The effectiveness of arbitration depends not only on arbitral tribunals, but also on the approach taken by national courts. In arbitration-friendly jurisdictions, courts protect both the legal order and the finality of arbitral awards by carefully respecting the limits of post-award review.
This article offers practical insights into selected aspects of Polish post-award jurisprudence and highlights lessons arising from recent case law, including pro-arbitration developments with the involvement of KKG Legal.
THE PUBLIC POLICY CLAUSE AS A SAFEGUARD OF THE ARBITRATION SYSTEM
Among the grounds for setting aside an arbitral award under Polish law, the public policy clause is both one of the most important and one of the most commonly relied upon in practice. Pursuant to Article 1206(2)(2) of the Polish Code of Civil Procedure, an arbitral award may be set aside where it is contrary to the fundamental principles of the Polish legal order.
At first glance, this provision may appear to grant state courts broad powers to review arbitral awards. In reality, however, Polish courts consistently emphasize that the public policy clause is not intended to serve as a gateway to a substantive re-examination of the dispute.
RATHER, IT OPERATES AS A SAFETY VALVE DESIGNED TO PROTECT THE INTEGRITY OF THE LEGAL SYSTEM WHILE PRESERVING THE AUTONOMY AND FINALITY OF ARBITRATION.
THE PURPOSE OF THE PUBLIC POLICY CLAUSE
The Polish Supreme Court has repeatedly stressed that review under the public policy clause cannot take the form of a full merits review comparable to appellate proceedings before state courts. A state court examining an application to set aside an award is not entitled to reassess the facts, reevaluate evidence, or determine whether the arbitral tribunal correctly interpreted the applicable law.
This restrained approach reflects the nature of arbitration itself. By choosing arbitration, parties accept that state courts will not conduct a full reconsideration of the dispute. Setting aside proceedings are therefore not intended to provide a second opportunity to litigate the merits of the case.
Judicial review serves a different and much narrower purpose. Polish courts consistently emphasize that intervention should be limited to exceptional cases involving serious abuses of arbitration or defects that affect the legal order itself. In this sense, the public policy clause protects the integrity of the legal system while preserving the autonomy and finality of arbitral awards.
WHAT CONSTITUTES A VIOLATION OF PUBLIC POLICY?
The term “fundamental principles of the legal order” is intentionally left undefined, giving courts flexibility to assess each case individually. Consequently, courts play a central role in determining the scope and limits of public policy review in arbitration matters.
The relevant question is not whether the arbitral tribunal correctly applied every rule of law. A legal error alone is insufficient. Rather,
THE KEY QUESTION IS WHETHER THE AWARD PRODUCES EFFECTS THAT ARE FUNDAMENTALLY INCOMPATIBLE WITH THE CORE VALUES OF THE POLISH LEGAL SYSTEM.
Polish jurisprudence recognizes that these “fundamental principles” encompass not only constitutional norms of particular significance, but also basic principles governing individual branches of substantive and procedural law. At the same time, the public policy clause is interpreted narrowly. Not every violation of a mandatory rule justifies setting aside an award. Judicial intervention is reserved for serious and qualified infringements that manifestly contradict the foundations of the legal order.
Importantly, courts focus on the award’s ultimate effect rather than on individual shortcomings in the tribunal’s reasoning. The task is not to construct a closed catalogue of public-policy principles and mechanically verify whether one of them has been infringed. Instead, courts assess whether the final outcome of the award is incompatible with the fundamental assumptions of the Polish legal system. Consequently, even an objectively identifiable legal error will not justify annulment unless setting aside the award is necessary to protect public policy.
PUBLIC POLICY CLAUSE IN ACTION
The practical importance of the public policy standard is best seen in cases where a state court is asked, under the guise of public policy review, to reassess the merits of a dispute already decided by an arbitral tribunal. For example, a losing party may seek to portray its disagreement with the tribunal’s interpretation of the contract not as an ordinary merits complaint, but as a violation of fundamental principles of law.
A recent Polish case before the Supreme Court illustrates this point. The arbitral tribunal had interpreted a contractual provision under Article 65 of the Polish Civil Code, which governs the interpretation of declarations of intent and contracts. The losing party argued that the tribunal’s interpretation was inconsistent with the parties’ actual intention and sought to set aside the award before a Polish court of appeal.
