Not many recent decisions of the Polish Supreme Court have stirred the “arbitration pot” in Poland quite as much as the one issued on 19 January 2024 (file ref. no II CSKP 897/22). The decision relates to a somewhat controversial topic, i.e., whether the party’s financial situation causing an inability to bear the costs of arbitration may be the reason to deny the jurisdiction of the arbitral tribunal due to the arbitration agreement’s incapability of being performed. In the abovementioned decision, the Polish Supreme Court joined the worldwide discussion on the matter and presented a view that that may be the case in some situations.
Up until the beginning of 2023 there was no convenient solutions for estate planning in Poland that would ensure the continuation of the business on one hand and the protection of assets of the other.
That changed on 26 January 2023, when the Polish Parliament adopted an act on the family foundation. The act entered into force on 22 May 2023.
Available data shows that the introduced mechanism is rather popular – in 2023 over 400 family foundations were registered and over 800 applications for the registry of such foundation were filed.
The piece was first published with ThoughtLeaders4 Disputes Magazine.
The court can inform the Swiss franc loan holder of the consequences of the invalidity of the agreement, but can it require confirmation from them?
Only a decision by the full Civil Chamber of the Supreme Court can resolve this new issue in Swiss franc loan cases, which is relevant to the settlement of abusive contracts.
A few remarks on the basis of the provisions of the Energy Law and the Investment Act. According to the list published on the website of the Transmission System Operator – Polskie Sieci Elektroenergetyczne S.A. (PSE, TSO) in December 2023. Polskie Elektrownie Jądrowe sp. z o.o. obtained connection conditions for the NPP SS facility, i.e. the future substation for the nuclear power plant in the area of Gdańsk Pomerania.
The Internet is flooded with advertisements: sell your CHF loan and get your money back. Lawyers advise caution.
The phenomenon is not new, but it has recently gained momentum, perhaps because of the growing number of Swiss franc loan holders who have already repaid their loans but would like to recover the overpayment from the bank and regain their peace of mind. On the other hand, after the collapse of Getin Noble Bank, thousands of its borrowers faced a new challenge and tried to exchange a long settlement for quick cash.
The Civil Chamber of the Supreme Court is considering a ruling on Swiss franc loans, which is still needed by many. It is worth noting that the new judges already make up two-thirds of the chamber, which should ensure a substantive session.
On the initiative of the First President of the Supreme Court, Professor Małgorzata Manowska, six long-prepared questions concerning the rules for the invalidation of Swiss franc loan agreements, the manner of settlement between the parties, in particular, whether separate claims arise for the Swiss franc loan holder and the bank, and compensation for the use of borrowed funds are to be considered.
Following the Court’s ruling, those affected by the prolongation of the Swiss franc loan case will be able to sue for damages.
Following the CJEU’s ruling on Monday stating that questions from the old section of the civil division of the Supreme Court on the status of the new judges who blocked the decision on the CHF loans were inadmissible, the question arises as to whether the holders of the CHF loans are entitled to compensation for waiting for the ruling.
In the past year, Polish and European courts have handed down several important and consumer-friendly judgments. These rulings have already resulted in favourable settlements for holders of Swiss franc loans (over 90%), and other cases involving foreign currency loans are still pending.
When joint property is created during a long-term concubinage, it is expected that both cohabitants will share in the increase in value of the property acquired with the funds of one of them.
The Supreme Court is consulting a wider panel on how to regulate the enrichment of cohabitants after separation. The case could also be significant for holders of Swiss franc loans.
Consumers do not need to make a formal declaration to the court in order to exercise their rights under EU law when settling a loan agreement.
This is the essence of Thursday’s ruling by the Court of Justice in the mBank case (C-140/22), which is likely to have an impact on the settlement of invalidated Swiss franc loan agreements.
In recent months the Polish arbitration framework has expanded. There are two legal novelties that are worth being familiar with while considering the state of commercial arbitration in Poland. The first change comes with an overhaul of the rules about submitting pending State court disputes to arbitration. Second, there is the possibility of introducing an arbitration clause in the statute of a family foundation.
Attempts to create a legal environment for CCS in Poland have been underway for many years. In this article, Grzegorz Pokrzywka, attorney-at-law and senior counsel at Kubas Kos Gałkowski, Energy and Natural Resources Desk – analyses the changes for this sector brought about by the amendment to the Geology and Mining Act and the solutions needed to popularise CO2 capture and storage technologies.
Agricultural biogas plants have significant potential to become an important part of Poland’s energy transition compliant with sustainable development principles. Our country has favourable conditions for this due to the significant share of agriculture and agri-food processing in the economy and the large area of rural land.
Investing in renewable energy sources is one of the ways to develop the energy sector. Poland has great potential in this regard – by 2030, up to 50% of the country’s electricity needs could be met by renewable energy sources1. By means of the Act of 17 August 2023 amending the Act on Renewable Energy Sources and certain other acts (Journal of Laws of 2023, item 1762), which entered into force on 1 October 2023, the legislator introduced a number of changes, among others to the Act on Renewable Energy Sources, to meet the expectations of the market. These changes have also affected the photovoltaic sector. There is no doubt that solar sources continue to be the pillar of the renewable energy sector in Poland, accounting for more than half of the installed renewable energy capacity – almost 57%.
Under Polish law, liquidated damages shaped by the parties do not have to perform the compensation function in contractual liability. If so, liquidated damages also do not have to implement the principle of the compensatory nature of compensation liability if, in a given contractual configuration, the parties have shaped the liquidated damages in such a way that they did not perform the compensation function or only compensatory function, but e.g. a repressive or preventive role. Consequently, awarding liquidated damages in such a case could not contradict the Polish public policy.
This article discusses the issue which seems obvious but, in some instances, is not, namely the effects of a party’s failure to raise the plea of lack of jurisdiction under the Polish arbitration law. The Polish legal system has developed coherent and comprehensive mechanisms for examining the arbitral tribunal’s jurisdiction. This system e.g. introduces specific time constraints in which a party may challenge the arbitral tribunal’s jurisdiction. Failure to meet the statutory deadline to raise such a plea of lack of jurisdiction has severe consequences. If the party raises a plea of lack of jurisdiction after the expiry of the time limit set in the Code of Civil Procedure, it generally should not be evaluated by either the arbitral tribunal or the state court in post-arbitration proceedings as time-barred (precluded).
What legislation applies to arbitration in your country? Are there any mandatory laws? Polish arbitration law is codified in the Code of Civil Procedure (“CCP”). It provides a comprehensive framework of arbitration proceedings and regulates i.a.: i. scope of application of Polish arbitration law (art. 1154 CCP), ii. arbitrability (art. 1157 CCP), iii. arbitration agreement (art. 1161-1164(1) CCP), iv. composition of the arbitral tribunal (1169-1179 CCP), v. jurisdiction of the arbitral tribunal (art. 1180 CCP) vi. interim measures (art. 1181 CCP), vii. arbitral procedure (art. 1183-1193 CCP), viii. applicable law (art. 1194 CCP), ix. arbitral award (art. 1195-1204 CCP). Code of Civil Procedure also regulates the postarbitration proceedings, namely the proceedings regarding the setting aside of the arbitral award (art. 1205-1211 CCP) and the recognition and enforcement of the award (art. 1212-1217 CCP). Some provisions applicable to arbitration can also be found in other legal acts (e.g., the impact of bankruptcy on arbitration proceedings is regulated by the provisions of bankruptcy law).
Although the EU regulations on novel foods came into force in the 1990s, the threat of a famine and food crisis in Europe has appeared to such an extent only in recent years. The concept of novel foods, which can address challenges, is nevertheless associated with several ethical issues. In the individual aspect, it is the possibility of using widely innovative methods to produce food that successfully replaces meat or provides an alternative to sugar.
Lawyers representing Swiss franc loan holders and banks are still waiting for the Civil Chamber of the Supreme Court to answer at least some of the questions posed by the First President of the Supreme Court.
The issue of these questions has been revived after two years by a recent unfavourable decision by a panel of the Supreme Court in favour of Swiss franc loan holders on the grounds (according to many lawyers, in a departure from current jurisprudence) that the Supreme Court’s rulings in Swiss franc loan cases are not consistent as the full Civil Chamber has made no decision and each case is different.
Our previous post on this Blog explored the Polish post-award case law from 2020. We tried to answer whether Poland is an arbitration-friendly jurisdiction. And we concluded that out of the more than 200 proceedings we have been able to review, arbitral awards were set aside or refused enforcement / recognition only in a relatively small number of cases. In over 90% of cases, arbitral awards survived their post-award review by the Polish Courts of Appeal. In this blog post, we take another look at the Polish arbitration landscape in 2021 and 2022 to compare our findings.
Introduction of the family foundation and the arbitration of family foundation-related disputes under Polish law, explained by Rafał Kos, PhD, LLM and Maciej Durbas, PhD, LLM. On 26 January 2023, the Polish Parliament adopted an act on the family foundation. This act introduces a new vehicle for estate planning (family foundation) into the Polish legal system and simultaneously allows for resolving family foundation-related disputes in arbitration.
The institution of preparatory proceedings was introduced in the Polish Code of Civil Procedure in 2019. The concept was borrowed from arbitration, where preparatory proceedings have been successfully operating for many years and have become highly efficient. This new institution was intended to: partially deformalise communication between judges and parties, contribute to the clarification of facts and evidence at an early stage of the proceedings, identify the essence of the dispute, create conditions for an amicable settlement of the dispute in its first phase. All of the above are supposed to make court proceedings less time and labour intensive by enabling the parties and the court to schedule the full proceedings efficiently. Although these intentions are commendable, preparatory proceedings have not been adopted comfortably into court proceedings; the impracticability of the regulations have caused a lot of ambiguities and prolonged the proceedings.
Rafal Kos and Maciej Durbas from Kubas Kos Galkowski believe recent amendments to the Polish Civil Procedure Code will incentivise the use of arbitration as an alternative to court proceedings and thereby potentially increase its popularity in Poland. On 9 March 2023, the Polish Parliament adopted an act that amended the Code of Civil Procedure by introducing changes that allow for the so-called conversion of litigation to arbitration. The act enters into force in July 2023. This article offers a brief overview of the special rules for submitting a dispute already pending before a state court to arbitration.
The European Union has high hopes connected with CCS (Carbon Capture Storage) technology in the context of decarbonisation goals and Member States’ move towards climate neutrality. The process involves capturing carbon dioxide (CO2) from industrial installations, transporting it to a storage site and injecting it into a suitable underground geological formation for permanent storage. Appropriate provisions have been enacted in both EU and national law to support the establishment of the first CCS installations and the development of this technology through to its commercialisation and wide dissemination.
Poland is currently in the process of an energy transition. The overallshare of conventional coal-based energy is declining in favour of newtechnologies, especially those including renewable energy. Investmentsin nuclear power are planned. Polish industry is striving towardsdecarbonisation. Billions of zlotys will be allocated toward nationalenergy and the climate transformation in the coming years.
In a judgment on 26 January 2023, the Polish Supreme Court addressed an interesting issue concerning the relationship between an agent’s information claims and the expiry of the limitation period for a claim for payment of a commission. The Court answered the question of whether it is possible for an agent to successfully pursue information claims aimed at determining the commission due to them, even if the limitation period for claims for the payment of that commission has already expired.
In this judgment, the Court also addressed other issues of interest from the point of view of those using an agency contract in their business. Following the Court of Justice of the European Union (CJEU) judgment of 13 October 2022, in Rigall Arteria Management, the Court confirmed the possibility of contractually excluding the agent’s commission for subsequent transactions concluded with clients previously acquired by the agent.
