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Amendment of Arbitration Law in Poland

The Act of 24 July 2015 on Support for Methods of Alternative Dispute Resolution, which includes changes to the system of post-arbitration proceedings in Poland, will enter into force on 1 January 2016.

The most important change will be to "flatten" the model of post-arbitration proceedings. Currently such cases are heard at two instances, plus a possible cassation appeal to the Supreme Court of Poland against some rulings by the court of second instance. Under the new rules, applications to set aside an award or for recognition or enforcement of awards will be heard by the courts of appeal at a single instance. The purpose is to shorten and simplify post-arbitration litigation, a change which has been sought for a long time by Polish arbitration practitioners. In the justification for the bill, the drafters asserted that "the use of a single instance for consideration of the merits of post-arbitration applications does not violate the principle of two instances guaranteed by Art. 176(1) of the Polish Constitution. (…) The resolution on the merits of the case is issued by the arbitral tribunal, and the state court reviews the award only with respect to strictly specified standards. In its rulings the Constitutional Tribunal has indicated that the principle of two instances applies only to situations where the case is considered by the state courts 'from beginning to end,' i.e. where the state courts have jurisdiction to resolve the case on the merits. The Tribunal has accepted that single-instance proceedings are consistent with the Polish Constitution when the state courts only review rulings from extrajudicial bodies."

Vesting jurisdiction over post-arbitration cases with the courts of appeal–located in the 11 largest cities in Poland–should help unify the case law and achieve greater professionalism in such rulings. Under the current system, such cases have often been assigned haphazardly to judges with little knowledge of arbitration or experience in this area.

The Act also amends the rules of procedure before state courts on applications to set aside an award or for recognition or enforcement of awards.

Proceedings to set aside an award

The Act reduces the time for filing an application to set aside an award from the current three months to two months, thus limiting the period of uncertainty as to the stability of the award. According to the drafters, three months was too long, especially when compared to the two-month period in the Civil Procedure Code for filing a cassation appeal to the Supreme Court.

The court of appeal will consider an application to set aside an award at a hearing, in a panel of three professional judges. On the merits of the application, the court will only be permitted to set aside the award in whole or in part or deny the application. As now, the state court will not be permitted to interfere in any way with the determination by the arbitral tribunal; the court cannot amend the award or rule on the merits of the dispute.

Under the new legislation, extraordinary review of a judgment on an application to set aside an award will be available in the form of a cassation appeal to the Supreme Court. The Supreme Court will decide whether to accept the cassation appeal for consideration. Otherwise, there will be no right of appeal to a higher court against a judgment on an application to set aside an award.

Proceedings for recognition or enforcement of an award

Under the Act, the competent court of appeal will rule on recognition or enforcement of an arbitration award, or a settlement concluded before an arbitral tribunal, regardless of whether the tribunal was seated in Poland or abroad.

The other party will have two weeks after service of an application for recognition or enforcement to present its position to the court. This provision will remove doubts and eliminate future use of the existing practice of not serving a copy of the application for enforcement of an award by an arbitral tribunal in Poland on the other party and obtaining an enforcement clause ex parte.

TheAct also modifies the system of review of orders on recognition or enforcement of awards. Firstly, an interlocutory appeal will be available to a different panel of judges of the same court against an order of the court of appeal on recognition or enforcement of an award issued by an arbitral tribunal in Poland (or a settlement concluded before an arbitral tribunal in Poland). Secondly, the ruling of the court of appeal on recognition or enforcement of an award issued by a foreign arbitral tribunal (or a settlement concluded before a foreign arbitral tribunal) will be final, but it will be permissible to pursue a cassation appeal against the ruling.

Arbitrator's impartiality and independence

The Act includes an amendment designed to increase the guarantees of arbitrators' impartiality and independence. Namely, a person appointed as an arbitrator will be required to submit a written statement to each of the parties and the other arbitrators on his or her impartiality and independence in the case, and immediately disclose any circumstances that could raise doubts as to the arbitrator's impartiality and independence. This is aimed at increasing the parties' trust in the arbitrators by requiring them to examine their impartiality and independence in order to avoid conflicts of interest, and communicate this to the parties. This provision transposes into national law solutions that have already been adopted in the rules of arbitral institutions.

These changes in Polish arbitration law were warmly welcomed by arbitration practitioners in Poland, who for many years have sought to simplify and expedite post-arbitration proceedings and ensure that such cases are entrusted to the most experienced judges. This will be achieved by assigning these cases to judges of the courts of appeal.