Choosing between arbitration and litigation

On paper, the choice between arbitration and litigation in Poland looks like a procedural footnote. In practice, it shapes the entire trajectory of a commercial dispute – from how long the case takes to whether a foreign counterparty can enforce the outcome in 170 countries without a second court proceeding.

Polish law offers two primary routes for resolving commercial disputes: state court litigation before the ordinary courts or arbitration before an institutional or ad hoc tribunal. Arbitration clauses must be in writing and clearly designate the seat of arbitration; absent such a clause, disputes default to the district or regional courts of the National Court Register (KRS) jurisdiction. The choice is largely irreversible once proceedings begin – switching routes after filing forfeits any advance in the statutory limitation period and may expose a party to cost sanctions.

This guide walks through the decision step by step. It covers the procedural mechanics of each route, the realistic timeline and cost envelope, three business scenarios that illustrate how the choice plays out in practice, the most common mistakes companies make, and a short FAQ. Whether you are a Polish manufacturer, a Warsaw-based technology company, or a foreign investor entering the Polish market, the framework below applies directly to your situation.

What does the Polish dispute resolution framework actually look like?

Polish commercial dispute resolution sits under two separate legal regimes. State court litigation is governed by the Kodeks postępowania cywilnego (Code of Civil Procedure, KPC). Arbitration – including both domestic and international proceedings seated in Poland – is governed by a dedicated section of the same code that closely follows the UNCITRAL Model Law. The Sąd Arbitrażowy przy Krajowej Izbie Gospodarczej (Court of Arbitration at the Polish Chamber of Commerce, SA KIG) is Poland's largest institutional arbitral body. The Sąd Polubowny przy Konfederacji Lewiatan (Lewiatan Court of Arbitration) handles a significant share of mid-market disputes. Both operate under published rules with fixed fee schedules.

State courts are organized in tiers. District courts (sądy rejonowe) handle lower-value claims. Regional courts (sądy okręgowe) hear commercial cases above PLN 75,000 and all first-instance appeals. The Sąd Apelacyjny (Court of Appeal) and, ultimately, the Sąd Najwyższy (Supreme Court of Poland) sit above them. Each tier adds time. A first-instance judgment in Warsaw or Kraków currently takes between 18 and 36 months, depending on case complexity and the court's docket.

The key structural difference is finality. An arbitral award rendered in Poland is final and binding at the moment it is signed. Enforcement through a Polish court requires a separate recognition step, but that step is administrative rather than substantive. A state court judgment, by contrast, can be appealed as of right – and a cassation complaint to the Supreme Court of Poland adds a further layer. Total state court proceedings, including one full appeal, regularly exceed 48 months.

SA KIG – Poland's main institutional arbitration body, Warsaw
Lewiatan Court of Arbitration – specialist mid-market tribunal
National Court Register (KRS) – determines default court jurisdiction
Polish Financial Supervision Authority (KNF) – relevant where regulated entities are parties

How do timelines and costs compare between the two routes?

Time and money are the two variables that most reliably predict which route a client will choose. Arbitration at SA KIG for a claim in the PLN 1m – PLN 5m range typically concludes within 12 to 18 months from the filing of the request. State court litigation for the same claim, through first instance and one appeal, rarely finishes in under 36 months. That 18-month gap is not merely inconvenient – it affects cash flow, contractual relationships, and the ability to reinvest capital.

Cost structures differ as much as timelines. SA KIG charges a registration fee scaled to the claim value: approximately 3% of the claim for amounts up to PLN 1m, tapering to lower percentages for larger claims. The minimum fee is PLN 3,000. State court fees are capped at PLN 200,000 for claims above PLN 2m, which makes litigation proportionally cheaper for very large disputes. Legal fees are broadly comparable on both routes, but arbitration tends to generate higher counsel costs per hearing day because of the compressed schedule and written-memorial format.

