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Dispute Resolution in Poland Issues and new developments in dispute resolution in Poland.

Interesting verdicts — annulment of the injunction

agnieszka1 Posted in Litigation

If you are just reading this post, it cannot be accidental. This is a new blog that is interesting for lawyer-practitioners and litigators, but not only, we believe. From now on you have an open invitation to join us at the table at which my outstanding colleagues are already seated. It is going to be a very interesting meeting in good company with the possibility of different generations exchanging opinions and knowledge on various, fascinating topics.

I have spent some time wondering how to structure my blog post and what its main objective should be. Of course, it will contain descriptions of important disputes and cases, and there are quite a lot of them. I am an advocate practicing for many years and I completed my apprenticeship at a law firm currently cooperating with a large legal corporation. I know the location of the courts at Leszno Street1 by heart, so many things happened there. I am sure there will be enough topics to discuss, both from my archives, but also from the most updated ones.

First, I would like to briefly discuss an interesting topic which relates both to the common and arbitration courts, namely the annulment of an injunction granted for the duration of arbitration proceedings.

In the discussed case, we are dealing with a situation in which arbitration proceedings were pending in Paris, and the claim being the subject of these proceedings was effectively secured by the Polish common court. The arbitration court dismissed the claim and stated in its justification that this decision was final and valid. In this situation, it became necessary to apply to the Polish court for declaring the annulment of the injunction. And the following question emerged: is it necessary for declaring the annulment of this injunction to declare first that the decision of the arbitration court dismissing the claim is admitted or deemed enforceable?

A dispute emerged over the basis of the mode of procedure I adopted, as I provided a negative response to the aforementioned question and I immediately submitted a motion to the common court for declaring annulment of the injunction. The court of first instance shared my opinion and its decision became the subject of the complaint of the defendant.

From the defendant’s perspective, this decision was incorrect, as it stated that in order to declare an annulment of an injunction in the circumstances of the case, it is necessary to conduct recognition of foreign verdict proceedings. The defendant raised numerous charges which all focused on the same fact, namely that a decision that is to be the basis for declaring the annulment of an injunction is a decision of a foreign arbitration court, so without its admission or declaration of enforceability by the Polish court, it cannot constitute grounds for declaring the annulment of the injunction.

The response includes elaborate polemics with the aforementioned complaint, which I am satisfied to state, was adopted by the Appeals Court in Lublin (decision of the Appeals Court in Lublin of April 7, 2009, file no. I ACz 299/09), which stated as follows:

Admission of a decision of the arbitration court or declaring its enforceability is necessary for them to be made equal with the court decision or a court settlement (art. 1212 of the Code of Civil Procedure). However, it is not necessary for declaring the annulment of the injunction, as the decision regarding the injunction was auxiliary in relation to the main proceedings conducted before the arbitration court, and its purpose was only to secure the possibility of implementation of the future decision admitting the claim. The arbitration court’s award dismissing the claim causes annulment of the injunction upon delivery of the award.

This is an interesting decision, with significant practical meaning. An injunction must be cancelled when it becomes groundless. Upholding an injunction in a situation whereby the claim was lawfully dismissed would favor the alleged creditor of the claims, which in fact do not exist. An expression of the excessive formalism would be thus to maintain the injunction until the arbitration court’s award is admitted or declared enforceable.

An injunction of claims during an economic crisis often plays a key role both in the proceedings before the common courts and before the arbitration courts and the modern solutions meet the requirements of the parties to cross-border transactions. In light of the aforementioned award, the termination of the dispute was considerably accelerated (facilitated).

You are encouraged to participate in the discussion and I hope that you will enjoy the future posts.

  1. The building in which the courts are located was designed in the 1930s by architect Bohdan Pniewski, and delivered for use in 1939. At that time it was the largest court building in Europe. Its facade included the following motto: “Justice is the basis for power and stability of the Republic of Poland”. After the end of World War II, the building was still used by the courts, until the 1990s almost all the Warsaw courts and the Supreme Court were located there.