowanie przed sadem polubownym. Komentarz do Regulaminu Sadu Arbitrazowego przy Konfederacji Lewiatan, Wolters Kluwer 2016 (in Polish).
20 Annex V to the SA KIG Rules – Rules of Procedure for Appeals.
21 See Katowice Court of Appeals judgment dated 25 October 2018, V Aga 18/18.
22 See Poznan Court of Appeals judgment dated 27 June 2018, I ACa 232/17.
23 See Katowice Court of Appeals judgment dated 30 November 2018, V AGa 482/18.
24 See Supreme Court judgment dated 1 December 2015, I CSK 170/17.
25 See Supreme Court judgment dated 23 January 2015, V CSK 672/13.
26 See Krakow Court of Appeals judgment dated 15 December 2016, V ACz 1309/16.
27 See Warsaw Court of Appeals judgment dated 18 June 2015, I ACa 1822/14.
28 Slovak Republic v. Achmea (case C-284/16). See http://curia.europa.eu/juris/document/document.jsf?text=&docid=199968&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=404057.