Several years ago, the case law of the Supreme Court addressed the issue of the statute of limitations for consumer claims against the insurer related to the insurer’s collection of so-called “liquidation fees” in life insurance contracts with insurance capital funds where contractual provisions providing for the collection of such fees by the insurer in the event of early termination of a life insurance contract with an insurance capital fund by the consumer were found to be unlawful (and thus not binding on the consumer). The issue was whether these claims were barred by the general statute of limitations under Article 118 of the Civil Code or by the three-year period provided in Article 819 § 1 of the Civil Code for claims under an insurance contract. The Supreme Court, in four resolutions, clarified that these claims are time-barred under the time limits arising from Article 118 of the Civil Code rather than the time limit applicable to claims under an insurance contract since these are claims related not to the insurance element in the insurance contract with an insurance capital fund, but to its investment element.
How does it work?
Any entity seeking to consume or feed electricity into the grid of a (transmission or distribution) Operator must confront the procedure described in Article 7 of the Energy Law. The word “confront” is most intentional here since the multi-stage and multi-variant procedure for connecting to the grid is one of the most legally complex issues in the entire Act. Moreover, the multiple amendments to Article 7, along with changes in EU climate policy and technological developments in renewable energy sources, have made it an extensive and unreadable provision. Consequently, even the doctrine postulates that grid connection issues should be singled out as a separate chapter of the Energy Law Act.
Parties to a commercial contract choose arbitration to exclude courts’ jurisdiction over a potential dispute. Yet, despite the arbitration agreement, the courts’ jurisdiction is preserved in terms of interim measures. Depending on which forum it perceives to be more beneficial, a party may apply to courts of law or arbitral tribunals for protective orders in most jurisdictions. The question is whether this approach is still appropriate, considering that, given emergency proceedings have become a standard generally accepted by arbitral institutions, parties do not have to wait for the arbitral tribunal to be appointed to obtain interim protection.
The possibility of producing electricity in the Baltic Sea holds the promise of building a local value chain for Poland that can crucially contribute to a fair transformation of the traditional Polish industry. Favourable regulatory mechanisms are a prerequisite for this goal to become feasible. The offshore legislative package is just being amended. This is a good sign – the legislator is responding to the postulates of entities whose investments provide the foundations for a completely new sector of the Polish economy.
The rules governing the procedure for hearing commercial matters bystate courts in Poland have, for many years, been rather unstable. Thelegislature introduced a special procedure for such cases, thensubjected them to the general rules of civil procedure, only tosubsequently return to the special procedure later. Since 2019, special rules of procedure for commercial matters have applied,although the return to them is highly criticised, mostly by the judgesthemselves. Thus it is unclear how long this phase will last and whether,in time, commercial matters will be heard according to the general rulesof civil procedure again. When re-introducing the special proceedings incommercial matters in 2019, the legislature cited the need to speed upthe adjudication of these cases as the reason for introducing separateprovisions in this regard. Three years from these provisions’ entry intoforce have shown that they have only marginally fulfi lled their role.
This paper discusses the consequences of a party’s failure to challenge the jurisdiction of an arbitral tribunal during arbitration proceedings. In such a situation, a party should lose its right to challenge jurisdiction at other stages of the dispute, in particular in post-arbitration proceedings. The article presents arguments in favour of such a conclusion based on elements of comparative and teleological legal analysis.
The pages of the history of Poland’s nuclear power industry are being marked by further important events. Only a year ago, most experts did not look very favourably at the likelihood of fulfilling the promises made in strategic documents regarding the construction of nuclear power plants in Poland. Today, in the face of the energy crisis, this situation looks quite different.
Arbitration is not yet prevalent as a method of resolving disputes in Poland, but it is a popular and respected means of dispute resolution. According to data gathered in 2021 by Anna Tujakowska, in 2019-20 parties initiated 515 cases in Polish arbitral institutions, with a 36% increase year on year. This number excludes ad hoc pro ceedings and cases heard by foreign institutions (which amount to at least several dozen more).
The Act of 20 May 2016 on Investments in Wind Power Plants (hereinafter: the Distance Act) regulated the rules for the location and construction of wind power plants in the vicinity of existing or planned housing developments. This regulation was therefore intended to solve a fundamental socio-economic problem by facilitating new wind farm investments on the one hand and, on the other hand, protecting the rights of the public (local community residents) in the process of locating such an investment.
The issue of the period of limitation of claims for damages or compensation to which the injured party is entitled against the insurer in the case of civil liability insurance has been subject to special regulation. As follows from Article 819 § 3 of the Civil Code, these claims become time-barred with the lapse of the period provided for these claims in the provisions on liability for damage caused by a tort or resulting from non-performance or improper performance of an obligation. This provision raises questions of interpretation in many respects. It is rightly accused of numerous imperfections, which cannot be presented and explained within the limited framework of this paper. This paper will analyse one controversial issue, namely the commencement of the period of limitation of claims referred to in Article 819(3) of the Civil Code, i.e. claims for compensation the injured party is entitled to directly against the insurer (pursued by way of the so-called actio directa provided for in Article 822(4) of the Civil Code).
This article discusses the practical problem of the recognition and enforcement of foreign arbitral awards based on the provisions of the New York Convention in situations in which the parties have not entered into an arbitration agreement in writing. The Convention was signed in 1958 and, for obvious reasons, only takes the standards prevailing in arbitration at the time into account. Consequently, the Convention explicitly only provides for cases in which the arbitration agreement meets the formal requirements of Article II. It also requires the applicant to supply the original agreement to recognise or enforce the arbitral award (Article IV(1)(b)). The text of the Convention, therefore, does not take into account the growing tendency to relax the formal requirements of arbitration agreements, including allowing arbitration clauses to be concluded implicitly, e.g., by waiving the objection to the jurisdiction of an arbitral tribunal or extended to non-signatories. This article attempts to answer whether, in all those situations, the recognition of an award under the Convention is possible and concludes that the award is recognisable and enforceable if the applicant can demonstrate the jurisdiction of the arbitral tribunal by any evidentiary means.
One of the barriers to accessing the Supreme Court is the specific formation of cassation grounds. Understanding the mechanisms that constitute the basis for a cassation appeal will facilitate comprehending its place in the system of legal remedies – this issue is devoted to part I of the article. Part II deals with the fundamental issues, i.e. two „positive” grounds (breach of substantive and procedural law) and one „negative” (prohibition to challenge the findings of fact and evidence).
Hydrogen needs a comprehensive custom-made regulation, but it is vital for legislative action to also focus on changes to current regulations and those areas of the economy where renewable hydrogen may provide an innovative solution to current problems – we talk to experts from the Energy Desk of Kubas Kos Gałkowski about opportunities and pitfalls for the development of the hydrogen economy in Poland.
Defendants often invoke that a claim directed against them is time-barred. A recent decision of the Polish Supreme Court confirmed and further clarified its position that Polish public policy does not coverissues related to arbitral tribunals’ application of rules on limitation ofclaims. This would be interesting enough, but the Supreme Court explained several essential rules on state court post-award proceedings, which render Poland an arbitration-friendly jurisdiction.
Under Article 192(3) of the Code of Civil Procedure, the disposal of a right or thing covered by a dispute in the course of a case does not affect the further course of proceedings pending before a state court (res litigiosa principle). The pendency of a dispute over a thing or a right does not preclude its transfer. As a rule, the transferor retains the right to sue and continues to act as a party in the proceedings in their own name, but on behalf of the transferee of the right (the so-called relative substitution, procedural substitution). The purpose of such a regulation, which stabilises proceedings before a state court in terms of the subject matter, is to protect the party opposing the transferor from the negative consequences of the transfer.
On 29 December 2021 an amendment to the Polish Civil Code (CC) was announced in the Journal of Laws of Republic of Poland. The act amends, among others, article 121 of the CC, which specifies when a limitation period is subject to suspension. This amendment should be regarded as another step by the Polish legislature to counteract the practice of submitting motions for a summons to a conciliation session for purposes other than to reach a settlement.
After energy clusters and renewable energy prosumers, energy cooperatives are another tool dedicated to the development of civic energy. However, despite its long history, this tool has not yet been widely used by energy market participants. The article addresses a current problem: to what extent the regulatory environment encourages the society to participate in the development of civic energy in the form of energy cooperatives. The paper focuses on selected legislative and regulatory issues, mainly concerning the definition of energy cooperatives and settlement rules in the discount system.
Corporate disputes have not yet gained momentum on the Polish arbitration market, despite recent legislative amendments. A recent Supreme Court case involving the assessment of a corporate arbitration dispute deserves attention, as it clarified that in the case of a dispute over the control of a company, one centre of interest is not able to appoint two arbitrators – one for the company and one for its shareholders.
In the jurisprudence of the Supreme Court to date, there has been a clear majority of opinions denying the possibility of transferring or assigning to another entity the claim for establishing perpetual usufruct, which is provided for in Art. 207(1) of the Real Property Management Act, as well as the possessor’s entitlement based on the previous regulations now replaced by this provision. In this light, the resolution of the Supreme Court of 18.2.2021, III CZP 15/20, may be regarded as a turning point because, according to its thesis, a company which is a general legal successor of the former possessor of real estate is entitled to the claim under Art 207(1) of the Real Property Management Act if the legal successor continues to be in possession of the real estate.
The photovoltaic (PV) market has been growing as the fastest of all RES sectors in Poland in recent years. According to the Energy Market Agency statistics, the installed capacity of photovoltaics in Poland was almost 6 GW at the end of August 2021. The scale and growth rate of these installations is demonstrated by the fact that in August 2020, the installed capacity of photovoltaics was just under 2.9 GW. Thus, in just one year (moreover, during the COVID-19 pandemic), there was more than a 100% growth in PV installed capacity.
To say that the issue of arbitral jurisdiction is important would be an understatement. It is the foundation of arbitration and the power of a given tribunal to make a decision on each case. This is why any objections in this regard need to be made without undue delay. For example, if a party is discontent with the tribunal’s positive ruling on jurisdiction and decides to take it to a state court, the court needs to decide swiftly to allow the arbitration to continue. The Supreme Court recently confirmed that a state court’s decision is final, and a party cannot relitigate the issue in the setting aside proceedings.
The subject of the article is an analysis of the decision of the Supreme Court of 7 November 2013 (V CSK 545/12) stating that an ex lege assignee is bound by the arbitration agreement contained in the basic contract from which the assigned claim arises. The common accepted view on the binding effect is justified by the Supreme Court with a new line of arguments, referring to the procedural nature of arbitration agreement. This new justification, which attempts to remedy the defects of the previous Supreme Court rulings referring to the concept of a substantive law character of an arbitration agreement, should be considered incorrect.
On 2 June 2021 the draft amendments to the Act of 10 April 1997 (the Energy Law) and to the Act on Renewable Energy Sources of 20 February 2015 were made available for public consultation by the Government Legislation Centre. The draft is extensive and includes numerous changes that are important for the functionality of the energy market. The main purpose of the amendments are to transpose EU regulations resulting from the “Clean energy for all Europeans” package into Polish law.
Law has never been at the forefront of innovation. Perceived as a “mirror of society” that reflects its norms and morals, the law often follows in the wake of changes that have already taken place in society. This reflection applies to the legal industry itself, which is rather conservative and cautious in welcoming new developments. In any event, the use of technology in international commercial arbitration and law in general proves to be slowly but steadily an increasing phenomenon only boosted by the COVID-19 pandemic. This is also true with the use of data mining and text analytics in international commercial arbitration. The practice of such arbitration proceedings shows that such technology is relied upon by the parties. Whether and how the law keeps up with the reality will be discussed in this paper.
Arbitration has been well-established in Poland already before and throughout the 1920s. It has, however, experienced a downturn between 1945 and 1989 due to the distrust of the Polish state. The winds had changed in the 1990s when arbitration started to flourish again.
Electromobility is about to undergo a considerable revolution. In November 2020, the Government Legislation Centre website posted a draft act amending the Act on Electromobility and Alternative Fuels and Certain Other Acts. This draft introduces a number of amendments to the Act of 11 January 2018 on Electromobility and Alternative Fuels (“a.o.e.”). One of its objectives is to implement Directive (EU) 2019/944 of 5 June 2019 on the common rules for the internal market for electricity and amending Directive 2012/27/EU (“Directive”) into the Polish legal order.
