The Process Through the Eyes of the Defendant

To answer this question, we must go back to the moment when the parties enter into a contract that includes a clause for Ultima Ratio. In practice, this often involves leasing commercial premises, wholesale sales, small services, or manufacturing. Such contracts are usually concluded in writing, although they can also be agreed upon through the acceptance of general terms and conditions of sale, posted on one of the parties' websites. 

What does entering into a contract with an arbitration clause mean in practice? It means the party cannot later back out from arbitration or change their mind unless with the consent of the other party. The arbitration clause is treated the same as other essential terms of the contract—such as the quantity of goods ordered or the price.

See also: How to Draft an Ultima Ratio Clause

Claim Only to Ultima Ratio

Moving forward in time, it often becomes apparent that something went wrong, and one party needs to bring a lawsuit against the other. To which court should the claim be filed? Here, the provisions of the Code of Civil Procedure leave no doubt. Disputes from contracts with an Ultima Ratio clause can only be brought to Ultima Ratio. Article 1165 §1 of the Code of Civil Procedure does not allow for such cases to be directed to common courts, clearly stating state courts should dismiss such claims upon objection from the other party.

The Defendant's Genuine Intentions Test

From the moment a claim is delivered to the defendant (typically via email to the address specified by the defendant in the contract or listed in a public register), the defendant has 7 days to respond. Their decision regarding potential defence needs to be carefully considered. It will cost them financially. Why? At Ultima Ratio, for submitting a response to a claim, we charge an arbitration fee equivalent to the claim fee. This aims to deter stalling and deliberate delays in the proceedings. 

If, therefore, the defendant truly believes in the strength of their arguments, they will certainly pay the response fee. If not—well, they quickly realise that at Ultima Ratio, they will not be able to play the games they are accustomed to in common courts. Innocuous objections, followed by a motion to hear 5 witnesses (3 of whom permanently reside abroad) — and three years of legal proceedings are ready.

Reading the Ultima Ratio's rules, they are surprised to find that such actions make no sense here. The response to the claim must be prepaid, and the judgment will be reached within 3 weeks of filing the claim. Additionally, the court will add legal costs and the opponent's legal fees.

Enforceability Clauses Also Without Appeals

You might expect that the defendant, who previously saved on the arbitration fee for the response to the claim, would finally unleash their procedural creativity in proceedings for granting enforceability to the arbitration award. Practice shows that they do not. We carefully monitor the fate of enforceability applications. So far, all Ultima Ratio awards have gained enforceability clauses, and no appeals have been filed. 

According to Article 1212 of the Code of Civil Procedure, an arbitral award has the legal force of a state court judgment upon granting it enforceability. You can therefore proceed to the bailiff with it.

See also: Enforceability Clauses in 1.5 Months. Appeal Courts Favour Ultima Ratio

Inspired by International Arbitration

In common courts, only 14% of district court judgments are appealed to regional courts. Why? The only logical explanation is that in most cases, the appeal is the first action for which the losing party pays a fee. Is this why collecting fees from both sides of the proceedings is a standard in international arbitration, including electronic arbitration? We do not know. Certainly, replicating this idea in Ultima Ratio works excellently.

In a Nutshell:

1. When signing a contract with a partner, remember the arbitration clause

2. Clause content: “All disputes arising out of or related to this contract shall be resolved by ‘Ultima Ratio’, the First Electronic Arbitration Court at the Association of Notaries of the Republic of Poland in Warsaw in accordance with the rules of this Court effective on the initiation date of the proceeding”

3. Arbitration thus becomes a significant term of the contract, and the other party cannot withdraw from it without your consent

4. A dispute from a contract with an Ultima Ratio clause can be filed only to Ultima Ratio

5. In Ultima Ratio, arbitration fees are paid by both parties

6. Cases in Ultima Ratio last no longer than 3 weeks from the filing date of the claim

7. Enforceability clauses for arbitration court awards are granted by appeal courts 

8. Courts only focus on the most glaring flaws

9. According to Article 1212 of the Code of Civil Procedure, an arbitral award has the force of a state court judgment upon granting it enforceability. You can therefore proceed to the bailiff with it 

10. The principle of collecting an arbitration fee for the response to a claim is widely applied in arbitration worldwide