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II ALLERHAND LITIGATION & ADR SUMMIT 2014

Warsaw, 20th May 2014

ALLERHAND INSTITUTE

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The Congress was inaugurated with an intro-ductory lecture delivered by Mariusz Haładaj, Deputy Minister of Economy, who outlined the activities undertaken by the Ministry of Economy with respect to the promotion of al-ternative methods of dispute resolution. The Minister observed that the current increase of the number of economic disputes considered by the courts of general jurisdiction is linked with the increasing economic activity of the Polish society. Dispute resolution by the pub-lic courts generates substantial costs for the economy not only on an economic level which is closely linked with the subject matter of the dispute but also non-economic damage such as loss of confidence, renown or markets by

the arguing contractors. In the opinion of the Minister, these costs show the importance of conciliatory ways of dispute resolution for the economy as well as entrepreneurs.

The Minister reminded of the Minister of Economy’s appointment of the Team for Sys-temic Resolutions dealing with amicable methods of economic dispute resolution en-hancing the conducting of business activity (Mediation and Arbitration Team); one of the Team’s tasks is to carry out an analysis of the current and recommended both legal and non-legal solutions which could contribute to the propagation of new methods of dispute resolution. In their mediation-related work,

II ALLERHAND LITIGATION & ADR SUMMIT 2014wARSAW, 20 MAY 2014

The Congress was inaugu-rated with an introductory

lecture delivered by Mariusz Haładaj

Introductory Lecture – Activities of the Ministry of Economy Aimed at Improving the Dis-pute Resolution Conditions for Entrepreneurs

Minister Mariusz Haładyj, Undersecretary of State, Ministry of Economy

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the Team goes beyond the mere amending and updating of the Civil Procedure Code (CPC) and deals with the issues which can be clas-sified into 4 areas, i.e. procedural, tax, organ-isational and systemic areas with the out-of-court mediation believed to be the key point in the opinion of the Ministry.

An inspiration for amending the arbitration regulations are comments concerning the currently applied solutions as well as the fact that arbitration is a dynamically growing in-stitution, which is confirmed by amendments to the arbitration legislation taking place in other countries. Domestic legislators aspire to modify individual legal frameworks and create optimum regulatory and development solutions adequate for the conditions of indi-vidual countries. However, in contrast to me-diation, the Team does not deal with the arbi-

tration issue in a complex manner; it focuses solely on the most urgent issues such as the effective nature of the arbitration clause by a bankrupt entity, limiting the post-arbitration procedure as a non-substantive procedure to a single instance and reinforcing the guarantee of independence and impartiality of the arbi-trators through, for example, the introduction of a duty to submit declarations of will of a specified content (“statement of impartiality and independence”.

In the summary of the lecture, the Minister once again emphasised the importance of the non-legislative measures by stating that the introduction of specific regulations is in-sufficient for the development of alternative dispute resolution methods and should be ac-companied by arbitration and mediation pro-motion in legal and business circles.

Keynote lecture – A Few Comments on the Need for Changes and Setting Directions in the Interpretation of the Arbitration Regulations

Professor Michał Romanowski, Ph.D., Civil Law Codification Commission

BLOCK I

The lecture of Professor Michał Roma-nowski, Ph.D., which initiated the first block of the Congress debate was based on a thesis that the attitude towards arbitra-tion is a measure of the size of the social capital: the more restrictive the arbitration regulation, the lower the social capital in a particular state. The Professor believes that arbitration leads to the decentralisation of the function of the state with respect to its judicial function; nowadays, the public do not have confidence in arbitrators who have the power to take decisions under the limited control of the state. The difference in the level of society’s confidence in ar-bitrators and general courts is based on

an erroneous assumption that arbitration courts, in contrast to state courts, do not rule on the basis of legal regulations but follow the principles of equity in their quite frequent passing of decisions in breach of the prevailing legal regulations. At the same time, society acknowledges that the possibility of choosing the arbi-trators with a view to their specific skills and competence offers an opportunity of a better judgment on a case. This particular dilemma appears to be of an apparent na-ture especially in light of the fact that the current regulation according to which the parties may resolve a dispute based on the principle of equity still leads to decisions