The liability of the State Treasury for obligations of entities deleted/recognised as deleted from the National Court Register (KRS) has been limited under the Act only to the components of property acquired by the State Treasury after those entities (Article 25e(2) of the Act of 20 August 1997 on the National Court Register, Article 9(2b) sentence 2 of the Act of 20 August 1997. – Provisions Introducing the Act on the National Court Register). This type of limitation of liability is referred to as liability cum viribus patrimonii.
Third-party issues occur often in arbitration. This is because the reality of business relations is rarely clear cut and there are often more than two stakeholders in a dispute. This often happens in the real estate market when a commercial property for lease is acquired from developers by investment funds. Such sales usually happen after the first lease agreements have been concluded; these agreements often contain arbitration clauses. Stakeholders should carefully consider Supreme Court case law regarding whether an arbitration clause in such an agreement binds the buyer of the real estate.
On 18 June 2021 an amendment to the Act of 10 April 1997 (Energy Law) was published in the Journal of Laws. One of the main features of the amendment was the introduction of the Central Information System for the Energy Market (CSIRE). The amendment distinguishes between the measurement system, for which individual distribution system operators (DSOs) and the transmission system operator (TSO) are responsible in Poland, and the information exchange system, creating a new entity – the Energy Market Information Operator.
During our conversation with Rafał Bałdys Rembowski about arbitration as part of the PRZE:budowa podcast, we touched upon, among other things, the historical background of arbitration in Poland. This thread of the history of Polish law is intriguing and, in my view, deserves more attention. I was particularly interested in one regulation that unfortunately never entered into force, i.e. the so-called Zamoyski Code of 1778. The full name of the document is “Zbiór praw sądowych na mocy konstytucji roku 1776 przez J.W. Andrzej Zamoyskiego ekskanclerza koronnego ułożony y na Seym roku 1778 podany”/”Collection of Court Laws by Virtue of the 1776 Constitution Compiled by J.W. Andrzej Zamoyski, Ex-Crown Chancellor and Presented to the Seym of the Year 1778”.
This paper is dedicated to analysing the acquisition by the State Treasury of property of entities deleted and deemed deleted from the National Court Register (KRS). In the first part of the article, the author presents the argument that such an acquisition has the nature of universal succession and thus that the State Treasury is the general legal successor of entities deleted/deemed deleted from the National Court Register (KRS). Acceptance of the thesis of universal legal succession makes it necessary to decide whether the State Treasury also acquired all of the obligations of entities deleted/deemed deleted from the National Court Register (KRS), or whether universal succession in such cases is limited only to the acquisition of all of the property rights (assets) of its legal predecessors.
On 18 June 2021 the Act of 20 May 2021 (the amendment), which amended the Energy Law and certain other acts, was published in the Journal of Laws. The amendment is referred to as the “meter law” because it states that remote energy consumption meters (so-called “smart electricity meters”) will be installed for at least 80% of end users, including at least 80% of households, by the end of 2028.
Arbitration is not yet prevalent as a method of resolving disputes in Poland, but it is a popular and respected means of dispute resolution. According to data gathered in 2021 by Anna Tujakowska, in 2019-20 parties initiated 515 cases in Polish arbitral institutions, with a 36% increase year on year. This number excludes ad hoc proceedings, and cases heard by foreign institutions (at least several dozens more). By contrast, parties filed 1,780 cases with the ICC court in 2019-2020 and almost 1.5 million commercial cases with Polish courts in 2020.
The provisions of the Act of 20.08.1997 on the National Court Register and the Act of 20.08.1997. The provisions of introducing the Act on the National Court Register provide for acquisition by the State Treasury, by virtue of the law, of the property of entities deleted from the National Court Register (KRS) and deemed deleted from the KRS as of 1 January 2016. Those regulations are accompanied by provisions on the State Treasury’s liability for the liabilities of entities deleted and deemed deleted from the KRS.
On 1 January 2021 the capacity fee came into force (for further details please see “Capacity fee enters into force”). However, the system for its determination and collection is not entirely clear in light of the wording of the Act on the Capacity Market (Journal of Laws 2020.247, 17 February 2020). In this regard, the act creates specific obligations for some system participants, including distribution system operators (DSOs). The wording of the provisions on this matter may give rise to some interpretative difficulties when applied in practice.
Changes to the parties to an arbitration agreement or proceedings happen frequently in business practice. According to the prevailing view in Poland, the assignee is bound by an arbitration agreement (for further details please see “Supreme Court decides that assignee is bound by arbitration agreement”). A recent decision of the Warsaw Court of Appeals dealt with a different situation in which the assignor pursued the claim despite assigning it to a third party.
The Ministry of Climate and Environment has published a draft amendment to the Act of 11 January 2018 on Electromobility and Alternative Fuels and certain other acts which proposes new regulations on the charging of e-cars. Among the acts which the draft proposes to amend are the Act of 7 July 1994 (the Building Law) and the Act of 10 April 1997 (the Energy Law).
The Supreme Court’s change in the case law line and its recognition that a shareholder’s intervention filed on the side of the defendant company in a dispute for repealing or declaring the invalidity of a resolution of a capital company is intrinsic and constitutes significant progress in the development of corporate and procedural law science. The substantiation presented by the Supreme Court also corresponds to the arguments raised in the literature in favour of recognising that the shareholder’s intervention is autonomous. At the same time, the Supreme Court once again reiterated, as self-evident, the position that a shareholder’s intervention filed on the claimant’s side (challenging a resolution – a shareholder, company body or its member) is always autonomous. However, the Supreme Court overlooked essential differences in the scope of rights of the intervening shareholder, depending on whether they intervene on the defendant or the claimant’s side. The purpose of this gloss is to draw attention to these differences as well.
Circumstances such as the lack of funds to cover the costs of the arbitration proceedings do not constitute a premise for the arbitration clause to lose its effect, nor do they constitute its unenforceability within the meaning of Articles 1165 and 1168 of the Code of Civil Procedure. While submitting a dispute to arbitration, the parties to the arbitration agreement must be aware of the negative effects as, for example, the lack of certain procedural guarantees applicable before a common court such as exemption from bearing the costs of the proceedings.
One of the most essential problems of international commercial arbitration is the issue of the influence of the seat of arbitration on proceedings before a court of arbitration. This is manifested in the form of three grave issues, namely: 1) the question of potential interaction of the arbitration court or parties to the arbitration agreement with the court of the country of the place of the proceedings, 2) the question of mandatory rules of proceeding binding the court of arbitration, 3) the question of a potential limited control of the proceedings before the arbitration tribunal by a common court at the stage of the proceedings to the complaint for the setting aside of the arbitral award or recognition or enforcement thereof.
A violation of public policy is grounds to refuse the enforcement or recognition of an arbitral award (Article V(2)(b) of the New York Convention) and set it aside (Article 1206(2)(2) of the Code of Civil Procedure (CCP)). Public policy encompasses the basic principles of both substantive and procedural law. The Polish courts rarely confirm violations of the latter. In two cases before the Gdansk and Warsaw Courts of Appeal, the courts found that procedural errors in arbitration were grave enough to justify setting aside the awards in question.
Carsharing is a well-known initiative globally which continues to gain popularity. In Poland, the Ministry of Transport, Construction and Maritime Economy recently prepared a proposal for a legal definition of ‘carsharing’. According to the glossary of terms provided for the Transport Development Strategy to 2020 (with an outlook to 2030), ‘carsharing’ is a system of shared use of passenger cars, which by definition leads to a significant reduction in the number of registered private cars. Vehicles in the system may be made available for a fee and the operators of the system which facilitate this include companies, public agencies and individuals.
In order to prevent the negative impact of transport pollutant emissions on human health and the environment, the legislature passed the Act of 11 January 2018 on Electromobility and Alternative Fuels, which introduced the possibility for community councils to create clean transport zones. In such zones, vehicle traffic restrictions were introduced, from which certain vehicles were exempt.
On 30 November 2020 the President of the Energy Regulatory Office announced the capacity fee rates for 2021. As of 1 January 2021, this fee will be added to electricity end users’ bills for the first time. This article provides an overview of the capacity fee, the rates thereof and the purpose of its introduction, as well as the key principals of the capacity market.
In a recent judgment, the Supreme Court applied Article 56(1)(6) of the Energy Law, clarifying when the Polish regulator (ie, The President of the Energy Regulatory Office) can impose an administrative fine on an energy company. The Supreme Court dealt with a situation where the tariff applied was contrary to the conditions specified therein. The court’s verdict is a reminder for energy companies operating in Poland that administrative fines also apply in situations other than when the prices or fee rates are higher than approved.
Arbitration does not provide for legal aid or an exemption from paying costs. Some regard this as a disadvantage of alternative dispute resolution. One party’s lack of funds to pay for its share of arbitration costs can indeed deprive it of its day in arbitration court. This issue recently came before the Warsaw Court of Appeals, which decided that a party’s lack of funds to launch arbitration does not render the arbitration agreement defective.
It goes without saying that the COVID-19 pandemic has significantly affected the dispute resolution system in Poland and worldwide. At the time of writing of this article (beginning of May 2020), court deadlines in proceedings before Polish common courts remained suspended, and hearings – except in urgent cases – were not held. On several occasions, the legislator has tried to take advantage of this extraordinary circumstance and introduce provisions on electronic service and extending the possibility to hold remote hearings. Up to the time this article was submitted, without success.
On 1 January 2020 EU Regulation 2019/943 entered into force, on which the new structure of the EU electricity market is based. The new model is the result of the Clean Energy for all Europeans package. The regulation establishes comprehensive rules for a modern electricity market and applies to: electricity market participants; transmission and network operators; distribution network operators; and electricity generators.
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.
On 9 July 2018, an amendment to the provisions of the Civil Code on the statute of limitations on claims entered into force. One of the introduced changes was the addition to Article 117 of the Civil Code § 21, under which: “After the expiry of the period of limitation, it is not possible to demand satisfaction of a claim against a consumer”. Most often, this change is explained by stating that starting from 9 July 2018, the expiry of the period of limitation of the claim against the consumer is taken into account by the court ex officio, without the need for the consumer to raise a charge of the statute of limitations.
All things must come to an end – same applies to arbitral proceedings. Arbitral proceedings conclude when the arbitral tribunal renders the award. As it is the arbitrators’ primary duty is to render an enforceable award, it is vital to determine its necessary elements.
The fact that the Court of Arbitration ruled ultra or aliu petita (beyond the limits of the claim submitted) is not explicitly indicated in the Code of Civil Procedure [CCP] as a legal ground for a motion to set aside its judgment. However, one of the main principles of arbitration proceedings is a rule of a court being bound by the matter at issue (relief or remedy sought), which has a private-law connotation (party autonomy), being also protected at the level of constitutional law.
This article discusses the latest amendments to the Polish Act of 17 November 1964 – The Code of Civil Procedure (Journal of Laws of 2019, item 1460, as amended) regarding arbitration. New regulations were entered into force on 8 September 2019 as a result of suggestions made by scholars over the past few years, especially regarding the notion of arbitrability. The aim of this article is to explain the doubts that arose based on the previous wordings of provisions regarding arbitrability, and to present the current provisions of the Code of Civil Procedure.
In recent weeks, information has been published concerning the draft amendment to the Act of 8 December 2017 on the Capacity Market (Journal of Laws 2020, Item 247, as amended). 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 new draft takes into account some of the comments raised during the public consultations. The Ministry of Climate’s assumption of responsibility for the draft act is a result of the entry into force of the Regulation of 20 March 2020 on the Transformation of the Ministry of Climate, under which the organisational units responsible for matters of the Energy Department which were excluded from the Ministry of State Assets were incorporated into the Ministry of Climate.
The new Article 387(1) of the Civil Code introduces the sanction of invalidity of an agreement on the transfer of ownership for securing residential property. The construction is intended to protect individuals in financial difficulties who, while remaining in a forced position, often agree to unfair terms. The article discusses the nature and construction of the agreement on the transfer of ownership of property as security and then analyses the new provision.
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 setoff’s effects on the main claim raised in the proceedings.
