August 19th, 2019

ARBITRADE has successfully represented the client’s interests in arbitration in Poland

ARBITRADE team has successfully represented the client’s interests in two arbitration cases, considered under the Rules of the Arbitration Court at the Polish Chamber of Commerce in Warsaw.

Disputes considered in the arbitration proceedings arose out of interrelated international sale and purchase agreements where ARBITRADE’s client was the buyer and the seller was a Polish company. As a result of the seller’s violation of its obligations to deliver the goods in the proper quantity and within the deadlines set by the agreements, the client instructed ARBITRADE’s team to initiate an arbitration claim. The dispute was considered under the substantive law of Poland.

The claims were not standard for international arbitration, since ARBITRADE’s client requested to oblige the respondent to supply individually identified goods, which were in the possession of the respondent and for which the claimant had made an advance payment. At the same time, since the respondent had at its disposal only a limited number of goods, the value of which was much lower than the advance payment made, the claimant made an additional claim for the termination of the contract with regard to the remainder of the goods and the repayment of the surplus of advance payment. The claimant also made a claim for contractual penalties. Despite the complex and unconventional nature of the claims, they were granted by the arbitral tribunal.

From the outset of the arbitral proceedings the consideration of the cases was encumbered by the improper appointment of the sole arbitrator by the Arbitration Court. While the Rules of the Arbitration Court at the Polish Chamber of Commerce in Warsaw stipulate that a sole arbitrator shall not have a nationality of either party to the dispute, the Arbitration Court appointed a citizen of Poland as the sole arbitrator in both cases, despite the polish seat of the respondent’s company. As a result of objections by ARBITRADE lawyers, the arbitrator resigned, and a citizen of the United States of America was appointed as a sole arbitrator in both cases.

In the process of consideration of the cases in arbitration, ARBITRADE’s client learnt from confidential sources of the respondent’s intention to resell the goods that were the subject matter of the agreements to a third party; consequently, the need arose to urgently obtain interim measures to secure the claims. ARBITRADE lawyers, having engaged Polish colleagues into their team for representation in Polish courts, applied to the Polish national court with a request to grant interim measures to secure the claims in the above-mentioned arbitration cases by prohibiting the respondent to transfer the goods to third parties. Due to the efficient work of the legal team, the requests to grant injunctions to secure the claim in both arbitration cases were granted.

During the merits phase the respondent invoked allegedly fictitious character of one of the additional agreements to the contracts, as well as force-majeure circumstances, which in the opinion on the respondent made the supply of goods impossible. In April 2019 a joint oral hearing in both cases was held, during which the witnesses for the claimant and the respondent were cross-examined. In July 2019 the award in both cases was rendered in favor of the claimant.

The ARBITRADE legal team has experience of successfully representing clients in commercial arbitration proceedings under the rules of various arbitration institutions, including those of VIAC, LCIA, SCC, ICC, GAFTA, FOSFA, ICAC at the UCCI etc. Now the Court of Arbitration at the Polish Chamber of Commerce in Warsaw, where ARBITRADE’s lawyers achieved a successful outcome despite the complexity of the factual circumstances and procedural aspects of the cases, can also be added to this list

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