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consistent with the prevailing legal norms which, by their very nature, are suffused with equitable elements. Professor Romanowski believes that in a situation in which the parties are both “leg-islators” and users of the contractual legal relationship binding upon them, there are no grounds for the denial of the right to resolve disputes related to such a relation-ship, the natural consequence of which is the possibility of an alternative manner of their resolution, i.e. arbitration. The latter one should be therefore treated as a private law institution legitimised by the public law which offers procedural guarantees. Professor Romanowski believes that the approval of the thesis implies arbitration liberation, thus bringing the public role down to a subsidiary function. At the same time, regulations with respect to ar-bitration should not be complimentary to the proper application of Civil Procedure regulations. The civil procedure regula-

tions are solely of a subsidiary nature with respect to the general competence of the parties. Professor Michał Romanowski, Ph.D.: “We should give a chance to the parties of the dispute to search for proper ways of its resolution.”Professor Romanowski devoted the final part of his speech to the discussion of changes which should be introduced in order for the freedom of parties in dispute management to become a decisive factor. He also proposed to abrogate the restric-tion of the arbitrability of property right cases, at least with respect to economic disputes and availability of the arbitration procedure in corporate disputes related to shareholder meetings resolution chal-lenges. Professor Romanowski believes that none of the features of the state courts are linked to the specific nature of the enterprise and therefore do not lay any grounds for distinguishing between dis-

Michał Romanowski: “The approach to arbitration is a measure of the

strength of the social capital”.

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pute resolution through a court procedure and arbitration. Additionally, the control over the arbitration court rulings should be improved by adopting a single-instance system or its centralisation in a specialised

court. At the same time, Professor Ro-manowski summoned the participants to interpret the arbitration regulations in the spirit of arbitration and not by the relevant application of the Civil Procedure Code.

The first session was devoted to the issues linked with effective economic dispute res-olution. The invited experts shared their opinions in the discussion of the desired changes and the future of the court and alternative dispute resolution methods. Their presentations were commented by the remaining panellists and participants.

The first panellist to speak was Beata Ges-sel-Kalinowska vel Kalisz, Ph.D., legal advisor, who pointed out that domestic arbitration could become more power-ful only if consciously chosen by the en-trepreneurs as an alternative and, at the same time, a standard manner of dispute resolution. Dr. Gessel believes that the arbitration model is a consequence of as-sumptions adopted in the Polish legislative system. Firstly, arbitration can be qualified as a repeal of the right to commence legal action before the court or be grounded in a commercial contract, hence to be sole-ly based on the state’s confidence in the

autonomous decision of the Parties. Sec-ondly, the arbitration model depends on the attitude of the Polish economic class (including not only entrepreneurs but also their proxies) towards the assumption of responsibility and liability for the dispute within the arbitration framework. Thirdly, the important thing is whether arbitration is perceived as a complementary institu-tion or as a counterpoint for the judicial powers of the courts. In the opinion of the lecturer, although the practice seeks the basis of arbitration in the agreement be-tween the arguing parties, legislation ap-pears to be following in quite the opposite direction. An interesting issue raised during the dis-cussion was the question of a two-instance procedure which, in essence, is contrary to arbitration nature. Considering the fact that the parties are the dispute holders pursing a security guarantee in the appeal procedure, Dr. Gessel admitted a possi-bility of the second instance being set up

Does the System of Dispute Resolution Meet the Expectations of Business Circles? An Interdisciplinary Debate on the Success and Wasted Chances of the Preceding Year

Iwo Gabrysiak, attorney-at-law (partner, Wierzbowski Eversheds), Beata Gessel-Kalinowska vel Kalisz, Ph.D., legal advisor (President of the Arbitration Court, the Lewiatan Confederation), Zbigniew Miczek, District Court Judge (District Court in Tarnów), Małgorzata Surdek, attor-ney-at-law (partner, CMS), Kamil Zawicki, attrorney-at-law, Chair of the Dispute Resolution

Section of the Allerhand Institute (partner, KKG Kubas Kos Gaertner, moderator).

SESSION I

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upon a clear decision of the parties. In her opinion, the parties should also be free to decide the question of confidentiality of the proceedings which is a frequent cause of selection of arbitration by entrepre-neurs.