The paper aims to analyse one of the approaches to the study of the problem of the abuse of law. The discussed concept, being a part of Christian Pestalozza’s scientific views, is specific in that it completely dissociates the issue of the abuse of law from the criteria and values which, although usually placed outside the normative content of a legal text, constitute a point of reference for determining whether the abuse of law actually occurred. The article also contains the author’s views on the concept of subsumption failure and a short presentation of how the civil law doctrine views the problem of the abuse of law.
The Act of 5 July 2018 on succession management of a single proprietorship introduces certain important changes in functioning of an enterprise of a deceased entrepreneur, with many of them being of great importance for the contracting partners of the deceased. Certain changes introduced by the said Act apply not only when the entrepreneur or his successors decide to appoint a succession manager, but in every case in which an entrepreneur dies and leaves his enterprise.
According to the Supreme Court’s verdict of 17 January 2020 (Case IV CSK 579/17), imposing a contractual penalty on energy consumers due to the early termination of a contract for energy supply is prohibited.
On 20 February 2020 an amendment to the Personal Income Tax Act and the Corporate Income Tax Act entered into force, introducing to the Polish legal system an income tax exemption for benefits received from the Low-Emission Transport Fund (ie, subsidies for purchasing e-vehicles).
In economic trading, corporations on both sides of a transaction are often represented by the same person. This often occurs within the framework of functioning groups of corporations, when a member of the management board of the parent is simultaneously a member of the management board of the subsidiary with which the parent performs operations. The Commercial Companies Code does not mention the admissibility of such simultaneous representation of two corporations by the same person acting as a board member of each. However, in the Civil Code, this situation is regulated with regard to the representation of two parties to a transaction by one ‘attorney-in-fact’. In 2018 the Supreme Court considered the issue of the same person acting as a board member of both corporations which are party to a transaction.
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 and give guidelines to other courts. One of its recent decisions underlines that the mere fact that the reasoning of an arbitral award is concise is insufficient grounds to vacate the award.
The Code of Commercial Companies allows for mergers of both independent companies and related entities. Transactions which involve the transfer of all of a company’s assets (ie, the company being acquired) to another company (ie, the acquiring company) for shares which the acquiring company issues to the acquired company’s shareholders are referred to as ‘mergers by acquisition’. Dominant companies acquiring subsidiaries (so-called ‘upstream’ mergers) are common and uncontroversial. However, concerns arise in the opposite situation when subsidiaries take over dominant companies (so-called ‘reverse’ or ‘downstream’ mergers) and the domination results in a subsidiary having a controlling shareholding package.
On 15 January 2020 the draft Promotion of Electricity Generation in Offshore Wind Farms Act was 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 (2018/2001/EU) – namely: ensuring that at least 15% of its total gross final energy consumption comes from renewable energy sources; and contributing to achieving the binding overall EU target of at least 32% of all energy consumption coming from renewable energy sources by 2030.
The Supreme Court previously opted for a broad and a narrow understanding of res iudicata in Polish arbitration law. In its recent judgment (available in Polish here), the court again leaned towards a narrow understanding of to what degree a court and an arbitral tribunal are bound by a previous judgment or award. This decision would have been of a limited interest for international practitioners save for an important factor. The decision in question clarifies that winning a test case does not signify that further proceedings will succeed as well.
The Law of 30 August 2019 significantly amended the Commercial Companies Code and other laws. The main change regards the general dematerialisation of shares in private joint stock companies and limited joint stock partnerships. The amendment will enter into force on 1 January 2021. Although the dematerialisation of shares is uncommon, this phenomenon is not unknown in Polish law. At present, shares are dematerialised (in principle obligatory) in the cases specified in Article 5 of the Law on Trading in Financial Instruments of 29 July 2005.
In Poland we have a special procedure for handling a series or group of related claims; namely, group proceedings, which may be deemed the “Polish version” of the American class action, obviously adapted to the continental legal tradition. Group proceedings have been functioning in Poland for 10 years and were introduced by the Act of 17 December 2009 on the Pursuit of Claims in Group Proceedings (Journal of Laws 2010.7.44 of 18 January 2010, hereinafter: “UDRPG” or “the Act”). The UDRPG was amended, after being in force for seven years, by the Act of 7 April 2017 Amending Certain Acts in Order to Facilitate the Recovery of Claims ( Journal of Laws 2017.933 of 12 May 2017, hereinafter: “Amendment No. 1”), which entered into force on 1 June 2017.
The arbitrability of corporate disputes has long been a controversial issue in Poland. This is particularly relevant to challenges to shareholders’ resolutions. Some commentators argued that it was impossible to hear such disputes in arbitration, primarily due to the fact that the parties cannot conclude a settlement in such a case (which is a prerequisite for the arbitrability of disputes under Polish law) and also for practical and procedural reasons. Other commentators more rightly opined that the objective arbitrability of such disputes was not an obstacle in this regard.
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 President of the Energy Regulatory Office recently announced an individual cogeneration bonus, applications for which will be open from 8:15am on 18 December 2019 to 4:15pm on 20 December 2019.
This review covers selected decisions of the Supreme Court in civil matters. Their subject matter is not uniform, it concerns the issue of premises for drawing up an oral will, classification of fiduciary legal actions performed in order to secure claims as paid or free-of-charge, the possibility to request reimbursement of the costs of preparing an expert’s report in connection with traffic damage, classification of an agreement establishing or transferring perpetual usufruct, prescription of a claim under Article 231(2) of the Civil Code, and the cessation of the separate ownership of premises. The rulings were selected primarily based on the practical importance of the issues they concern.
A Polish appeals court vacated an International Chamber of Commerce (ICC) partial award for alleged irregularities in the arbitrator’s appointment (for further details please see “ICC award set aside due to irregularities in arbitrator’s appointment”). The sole arbitrator’s final award was also successfully challenged and set aside. The first reason to vacate the final award was also the issue of the sole arbitrator’s appointment.
On 23 July 2019 Prime Minister Mateusz Morawicki and Minister of the Environment Henryk Kowalczyk presented a new programme called My Electricity, which aims to promote the use of photovoltaics (PVs). The programme has been created for household consumers of electricity, especially those living in less urbanised areas. The total budget for the programme is Zl1 billion (approximately $260.5 million). Each PV system between 2kW and 10kW can receive a grant of up to 50% of the total cost of a PV system, but no more than Zl5,000 (approximately $1,300); thus, 200,000 household consumers should be eligible for funding. The total cost of a PV system is approximately Zl15,000 to Zl20,000 (approximately $3,900 to $5,200), hence the beneficiaries should receive between 25% to 30% of the total cost of the PV system. The programme will be offered by the National Fund for Environmental Protection and Water Management, which contributes to the improvement of air quality in Poland and the development of renewable energy sources.
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 for interest granted for a different period than the one demanded by the claimant in the proceedings.
This article constitutes the third part of a study dedicated to the new type of lease in Polish law, i.e. an institutional lease with ownership regulated in Article 19k–19s of the Act of 21 June 2001 on the Protection of Tenants’ Rights, Municipal Housing and on Amendments to the Civil Code [OchrLokU]. The first and second parts of the study presented the characteristics of an agreement on institutional lease with acquisition of ownership, elements of the contents of this agreement, performance of an obligation to transfer ownership to the premises onto a tenant, the manner of lease relationship termination, as well as settlement between parties where the ownership was not transferred onto the tenant. The third and last part of the study discusses issues related to entering into a lease relationship (Articles 691 and 678 CC), the exercise of tenant’s rights in the event of the declaration of the lessor’s bankruptcy, and the relationship of the new provisions of the Act on the Protection of Tenants’ Rights, Municipal Housing and on Amendments to the Civil Code [OchrLokU] on institutional lease with acquisition to ownership to regulations related to lease with an option provided for in the provisions of the Act of 20 July 2017 on the National Property Resources.
This paper constitutes the second part of a study dedicated to the new type of lease in Polish law, that is an institutional lease with access to ownership regulated in Article 19k–19s of the Act of 21 June 2001 on the Protection of Tenants’ Rights, Municipal Housing and on Amendments to the Civil Code [OchrLokU]. The first part of the study present the characteristics of an agreement on institutional lease with the acquisition of ownership and elements of the contents of this agreement. The further part, in turn, presents an analysis of the performance of an obligation to transfer ownership to the premises onto a tenant, the manner of the lease relationship termination, with a particular emphasis on the notice of termination and its consequences, i.e. settlement between the parties.
As a rule, limited liability companies are represented by their management boards in accordance with the rules of representation provided for in their articles of association or – in the absence of contractual regulations – in accordance with the statutory rules (Article 205 of the Commercial Companies Code). However, the Commercial Companies Code provides for derogations from representation by management boards to protect company interests. One such exception is representation by a supervisory board or proxy appointed by a resolution of a shareholders’ meeting in contracts or disputes between companies and members of their management boards (Article 210 of the Commercial Companies Code).
On 7 August 2018 another type of lease was introduced into the Polish legal system – an institutional lease with the acquisition of ownership. Provisions regulating this type of lease have been added to Chapter 2b of the Act of 21 June 2001 on the Protection of Tenants’ Rights, Municipal Housing and on Amendments to the Civil Code. The regulation is based on the provisions of the institutional lease previously in force and repeats some of the solutions adopted therein. This similarity of the legal regulations commands to assume that an institutional lease with the acquisition of ownership is a type of institutional lease. The substantial difference between a “basic” institutional lease (Art. 19f–19j of the Act of 21 June 2001 on the Protection of Tenants’ Rights) consists in the fact that an institutional lease agreement with the acquisition of ownership is simultaneously an agreement obligating the lessee and the lessor to conclude an agreement transferring the ownership of the leased premises onto the lessee when the latter pays the premises acquisition price. Therefore, it constitutes a new way to access ownership of residential premises.
Maciej Bando’s five-year term of office as the President of the Energy Regulatory Office came to an end on 2 June 2019. A first vacancy notice was published on the Public Information Bulletin’s website on 30 April 2019 and the application deadline expired on 17 May 2019. A team appointed specifically for this purpose was expected to select up to three candidates, whose applications should have been proposed to the prime minister. However, on 25 June 2019 the spokesperson of the Council of Ministers communicated that the selection procedure had been completed without selecting any candidates. Therefore, Maciej Bando is still performing the function of the President of the Energy Regulatory Office. A new vacancy notice was published on 26 June 2019. The application deadline expires on 8 July 2019.
In Poland, the mechanism of pursuing claims in group proceedings, which can be perceived as the ‘Polish version’ of the US class action, has been present since 2010. It was introduced into the Polish legal system by virtue of the Act of 17 December 2009 on Pursuing Claims in Group Proceedings, Journal of Laws 2010.7.44 of 18 January 2010 (the Act). This Act is separate from the regulation provided for by the Polish Code of Civil Procedure (CCP). After several years, the Act was amended in 2017 by virtue of the Act of 7 April 2017 Amending Certain Acts to Facilitate the Seeking of Receivables (Amendment 1); the amendments have been in force since 1 June 2017.
The fact that the court of arbitration is not a court composed of professional judges cannot explain the lack of comprehensive recognition of the case. On the other hand, non-subordination to the legal provisions with regard to the examination of civil law cases, collecting evidence, its assessment and expressing opinions about its value does not mean that some obvious standards of fair and equal treatment for the parties were not applicable.
This paper discusses the new ground for the refusal of recognition or enforcement of arbitral awards in consumer cases established in Article 1214 of the Polish Code of Civil Procedure. The regulation was introduced on 10 January 2017 as a result of the implementation of Article 11 of the EU Directive on Consumer ADR. The aim of this paper is to explain the relevance of the new regulation, and its influence on the arbitration proceedings and on the system of control of the arbitral award by State courts in domestic postarbitration proceedings.
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. In order to prove allegations of this sort, the parties 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.