This type of argument creates a natural temptation for a state court. Since the dispute concerns the meaning of the parties’ contract, the court may be inclined to verify whether the arbitral tribunal interpreted the contract correctly. However, that is precisely where the boundary between public policy review and impermissible merits review must be drawn. As the Supreme Court later emphasized, review of the elements forming an arbitral award under the public policy clause “cannot assume the scope proper to a review of the merits” of that award.
WHY THE SUPREME COURT INTERVENED
The court of appeal nevertheless set aside the award. In substance, its reasoning focused on the premises and outcome of the arbitral tribunal’s interpretation of the parties’ declarations of intent, rather than on identifying a violation of the fundamental principles of the Polish legal order. The Supreme Court firmly rejected this approach. It held that the court of appeal had carried out an impermissible merits review of the arbitral award by questioning the tribunal’s interpretation under Article 65 of the Polish Civil Code instead of demonstrating why the award breached basic principles of public policy.
The Supreme Court’s reasoning is important because it confirms that an error in substantive law is not, by itself, enough to set aside an arbitral award. In the context of Article 65 of the Polish Civil Code, the Supreme Court made the point even more directly:
a breach of that provision could justify setting aside an arbitral award only if the incorrect interpretation resulted in an award that was impossible to accept from the perspective of fundamental principles of the legal order
The case illustrates a point that is crucial for post-award review.
THE PUBLIC POLICY CLAUSE IS A SAFEGUARD, NOT AN APPEAL MECHANISM.
It protects the legal order against awards that are truly incompatible with its most basic principles. It does not allow state courts to replace the arbitral tribunal’s contractual interpretation, assessment of evidence or legal reasoning with their own. The Supreme Court expressly tied this limitation to the autonomous position of arbitration as an alternative to state courts. Parties who agree to arbitrate must accept that review by a state court “does not and cannot constitute an equivalent of appellate review typical of state court proceedings.
THE BROADER POLISH PERSPECTIVE
The case should also be viewed against the broader backdrop of Polish post-award jurisprudence, which consistently demonstrates judicial restraint towards arbitral awards Empirical studies of Polish case law show that arbitral awards generally withstand judicial scrutiny.
In 2020, successful parties defended 194 out of 213 awards before Polish courts, which means that more than 91% of awards survived post-award review.
In the 2021–2022 study, the authors similarly concluded that, in approximately 90% of post-award decisions, Polish courts either enforced arbitral awards or refused to set them aside, thereby upholding their effectiveness.
Against that background, the court of appeal’s intervention was exceptional. It showed that even in an arbitration friendly jurisdiction, the public policy clause may occasionally be interpreted too broadly. The Supreme Court’s judgment corrected that error. Following a cassation complaint, the Supreme Court set aside the court of appeal’s judgment and remitted the case for re-examination. In doing so, it reaffirmed that a substantive review of an arbitral award under the public policy clause would contradict the very nature of arbitration and the autonomy of the parties’ will.
POLAND AS AN ARBITRATION-FRIENDLY JURISDICTION
The case therefore demonstrates both the risk and the safeguard. The risk lies in the possibility that a state court may transform setting-aside proceedings into a disguised appeal on the merits. The safeguard lies in the Supreme Court’s willingness to restore the proper boundary between permissible public policy control and impermissible merits review. In practical terms, the “safety valve” of cassation review worked.
More broadly, the case law demonstrates that Polish courts view the public policy clause as an exceptional safeguard rather than a mechanism for routine judicial review of arbitral awards. This approach is consistent with the broader trend visible in Polish post-award jurisprudence, where courts generally exercise restraint and respect the autonomy of the arbitral process.
Taken together, the available case law and empirical data support the conclusion that Poland is an arbitration-friendly jurisdiction. While Polish courts remain prepared to intervene where an award genuinely threatens the fundamental values of the legal order, they are equally committed to preserving the finality of arbitral awards and the parties’ decision to resolve their disputes through arbitration. In this respect, national courts do not merely supervise arbitration. They actively contribute to its effectiveness and legitimacy.
The full text of the publication is available at link.
The text originally appeared: BAC Insights, 2026