Maciej Durbas, partner and co-leader of arbitration practice, Kubas Kos Gałkowski, Poland
Angelika Ziarko, senior associate, Kubas Kos Gałkowski, Poland
Introduction:
A few weeks ago, arbitration with consumers became a hot topic even in the mass media. It all stemmed from a case pending in the United States - the husband of a woman who died while visiting an amusement park sued, among others, one of the large corporations that owned the park. The defendant asked the court to refer the parties to arbitration. All because of the terms and conditions of the company's streaming platform, which included an arbitration agreement. The plaintiff had set up an account on the streaming platform several years earlier.
Would such a situation be possible in Poland? The short answer is no, due to a slightly different legal framework and increased consumer protection in B2C relations. Below we will outline the framework of consumer dispute resolution in Poland.
Special consumer protection in Poland resulting from the implementation of European Union law
The definition of a consumer is contained in art. 22(1) of the Polish Civil Code: A consumer is defined as a natural person who makes a legal transaction with a professional which is not directly related to their commercial or professional activity.
Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR) was implemented by Poland in 2016.
This new legislation, while promoting out-of-court settlement of consumer disputes and alternative dispute resolution mechanisms, also established specific rules to protect consumers in such disputes.
Specific formal requirements of an arbitration agreement concluded with a consumer
According to Art. 1164(1) of Polish Code of Civil Procedure, an arbitration agreement relating to disputes arising from contracts to which the consumer is a party can only be concluded after the dispute has arisen and must be in writing.
An arbitration agreement cannot therefore be part of a contract with a consumer. It must be made in writing and only after the dispute has arisen. In the case of disputes with consumers, it is also not possible to refer to a provision contained in the entrepreneur's general terms and conditions attached to the contract.
The Act on Polish Language, on the other hand, imposes an obligation to use the Polish language in consumer transactions. Therefore, an arbitration agreement concluded with a consumer should be concluded in Polish.
The law also requires that the arbitration agreement with a consumer must contain specific wording, without which it is null and void. It must be expressly stated in the contract that the parties are aware of the effects of the arbitration agreement, in particular the effects of an arbitral award or a settlement reached before an arbitral tribunal on a par with a court judgment or a settlement reached before a court, once it has been recognised by the court or declared enforceable by the court.
Specific rules of conduct of arbitration proceeding involving consumers
Polish law also contains mechanisms to protect the consumer during the arbitration proceedings.
As a general rule, the parties may authorise the arbitral tribunal to decide the dispute not on the basis of the law, but on the basis of principles of equity (ex aequo et bono). In the case of consumers, the resolution of the dispute on the basis of principles of equity (ex aequo et bono) shall not have the effect of depriving the consumer of the protection afforded to them by the mandatory provisions of the law.
If the consumer is deprived of such protection, the award is defective and may be set aside or the state court may refuse to recognise or enforce the award.
What this means
Arbitration involving consumers is possible. However, the law contains a number of requirements as to the form and content of the arbitration agreement, which are designed to protect consumers and to emphasise the voluntary nature of their consent to arbitration. It also seeks to ensure that consumers are adequately informed of the effects of their consent to arbitration (including the binding nature of the award).
Therefore, if a professional wishes to submit its dispute with a consumer to arbitration on the basis of an arbitration agreement concluded several years earlier in the general terms and conditions attached to an electronically concluded contract, such an agreement would not be valid and effective in Poland.
However, the flipside of this increased level of protection is the relatively low popularity of consumer arbitration in Poland. This is a pity, as arbitration, with its flexibility, efficiency and speed, would be perfectly suited to the mass resolution of consumer disputes.
For further information on this topic please contact Maciej Durbas or Angelika Ziarko at Kubas Kos Gałkowski by telephone (+48 12 619 40 40) or email ([email protected] or [email protected]). Kubas Kos Gałkowski website can be accessed at www.kkg.pl.