This article was featured in Jus Mundi‘s 2024 Arbitration Year in Review, in collaboration with VYAPs, a yearly collection of articles from jurisdictions all around the globe updating you on arbitration-related developments from the previous year.
THE AUTHORS:
Olga Marcinkowska, Trainee Advocate at Warsaw Bar Association
Justyna Sikora, Associate at White & Case
Agata Zwolankiewicz, Associate at Linklaters
The year 2024 marked significant advancements in arbitration within Poland. The country is further solidifying its status as a crucial hub for international arbitration activities in the Central and Eastern European (“CEE”) region.
This report provides an overview of developments in the fields of commercial and investment arbitration, as well as highlights of various arbitration events in 2024.
Developments in Commercial Arbitration
New Modernized Arbitration Rules of the Largest Polish Arbitration Institutions
Both of Poland’s most prominent arbitration institutions: the Court of Arbitration at the Polish Chamber of Commerce (“SAKIG”); and the Court of Arbitration at the Polish Confederation of Private Employers (the “SA PKPP Lewiatan”), adopted new arbitration rules in 2024:
The new rules in both cases entered into force as of 1 January 2025 with the aim to improve efficiency and provide parties with the desired flexibility. This move is anticipated to attract more international parties to choose Poland as a preferred venue for arbitration proceedings.
The most relevant changes in the arbitration rules include:
| Issue | SAKIG | SA PKPP Lewiatan |
Commencement of the proceedings | Arbitral proceedings may now be commenced solely by a request for arbitration. | Arbitration proceedings shall be commenced by the filing of either a request for arbitration or a statement of claim. |
Electronic communications | All communications exchanged after the initial filings in the course of arbitral proceedings shall occur electronically by order of the tribunal. | All communications exchanged after the initial filings in the course of arbitral proceedings shall occur electronically by default. |
| Third-Party Funding (“TPF”) | The TPF arrangement and the identity of the funder are subject to mandatory disclosure. | The tribunal is empowered to decide on costs taking into account any TPF or success fee arrangements. |
| Composition of the Tribunal | The president of the tribunal no longer needs to be a person listed on the roster of arbitrators recommended by SAKIG. | The process for appointing an arbitrator in the absence of a choice by the parties has been expedited. |
| The language and seat of the proceedings | The Polish language and Warsaw are no longer a default language and seat of proceedings. In the absence of parties’ choice, the seat and language will be determined by the tribunal. | [no changes] |
| The applicable substantive law | In the absence of parties’ choice, the tribunal shall apply the substantive law which it deems to be applicable and not necessarily the law most closely connected to the legal relationship in dispute. | [no changes] |
| Expedited proceedings | [no changes] | The limit for the amount in dispute eligible for expedited proceedings has been increased from PLN 50,000 to PLN 200,000. |
| Early determination | Introduction of the early determination procedure. | [no changes] |
| Emergency arbitrator | Introduction of the emergency arbitrator institution, who may decide on the interim measure to secure a claim or preserve evidence. | [no changes] |
Polish Supreme Court’s Landmark Ruling on Unenforceability of the Arbitration Agreement in the Event of an Impecunious Party
On 19 January 2024, the Polish Supreme Court issued a landmark decision in case no. II CSKP 897/22, stating that an arbitration agreement may be unenforceable if a party is objectively unable to bear the costs of arbitration.
The ruling emerged from a case between parties bound by an investment and shareholders’ agreement, which contained an arbitration clause directing all disputes arising out of or in connection to this agreement to be resolved by three arbitrators appointed under the auspices of SAKIG. The claimant argued that the lack of financial means on its part to conduct proceedings before the arbitral tribunal may be qualified as an ‘other reason’ causing the hearing of the case to be impossible under Article 1168 § 2 of the Polish Code of Civil Procedure. This provision provides that if such a reason occurs, the arbitration agreement loses its effect (ceases to be in force).
Both the District Court and the Court of Appeal dismissed the case on formal grounds, as the dispute remained within the exclusive jurisdiction of the arbitral tribunal. They rejected the claimant’s argument on the impossibility of performance and emphasized the significance of party autonomy.
The Supreme Court, however, quashed the decision of the Court of Appeal. It stated that party autonomy is not unlimited, and the parties never fully waive their right to court protection. Consequently, the waiver of the right to have the case heard in a common court is dependent on the accessibility of the alternative forum (arbitration) and the ability to effectively present the case in this forum. In light of this, the Supreme Court concluded that the objective inability of the claimant to bear the costs necessary to initiate and conduct proceedings before the arbitral tribunal may render the arbitration agreement unenforceable (even if the unenforceability is temporary) within the meaning of Article 1165 § 2 of the Polish Code of Civil Procedure. However, the Supreme Court did not agree that such a circumstance could deprive the arbitration agreement of its legal force.
The decision garnered widespread attention and was extensively discussed both within the legal community and in mainstream media throughout Poland.
Developments in Investment Arbitration
The year 2024 has seen a range of developments in investment arbitration involving Poland, marked by significant awards and the initiation of new proceedings against the State. Here are some noteworthy events from the year.
Belgian Supreme Court Reinstates Treaty Award Against Poland
Belgium’s Court of Cassation has restored an investment treaty Award in Manchester Securities v. Poland, ordering Poland to pay USD 10 million to Manchester Securities, a US hedge fund, due to denial of justice. The Judgment of the Belgian Court of Cassation C.22.0348.F/1 on 12 April 2024 overturned a prior ruling by a lower court that had annulled the award on public policy grounds. The dispute originated from loans Manchester provided for a real estate project in Krakow, which faced legal obstacles regarding mortgage validity. After being set aside by the Brussels Court of First Instance in 2020, the award has now been remanded for further review by a different court.