The next panellist, i.e. Zbigniew Miczek, District Court Judge, commented on the justifiability of the liquidation of separate proceedings in economic cases. Accord-ing to Judge Miczek, although economic proceedings were not complementary opposite civil proceedings, their liquida-tion rendered the application of certain attractive solutions impossible not only from the perspective of entrepreneurs but also the courts’ perspective. As the basic function of economic proceedings is to ensure efficient economic trading by elim-inating the dispute-related risk, the state should provide judges with a tool enabling its efficient and effective resolution. Judge Miczek expressed an opinion that the process would be greatly enhanced by ex-tending the scope of activities performed during closed-door hearings, a broader application of forms, or the exclusion of the possibility of an appeal in simplified proceedings. Additionally, Judge Miczek pointed out the need for institutional re-structuring such as the education of judges ruling in economic cases, change of the manner of supervision, or the introduc-tion of economic courts in appeal courts, which could lead to an improved quality of the rulings. The proposed changes should be introduced into the system with the participation of the law practitioners and corporate bodies.

The question of concealed expenses raised by Judge Mieczek in relation to economic disputes including, among other things, witness compensation, compensation of administrative staff and consultations lay the grounds for the discussion concerning the financial viability of specific methods of dispute resolution. As Iwo Gabrysiak observed, the concealed expenses do not favour any specific method as they occur independently of the procedure chosen by the parties. Dr. Beata Gessel pointed out, however, that these expenses grew as the period of the procedure extended, which speaks in favour of the arbitration procedure. The fact that participants in the dispute do not bear the actual costs related to the procedure because the judicial sys-tem is subsidised from the budget favours the court proceedings. Małgorzata Surdek believes that parties would be less inclined to follow the court path should they be required to bear the real costs of the pro-ceedings. Additionally, higher arbitration expenses may be set off against other fea-tures of the method such as arbitrator’s neutrality, which cannot be overestimated in international disputes. Furthermore, in response to the question concerning the mandatory referral of the dispute parties to mediation proceedings, Judge Miczek indicated that recommendations be put forth by the Ministerial team for Sys-temic Solutions with respect to arbitrary methods of economic dispute resolution, instead of obliging the parties to use alter-native methods could encourage them to make an attempt at an amicable dispute resolution through financial incentives such as charging the party failing to resolve the dispute through negotiations with the

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costs of the proceedings (notwithstanding the final award).

The third speaker during the panel was Iwo Gabrysiak, attorney-at-law, who dis-cussed the relationship between alterna-tive methods of dispute resolution and the state courts, particularly group (collective) actions, and encouraged the participants to view the dispute from the perspec-tive of a phenomenon which needs to be structured as it exists outside a specific procedure whether deriving from the reg-ulations of the Civil Procedure Code or ar-bitration regulations and which eventually has to be concluded with a resolution. The speaker believes that building a structure of the dispute is possible only if a verified method is used such as the game theory used in economics. Additionally, the use of alternative dispute resolution methods will enable the better management of the dispute at the pre-court stage and thus re-duce the motivation necessary to organise a complaint group and file a class action. The development of alternative dispute resolution methods may have a consider-able effect on the class action.

The participants in the discussion drew the Speakers’ attention to two adverse factors in economic proceedings, i.e. the quality of court experts and lack of pos-sibilities to collect evidence. As Małgor-zata Surdek observed, the current system does not envisage the verification of the experts, or offer fair compensation which would be attractive for competent experts in particular areas. In reference to organ-isational issues in the judicial proceeding, Judge Miczek pointed out that the current system of evaluation of the judges’ work

does not promote concentration of the proceeding and favours a situation where there are many cases on trial. For the same reasons as well as in view of lack of time for the preparation for the case, the possi-bility of holding an organisational meeting introduced under Article 207 sections 3 and 4 of the Civil Procedure Code, being a standard procedure in arbitration pro-ceedings, is rarely pursued by the judges. Judge Miczek explained: “Currently, as much as 75% of entrepreneurs whose activ-ity gave rise to a dispute have no or limited knowledge on alternative dispute resolution methods.”

The last Lecturer in the session was Małgorzata Surdek, attorney-at-law. The topic of her presentation was: “Can Alternative Methods of Economic Dis-pute Resolution Be an Efficient Recipe for Entrepreneurs to Cure Deficiencies of the Public Judicial System?” The speaker also commented on the issues previously raised by other speakers. In reference to the eval-uation of the liquidation of the economic procedure by Judge Miczek, Ms. Surdek observed that this was purposeful from the proxy point of view due to its excessive formalism and deadlines – inadequately short in complex economic cases. At the same time, Ms. Surdek warned against excessive expansion of the scope of court

Zbigniew Miczek: „Currently, as much as 75% of entrepreneurs

whose activity gave rise to a dis-pute have no or limited knowledge on alternative dispute resolution

methods”.

