The consequences of an arbitration clause in a contract between entrepreneurs are particularly far-reaching. Generally speaking, entrepreneurs thereby remove from the ordinary courts the competence to handle disputes that may arise from these contracts. An entrepreneur can no longer sue their counterpart in a regular court — the case must go to arbitration. But what happens when the arbitration tribunal has heard the dispute and delivered a judgement, and one of the parties is dissatisfied with the verdict?

There is no 'ordinary' appeal against an arbitration award, in which a party could argue, for instance, that the court misinterpreted the law or illogically assessed the evidence. However, the law does allow for a challenge to void the arbitration award. This option is limited, though, to particularly egregious, specifically enumerated defects. Why is this the case? In legal procedural doctrine, it is recognised that since entrepreneurs opted for arbitration, expecting a quicker resolution based on less formal procedures, they simultaneously limited the ability of state courts to examine the legality of such awards.

What particularly egregious defects might justify a challenge, then?

Certain procedural norms must be met by every modern civil process to ensure its rulings comply with the rule of law standards. Such norms include, for example, that each party must be properly informed about the case and must have the opportunity to defend their interests. The case must be heard by a duly constituted and impartial tribunal. The agreed-upon procedural rules must be honoured by the parties. A verdict must not be achieved through criminal means nor based on forged or altered documents. It is also obvious that an arbitration award cannot be made if the same matter between the same parties has already been previously resolved by another arbitration tribunal or a regular court. An arbitration award with any of these defects should be annulled. This is in the interest not only of the party but of justice as well.

Other scenarios where a regular court might annul an arbitration award include situations where there is no arbitration clause in the contract between the entrepreneurs, or the contract containing the clause has lost validity. There is also what is known as the 'public order clause'. This allows an arbitration award to be annulled if, despite formal correctness, it violates the fundamental principles of the legal order of the Republic of Poland. The Supreme Court advises that this can only occur in extreme cases, such as awarding damages in a verdict without finding that the plaintiff suffered a loss, or when the issued verdict does not correspond at all with the evidence collected in the case, or in other similar scenarios.

As can be seen from the above, a regular court does not examine which party is right in the dispute or whether the arbitrator's reasoning adheres to logic or life experience principles. Such circumstances cannot, therefore, be grounds for a challenge. It must be remembered that it was the parties themselves who deprived the ordinary court of the ability to examine such circumstances! For this reason, an arbitration award can either be overturned — annulled entirely, with the matter referred back to arbitration for further proceedings, or the challenge can be dismissed. No other options are provided by law.