Arbitration Success of the Hoogells Dispute Resolution Team

We are pleased to announce a positive outcome in a case conducted by Hoogells before an arbitration court in Poland. The litigation team at Hoogells successfully represented the contractor in a highly significant case concerning the assessment of the right to request a modification of the legal relationship and the validity of a multimillion claim for payment. The case was led on behalf of the Firm by Łukasz Kotarba.

We are particularly satisfied that, in the context of the dispute – especially considering the widespread relevance and popularity of the rebus sic stantibus clause – it was possible to conduct a substantive analysis and assessment of the fundamental issues related to its practical application.

Our Conclusions

Entrepreneurs can effectively assert their rights in cases based on the rebus sic stantibus clause, i.e. seek to modify the legal relationship, as well as defend against such claims – though it must be clearly emphasized that each case must be assessed individually. It should also be noted that, in our opinion, the rebus clause is not an exception to the pacta sunt servanda principle or its opposite, but rather a realistic application of that principle – hence, the prerequisites of the rebus sic stantibus clause should be interpreted strictly.

What is key is a meticulous analysis and evaluation of the core, codified grounds for a potential claim to modify the legal relationship, such as:

• an extraordinary change in circumstances;
• its unpredictability at the time of contract conclusion;
• the inability to foresee the impact of such change on the performance of the contract;
• and the causal link between that change and the deterioration of one party’s situation.

Procedural aspects

In our view, the case is also worth noting for several interesting procedural insights (specific to arbitration):

• the proceedings were conducted efficiently, with commendable engagement by both the tribunal and counsel;
• the case dynamic was constructive – action prompted reaction, with appropriate moderation by the tribunal and without excessive polemics;
• only a little over six months passed from the filing of the claim to the issuance of the award (a single-instance procedure applied, as per the rules);

during this time, the parties:

• held two remote hearings (including one preliminary and one main hearing with witness examination);
• exchanged two written pleadings each – including the statement of claim and the response.

The case was bifurcated into stages (what is used in arbitration) – procedural/preliminary matters resolved prior to substantive assessment.