A and B concluded a contract of sale on December, 27 2007. By this contract A appointed B as its agent in terms of the brand X and temporarily empowered B to sell two models of its product. B obligated itself to actively conduct sales of these two models and make its best efforts to reach sale goals in a certain period of time. The contract provided also that all disputes arising out of or connected with the contract shall be settled by negotiations. In case of lack of agreement, the dispute shall be settled by the China International Economic and Trade Arbitration Commission (CIETAC), branch in Shanghai, according to the rules of this Commission in force on the date of filing the request for arbitration. The award shall be final and binding for the parties.

The contract was concluded in English and its copy (facsimile) was signed by A on December, 27 2007 and then signed by B and faxed back to A. In the place for the signature of B there was a stamp of the company of B and one illegible signature. B filed the following information with the Polish National Court Register (stemming from the deed of partnership): each partner of the company is empowered to represent the company, however at least two partners together or one of them together with a proxy are empowered to make declarations of will and signatures in the name of the company.

In 2009 the parties took part in a mediation in the Mediation Centre in N., China. B actively took part in the proceedings. Since November, 3 2009, B made 26 payments to A.

Subsequently, A initiated arbitration under CIETAC. On June, 17 2011 CIETAC filed to A and B an information of accepting the request for arbitration, the list of arbitrators and the rules. However, B did not appoint an arbitrator, did not file an answear to the request and did not appoint any counsel. CIETAC used company Y for mailing services. The confirmation of reception of correspondence is organized in the following manner: the courier scans the number of the mail and the receiver makes a signature on the scanner. Such confirmations of dispatch were made on June, 22 2011 and October, 27 2011.

On 24 October 2011 a CIETAC tribunal awarded to A from B USD 828.473 with interest from 1 January 2010 to the date of payment, CNY 82.931 for legal costs, CNY 58.525,43 for reimbursement of costs of travel to Poland and CNY 157.344,25 for arbitration fees.

A filed for a motion for enforcement of the arbitral award in Poland to the Regional Court. B argued that there was no arbitration agreement in the case at hand.

The Court found that, first, Poland-China Agreement applied in the case, and, second, Poland-China Agreement, as far as the rules on the recognition and enforcement are concerned, directed to the rules set forward in the New York Convention, especially articles II and IV.

The Regional Court also found that the the contract of December, 27 2007 contained a valid arbitration clause. It is true that the contract was signed by only one partner of B (when under the deed of partnership stipulated for a joint representation), however the arbitration agreement did not set Polish law as the governing law. Even if Polish law applied, under Article 29 k.s.h., on the basis of caselaw, each partner is empowered to act towards third parties on behalf of the company. Consequently, one of the partners of B could sign the contract in the case at hand. Irrespectively of that, Article II New York Convention recognizes both arbitration clause and the submission agreement – both signed by the parties or contained in an exchange of letters or telegrams. Consequently, in the case at hand the arbitral award was issued on the basis of a valid submission agreement, contained in the exchange of facsimile. Moreover, the Regional Court found that B was properly notified in the arbitration proceedings.

Consequently, the motion for enforcement was granted. The motion for recognition was denied as the award was subject to enforcement.

B filed a complaint. It underlined, that one partner was not empowered to represent the company, that the arbitration clause cannot be a submission agreement, as it was concluded before the dispute emerged and that it did not receive the notifications during the arbitral proceedings.