According to the Supreme Court, Polish courts should adjust the amount of awarded damages taking into account the local standards when deciding on the enforcement of foreign judgments.
Under Polish law, foreign judgments which can be enforced by the means of execution require a declaration of enforcement issued by a Polish court. When ruling on the declaration of enforcement, courts are not authorised to examine the correctness of the judgment. Declaration of enforcement may be refused e.g. on the grounds of the public policy clause.
In a recent case, the daughter of a former Polish prime minister sued the Polish weekly “Wprost” for defamation. As “Wprost” is available in the United States and the claimant is a US resident, the case was resolved by a US court. An Illinois court awarded damages to the claimant consisting of USD 1 million in compensation for actual loss plus USD 4 million as punitive damages.
The Polish courts of first and second instance refused to declare the enforceability of the judgment of the Illinois court on the grounds of the public policy clause. The courts pointed out inter alia that awarding damages in such an amount would infringe a basic principle of the Polish legal system, which prohibits the injured party from enrichment based on a suffered loss. In the opinion of Polish courts, damages for defamation awarded in Poland should not exceed PLN 150 000 (approx. USD 50 000).
The Supreme Court upheld the cassation appeal of the claimant, ruling that:
- awarding punitive damages would be contrary to the basic principles of the Polish legal system, as it would threaten the existence of the defendant and may be perceived as a limitation of the freedom of speech;
- courts are allowed to declare the foreign judgment partially enforceable;
- the courts should examine and moderate the damages awarded in foreign judgments in the light of Polish standards.
This decision seems controversial and may affect the practice of enforcement of foreign judgments. The judgment may also affect post arbitration proceedings, where the awards are assessed in the light of the public policy clause as well. Some further clarification is expected when the Supreme Court issues the justification to this ruling.
Law: Supreme Court ruling I CSK 697/12 dated 11 October 2013