Source: http://arbitration-poland.com/case-law/717,katowice_court_of_appeal_judgment_dated_23_march_2017_case_no_v_aca_415_16.html
Timestamp: 2018-08-17 03:49:23
Document Index: 701290171

Matched Legal Cases: ['art. 1173', '§ 1', 'art. 1173', '§ 2', 'art. 1174', '§ 1', 'art. 1174', '§ 2', 'art. 1176', '§ 2', 'art. 1206', '§ 1']

arbitration-poland.com - Case Law - Katowice Court of Appeal judgment dated 23 March 2017 Case No. V ACa 415/16
art. 1173 § 1 CPC (from 1.1.2016) , art. 1173 § 2 CPC (from 1.1.2016) , art. 1174 § 1 CPC (from 1.1.2016) , art. 1174 § 2 CPC (from 1.1.2016) , art. 1176 § 2 CPC (from 1.1.2016) , art. 1206 § 1 and 2 CPC (from 1.1.2016)
Case No. V ACa 415/16
A bank’s corporate customer won an arbitration award against the bank for about PLN 6.5 million, the outstanding balance under a banking product intended to cover losses previously suffered by the client under currency option (forex hedging) contracts, under a theory of unjust enrichment and the invalidity of the underlying transactions. During the arbitration proceeding, the respondent bank filed a challenge against the arbitrator appointed by the claimant, Dr P.K., on the ground that he was biased against banks as demonstrated by the fact that, inter alia, he had appeared as an expert for customers in other proceedings against banks, had published articles opposing forex hedging contracts, and was involved in an association supporting bank customers who had lost money to banks under forex hedging contracts in the 2008 financial crisis. The arbitration court twice refused to remove the arbitrator, finding that his experience in this field did not demonstrate an actual conflict of interest (the “red list” under the IBA Guidelines on Conflicts of Interest in International Arbitration) or a potential conflict of interest (the “orange list”), but fell in the “green list” of permissible activities under the IBA guidelines.
The bank applied to the Katowice Regional Court to set aside the award on the grounds that the arbitral tribunal was not properly empanelled because there were justified doubts as to the independence and impartiality of arbitrator Dr P.K. The bank also alleged that the award violated public policy because it did not determine the merits of the case, granting the award on the basis of unjust enrichment without ruling on the validity of the underlying transactions.
The regional court found that there was no objective basis for challenging Dr P.K. It also found that the award did not violate public policy because of failure to rule on the merits of the dispute, as it was clear from the justification for the award that the arbitral tribunal regarded the finding of unjust enrichment as sufficient regardless of whether or not the underlying transactions were invalid and thus there was no need to rule on that issue.
On appeal, the Katowice Court of Appeal agreed with the lower court that the objections to arbitrator Dr P.K. fell within the “green list” under the IBA guidelines. The court further pointed out that after the bank’s challenge to the arbitrator was denied by the arbitration court, the bank had failed to seek a ruling from the state court. Consequently, the bank forfeited the right to rely on those objections as grounds for setting aside the award. That would be permissible only if the objections to the arbitrator were equivalent to those included in the “non-waivable red list” under the IBA guidelines. The court of appeal found that the allegation that the award violated public policy because of the failure to rule on the merits of the case was not well-developed by the appellant, but in any event the finding by the arbitral tribunal that there was no need to rule on the validity of the underlying transactions because the customer’s claim was justified either way under a theory of unjust enrichment did not constitute a failure to rule on the merits of the dispute.
The court denied the appeal accordingly.