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Beata Gessel-Kalinowska vel Kalisz, Ph.D., legal advisor

activities undertaken during a closed door hearing. She also emphasised the impor-tance of entrepreneur education in alter-native dispute resolution methods – par-ticipants in economic trading will follow the procedure other than the court path only if they are aware of such a possibility. Currently, as much as ¾ of entrepreneurs whose activity gave rise to a dispute have no or limited awareness of availability of alternative methods of dispute resolution. The educational aspect was also present in the agonistic statement of the Judge Zbig-niew Miczek, who emphasised the fact that one of the recommendations of the Team for Systemic Solutions with respect to am-icable methods of the economic dispute resolution will concern the introduction of mediation and arbitration in university programmes educating future managers and engineers. Małgorzata Surdek be-lieves that the key effort should be aimed at changing the mentality of participants in economic life, not the modification of process regulations.

Iwo Gabrysiak, attorney-at-law

Zbigniew Miczek, District Court Judge

Małgorzata Surdek, attorney-at-lawKamil Zawicki, attrorney-at-law

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The second Block began with the presenta-tion of the keynote speaker from the Unit-ed States, i.e. Michelle Glassman Bock, counsel, from the international renowned WilmerHale law firm. The topic of her presentation which was held in the form of an interview was witness preparation in court proceedings in the Aglo-American tradition and international arbitration practice. The session was held in English and the questions were asked by Dr. Łu-kasz Gorywoda, counsel at the Permanent Court of Arbitration in the Hague.

At the outset, Ms. Glassman Bock gave a brief presentation on witness preparation in arbitration. It was emphasised that wit-ness preparation is a topic vividly debated, in particular in the context of the law-yer-witness contact prior to the testimony or in connection with the witness’ written statements. The practice in this area differs in common and civil law. Civil law lawyers are familiar with the procedure where there is minimum or no contact between the lawyer and the witness before the tes-timony. On the other hand, in American proceedings, a lawyer will typically meet with the witness before they testify, wheth-er in writing or orally, and they will dis-cuss the procedure as well as the substance of the testimony. Moreover, the Speaker drew attention to

the fact that as there is no universal gov-erning code of conduct for international arbitration, it leads a lot of practitioners to question what rules shall apply or what is fair or unfair. In this respect, the use of guidelines might be very helpful. In the attempt to harmonise the practice of inter-national arbitration, especially against the common vs civil law systemic differences, in May 2013 the International Bar Associ-ation introduced its guidelines on parties’ representation in international arbitration, including the line of questioning.Followed by a brief introduction the real interview started.

Do you think that witness prepara-tion can be a useful tool for uncov-

ering the materials and the truth, more generally what are the advantages and disadvantages of this procedure?

“Arbitration is a real hybrid between common and civil law”.

“The truth is the priority in the com-mon law system”.

Keynote lecture: Corporate Disputes in Arbitration and Mediations, a Legal and Compara-tive Analysis. Preparation of Witnesses for Testifying in International Arbitration

BLOCK II

Michelle Glassman Bock

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As an advantage the speaker pointed out the fact that witness testimony can be use-ful to uncover the truth. Despite the fact that documents are the best form of evi-dence, witnesses are needed to offer evi-dence about the missing pieces. Moreover, a witness sometimes does not understand how important his or her testimony can be. That is why talking with the witness and figuring out what is the most relevant part of his or her testimony is rather cru-cial in finding out what actually happened. On the other hand, there are, of course, some disadvantages of witness prepara-tion. When the facts are adverse or the claim is not good, the lawyer’s job will be to tell the witness to do the least damage possible to the case. Sometimes it seems that lawyers have instructed the witness-es, prepared them as robots, which brings about the risk that the witness will smartly avoid the questions.

When lawyers come from different jurisdictions the problem is what

ethical rules apply? We can have several possibilities; the seat of arbitration, the seat of the hearing, or maybe the juris-diction of the counsel. What is your view on that? The speaker emphasized that there is no good/one answer to this question. The rules that apply are far from clear. There are no rules of conduct set out in any of

the major institutions which govern pro-ceedings, and there are no rules of conduct contained in national arbitration laws. Most national home jurisdictions’ ethi-cal rules are silent about witness contact. However, in the speaker’s opinion which rules apply is less important than what one does/ how one acts.