The current substantial diversification in M&A deals, in particular in the market of Central and Eastern Europe, is noticeable. The value and activity of transactions has increased significantly in Poland. In 2018, the Polish market recorded a 12% growth in the number of acquisitions (323) announced. However, in comparison to previous years (2016-2017), when big transactions had increased the value of the Polish market to about EUR 10 billion, last year saw a nearly 40% drop M&A deal value. Nonetheless, the availability of attractive assets, current valuations, and measurable economic growth encourage interest in Polish M&A. Moreover, the outlook for the Polish M&A and JV market in the near future is optimistic. There are significant developments in Polish legislation already affecting, or which will affect, the M&A market. Below is a brief description of some of the changes introduced to Polish law worth mentioning.
“Can a contractual provision allowing one party to the legal relationship to temporarily withhold its performance and retain the right to the reciprocal performance, on account of the other party to the legal relationship’s improper performance of its obligation, until that party has fulfilled its contractual obligation, be regarded as contrary to the nature of the legal relationship (lease agreement, concluded for a fixed term) and thus as invalid under Article 3531 of the Civil Code in conjunction with Article 58 of the Civil Code?”
Under Article 1214 of the Code of Civil Procedure, Polish state courts can refuse the enforcement of arbitral awards made in Poland only due to a lack of arbitrability, a violation of public policy or consumer rights (for further details please see “Important changes regarding consumer arbitration introduced”). The grounds for refusal are limited and consistent with international standards. his is understandable, as a motion to set aside an award is regarded as the primary recourse against a defective award in Poland. It allows for broader (but still limited) control of an arbitral award, similar to the control prescribed in the United Nations Commission on International Trade Law Model Law.
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. Although these rules are clear on paper, they are less clear when applied in individual cases. A recent Supreme Court decision illustrates the conflict between public policy in theory and in practice.
In one of its latest arbitration rulings, the Supreme Court held that the autonomous position of arbitration courts as an alternative to state courts means that the judicial review of an arbitral award by an arbitral tribunal cannot be considered the equivalent of appellate review by a court. The control over arbitration exercised by common courts is primarily aimed at eliminating abuses of arbitration, which constitute violations not only from the point of view of the parties, but also against the public order in general; however, the Supreme Court ruled that provisions regarding the statutes of limitations of claims are excluded from this category.
The assignment of rights and obligations stemming from an agreement forms part of everyday business. This issue can become complicated if a transferred claim is covered by an arbitration agreement. A recent Supreme Court decision shows that in such a case, the assignee and the debtor must resolve their disputes through arbitration. The defendants in the present case and another Polish company entered into a consortium agreement for major construction work in Poland. The Polish consortium member assigned its claims against the Irish consortium leader to a Polish bank to secure the credit agreement. The bank decided to pursue these claims against the Irish parties before a Polish state court.
In Poland, the mechanism of pursuing claims in group proceedings, which can be perceived as the ‘Polish version’ of the US class action, has been present since 2010. It was introduced into the Polish legal system by virtue of the Act of 17 December 2009 on Pursuing Claims in Group Proceedings, Journal of Laws 2010.7.44 of 18 January 2010 (the Act). This Act is separate from the regulation provided for by the Polish Code of Civil Procedure (CCP). After several years, the Act was amended in 2017 by virtue of the Act of 7 April 2017 Amending Certain Acts to Facilitate the Seeking of Receivables (hereinafter ‘Amendment 1’); the amendments have been in force since 1 June 2017.
In a judgment of the Regional Court of Dortmund dated September 13, 2017 (Docket No 8 O 30/16 (Kart)) but only recently published, the court held that if a cartel damages claim is brought on the basis of a contract subject to an arbitration agreement, that claim is subject to arbitration. This holding came somewhat as a suprise as it is contrary to the prevailing view in legal literature.
The headlong push by European and American companies to collect and mine consumer data can be compared to the 19th century Alaskan gold rush. Exercising a different historical metaphor, Doug Fisher, an Intel executive, predicted that data would be to the 21st century what oil was to the 20th century, an engine for corporate growth, with one significant difference: “oil is definite while data is renewable.” Databases are key corporate assets, particularly in technology companies, and an up-to-date, growing database can lead directly to an increase in sales. When the data being collected and processed is about individuals who may not be aware that personal information has been collected and is being used, serious privacy concerns accompany this growth.
The control of the decision of the arbitration court is not equivalent to the control within the appeal proceedings typical for the state judiciary. The specificity of the state judiciary control over arbitration courts’ awards results in the fact that a potential breach of substantive law cannot cause an arbitrary sentence’s revocation per se, unless that infringement would lead to a violation of the basic principles of the legal order of the Republic of Poland, whereas the faulty interpretation of limitation regulations does not cause a contradiction of the arbitration court’s decision herewith.
This article discusses the recent rulings of Polish courts in a case where a party to an agreement in which all disputes were to be resolved by arbitration filed a petition to a State Court. They requested the issuance of a European Account Preservation Order under Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014, which established a European Account Preservation Order to facilitate cross-border debt recovery in civil and commercial matters. The Court of First Instance (Regional Court) dismissed the petition arguing that under the provisions of the European Account Preservation Order Regulations a Preservation Order may not be granted in cases referred to arbitration. The Appellate Court reversed this decision and remanded the case back to the lower court thus allowing the possible application of a Preservation Order. The purpose of the paper is to present the argumentation provided by the Courts of both instances and to comment on the advisability of these decisions.
Cross-border debt recovery undoubtedly has a great chance of becoming more efficient following the adoption of EU Regulation 655/2014, which establishes a European account preservation order (EAPO) procedure to facilitate cross-border debt recovery in civil and commercial matters. According to Article 1 of the regulation, an EAPO aims to prevent the subsequent enforcement of a creditor’s claim from being jeopardised through the transfer or withdrawal of funds up to the amount specified in the order which are held by the debtor or on its behalf in a bank account held in an EU member state. Clearly, obtaining a favourable award is an important step, but it is the efficient enforcement that matters most for the client in the end.
The legal system in Poland is a continental law system (statutory law), whereas the source of legal standards derives from legal acts enacted by legislative bodies. One of such acts is the Code of Civil Procedure (Polish abbreviation: ‘KPC’; English abbreviation ‘CCP’) which contains provisions regulating the civil procedure. The civil court system in Poland consists of three tiers: the first level comprises District Courts, which, in principle, are courts of first instance; the second level comprises Regional Courts, which are courts of second instance in cases heard at first instance by the District Courts and courts of first instance in cases enumerated in the provisions of the law; and the third level consists of Courts of Appeal, which are courts of second instance in cases heard at first instance by Regional Courts.
According to Article 375 of the Code of Commercial Companies, the general meeting and supervisory board of a joint stock company cannot give binding instructions to the management board concerning the management of the company’s affairs. This provision makes it absolutely clear that management board members of joint stock companies are not obliged to follow instructions from a supervisory board or general meeting on how to manage the company’s affairs.
Cases in which an arbitrator must be appointed on behalf of a party have long been problematic. The French Supreme Court in Siemens v Dutco underlined that each party should have the same rights in the appointment process. A recent Polish Court of Appeals decision invoked similar reasoning in setting aside an International Chamber of Commerce (ICC) award due to the fact that, among other things, one party’s rights had allegedly been infringed when the sole arbitrator was selected in the course of the proceedings.
In 2017 there were two major changes in the Polish arbitration landscape. Firstly, a new set of rules for consumer arbitration was introduced. These changes involve the form of an arbitration agreement as well as grounds for challenging an arbitral award and questioning the recognition or enforcement of an arbitral award. The amendments are aimed at reinforcing consumers’ rights in arbitration.
The subject matter of this article is the comparative outlook for the civil procedure in common law tradition and continental law family – throughout the three various viewpoints – citizen’s, court’s and finally – the prospective aspects for civil proceeding. Therefore, my aim is to construct a storied composition that embarks on individual’s level, goes over the structural grade and reaches the towering rung – the global perspective.
Shareholder activism has grown in popularity in recent decades (particularly in the United States) due to leading law firms specialising in the implementation of available shareholder activism strategies, and the role of hedge funds and related services constitutes a significant niche in the legal services market. This update will examine whether shareholder activism can be applied under Polish legislation.
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 by approximately 60%, even though the commission was for the transfer of Robert Lewandowski, one of the world’s best footballers. The decision underlines that football agents, in the view of the court, should not claim more than 30% of what is due for players themselves if they want to avoid their claims being dismissed as excessive and an abuse of rights.
Is there such a thing as a perfect arbitration clause? Commercial lawyers have been struggling with this question for decades. In reality, a perfect arbitration clause does not exist because every contract involves different needs and circumstances, many of which do not surface until long after the clause has been drafted. Indeed, the difficulty of identifying one “ideal” arbitration clause demonstrates one of the key advantages of arbitration: It is a form of dispute resolution that adapts to different kinds of disputes and surrounding circumstances.
By assumption, the process of merging capital companies is advantageous from the point of view of the merging companies and their shareholders. However, sometimes, as a result of the merger, a shareholder may receive fewer shares in the acquiring company than he or she should have. Therefore, the merger is disadvantageous from an economic and corporate power point of view. In such a context, the question that arises is whether the protection of shareholders’ interests against an unfavourable share exchange rate is possible under Polish law and, if so, how it can be accomplished.
Third-party arbitration funding can benefit both under-resourced growing businesses as well as established and profitable companies, allowing them to cover the legal costs of potentially complex proceedings. However, companies should be aware of its potential risks and downsides, such as concerns over confidentiality and privilege of sensitive information, the funder’s self-interest in returning a profit on its investment and potential conflicts of interest between funders and arbitrators. A number of jurisdictions and arbitration institutions are considering introducing external regulation of third-party arbitration funding.
Generally speaking, in Poland arbitration is becoming an increasingly popular method of dispute resolution as evidenced by recent research in that field. According to a study prepared by the European Commission entitled ‘Business-to-Business Alternative Dispute Resolution in the EU’, based on 500 interviews with Polish businesspeople, 15% of them have already used arbitration, which gave Poland second place, tied with Italy, in the whole of the European Union. According to the latest research from 2015, 75% of businesses which were already engaged in arbitration expressed their willingness to use this method of dispute resolution in the future.
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 at least in an equal manner to that required to conclude the agreement itself (ie, at least by way of an electronic document). This decision also shows that the issue of an agent’s authorisation to enter into an arbitration agreement is problematic, but not only in Poland.
Polish law regulations on bankruptcy and restructuring were substantially altered due to changes which entered into force on 1st January 2016. The fundamental functions of the new regulation are: realising a ‘new chance’ policy, i.e. guaranteeing an opportunity for a new start to entrepreneurs whose enterprises failed in connection with deteriorating economic conditions; separating restructuring procedures, aimed at preventing a debtor’s enterprise from reviling (or stigmatising) bankruptcy procedures; examination of the effectiveness of the law in force heretofore has demonstrated that the very declaration of bankruptcy in the majority of cases precluded any restoration of a debtor’s enterprise due to the negative attitude of the economic environment (creditors/counterparties) towards an entrepreneur who was declared bankrupt.
The company merger procedure is regulated by the Commercial Companies Code, which provides for the adoption of shareholder resolutions during company mergers. Similar to other shareholder resolutions during general meetings, the resolution may be challenged according to the principles set out in the code. However, due to the specificity of the merger process and the necessity of recognising the primacy of a company’s interest over that of a shareholder, certain exceptions to the general principles apply.
De lege lata no changes in the Polish law are necessary for the recognition of the arbitrability of resolution-related disputes, similarly as was the case in German law which today allows for an effective practice of corporate arbitration. The real obstacle for Polish arbitration practice in resolution-related disputes is the lack of model rules of proceeding before a court of arbitration in the case of a multi-entity dispute arising against a company relationship, which shareholders and the company alike could refer to. This obstacle would be eliminated by offering parties to arbitral proceedings such a “model law” in the scope of proceedings before the court in the case of resolution-related disputes which would guarantee that the standard of a shareholder’s constitutional access to justice is always complied with in such proceedings. This is, nota bene, what the German DIS has done.
