Online Arbitration Court wishes to be competitive in terms of speed and cost
On 12 February 2019, the Online Arbitration Court (OAC) was launched, intended by the architects to be a ground-breaking development in the Polish judicial system and a revolutionary development for business.
An entire case – from the moment of submission of a statement of claim, through the response to the statement of claim, pleadings, and a hearing, to adjudication, is to be handled via an online portal. Due to a switch to proceedings in electronic form and short deadlines for the individual procedural steps (10 days for the response to the statement of claim, and five days for the plaintiff’s and defendant’s follow-up pleading), an award is intended to be issued within three to five weeks.
The case will also proceed quickly due to correspondence being served instantly. A statement of claim is posted on the portal and is accessible to the parties and the arbiters, and the related notification is also sent to the defendant by e-mail and SMS. Service in this form is effective.
This will supposedly mean that costs of proceedings are lower than in other arbitration tribunals, and, starting from a certain value of a dispute, lower than in common courts as well. The estimated costs of the proceedings can be checked on the OAC website. For a dispute of a value of PLN 10,000, the gross cost is approximately PLN 1,500 for one arbiter (approximately PLN 2,500 gross for three arbiters). For a dispute valued at PLN 100,000, it is approximately PLN 6,000 for one arbiter and approximately PLN 10,000 for three arbiters. The switch to electronic proceedings also eliminates the expense of attending a hearing in person.
The founders of the OAC say that it is worth considering this means of dispute resolution starting from a value of a dispute of around ten or twenty thousand zlotys, especially as arbiters will order the defendant to pay the plaintiff the related costs if the award is given in favour of the plaintiff.
At the moment, approximately 20 arbiters are registered with the OAC. These are attorneys-at-law licenced in Poland and other countries, with a minimum of ten years’ experience handling commercial cases. More will be added to the list.
The president of the OAC is Dr Bartosz Ziemblicki, attorney-at-law and tax advisor.
Ultima Ratio, an online arbitration court operated by the Association of Notaries of the Republic of Poland, is proposing a similar system, due to start taking cases in April 2019. Does this mean that there is now going to be a flood of online arbitration tribunals, and is it really likely that they will function better?
- I am always glad to see initiatives aimed at conducting arbitration proceedings more efficiently, says Monika Hartung, an attorney-at-law at Wardyński & Partners. – Like the cost, how quickly a case can be handled is immensely important for the parties, but I also think that the OAC is promising slightly more than it can deliver. It is hard to imagine an award being given within three days of the exchange of pleadings electronically being completed. In a complex dispute regarding property development, the pleadings themselves can be hundreds of pages long, and that does not include the appendices. Even if an arbiter begins work on an award the moment the statement of claim is received and updates it as subsequent pleadings come in, this does not seem to be a very feasible timeframe. This is especially true if there are three arbiters. After all, the arbiters have to review the pleadings and consult to agree the award, and then draw up the ruling. A three-day time period might be possible, but only in minor cases. The OAC terms state in fact that this timeframe is only a general guideline.
It is also not clear how documents should be provided for review when an expert witness is being examined. Usually, the expert witness is only shown a specific document that has been placed in the case files, about which they are being consulted. Does this mean that if a hearing is held in the form of a conference call the document should be held up to the camera? Does this mean that the expert witness needs to have access to the system and to all of the files? How can this be done while keeping the proceedings confidential?
It is also debatable whether proceedings are less expensive and more accessible, given that according to the terms and conditions the parties have to have the equipment needed to take part in a conference call, i.e. a computer with a broadband internet connection, a web camera, and headphones. The parties also have to install specified conference call software.
I am sure that a switch to digital proceedings is necessary and inevitable, says Monika Hartung, – but a switch to digital proceedings does not necessarily ensure that proceedings will take less time and be less expensive. All the same, I will be glad to see the new court in action and am interested to see the true statistics with respect to the time taken to review cases.
Justyna Zandberg-Malec, Wardyński & Partners