Assuming the jurisdiction where witness testimony is not allowed or

the rules are silent in this regard and it comes out that the lawyers did engage in witness preparation: do you think that such a situation, if uncovered, can pose a risk for the stability of an award?According to the speaker it should not, however, this probably depends on where you try to enforce the award. The speak-er admitted that she has never heard about a case in which the arbitral award was successfully challenged or denied enforcement on the grounds of witness preparation. Additionally, Ms. Glassman – Bock presented the English arbitration as an example, which allows the award to be challenged when it is of serious irregu-larity, such as false testimony under oath. Furthermore, the issue of the recognition and enforcement of an arbitral award is governed by the New York Convention. There are reasons listed as to why an award may not be enforced. The one that will be applicable here is when an award would be contrary to the public policy. However, courts have held this policy exception to be interpreted very narrowly, in most de-veloped nations that are signatories to the Convention is definitely pro enforcement kind of regime.

The interview concluded with questions from the audience, i.e. one from which we could learn that paying the witness for their time is a common practice. Subsequently, when witness testimony is contrary to the

Dr. Łukasz Gorywoda

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evidence submitted by the parties in documents, the tribunal must assess the weight of relative importance of the evidence. Last but not least, that testimony supported by notes and preparation materials would not be credible.A summary of the aforesaid presentation may be a comment by Paweł Pietkiewicz, Attorney – at law who stated that the “question of witness preparation shows how close arbitration is to the court procedure while breaking away with the traditional arbitra-tion reality”.

Arbitration and Mediation Suitability of Corporate Disputes – Are We on the Verge of a Breakthrough?

Rafał Kos, attorney-at-law (partner, KKG Kubas Kos Gaertner, moderator), Paweł Lewandows-ki, legal advisor (DZP), Paweł Pietkiewicz, attorney-at- law (White & Case), Professor Andrzej

Szumański, Ph.D. (Jagiellonian University).

SESSION II

The 2nd Session was devoted to topics closely linked to the leitmotif of this year’s Congress, i.e. the question of corporate disputes. It was initially emphasised that the arbitrability of corporate disputes is a controversial topic, which gave rise to the most fervent discussion in arbitration cir-cles apart from post-arbitration proceed-ings. There is no doubt that corporate disputes could gain a lot if they could be heard be-fore an arbitration court.The speakers strongly emphasised that the largest issue in this respect is the question of arbitrability which is regulated under Article 1157 of the Civil Procedure Code. This problem becomes particularly prom-inent in disputes concerning cancelling or revoking the resolutions of limited liability / joint stock companies. Such disputes are most frequent in commercial law compa-nies.

In the opinion of Professor Andrzej Szu-mański, a criterion for determining dis-pute arbitrability under Article 1157 of the Civil Procedure Code is not adequate in any way to corporate disputes.The speak-

er believes that it is caused by an original error idem per idem, i.e. determination of the arbitrability by referring to a vague cri-terion of the dispute resolvability as well as a defective structure of Article 1157 of the Civil Procedure Code. The Professor presented a pragmatic resolution of the problem de lege lata and presented a view that Article 1163 of the Civil Procedure Code provides lex specialis vis a vis Arti-cle 1157 of the Civil Procedure Code thus expressing a position contrary to the one presented by the Supreme Court in the resolution of 7 May 2009 which excluded the possibility of the aforesaid interpreta-tion. Additionally, Professor Szumański postulated a change of the discourse of the

Professor Andrzej Szumański, Ph.D

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dispute resolution arbitrability by stating that it is a matter which requires the leg-islator’s intervention. The speaker believes that the legislator is discouraged by the systemic obstacles related to the necessity to reconcile two apparently contradictory natures (i.e. the corporate relationship and the arbitration ), which gives rise to the following issues: • he question of the subject of the reso-

lution dispute,• The question of the extended effective-

ness of the arbitral court ruling, • The question of arbitrator appoint-

ment by several plaintiffs,• The question of the of the company’s

executing disadvantageous settle-ments as a result of the appeal of the resolutions adopted by the general shareholder meetings of limited liabil-ity / joint stock companies.

