The purpose of referral to arbitration
Generally, dispute resolution is entrusted to state courts, but the parties can renounce this jurisdiction in favour of arbitration. Typically, the parties elect arbitration in an arbitration clause included in their original contract, signed well before any dispute arises. In other cases, after a dispute arises, the parties may agree to seek arbitration by signing a post-dispute referral to arbitration.
Conversion of state court proceedings into arbitration proceedings
On 1 July 2023, another major amendment to the Polish Civil Procedure Code enters into force. The changes involve general provisions, consideration of the merits, interim relief, enforcement, and arbitration. In this article, we will examine the amendments to Part Five of the Civil Procedure Code—the arbitration chapter.
Another overhaul to the Civil Procedure Code: Key provisions
The Polish parliament has voted to amend the Civil Procedure Code, introducing numerous changes primarily intended to speed up proceedings. On this occasion, the parliament decided to reinstate some solutions it had abandoned in recent years. Below we discuss the most important changes.
Limitation periods in a contract for a specific work
The statute of limitations for claims arising from a contract for a specific work is regulated differently from the general rules. Pursuant to Civil Code Art. 646, these claims become time-barred two years after the work is delivered, or if the work has not been delivered, two years after it was supposed to be delivered under the contract. This is a short timeframe, and requires great care to avoid forfeiting claims—especially as the way it is counted can raise practical questions, and in some cases a three-year term is used.
The investor’s lack of cooperation and rescission of a construction contract
Cooperation between the parties is essential to implement many contracts. This is particularly so in the case of a construction contract or a contract to produce a specific work, where the purpose of the contract is achieved over the course of a fairly complex process and comprises many elements. The Polish parliament has recognised this strong dependence and has provided a far-reaching solution applicable when the necessary cooperation is lacking. Such a situation may even lead to rescission of the contract.
Settlement before the first hearing may allow for recovery of the entire court fee
Settlement is a popular and safe way of resolving civil disputes. By making concessions to each other, the parties autonomously frame the legal relationship between them and allocate the rights and obligations acceptable to them. The law in Poland also promotes this model, providing advantageous rules for parties to court proceedings allowing for return of the court fee on claims if a settlement is reached. The earlier a settlement is reached, the more of the fee can be recovered. In some cases, even the entire fee may be refunded.
Claim for a guarantee of payment for construction works: Practical problems
A request for a payment guarantee may appear on an investor’s desk suddenly, causing numerous complications. Sometimes, contractors make such a demand to have an excuse to withdraw from the contract. Then a race against the clock begins, not to give them that excuse. But in advance, the investor can also arrange a commercial solution to the problem, i.e. a bank guarantee facility in the loan agreement.
Disqualification of a judge in a case over a mortgage denominated in Swiss francs is not as obvious as it seems
Can a judge impartially rule in the case of a bank from which the judge has taken out a mortgage loan? Is the mere fact of holding a mortgage in Swiss francs a basis for disqualifying a judge from hearing cases seeking invalidation of mortgage loans indexed or denominated in that currency? And why is it easier to disqualify a Supreme Court judge than a lower-court judge?
Traps when notifying the insured of the general conditions of insurance
The insurer incorrectly notified the insured of the general conditions of insurance. Could this result in the insurer being required to pay compensation, even though the general conditions of insurance state that there is an exception excluding the insurer’s liability?
A guide on how (not) to write jurisdictional clauses
In agreements with foreign counterparties, provisions on which courts have jurisdiction to resolve disputes are standard, but they are often drafted by rote, without deeper reflection. If a dispute unexpectedly occurs, this can lead to serious problems. Based on our experience, we suggest how to avoid the worst mistakes.
What conditions can be imposed on the obligation to pay a fee to a construction contractor?
In its judgment of 2 June 2021 (case no. II CSKP 7/21), the Supreme Court of Poland ruled on whether payment of the fee to a contractor for construction works can be conditional. This ruling is of great practical importance, as it comments on which contractual provisions regarding the fee are permissible and which are prohibited and thus invalid. This is essential reading for contractors and investors alike, providing valuable tips on how to frame construction contracts to ensure compliance with the regulations while affording proper legal protection.
Acknowledgement of debt: What does the debtor’s behaviour mean?
Recently, the Supreme Court of Poland commented on the subject of acknowledgement of debt, and at the same time gave some general guidance on how to interpret a debtor’s statements and behaviour. This is a key practical issue, as action by the debtor can cause interruption of running of the statute of limitations on the claim. Therefore, debtors should be cautious about what they state to creditors. Conversely, in many cases, creditors can take advantage of the debtor’s behaviour to improve their legal position.