Arbitration is a process and its product is an arbitral award that can be a substitute for a state court judgment in the most important aspect – enforceability. As a result, both arbitral tribunals and counsels should undertake necessary steps to ensure the future enforceability of the award. This requires tailoring the arbitral process with enforcement issues in mind and conducting the arbitration proceedings with a flexible and knowledgeable navigation among several different legal systems that will only come into play during enforcement as provided by the New York Convention.
An arbitral award is equal to the judgment of the state court after being recognised or enforced, therefore, it has the same binding force and the authority of res judicata as the final and enforceable judgment of the state court. Both the state courts and the parties are bound by such arbitral award, so it should be taken into account when deciding on subsequent disputes between the same parties. What is more, if an award deals with an issue of a precedential nature, that issue cannot be re-litigated in further proceedings.
Under Article 180 of the Commercial Companies Code, the effective transfer of share ownership requires a transfer ownership agreement to be concluded in writing with a signature certified by a notary. This is an absolute requirement and does not depend on the agreement’s value or the percentage of a company’s share capital that is subject to the transaction (eg, as is the case in Lithuanian law). However, not all legal regulations in force in EU member states require adherence to a special form – namely, a written form with signatures certified by a notary. The question that therefore arises is whether – in the event that the agreement is concluded under the legislation of a state that sets less restrictive requirements regarding the agreement form for the purchase of shares in a limited liability company with a registered office in Poland – adhering to a less restrictive form will suffice for the effective transfer of the legal title in the shares being disposed of.
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). In its October 27 2016 judgment, the Supreme Court 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 (where the seat of the Dutch company’s parent company was located) as the place of arbitration was invalid, as it was grossly unfair to the Polish party.
The legal system in Poland is a continental law system (statutory law) whereas the source of legal standards is legal acts enacted by legislative bodies. One of such acts is the Code of Civil Procedure (Polish abbreviation: ‘k.p.c.’; English abbreviation ‘CCP’) which contains provisions regulating the civil procedure. The civil courts system in Poland consist of three tiers: the first level comprises District Courts, which, in principle, are courts of first instance; the second level comprises Regional Courts, which are courts of second instance in cases heard in first instance by the District Courts, and courts of first instance in cases enumerated in the provisions of the law; the third level consists of Courts of Appeal, which are courts of second instance in cases heard in first instance by Regional Courts. Judgments of courts of second instance may sometimes be challenged with cassation complaints before the Supreme Court. Some categories of cases are, however, reserved for the competence of specific courts, e.g. the Regional Court in Warsaw is the court competent for competition and consumer protection.
“Better safe than sorry!” Despite the fact that this proverb is well known, lawyers often fail to apply this rule with respect to data protection. They seem to forget that information is the most valuable asset and that their law firms are susceptible to cyberattacks. Therefore, lawyers should be adequately prepared to secure data and address information leakage incidents. The first step of this preparation is crisis anticipation, which helps avoid the crisis in the first place and also gives necessary confidence to react effectively.
Significant changes to the regulation of arbitration in Poland were introduced on January 10 2017 through the Act on Out of Court Resolution of Consumer Disputes, in line with the EU Alternative Dispute Resolution Directive (2013/11/EU). 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.
Assuming that the principal goal of people involved in creating the law regulating the functioning of the judiciary is to facilitate citizens’ access to justice and expedite the proceedings, one should expect that any systemic reforms will lead to streamlining the system of the administration of justice. A neutral observer, however, has had many an opportunity to see that each amendment aimed at introducing progressive innovations into the court room results in a frontal confrontation between advocates and opponents of innovative solutions. Are these fears substantiated? Or perhaps all the reservations are rather rooted in individual barriers stemming from the fear of abandoning one’s habits?
Arbitration is becoming an increasingly popular method of dispute resolution in Poland as shown by recent research in that field. According to a study prepared by the European Commission entitled ‘Business-to-Business Alternative Dispute Resolution in The EU’, based on 500 interviews with Polish businesspeople, 15 per cent of them have already used arbitration, which ranked Poland second place in the whole of the European Union. According to the latest research from 2015, 75 per cent of businesses that were already engaged in arbitration expressed their willingness to use this method of dispute resolution in the future.
The Act of 17 December 2009 on Pursuing Claims in Group Proceedings (Journal of Laws 2010, No. 7, item 44, hereinafter referred to as: the “Act”), in force as of 19 July 2010, introduced a new mechanism for the collective pursuit of claims/group proceedings in the Polish legal system. In principle, the Act is of a purely procedural nature – it introduces no changes to the substantive legal basis for claims or to the principles of a defendant’s liability.
Parties may agree for a multi-tier dispute resolution process to be administered by a Contract Administrator. However, when the contract is fully performed, in result of which the Contract Administrator is relieved of his duties, there is no competent (contractually selected by the parties) person through which parties may start the dispute resolution process. This also concerns the initiation of arbitration as the final stage of the multi-tier dispute resolution procedure.
This paper concerns two frequent situations in international commercial arbitration, i.e. concluding a conditional arbitration agreement and implementing an arbitration agreement in the conditional mail contract. The first part concerns the possibility of making the arbitration agreement conditional (from the procedural and substantive point of view) and also includes practical examples of such conditional arbitration clauses. The second part concerns the effect that a conditional main agreement has on the arbitration clause contained therein. The third part discusses the effects of conditional arbitration agreements, also from the procedural and substantive perspective.
Anti-suit and anti-arbitration injunctions are useful instruments for enabling efficient dispute resolution and preventing forum shopping. However, these instruments – not free from criticism – 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. On November 22 2016 the Krakow Court of Appeals (I ACz 1997/16) 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 to be very formal and parties should be careful not to overlook certain requirements of a motion. A May 25 2016 Supreme Court decision (V CSK 257/15) demonstrates the serious consequences that can stem from parties’ errors in this regard. It also shows that Polish courts sometimes require a party to present more than just original or certified copies of the arbitration agreement and the award, as prescribed in Article IV of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958.
Legal uncertainty is highly undesirable in business. However, uncertainty is likely in dispute resolution, at least to some extent and especially regarding the outcome. Other factors, such as the forum, costs and conduct of proceedings can and should be determined at the start of a dispute. This also pertains to the issue of whether a case should be heard in arbitration or before a state court.
A recent Supreme Court judgment contributed to the debate on the res judicata (binding power) of arbitral awards on other cases. In its January 20 2016 judgment, the Supreme Court clarified to what extent findings made in a previous arbitral award (and not only an operative part of the award deciding on claims) should be taken into account when deciding on subsequent disputes between the same parties. This judgment may constitute an important guide for arbitration practitioners who want to make use of arbitral awards that have already been issued to support their position in future litigation or arbitration in Poland.
Under Article 45 of the Constitution of the Republic of Poland everyone shall have the right to have their case heard without undue delay by a competent, impartial, and independent court. The positively defined right of access to justice is supplemented in Article 77 of the Constitution of the Republic of Poland which establishes a ban on a narrowing interpretation of provisions guaranteeing individuals access to justice – a statute may not block anyone’s access to seek justice for infringement rights or freedoms. Interestingly, both these key provisions of the Constitution of the Republic of Poland enacting ‘access to justice’ do not directly articulate which court is meant – a state court, but perhaps also a private court, which a court of arbitration is.
The security of economic transactions and their participants requires the elimination of entities failing to adhere to fundamental rules and principles and, as such, constituting a threat to the correct functioning of the market. One of the means for accomplishing this goal comes as the possibility, provided by Article 373 et seq. of the Insolvency Law, depriving, by virtue of the ruling of an insolvency court, a specific entity, of the right to conduct their own economic activity or engage in such activity in the frames of a civil partnership and ban them from discharging functions of a member of a supervisory board, member of audit committee, representative or agent of a natural person conducting an economic activity in the scope pertaining to this activity, but also as an agent of a commercial company, a state-owned enterprise, a cooperative, foundation, or association (hereinafter referred jointly as to: “depriving of the right to engage in economic activity”) for ten years.
For many years after the introduction of the Civil Code, the set of issues pertaining to mortis causa acts in law has remained on the margin of interest of civil law practitioners. One of the few who engaged in an analysis of this subject was Professor Andrzej Kubas, who was the first author in Polish legal literature to have embarked on an attempt at presenting a broader characteristics of these acts. In recent years, this situation has undergone a significant change, whereas mortis causa have provided a matter for an interesting debate.
The problem of relations between the scope of application of Article 58 § 1 and 2 and Article 527 CC is the subject of multiple and frequently divergent opinions of the case law, issued on the grounds of different factual statuses. This Article constitutes an attempt at determining when an act in law performed to creditors’ detriment is only ‘ineffective’ and when (under which circumstances) it may be found invalid.
In the frames of the class action mechanism, newly introduced into the Polish procedural law system, the Act of 17 December 2010 on Pursuing Claims in Group Proceedings, in force since 19 July 2010, provides for the shaping of a demand of the statement of claims (verba legis: ‘limitation’ of the demand) as a demand for the establishment of liability of the defendant (defendants).
The Jubilarian is a Professor Emeritus at the Chair of Civil Law of the Jagiellonian University and an attorney-at-law of established reputation as a consummate and effective litigation expert. In turn, the author of these words focuses on company law in his work. Since the publication is designed as a jubilee contribution, in attempting to define an area that, on the one hand, would emphasise the Jubilarian’s interests while on the other indicate the professional capacity of this paper’s author, the article should naturally focus on several issues revolving around corporate disputes and the way they are settled by state and arbitration courts.
The subject of this article is procedural issues related to establishing national jurisdiction in a situation where an action is brought forth by a company shareholder who suffered so-called indirect damages. Assuming the active capacity of such a shareholder (discussed in greater detail below), in the case containing a cross-border element, a problem having both theoretical and practical significance may arise, i.e.: according to what principles and which understanding of prerequisites the national jurisdiction should be established.
From among a host of problems within the set of issues concerning the operation of capital companies, recently the issue of defectiveness of resolutions of collegiate corporate bodies have begun to feature prominently in the doctrinal debate and in judicature rulings. This discussion focuses first and foremost on attempts at establishing the nature of a civil law sanction affecting the resolutions of shareholders or general meetings which remain in contradiction with the act.
Under the disposition of Article 23 CC, the personal interests of a human being, including dignity and good name shall be protected by civil law independent of protection envisaged in other provisions. Claims on the grounds of infringement of personal interests set forth in Article 24 CC materialise only when a charge of infringement of personal rights is raised by a person guaranteed protection under the above-indicated provision. Complications, however, arise in a situation where the incriminated statement does not pertain to a specific single person, but an entire group, collectively defined by the person who committed the infringement.
I dedicate this study to Professor Andrzej Kubas, my Mentor during my attorney apprenticeship in Krakow, in recognition of his scholarly work and legal practice. My cooperation with Professor Kubas constituted a continuous opportunity to study law, but also much more. Professor Kubas’ charisma, but first and foremost his personality, make him, in my belief, a paragon of both an attorney and arbitrator. Since the Professor’s practice also extends to arbitral proceedings, selecting a subject related to broadly understood arbitration was a natural choice.
The Warsaw Court of Appeals judgment of October 9 2015 is a recent and important contribution to the development of arbitral law in Poland. The court made a clear distinction between the jurisdictions of state courts and arbitral tribunals regarding the enforcement of claims. It also discussed the defence of set-off raised after an award has been made. Finally, and perhaps most importantly for foreign parties arbitrating in Poland, the court clarified when a claim covered by a valid and enforceable arbitration agreement can be examined only by a state court.
The limitation of claims under Polish law is a matter of substantive law, not procedure. However, procedural acts (ie, the start of litigation or arbitration) are important in this regard, as they can interrupt the limitation period. The effective interruption of the limitation period of a claim can be crucial to the final success of litigation or arbitration. However, parties are often unsure whether a case is more suited to arbitration or whether it should be heard by a state court. If they make the wrong choice, there is a chance that the limitation period will run uninterrupted and the claim may become time barred. his issue is problematic in Poland and remains unresolved. It is unclear whether a party can interrupt a limitation period by bringing a case before an improper forum or by initiating onciliatory proceedings before a state.