The subject aspect was also emphasised by Paweł Pietkiewicz, attorney-at-law, in reference to Article 1163 of the Civil Procedure Code, which does not cover all the parties entitled under the Commercial Companies Code to question the validity of the resolutions, or to move for a decla-ration of their invalidity. The question of the extended effectiveness of the arbitral

award was given prominence by all the speakers. There was no doubt that the extended effectiveness of the award. The award should be effective upon all the part-ners and shareholders and should not be limited solely to the relationship between the appealing shareholders / partners and the Company. Mr. Pietkiewicz presented a proposal of resolution of the difficulties deriving from the extended effectiveness of the court decision following the idea put forth by Dr. Andrzej Wiśniewski, who systematised the problem by identifying four models which could be applied in this situation: a negative model, extend-ed control model, extended arbitration clause model, and the restrictive model. According to Paweł Pietkiewicz, the most appropriate model is the extended arbitra-tion clause model, which requires draft-ing the arbitration clauses enabling third party’s participation in the proceedings although they do not question the reso-lution. It would offer them a possibility of controlling the course of the proceedings and where the ruling is inappropriate/in-adequate from their perspective, it would also offer them a possibility of using the instruments in the form of a complaint aimed at the reversal of the sentence. As regards the arbitrator selection by several entities, the rule applied globally says that where there are multiple entities appear-ing on one side of the dispute, they jointly appoint the arbitrator. The disputable issue in the doctrine is whether the appoint-ment is to be governed by the principle of majority over minority, or the unanimity principle. Professor Szumański believes that structural solutions from the corpo-rate law should take precedence, i.e. the principle of supremacy of majority over

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Paweł Pietkiewicz, attorney-at-law

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minority. Mr. Pietkiewicz regarded the argument of the so-called conspiracy of the management board with partners, i.e. the question of the company entering into disadvantageous contracts as a result of appeal of the resolutions adopted by the general meetings of shareholders of the limited liability / joint stock companies as inadequate because this matter falls within the realm of the penal law, not the private law.

In the subsequent part of the session, the panel moderator, i.e. Rafał Kos, attorney -at- law performed a retrospective analysis of the German and Austrian regulations. In his opinion, the lesson from the expe-rience of our western neighbour shows that giving the Supreme Court a chance to present their view is a worthwhile exercise. The aforementioned rulings of the Polish Supreme Court of 2010 which predeter-mined the arbitrable nature of the disputes concerning the declaration of the absolute invalidity of a legal action do not provide a direct answer to the question whether or not the corporate disputes are of an ar-bitrable nature. In its ruling of 2009, the German BGH found a solution in the rel-evant wording of the arbitration clause so

it guarantees the partners/ shareholders of individual commercial law companies that whenever the arbitral proceedings satisfy the same guarantees as the proceedings before the general court, the ex post arbi-tral award is acknowledged (effective) and introduced into the existing legal order. Rafał Kos: “In the doctrine it is possible to state that all the parties have spoken and additionally that everything has been said. The only speaker remaining silent is the Su-preme Court.”

A summary of the panel and consideration of the de lege ferenda postulates which could provide a resolution to the currently outlined issues related to the arbitrabil-ity of corporate disputes was provided by Paweł Lewandowski, legal advisor. In his opinion, there is a general consent as to the areas where the arbitrability of

Rafał Kos: „In the doctrine it is possible to state that all the par-ties have spoken and additionally that everything has been said. The only speaker remaining silent is the

Supreme Court”.

Rafał Kos, attorney-at-law

Paweł Lewandowski, legal advisor

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corporate disputes and related obstacles could be sought. The de lege ferenda issues which arise from the above considerations include among other things legislator’s in-tervention, setting the judgment and doc-trine trend, or acceptance of the existing situation. In the context of the legislator’s interven-tion, Mr. Lewandowski did not consent to the change proposal presented by Dr. Maciej Tomaszewski with respect to the introduction of the relevant regulations which would guarantee the partners’/ shareholders’ participation in the proceed-ings. The speaker believes that it is still to be considered whether or not to pursue

the German path in parallel to a reform of legal regulations where the arbitration fo-rum was open by the ruling of the Federal Tribunal of Justice. Mr Lewandowski also pointed out that instead of introducing the relevant procedures, which are only intended to make the arbitral procedure similar to the proceedings before public courts, and establishment of a specific procedure, introduction of regulations guaranteeing third party’s participation in the procedure could be a good solution. The speaker concluded his speech with the statement that there are no axiological grounds for the exclusion of specific cor-porate disputes from the arbitral path.

Corporate Disputes Before State Courts in Light of the Latest Court Rulings – Is this Ship Going to a Safe Harbour?

Marcin Asłanowicz, Ph.D., legal advisor (Baker & McKenzie), Benedykt Fiutowski, legal advisor (Budzowska, Fiutowski i Partnerzy Law Office, moderator), Zbigniew Kruczkowski, legal advisor (Linklaters), Tomasz Szczurowski, Ph.D. District Court Judge (District Court for the Capital City

of Warsaw), Alicja Zielińska, attorney - at - law (Linklaters).

