Judicial review of an arbitral award cannot become a disguised appeal. Under Polish law, the public policy clause allows a court to set aside an arbitral award only when its effects are fundamentally incompatible with the core principles of the Polish legal system. An error in interpreting the law or a contract is not sufficient on its own.
The limits of this review are examined by KKG Legal attorneys Maciej Durbas, Partner and Leader of the Arbitration Practice; Marta Lewko-Walczak, Senior Associate; and Stanisław Lalik, Associate. Their article, “When National Courts Protect Arbitration: Practical Lessons from Poland,” was originally published in BAC Insights.
The public policy clause is a safeguard, not an appeals mechanism
Under Article 1206(2)(2) of the Polish Code of Civil Procedure, an arbitral award may be set aside if it is contrary to the fundamental principles of the Polish legal order. This provision does not, however, authorize a national court to reassess the facts, reevaluate the evidence, or determine whether the arbitral tribunal correctly interpreted the applicable law.
Judicial review serves a much narrower purpose. It protects the legal system against awards whose effects cannot be reconciled with its fundamental values. It does not give the losing party another opportunity to litigate the merits of the dispute.
The award's effects, rather than every legal error, determine whether it may be set aside
The fundamental principles of the legal order are not defined in a closed list. They include constitutional norms of particular importance, as well as basic principles governing specific areas of substantive and procedural law.
Not every violation of a mandatory rule justifies setting aside an arbitral award. Courts should focus primarily on the award’s ultimate effects and determine whether they are manifestly incompatible with the foundations of the Polish legal system. An identifiable legal error alone does not meet this standard.
The Supreme Court confirmed the limits of judicial review of contract interpretation
In the case discussed by the authors, the arbitral tribunal interpreted a contractual provision under Article 65 of the Polish Civil Code. The losing party argued that the tribunal’s interpretation did not reflect the parties’ actual intent and sought to have the award set aside.
The court of appeals set aside the award based on its assessment of the tribunal’s interpretation of the parties’ declarations of intent. The Polish Supreme Court rejected this approach. It concluded that the court of appeals had conducted an impermissible review of the merits because it had not established that the award violated the fundamental principles of the Polish legal order.
The Supreme Court also explained that a violation of Article 65 of the Polish Civil Code could justify setting aside an arbitral award only where the erroneous interpretation led to an outcome that was incompatible with those fundamental principles. The Supreme Court therefore set aside the court of appeals’ judgment and remitted the case to that court for reconsideration.
Poland as an arbitration-friendly jurisdiction
The judgment reflects the broader approach of Polish courts to post-award proceedings. Studies cited in the article show that in 2020, successful parties defended 194 out of 213 arbitral awards before Polish courts, meaning that more than 91% survived judicial review. Research covering 2021–2022 similarly found that, in approximately 90% of post-award decisions, Polish courts either enforced the awards or refused to set them aside.
For parties choosing arbitration, this means that a national court generally will not replace an arbitral tribunal’s interpretation of a contract, assessment of evidence, or legal reasoning with its own. At the same time, courts retain the power to intervene in exceptional cases where an award genuinely threatens the fundamental values of the legal system.
Read the full article by Maciej Durbas, Marta Lewko-Walczak, and Stanisław Lalik in BAC Insights here.