The Law Firm’s lawyers, acting on behalf of the plaintiff, obtained settlement of the Client’s monetary claims before the common court, despite the fact that the contract linking the plaintiff and the defendant contained a provision indicating the jurisdiction of the arbitration court as having jurisdiction to hear the case (“Any dispute arising in connection with this contract that cannot be resolved by the members in accordance with the provisions of this contract shall be settled by arbitration …”). The agreement also indicated the permissibility of bringing an action in a court of law.
The above provision was in the consortium agreement, and the case concerned monetary settlements between the consortium member (plaintiff) and the consortium leader (defendant). Given the unclear provisions of the above-mentioned agreement, the Client – relying on a recommendation from the Law Firm – decided to file a lawsuit in the common court. The defendant, in his response to the lawsuit, raised a plea of arbitration (Article 1165 § 1 of the Code of Civil Procedure).
The argumentation presented by the Law Firm’s lawyers aimed to show that a contractual provision in which the parties submit a dispute to arbitration should be unambiguous when it comes to the intention of the parties to submit the dispute to arbitration. If there is no such unambiguity, the provision in question does not constitute a valid arbitration provision, and consequently does not exclude the jurisdiction of a common court. The Court of Appeals in Rzeszow agreed with the view presented above.
The above case shows that the inclusion in a contract between the parties a provision indicating submission of a dispute to arbitration does not necessarily mean a definitive exclusion of the jurisdiction of a common court. It may turn out that such a provision is an arbitration clause, but a defective one (e.g., invalid or unenforceable). Demonstration of such defectiveness will lead to hear the case by a common court. It may also turn out that the provisions of the contract, which seem to indicate the jurisdiction of the arbitration court, in fact are not such a provision (ostensible provision). This also has the effect of assuming the jurisdiction of the ordinary court. The argumentation aimed at undermining the correctness of the arbitration clause (and sometimes at questioning its existence), is of particular importance when the arbitration court indicated by the parties is located outside the country (e.g., it is the ICC International Court of Arbitration, i.e., at the International Chamber of Commerce in Paris), as a result of which the pursuit of claims by a Polish entrepreneur would expose him to much higher costs than he would incur if he sought satisfaction through a domestic court.