SESSION III

The panel in which the key point was the breakthrough Resolution of the Supreme Court of 18 September 2013 composed of 7 Judges began with the lecture by Dr. Marcin Asłanowicz, legal advisor, who ventured to provide an answer to the question whether the aforementioned sentence is correct and discuss its practical consequences. The resolution also refers to the civil and legal nature of the sanctions and emphasises that the court’s ruling stating the invalidity of a limited liability company partners’ resolution or of a reso-lution adopted by the general shareholder meeting having been adopted in breach of the Act is of a constitutive nature.

Marcin Asłanowicz: “The Supreme Court’s justification is on the highest quality level, the judgment was carefully considered and only the conclusion appears to be controver-sial”. A consequence of a constitutive nature of the sentence is first and foremost that

Marcin Asłanowicz: „The Supreme Court’s justification is on the highest quality level, the judgment was care-fully considered and only the conclu-

sion appears to be controversial”.

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fact that until the sentence is issued by the court, the resolution in question is legally valid. Secondly, a question arises how to protect third parties who execute contracts with the company which uses an invalidly adopted resolution. Thirdly, the sentence of the court due to ex tunc invalidates the resolution as of the date of its being adopted. In light of the above, Dr. Asłanowicz points out however that adopting an alternative solution, i.e. the ex nunc consequence would be an even worse a scenario. Following up on a discussion of risks re-lated to the concept of the contestability of the resolution, the speaker drew attention to the fact that the solution adopted by the Supreme Court does not ensure the security and stability of the legal trading or contractors’ confidence. A situation of legal uncertainty occurs. If the court

constitutively declares a particular reso-lution to be invalid, then the question of the reversal of the measures related to the resolution comes forward. Looking at the issue from a business per-spective, Mr. Asłanowicz mentioned an interesting issue of “business risks” de-rived from the resolution of the Supreme Court, i.e. arguments against adopting a contrary concept. They will include the question of the invalidity of the resolution, indefinite and unlimited as to the entitle-ment of entities, legal trading security and the lack of flexibility in the application of court judgements. In the context of the presented issue, the expert stated that the only way of mitigating the risks is to de-mand the so-called reps (representations and sureties). Dr. Asłanowicz concluded his presentation with the discussion of the de lege ferenda postulates. He believes that the interven-tion of the legislator would be necessary in the following issues: 1. The relationship between Article 252

and Article 425 of the Commercial Companies Code with Article 58 of the Civil Code in connection with Ar-ticle 2 of the Commercial Companies Code (petition to declare invalidity – invalidity under the legal regulations).

2. The question of the justifiability of

Marcin Asłanowicz, Ph.D., legal advisor

Zbigniew Kruczkowski, legal advisor Alicja Zielińska, attorney-at-law

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upholding of two separate types of petitions in the current version of the Commercial Companies Code in the event of the occurrence of the premise of being in contradiction with the Act.

3. In the context of the concept of the in-validity of the law under the prevailing law, the issues related to the determi-nation of the deadline for raising the issue of resolution invalidity.

4. The question of a list of entities and persons authorised to file a relevant petition.

The Moderator of the session, Mr. Fiutows-ki, shared the doubts of Dr. Asłanowicz and added that a positive value derived from the Supreme Court resolution, the concept of which is based on the achievement of certainty and stability of the trading within a short period of time. The resolution may be deemed invalid only after the court’s issue of a sentence and for the sentence to be passed, a relevant procedure has to be initiated within a strictly defined deadline.

In the consecutive parts of the panel, at-torney-at-law Alicja Zielińska and legal advisor Zbigniew Kruczkowski present-ed the topic of an Appeal of the Resolutions of Limited Liability / Joint Stock Companies Adopted by Third Parties. The starting