Arbitration Tribunal Awards Compensation to GreenX Metals Over Coal Project
GreenX Metals (formerly Prairie Mining) has secured compensation of GBP 252 million from Poland through a series of investment treaty claims linked to impediments facing its coal projects. In GreenX Metals v. Poland (II) it has been awarded that amount in damages and pre-award interest in an arbitration under the Australia-Poland Bilateral Investment Treaty (“BIT”) (1991). It also won in GreenX Metals v. Poland (I), a parallel arbitration against Poland under the Energy Charter Treaty (1994) (“ECT”). The claims concerned the Jan Karski coal project. However, the tribunal dismissed claims relating to another mine. Both sides were instructed to cover their own legal costs, and specific set-off provisions were included to avoid double recovery between the awards.
Poland has applied to set aside the award issued under the Australia-Poland BIT.
Mondi Pursues Arbitration Against Poland Over Renewable Energy Investments
Mondi, a UK-based packaging firm, has initiated an ECT arbitration against Poland concerning a renewable energy venture. The proceedings were formally registered by the International Centre for Settlement of Investment Disputes (“ICSID”) and revolve around Mondi’s various investments in the country, particularly in paper and packaging infrastructure. The specifics of the case remain largely undisclosed.
Warburg Pincus Initiates Arbitration Over Polish Pharmacy Legislation
A US private equity entity has advanced an ICSID claim challenging restrictions imposed by Poland on pharmacy franchise expansion. This legal action, led by Warburg Pincus and its subsidiaries, stems from amendments to Polish legislation that sought to curb pharmacy chains, limiting them to four outlets. The value of this dispute remains undetermined, though Polish reports speculate figures stretching from USD 9 billion to USD 25 billion.
Arbitration Events
Many international arbitration events took place in Warsaw in 2024, which demonstrates strong interest of the arbitration community from the CEE region. Below are selected highlights:
- FEBRUARY 13-14 – 15th Warsaw Premoot and the conference “Navigating Arbitration in the Digital Age: Cyber-Resilience and Dispute Resolution” organized and hosted at the University of Warsaw with a particular focus on the basics of cybersecurity and ensuring confidentiality and integrity as the key factors for securing disputes.
- MAY 23-24 – The 7th edition of the biannual conference Dispute Resolution in M&A Transactions, the biggest M&A conference in the region, is organized by the International Chamber of Commerce (ICC). Poland and GESSEL law firm gathered experts and enthusiasts of mergers and acquisitions. The conference included a keynote from Yves Derains on paradigm of arbitration and the address from Secretary General, Permanent Court of Arbitration (“PCA”), Marcin Czepelak titled “125 years of Peace through Justice”, and the panels addressed questions such as independence and impartiality of party-appointed experts in M&A disputes, Insuring Known Legal Risks in M&A Transactions, M&A Arbitration in Wartime.
- JUNE 13-14 – The 10th Lewiatan Arbitration Moot Competition – the final rounds of the first and biggest moot court competition in Poland for teams composed of trainee attorneys and trainee legal advisers, providing an opportunity to gain practical experience in dispute resolution.
- OCTOBER 19-22 – Vis Moot Fall Bootcamp organized together by the United States Agency for International Development (“USAID”), and the Commercial Law Development Program Office of the U.S. Department of Commerce and hosted at SWPS University welcomed students from 10 countries, including Ukraine, Moldova, Poland, and Lithuania for a third time.
- OCTOBER 24-25 – Another edition of Solidarity Arbitration and Mediation Days aimed at expressing the ongoing support of the Polish arbitration and mediation community towards our friends in Ukraine. As in the previous years, the conference provided a fund for the scholarships dedicated especially towards Ukrainian law students and young lawyers. The leitmotif of the 2024 edition was “Shaping Horizons: Current Challenges and Innovations in Infrastructure, Construction and Energy in Central and Eastern Europe”, with a keynote speech from Prof. Renato Nazzini.
- DECEMBER 6 – The ICC YAAF breakfast “Making Sense of Artificial Intelligence and Dispute Resolution at the Break of Dawn” followed by the extremely successful ICC Charity Christmas Dinner, which again proved the generosity of the Polish arbitration community, as the Dinner was organized with the input from the record 20 sponsors. The charity auction put the inherent competitiveness of the lawyers to good use as it allowed to raise over PLN 120,000 for the “po DRUGIE” Foundation, which provides comprehensive support to homeless youth and young adults. The Foundation runs a youth shelter, training apartments, and supports its beneficiaries in their daily activities, helping them access appropriate therapies and continue their education or employment. The goal of the Foundation is to assist young people in becoming independent so that none of its beneficiaries return to homelessness.
ABOUT THE AUTHORS
Olga Marcinkowska holds an LL.M. in International Dispute Resolution at Humboldt-Universität zu Berlin. Olga is also a Trainee Advocate with the Warsaw Bar Association and a member of the Poland VYAP Founding Committee.
Justyna Sikora is an Associate at White & Case International Arbitration and Dispute Resolution practice, as well as a trainee advocate with the Warsaw Bar. She is a member of the Poland VYAP and a seasoned mooter currently serving as a coach of the University of Warsaw’s Willem C. Vis International Commercial Arbitration Moot team.
Agata Zwolankiewicz is a qualified Lawyer, an Associate in the Litigation, Arbitration and Investigations department at Linklaters Warsaw, and a PhD Candidate at KU Leuven. She holds an LL.M. with concentration in international investment and trade law from the University of Ottawa. Agata is a member of the Poland VYAP Founding Committee.
Discover more insights into the latest developments in arbitration in 2024 from around the world now
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