The Act of 17 December 2009 on Pursuing Claims in Group Proceedings (Journal of Laws 2010, No. 7, item 44, hereinafter referred to as: the “Act”), in force as of 19 July 2010, introduced a new mechanism for the collective pursuit of claims/group proceedings in the Polish legal system. In principle, the Act is of a purely procedural nature – it introduces no changes to the substantive legal basis for claims or to the principles of a defendant’s liability.
The year 2015 brought about two very important amendments to Polish arbitration law: amendments introduced by the Act of 15 May 2015, the Restructuring Law (the Restructuring Law), in general in force as of 1 January 2016; and amendments introduced by the Act of 24 July 2015 on Amendments of Certain Acts Due to Support of Alternative Dispute Resolution (the ADR Law), the legislative process of which is still pending. The aim of these amendments was to adapt Polish rules on arbitration (and ADR in general) to the needs of modern business and create a friendly environment for arbitration.
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. Further, parties must choose their arguments carefully, as they may be used against them at a later point. The role of arbitrators in overcoming procedural problems with the parties is also crucial to render an enforceable award. These issues arose in a recent judgment issued in post-arbitral proceedings. The Warsaw Court of Appeal’s June 18 2015 judgment dealt with the interpretation of arbitration agreements.
Generally speaking, in Poland arbitration is becoming an increasingly popular method of dispute resolution as evidenced by recent research in that field. According to a study prepared by the European Commission entitled ‘Business-to-Business Alternative Dispute Resolution in the EU’, based on 500 interviews with Polish businesspeople, 15% of them have already used arbitration, which gave Poland second place, tied with Italy, in the whole of the European Union.
Arbitration is often described as a quick means of dispute resolution in comparison to state court proceedings. Whether this argument is still valid regarding the length of arbitral proceedings themselves is debatable. However, arbitration does not operate in a vacuum and state court proceedings are also needed to preserve or enforce the rights of the parties. If a winning party wants to enforce a favourable award, it seeks the state court’s assistance in recognition or enforcement proceedings. If a party is not content with the outcome of the arbitral proceedings, it can motion the state court to set aside the award. Consequently, post-arbitral proceedings are a necessary complement of the arbitral proceedings. Thus, the length of the former should be added to that of the latter to determine the overall length of enforcing claims in arbitration. When arbitral and post-arbitral proceedings are examined together, it is clear that the efficiency of post-arbitral proceedings is crucial in maintaining a quick resolution of disputes. This remains a challenge in many jurisdictions, including Poland.
Arbitration is often described as a quick means of dispute resolution in comparison to state court proceedings. Whether this argument is still valid regarding the length of arbitral proceedings themselves is debatable. However, arbitration does not operate in a vacuum and state court proceedings are also needed to preserve or enforce the rights of the parties. If a winning party wants to enforce a favourable award, it seeks the state court’s assistance in recognition or enforcement proceedings. If a party is not content with the outcome of the arbitral proceedings, it can motion the state court to set aside the award. Consequently, post-arbitral proceedings are a necessary complement of the arbitral proceedings. Thus, the length of the former should be added to that of the latter to determine the overall length of enforcing claims in arbitration. When arbitral and post-arbitral proceedings are examined together, it is clear that the efficiency of post-arbitral proceedings is crucial in maintaining a quick resolution of disputes. This remains a challenge in many jurisdictions, including Poland.
Polish law prescribes both the formal and material requirements for arbitration agreements. As to the form, an arbitration agreement, under Article 1162.1 of the Polish Code of Civil Procedure of 17 November 1964 (hereinafter: “CCP”), has to be made in writing. This requirement is also fulfilled when this agreement is included in letters or recordable communications exchanged between the parties or if the parties refer in their agreement to a document containing a decision to resolve their dispute in arbitration, and if such an agreement is made in writing and the reference incorporates that clause into the agreement (Article 1162.2 CCP).
On June 9 2015 the president signed the new Law on Restructuring. This new statute (which will fully come into force on January 1 2016) will reshape the Polish bankruptcy, insolvency and restructuring rules to make it easier for companies to get back on their feet after a period of financial difficulty. From the perspective of arbitration, the new law derogates from the controversial provisions – well known to the arbitration world from the Elektrim case – under which a declaration of bankruptcy rendered arbitration agreements concluded by an insolvent company ineffective. In principle, in future a declaration of bankruptcy will not impede ongoing arbitration. The new provisions deserve a closer look by any foreign party that has entered into an arbitration agreement with a Polish company.
A comparison of the German and Polish regulation of company law and procedural law, including arbitration law, has an obvious theoretical foundation. In relation to company law, the Polish regulations most often copy the solutions adopted by the German legislator. Procedural law in both systems is based on the same principles of proceeding and shares a similar understanding of procedural institutions.
On February 5 2015 the Supreme Court issued a judgment (V CSK 231/14) related to a provision of the law regarding the expiration of an arbitration clause (ie, Article 1168 of the Code of Civil Procedure). Pursuant to this provision, if a person identified in an arbitration clause as 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. According to the same provision, unless the parties have agreed otherwise, the arbitration clause will lose its effect if the arbitration court defined therein refuses to hear the case or if it is otherwise impossible for the court to hear the case.
The commented judgement of the Supreme Court (SC) raises three issues instrumental to the process of appealing merger resolutions in limited companies: 1) what exactly is the meaning of the prohibition on basing legal actions seeking to declare invalidity or repeal a merger resolution upon claims concerning the exchange parity (Article 509 § 3 of the Commercial Companies Code)?; 2) whether a Commercial Companies Code provisions’ breach in the course of a merger procedure, preceding the passing of a merger resolution, may constitute the basis for questioning the legality of the merger resolution?; and 3) whether the time limitation set forth in Article 497 § 2 of the Commercial Companies Code, prohibiting a merger’s repeal after six months of the date of the merger’s registration, should be applied only to the competences of a registry court acting ex officio, or whether it should be construed as also comprising a prohibition to declare invalidity or repeal a merger resolution after that time limit?
On February 13 2014 the Supreme Court (V CSK 45/13) confirmed that the principle of the compensatory function of penalty clauses is a basic rule of public order. The key issue from a commercial arbitration viewpoint relates to the requirements for enforcing a foreign award in Poland and the limits of the public order clause. The judgment has prompted debate on the criteria that should be followed when assessing whether an award complies with the fundamental principles of the Polish legal system. It also provides a basis for examining other legal standards that are covered by the public order clause.
The Polish Supreme Court’s (SC) finding that the shareholder’s intervention in a dispute for the annulment or cancellation of a company’s resolution is of a non-autonomous nature if lodged on the side of the defendant company, whereas it is autonomous when a shareholder lodges it on the side of the member challenging the resolution, constitutes a dangerous precedent. The gloss presents a critical analysis of arguments which motivated the SC into adopting this thesis.
An arbitration agreement encompasses not only the disputes explicitly mentioned in its substantive scope but also cases relating to these disputes. Consequently, the prohibition of hearing the case by the state court is applicable also if the determination of the case presented before the state court and not explicitly covered by an arbitration agreement is impossible without examining a dispute being the subject of such an agreement.
Although international arbitration has achieved a substantial level of independence from state courts, the role of such courts is still important for effectiveness of arbitral proceedings. Interactions between state courts and arbitral tribunals may be particularly intensive in those areas in which tribunals and state courts have parallel or concurrent competence in the course of arbitration. State courts play an important part in the examination of the jurisdiction of the arbitral tribunal in a given case.
One of the Polish arbitral tribunals expressed the view that the arbitrability of disputes involving claims for declaring a resolution of a company invalid is conditional on circumstances which invariably require to be assessed in concreto. This opinion is clearly incorrect and the commentary explains why the arbitrability of corporate disputes should not raise any concerns whatsoever.
In his most important work entitled “An Inquiry into the Nature and Causes of the Wealth of Nations” Adam Smith, the father of economics, differentiated three production factors: soil, labour and capital. The effective combination of these three factors was to decide on the economic success of a given nation. The mentioned “effective combination” – is nothing more than, in the words of Adam Smith – the “laws and institutions” of a given nation, which decide the level in which the production factors will be exploited.
Arbitration is characterized by a series of advantages, which make it a good alternative for state court proceedings. One of the advantages is more freedom for arbiters in creating rules for evidence proceedings, including the acceptability of certain pieces of evidence. The aim of the paper is to answer the question about the possibility to proceed evidence from private recordings in Polish arbitration court proceedings, in compliance with the international practice in this matter.
Arbitration is a creature that owes its existence to the will of the parties alone. This phrase is often used as the leitmotif of arbitration. It draws attention to two of its prominent features, namely its contractual nature and the decisive role of the parties in shaping its procedural scheme.
On June 26, 2007, two Polish companies, P and I entered into a framework agreement aimed at creating an environment for concluding options contracts on the financial market. On July 11, 2008 the parties entered into an additional agreement securing I’s claims against P.
The Polish law prescribes both the formal and material requirements for the arbitration agreement. As to the form, an arbitration agreement, under Article 1162.1 of the Polish Code of Civil Procedure of 17 November 1964 (hereinafter: “CCP”), has to be made in writing. This requirement is also fulfilled when this agreement is included in letters or recordable communications exchanged between the parties, provided they refer in their agreement to a document containing a decision to resolve their dispute in arbitration, and if such an agreement is made in writing and the reference incorporates that clause into the agreement (Article 1162.2 CCP).
Damage predictability, which is referred to in par. 74 sentence 2 of the United Nations Convention on Contracts for the International Sale of Goods (Journal of Laws 1997 No. 45 pos. 286), does not exclude liability of the party violating the contract, but restricts the amount of the due damage. Verdict of the Supreme Court of 8 February 2012, V CSK 91/11, OSNC No. 7-8/2012, item 100.
The examination by the Polish Supreme Court of a case which arose on the grounds of the United Nations Convention on Contracts for the International Sale of Goods (CISG) of 11 April 1980 is a true rarity. In any event very few of these rulings spark the interest of the doctrine. Greater attention should be paid to the case in which the Supreme Court made three separate statements. The glossed verdict of the Supreme Court of 8 February 2012 regards the issue of contractual liability on the grounds of the CISG for the non-performance of the sales contract for goods, and specifically the issue of the foreseeability of the caused damage. What sparks concern is the fact that the Supreme Court identified the rules of liability on the grounds of Article 471 et seq. of the Civil Code and Article 45 and 61 om conjunction with Article 74 of the Convetion.
Arbitrability of disputes on validity of resolutions of capital companies constitutes one of the most disputed issues of the arbitration law doctrine. The dominating view holds that in the present legal status such disputes are not arbitrable and de lege ferenda proposals aimed at changing this status quo are put forth.
In the international arbitration practice, we may see a trend of improving arbitration proceedings and lowering their cost. One of the ways to optimize the proceedings is to divide it into parts, each of which is finalized with a separate verdict. Such an operation is called in the arbitration bibliography bifurcation.
Recognition by the Supreme Court (hereinafter the SC) that the assignee of liabilities is bound by the arbitration covenant from a basic relationship from which the liability arises, was decisive for establishing- uniform both in the case law, as well as in the doctrine that each legal successor of a specific title of a party from the basic agreement is bound by the arbitration covenant included in this agreement.
In light of Venezuela’s recent denunciation of membership in the International Centre for Settlement of Investment Disputes (“ICSID”) this article provides information on the available procedures for conflict resolution used by a non-ICSID country such as Poland. The number of countries that either never became members of the ICSID such as Brazil, Mexico, India, South Africa and Poland, or denounced their membership, such as Bolivia or Ecuador is not insignificant. The application of Canada and Russia still Awaits Ratification.
When it comes to M&A in Central & Eastern Europe (CEE), last year was definitely less interesting than 2011, which was considered to be a record-breaking year for M&A deals. In 2012, the total deal value of transactions in Poland was €9bn from 331 transactions completed – compared to 2011 where the total value was €18bn from 516 transactions completed. However, Poland remained among the region’s leading countries for M&A.