point for the analysis were lists of entities authorised to appeal the resolutions under Article 250 and Article 422 section 2 of the Commercial Companies Code, and a subsequent identification of the entities excluded from the statutory regulations such as for example: the creditor, pledgee, former shareholder (partner), or former members of authorities of Limited liability / Joint Stock Companies. The catalogue of the additional entities analysed by the speakers is a varied and inhomogeneous list of third parties and, what is more, they include entities, the entitlements of which to appeal resolutions may give rise to seri-ous controversies.The first issue discussed was an enforcing creditor – in connection with a share or stock. To justify this active mandate to ap-peal the resolutions of the business entity, a number of rulings of the Supreme Court of 2009 and 2013 were quoted. Subsequent-ly, subject to analysis was the status of a former partner (shareholder) of a limited liability / joint stock company. The first breakthrough ruling in this respect was passed in February 2006. The Supreme Court stressed that former shareholders preserve a mandate to appeal resolutions of the general shareholder meeting in so far as they pertain to their corporate or property rights and the mandate becomes void with regard to resolutions which do not concern their rights. In the same rul-ing, the Supreme Court stated that the actual situation as at the date of closure of the issue is decisive for the evaluation of the petitioner’s mandate to declare the in-validity of the resolution is the status quo as at the closure of the case, not at the time of adoption of the appealed resolution or the commencement of the appeal proce-dure. At this point a number of doubts as

Benedykt Fiutowski, legal advisor

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to the justifiability of the Supreme Court’s position arose. The speakers also consid-ered the question of an active mandate of former members of authorities of limited liability / joint stock companies and the evolution of the views expressed in the rulings on this topic. From the point of view of a current approach of the judica-tory, the case seems to be decided – in the resolution of the Supreme Court adopted in the composition of 7 judges of 2007, it was indicated that former members of authorities of the limited liability / joint stock companies are not entitled to appeal resolutions. In summary, it was stated

that external to the nature of the dispute is the concept of appeal of the resolution by third parties; what is disputable, is the list of the entitled entities as well as the construction legal regime of appeal. As the de lege ferenda postulates were mentioned among other things, the justifiability of the legislator’s intervention in the legitimacy of the members of authorities of the capi-tal company to appeal the resolutions.

The last speaker in this session was To-masz Szczurowski, Ph.D., District Court Judge, who presented the role of the Reg-istry Court in controlling the resolutions adopted by the general meetings of share-holders of a limited liability / joint stock companies in light of the aforementioned resolution of the Supreme Court of 2013

Tomasz Szczurowski: „The Register Court encounters a significant prob-

lem and dualism of its role”.

Tomasz Szczurowski, Ph.D. District Court Judge

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in an attempt to provide an answer to the question concerning the register cognition and the positive consequences of the reso-lution. Judge Tomasz Szczurowski: “The Regis-try Court encounters a significant problem and dualism of its role.”The Speaker regarded the prevention of a variety of decisions and acceleration of the registration procedure as positive. He identified, however, many more downsides of the situation. The first argument which is the accelerated procedure works two-ways. Mr. Szczurowski stated that should the judge not be required to consider the procedure and correctness of the resolu-tion, then the procedure would be much faster and on the other hand there would be a doubt as to the role of the registry court. Another adverse consequence is the registry court’s silent approval of a resolu-tion adopted in breach of the law. The court has to register a resolution which is inval-id. Next, the resolution leads to different decisions of the registry court depending on the authority adopting the resolution. Furthermore, there is a difference in the

scope of cognition in relation to limited liability / joint stock companies and part-nerships. At the same time, the speaker ex-pressed the view that the Supreme Court did not specify exactly the possibility of a charge being made, i.e. Article 252 section 4 of the Commercial Companies Code.In the opinion of Judge Szczurowski, the Supreme Court’s resolution may bring a number of benefits, nonetheless it failed to face the existing problems. In this context, an intervention in the Act or with respect to the interpretation of the law would be necessary. The Speaker presenting his own view opted for a declaratory effect of the outcome of the ruling of the court declar-ing the invalidity of the resolution and, in consequence, for the opening of the com-petence of the registry court to the control of such resolutions.Thus this lecture concluded the Congress. Mr. Kamil Zawicki closed the meeting thanking all the honourable speakers, Partners and Patrons of the event and the Participants whose activity was invaluable much appreciated.

Mr. Zawicki: “We are once again pleased that the Congress provided a common ground for the discussion what path the Polish arbitration and mediation should follow. We en-courage you to follow the activities of the Dispute Resolution Section of the Allerhand Institute and already today we invite you to 3rd Litigation&ADR Summit 2015.

III Allerhand Litigation & ADR Summit 2015:

Official website:www.rozwiazywaniesporow.allerhand.pl

7th May 2015

Warsaw, Polonia Palace,

Aleje Jerozolimskie 45

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HONORARY PATRONS

PARTNERS

Report prepared by Anna Kaszowska, Urszula Furgał

Substantive supervisor of the Summit – Kamil Zawicki, attorney -at- law (Allerhand Institute, KKG Kubas Kos Gaertner)