We secured a reversal of a cost allocation decision exceeding PLN 800,000 for a logistics client in the Mazowieckie region (autumn 2025). The client had initially filed in state court and, after 14 months without a first hearing, agreed to a jurisdiction transfer clause in an amended contract – allowing the dispute to restart in arbitration with a final award within nine months.

Three cost considerations are often overlooked. First, arbitration costs are typically shared equally unless the tribunal orders otherwise, while in state court the loser pays the winner's costs at a statutory tariff that often understates actual legal fees. Second, interim measures in arbitration require a parallel state court application – adding roughly 30 to 60 days and an additional PLN 30 per application. Third, enforcement of a foreign arbitral award in Poland under the New York Convention (to which Poland is a party) is faster than enforcing a foreign court judgment, which requires a separate recognition proceeding under EU Regulation 1215/2012 or bilateral treaty.

Which route fits which business scenario?

Three scenarios capture most of the real choices companies face. They differ by contract type, counterparty profile, and the strategic weight of confidentiality.

Scenario 1 – Manufacturing supplier dispute. A Silesian manufacturer has a PLN 3m claim against a domestic component supplier for defective goods. The supplier is a Polish company with assets registered in the KRS. Both parties have an ongoing commercial relationship they want to preserve. Arbitration is the better choice here. The compressed timeline reduces the risk of the relationship deteriorating over years of litigation. The confidentiality of arbitral proceedings – there is no public register of awards – allows both sides to manage reputational exposure. The SA KIG fee for a PLN 3m claim is approximately PLN 60,000, split between the parties.

Scenario 2 – IT services contract with a foreign counterparty. A Warsaw-based software company has a EUR 500,000 claim against a German client for unpaid invoices. The contract is silent on dispute resolution. Without an arbitration clause, the default is state court litigation in Poland. Enforcement of any resulting judgment in Germany is available under EU Regulation 1215/2012, but the process adds three to six months. For future contracts, a clause designating SA KIG or the ICC International Court of Arbitration with Warsaw as the seat gives the Polish company a single enforceable award in both jurisdictions. For existing disputes without a clause, our guide on dispute resolution for companies doing business in Poland sets out the cross-border enforcement path in detail.

Scenario 3 – Public procurement and KIO appeal. A construction company in Lower Silesia has been excluded from a public tender. The Krajowa Izba Odwoławcza (National Appeals Chamber, KIO) is the mandatory first-instance forum for public procurement challenges – arbitration is not available here. A KIO appeal must be filed within 10 days of the challenged decision. The KIO issues its ruling within 15 business days. A further appeal lies to the regional court within 7 days of the KIO ruling. This is a self-contained track entirely separate from both state court litigation and arbitration; sanctions compliance issues in the procurement context (for example, exclusion grounds based on sanctions lists) must be addressed within this KIO timetable.

What are the most common mistakes when choosing a dispute route?

The single most damaging mistake is drafting an arbitration clause that is ambiguous about the seat, the institution, or the governing procedural rules. A clause that says "disputes shall be resolved by arbitration in Warsaw" without naming an institution or adopting a set of rules creates a pathological clause. Polish courts have held that such clauses may be unenforceable, defaulting the dispute back to state courts – forfeiting the confidentiality and speed that motivated the clause in the first place. The irreversible consequence is a dispute that restarts from zero in state court, with the limitation clock still running.

We obtained an interim freezing order protecting assets worth over EUR 2m for a foreign investor's subsidiary in Wielkopolska (spring 2026). The underlying arbitration clause had been drafted by the client's in-house team without specifying institutional rules; we successfully argued before the regional court that the clause was nonetheless valid as an ad hoc agreement under UNCITRAL rules, preserving the client's arbitration track.

