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Arbitration proceedings

We are very pleased to announce that our Law Firm has won a dispute in a case which was pending before the Court of Arbitration at the Polish Chamber of Commerce in Warsaw. We are proud of another success of our team.

From the experience of our Law Firm we see, that proceedings before arbitration courts in terms of speed of dispute resolution are more favorable to our clients than proceedings before common courts. Lack of sufficient information about arbitration and lack of awareness among entrepreneurs makes arbitration proceedings less popular.

In order to emphasize how quickly a dispute in arbitration proceedings was resolved (from the filing of a statement of claim to the issuance of an award), below we present a chronology of proceeding which was pending before the Court of Arbitration at the Polish Chamber of Commerce in Warsaw, in which our Law Firm represented one of the parties:

  1. May 2020 – filing of a statement of claim
  2. July 2020 – reply to the statement of claim
  3. October 2020 – hearing
  • during one hearing all witnesses submitted by the parties were questioned (six witnesses) and the parties’ explanations were heard (two persons)
  • the case was closed at the session of the court on October 8, 2020 after being considered by the arbitrators as finally clarified for settlement
  • the award of the Arbitration Court was issued, with a positive result for our client – the claim was dismissed in its entirety.

The settlement of the dispute lasted five months (from the moment of filing of a statement of claim to the issuance of an award) and ended with our client winning. In above mentioned case all the witnesses and parties were heard at one hearing, which significantly contributed to the quick resolution of the dispute. The speed of the dispute resolution may have also been influenced by the high experience of the appointed arbitrators adjudicating in the aforementioned case.

Arbitration proceedings have many advantages, including inter alia the fact that they lead to the resolution of a dispute in a less formalized form and arbitration proceedings are quicker than proceedings before common courts. The parties have also influence over the elements of the proceedings and choose the arbitrators by themselves, who may be chosen for their specialization and experience. On average, arbitration proceedings last between approximately 1 and 1,5 years. Moreover, proceedings before the Court of Arbitration are single-instance. For comparison – the average duration of proceedings in commercial cases in common courts in Poland can last several years. It should be emphasized that proceedings before common courts are multi-instance, which significantly prolongs the settlement of a dispute.

Proceedings at first instance can take approximately 3 years, while an appeal can take between 1 and 2 years.

Another advantage of settling disputes before the Court of Arbitration is the confidentiality of the proceedings. The very fact of conducting a dispute, hearings, including hearings of parties and witnesses – take place behind closed doors, which helps entrepreneurs to a great extent. There is no risk that any company secrets will become public and the proceeding will have a negative impact on the company’s reputation.  In common courts, on the other hand, hearings are usually held in public, they may, however be also held behind closed doors, but the delivery of judgment is always public, which may negatively impact on the company’s reputation.

Disputes can be resolved before an arbitration court if an arbitration clause has been made.  This may be done in the following ways:

  1. by an arbitration clause made in the contract,
  2. by concluding an additional agreement to submit to arbitration when the dispute arises (compromise),
  3. by inserting an arbitration clause in the articles of association of a company, foundation, cooperative or association.

Summarizing, arbitration proceedings are very favorable for entrepreneurs for a number of reasons, which include in particular:

  • speed of proceedings and dispute resolution,
  • less formalism of the proceedings,
  • simpler procedure,
  • lower and predictable costs,
  • arbitration is single-instance, which means that there is no risk that an appeal will be filed against an arbitral court’s award and that the case will be remanded for re-examination,
  • confidentiality and discretion of the proceedings,
  • high level of specialization of arbitrators, most of whom are representatives of the given field,
  • respect for the interests of the parties and trade secrets,
  • an arbitration court’s award has the same force as a judgment of a common court after it has been declared enforceable by a common court.

There are approximately 50 arbitration courts in Poland. The Arbitration Court at the Polish Chamber of Commerce in Warsaw is one of the most renowned permanent arbitration courts in Poland. It resolves about 300- 500 cases per year of which about 20% has international character. In 2019, approximately 180 new cases were submitted to the above-mentioned Court of Arbitration, and in 100 cases, decisions ending the proceedings were issued.

Our law firm offers substantive support during the conduct of a dispute before the arbitration courts. We invite you to contact us.