The aim of the present article is to outline the opinions appearing in the Polish doctrine on the topic of the introduction of the compulsory liquidation of insolvent companies, towards which bankruptcy proceedings have not been instigated due to the lack of a sufficient estate to cover the costs as well as the formulation of a stance which, in the opinion of the authors, would allow for the settlement of this issue on the basis of solutions proposed in the Recommendations of the Team of the Minister of Justice on the amendment of the Bankruptcy and Rehabilitation law.
The scope of binding mandatory provisions of procedural and substantive law seems to be one of the most important problems of arbitration, especially international arbitration. It is connected to various other concerns, e.g. the law applicable to various elements of arbitration, mainly the arbitration agreement, but also arbitrability.
With the arbitration award of the Arbitration Court at the Waren-Verein der Hamburger Bőrse e. V. Association in Hamburg (Germany)of 3 November 2010 (hereinafter respectively as: “Arbitration Court” and “Arbitration Award”) G-N. Ltd, with its registered seat in Old Tbilisi (Georgia) was awarded from “R.-H.” S.A. with its registered seat in W. (Poland) the amount of USD 101,600 with interest and fees on account of the remaining sale price of hazelnuts.
The history of economic policy confirms that the idea that detailed top-down “decreeing” of the spheres of business activity, through norms ordering the taking of certain actions or forbidding the taking of others (often in separation from the rules of economics) have brought about inconveniences, and only sporadically solved the problems lying at their bases.
According to many insured car holders in Poland, insurers have been underestimating compensation for losses, and the majority of auto insurance cases in Poland have been settled for amounts far below the actual costs of restitution. The most frequent reason is that the value of a loss has been determined based on the prices of used spare parts rather than new ones. A recent resolution by the Supreme Court of Poland may put an end to these activities committed by insurers and may be another indication that the courts are favoring insurance holders in recent car insurance cases.
Dispute resolution in the case of construction contracts may prove to be a challenging and complex process. When an investor enters into a construction contract with a general contractor, there are, as a rule, several other parties involved in the process, such as: the architectural design studio and the sub-contractors. These parties are, as a rule, bound by several contracts. The existence of multiple parties and multiple contracts is a key characteristic of the construction proces.
A new regulation, the act on the Financial Liability of Public Servants for the Grave Violation of the Law (FLPS), may impact the Polish insurance market in the next few years. FLPS concerns the financial liability of public servants towards the State Treasury, the territorial government unit or other legal persons that bear liability for damages inflicted while exercising public authority. The Polish Parliament passed the act on January 20, 2011, and it became effective on May 17, 2011.
Directors and officers (D&O) insurance has grown steadily in popularity since it was introduced in Poland 15 years ago. Accompanied by a rise in risk-aware corporate leadership, D &O insurance has evolved from an unknown product in the mid-1990s to a near necessity during periods of economic instability. Liability for damages caused by the decisions of professionals has become apparent. Although the market for D&O insurance is still developing, insurance premiums for 2010 were between PLN30 million and PLN50 million (approximately USD10.2 million and USD17.1 million). Current predictions indicate the market size will double in the coming years.
Polish regulation on the process of merging companies does not differ from solutions, applied in other European states. Furthermore, these laws are influenced by changes to similar European regulation. However, in analysing the company merger control process in Poland, it is important to differentiate two significant issues: first, the control of the registry court and second, competition law.
Although the profession of a lawyer so far has not required a change of the location of practice too often, in the globalised world of today, lawyers more and more often represent clients also outside of the jurisdiction within which they practice on a daily basis. As a consequence, in diverse legal cultures they come across ethical standards different than their own. This pertains, among others, to the confidentiality principle in international commercial arbitration.
Often, investors have to restructure the companies they own, and Poland is by no means an exception in this regard. The process entails taking action on the part of previous or new managers. However, Polish law presents legal risks to members of the management board and each manager participating in the administration of a company ought to be familiar with these risks. This article will present the most pertinent legal risks in terms of criminal, fiscal and civil liability faced by members of management boards of companies subject to restructuring.
By virtue of the Act dated 28 July 2005 (Code of Civil Procedure, Journal of Laws no. 178, item 1478) a new Part Five (Articles 1154 – 1217) containing extensive regulations of arbitration jurisdiction was introduced to the Code of Civil Procedure (“CCP”). This regulation is based vastly of the UNCITRAL Model Law on International Arbitration of 21 June 1985. However, as regards one of the major elements of the arbitration system, i.e. the so-called capability of settlement by arbitration, the solution suggested in the model act was not taken into account…
Agreements are a basic source of creation of obligational relationships in the Polish law. The provisions of the Polish Civil Code dated 23 April 1964 provide for three manners in which the conclusion of an agreement may occur as well as the liability for the non-performance of an agreement and the so-called pre-contractual liability…
The Polish civil procedure differentiates between two types of proceedings at the case examination stage:
a) so-called litigious proceedings (disputable) and
b) non-litigious proceedings (non-disputable).
In the case of non-litigious proceedings, the number of parties that may participate in the proceedings is theoretically unlimited – apart from the applicant, the status of a party in the proceedings (i.e. a participant) may be obtained by any person interested in the case who proves that the outcome of the proceedings affects the scope of their rights or obligations.
Bankruptcy is declared in relation to a debtor which has become insolvent. A debtor is insolvent when it fails to perform the required pecuniary obligations. If the debtor is a legal entity or organisational unit not possessing a legal personality, but a separate act grants its legal capacity, it is also deemed as insolvent when its obligations exceed the value of its estate, even if the obligations are met on a standing basis.
Intellectual property rights can sometimes be underestimated or even overlooked in a due diligence progress preceding a corporate transaction. This occurs because intellectual property is not a physical asset. Its very existence and scope, and thus its value heavily depends on contractual rights and other legal issues. Yet, intellectual property may be the most valuable asset of the company and acquirer should attach utmost attention to their proper investigation and evaluation. This article discusses vital issues in corporate transactions through the lens of an IPR lawyer and provides a practical checklist of what needs to be done and cared for.
The Paper reviews the legal requirements and processes associated with the going-private transaction. Since delisting dramatically changes the investors’ position, the law imposes certain mechanisms aimed at minority investor protection, which – correspondingly – the controlling majority needs to observe. These legal mechanisms equip the minority with an exit option so as to mitigate the liquidity loss of their original investment. Correspondingly, this trade-off imposes on the acquirer additional transaction cost that needs to been taken into account.
Not only are listed companies exposed to takeovers, control change may occur in non-listed companies as well, although for obvious reasons the latter are less vulnerable to unsolicited takeover. An important puzzle of the entire legal framework facilitating takeovers is the squeeze-out mechanism. Squeeze-out is understood as a means of the residual shares of the target. In many jurisdictions squeeze-out only exists for listed companies. This is not the case in Poland, where there is a separate set of rules applicable to non-listed companies. This article discusses practical problems associated with the compulsory acquisition of non-listed companies under Polish Law.
A corporate merger is capable of significantly amending the position of shareholders in the two or more companies embraced by such a transformation. Additionally, creditors as third parties, might also be affected by their debtor’s transformation. This article discusses the position of dissenting shareholders and corporate creditors and explains what legal rights and remedies they enjoy. On the other hand, the existence of a certain level of minority and creditor protection imposes a legal risk on the transaction which also needs to be taken into account as a cost factor.
Takeover law has been subject to European harmonization for many decades. The finally adopted 13th Directive of 2004 is widely perceived as a modest compromise. Hence, substantial differences remain among national laws and legal practice. For a successful tender bid or – taking the opposite perspective – for an effective takeover defence, it is crucial to comprehend the legal framework governing takeovers and to understand specificities the target board’s duties and available defence mechanisms.
In the event of a declaration of liquidation bankruptcy or arrangement bankruptcy, which removes the bankrupt’s rights to manage the assets comprising the bankruptcy estate, the court, pursuant to Article 174.1.4 of the CCP, is obligated ex officio, to suspend the pending proceedings as well as inform the receiver in bankruptcy or the court administrator on the pending proceedings, setting a relevant time period for him to accede to the said proceedings.
The issue of control over unfair terms is one of the basic issues of European harmonization of private law, mainly due to Directive 93/13 of 13 April 1993 on unfair terms in consumer contracts, which was adopted and is being implemented into legal systems of member states of the European Union. However, the subject has not yet been exhausted, and the process of regulating the issue has not yet been terminated.
In the current financial climate, corporate disputes are inevitable. Such conflicts often result from a combination of factors, and developing a comprehensive dispute resolution strategy has never been more important. A company needs to manage risks and deal with conflicts as soon as they arise. A company needs to manage risks and deal with conflicts as soon as they arise. There will be questions about whether a conflict should be resolved in court, via arbitration or through other forms of alternative dispute resolution. Since there is no ‘one size fits all’ approach, each solution has its pros and cons.
The Polish Ministry of Justice has prepared draft amendments to the Bankruptcy and Rehabilitation Law (“BRL”), proposing the repeal of two controversial provisions of this Act. Under the current law, on the declaration of a business’ bankruptcy (bankruptcy with the possibility of entering into a reorganization agreement – Article 142 BRL, as well as bankruptcy covering the liquidation of the bankrupt party’s estate – Article 147 BRL), any arbitration covenants made by the bankrupt party lose their force of law, and any already pending proceedings are subject to discontinuance.
Unless otherwise agreed by virtue of the jurisdictional choice or arbitration clause, the disputes between entrepreneurs in Poland are examined within special commercial proceedings by the commercial divisions of state courts. In these proceedings, the parties face many formal requirements. Failing to observe those requirements may result in losing the case, irrespective of the legal evaluation of the merits of the case.
The paper is an attempt at locating derivative and structured financial instruments in the system of the European Union law, but also in American and Polish law. A collapse on the mortgage market in the US resulted in calls for tightening provisions to protect the stability and security of the financial system. Banks and other financial institutions transformed (by way of securitisation) the majority of high risk instruments into ABS, MBS, or CDO type instruments. Next, the securitisation initiators sold these assets on securities markets to insurance institutions, hedge and investment funds, as well as other investors all over the world, transferring not only the rights to payment from the assets, but also the mortgage risk related therewith.
Amid the economic crisis, entrepreneurs should carefully consider European provisions regulating bankruptcy issues, i.e. Council Regulation (EC) No. 1346/2000 of 29th May 2000. Under these provisions, the declaration of insolvency of a company in one member state may be carried out by the court of another member state.
The paper aims at summarising the present situation on financial markets with a particular emphasis on the legal causes of the financial crisis. The subject of the analysis, however, is not limited only to the legal aspects since in the case of such a complex phenomenon as a financial crisis, elements of sociological or psychological nature, as well as economic aspects must be taken into account. Only a synthetic take of the entirety of issues, while taking relations between them, allowed for an indication of the mechanisms which have led to the current turmoil on the financial market and a formulation of conclusions capable of providing assistance in overcoming the crisis.
The current economic crisis has affected the world’s markets in a number of different ways. Some countries are struggling to cope with a rapid economic slowdown, while others are emerging virtually unscathed in comparison. An example of the latter is Poland, a country buoyed by export growth, industrial production and increasing levels of foreign direct investment (FDI). Ruth Saunders spoke to the partners of Kubas Kos Gaertner, one of Poland’s leading law firms to find out more.
The global financial crisis that began last year, so far has been relatively gentle on the Polish economy. According to the current data published by Eurostat, only Poland and Cyprus have recorded positive GDP growth out of the EU member states that have communicated their results. However, despite the relatively good shape of Polish businesses, a significant weakening of the Polish currency in relation to the Euro has taken place since August 2008.
Professor Andrzej Kubas PhD. The introduction of the free market economy principles, and soon after of the market economy principles in Poland at the turn of the 1980’s and 1990’s has fundamentally changed both the substantive law links between enterprises as well as the manner of dispute resolution and mediation in commercial cases.
Polish law contains provisions due to which declaring the bankruptcy of an enterprise, an entrepreneur not only may continue his operations, but may also obtain extra protection against creditors. Such a “deal” may also prove useful for creditors whose claims will be satisfied to a higher degree than through the regular sale of assets.