Four further mistakes appear consistently across our caseload. First, companies assume that choosing arbitration automatically provides interim relief – it does not. Interim measures still require a state court application, and personal liability for wrongful attachment is real. Second, parties underestimate the importance of choosing the right arbitrators: under SA KIG rules, each party nominates one arbitrator and the two nominees select the chair, giving the nomination decision outsized strategic weight. Third, companies fail to coordinate their dispute resolution clause with their warehouse and logistics contracts, creating inconsistent clauses across a supply chain. Fourth, foreign investors sometimes assume that an English-language arbitration clause automatically means English-language proceedings – SA KIG proceedings default to Polish unless the parties agree otherwise in writing.

Specify institution, seat, language, and number of arbitrators in every clause
Confirm that the arbitration clause is consistent across all related contracts
File interim measures in state court within 7 days of commencing arbitration
Check the KIO timetable separately for any public procurement element
Review sanctions compliance status of counterparties before filing – a sanctioned counterparty may trigger asset-freeze complications

Specific advice tailored to your dispute's value and counterparty profile matters here. Contact info@kordeckipartners.com to receive an expert assessment of your dispute resolution clause or pending claim.

How should foreign investors structure their dispute resolution strategy in Poland?

Foreign investors face a distinct set of pressures. Enforcement is the first. A party that wins a state court judgment in Poland against a counterparty with assets in multiple jurisdictions must seek separate recognition in each country. An arbitral award rendered in Poland, seated in Warsaw, is enforceable in 170 New York Convention states on a single application per jurisdiction. For transactions above EUR 1m involving non-EU counterparties, this enforcement advantage alone typically justifies the higher upfront arbitration cost.

Language and procedural culture are the second pressure. Polish state court proceedings are conducted entirely in Polish. Documents must be translated by a sworn translator (tłumacz przysięgły), adding both cost and delay. SA KIG and Lewiatan Court of Arbitration both permit English-language proceedings where the parties agree, which removes a significant friction point for foreign in-house teams managing disputes remotely.

The third pressure is confidentiality. State court judgments in Poland are publicly available on the National Court Register portal. Arbitral awards are not. For disputes involving trade secrets, pricing structures, or joint-venture terms, confidentiality is not a luxury – it is a commercial necessity. The disputes practice page explains how we structure confidentiality protocols for cross-border arbitration proceedings.

A specific situation your company faces may have no clean parallel in published guidance. The combination of sanctions compliance screening, KRS asset searches, and parallel interim measure applications requires coordinated handling – and the window to act is often shorter than clients expect. To receive a tailored strategy for your Polish dispute or investment structure, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can we switch from state court litigation to arbitration after proceedings have started?

A: No – once a claim has been filed in state court and served on the defendant, that court retains jurisdiction for the duration of the proceedings. The only exception is where both parties subsequently agree in writing to discontinue the state court proceedings and submit the dispute to arbitration, which requires the defendant's cooperation. Attempting to file the same claim in arbitration while state court proceedings are pending will result in the arbitral tribunal declining jurisdiction on grounds of lis pendens. Planning the route before filing is therefore essential.

Q: How long does enforcement of an arbitral award take in Poland?

A: Recognition and enforcement of a domestic arbitral award before a Polish regional court typically takes between 3 and 6 months from the application date, assuming no substantive challenge is raised. A party challenging the award on public policy or procedural grounds can extend that period by a further 6 to 12 months. Enforcement of a foreign award under the New York Convention follows a broadly similar timeline. The key misconception is that an award is automatically self-executing – it is not. A separate court order is required before bailiff enforcement can begin.

Q: Is arbitration always more expensive than state court litigation?

A: Not always. For claims above PLN 2m, the state court fee is capped at PLN 200,000, which can make litigation proportionally cheaper on the fee alone. However, the total cost of a 48-month state court proceeding – including counsel fees, management time, and the cost of capital tied up in the dispute – regularly exceeds the total cost of a 15-month arbitration for the same claim value. The fee comparison is the starting point, not the conclusion. For claims below PLN 500,000, state court litigation is often the more economical choice on a pure cost basis.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to commercial litigation, arbitration, and cross-border dispute resolution. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.