International arbitration law and rules in Portugal

Ad hoc arbitration tends to be more commonly used in Portugal than institutional arbitration, as opposed to the general international tendency the other way, as evidenced by recent surveys.

1.1.1 In 2012, a new Voluntary Portuguese Arbitration Act, Law 63/2011 (the Portuguese Arbitration Act), was enacted and revoked the Voluntary Arbitration Act of 1986 (1986 Act). 1 Law No. 31/86 of 29 August 1986 (in force since 29 November 1986), as amended by Decree-Law No. 38/2003 of 8 March 2003. The new Portuguese Arbitration Act was agreed between the Portuguese Government, the International Monetary Fund and the European Union’s institutions in order to modernise the alternative dispute resolution mechanisms available in Portugal and to perfect them as an alternative to the Portuguese judicial system. This agreement was reached in the wider context of the structural reforms imposed on Portugal in order to repay its external debt. The reform also reflected the requirement to harmonize the 1986 Act with the most common practices adopted internationally.

1.1.2 The Portuguese Arbitration Act:

• follows the Model Law (1985) and (2006), 2 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. For the full text of the Model Law (amended in 2006) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf.  albeit with influences from other, more recent arbitration laws;
• contains a more detailed set of procedural rules to be applied within the arbitral proceedings, if the parties fail to agree on those rules between themselves;
• maintains the notion that party autonomy constitutes the essential framework of arbitration; and
• sets out matters previously absent from the 1986 Act, such as multi-party issues, interim measures and preliminary orders which may be issued by the arbitral tribunal (and their enforcement), and the recognition and enforcement of foreign arbitration awards.

1.1.3 In the six years since the enactment of the Portuguese Arbitration Act, the legal framework remained relatively unchanged. The new legislation has been well received as the state courts are increasingly applying the legal provisions in an arbitration-friendly fashion in Portugal.

2.1.1 The Portuguese Arbitration Act governs all arbitrations held within Portugal. 3 Portuguese Arbitration Act, art 61.  Any claim involving an economic interest is arbitrable. The Portuguese state and public law entities are able to enter into arbitration agreements when duly authorised by law, 4 The Portuguese Administrative Courts Procedure Code, art 180, allows the entering into of arbitration agreements on matters regarding administrative contracts, civil liability and administrative acts. or if the matters at issue refer only to private law. The Portuguese Arbitration Act constitutes a general law on arbitration and is, therefore, not applicable where there is a specific law concerning arbitration within a certain type of dispute (eg labour disputes and others set out at section 11 below).

2.2.1 The Portuguese Arbitration Act is divided into twelve chapters, which are roughly organised to mirror the typical timeline of an arbitral proceeding.

2.2.2 The first three chapters deal with matters prior to the arbitral proceedings: the arbitration agreement, its mandatory content and its validity (Chapter I); the composition of the arbitral tribunal, the rules on the appointment of arbitrators and their substitution (Chapter II); and the competence of the arbitral tribunal (Chapter III).

2.2.3 The following two chapters deal with the essential procedural rules of arbitration, including interim measures and preliminary orders (Chapter IV), and the arbitration procedure itself (Chapter V). The subsequent chapters deal with aspects concerning the conclusion of the arbitration; the issue of the award (Chapter VI); the terms to set aside an award (Chapter VII); and the enforcement of the award (Chapter VIII).

2.2.4 The final four chapters concern more specific matters, such as: international arbitrations (Chapter IX); the recognition and enforcement of foreign awards (Chapter X); the competence of judicial courts as regards arbitration (Chapter XI); and final rules concerning the scope of application of the Portuguese Arbitration Act and the creation of arbitral institutions (Chapter XII).

2.3.1 One of the main principles of the Portuguese Arbitration Act is party autonomy. The resolution of disputes through arbitration depends on an agreement between the disputing parties to exclude their dispute from the jurisdiction of the state courts.

2.3.2 The Portuguese Arbitration Act upholds the will of the parties in several areas, from the constitution of the arbitral tribunal to the procedural rules to be applied. It also recognises the principle of competence-competence, which is addressed in section 5.1 below. 5 Portuguese Arbitration Act, art 18(1), (8), (9) and (10).

2.3.3 Throughout the duration of the arbitration, there are also essential procedural principles which must be observed, such as the equality of the parties, due and fair process and the adversarial principle. 6 The adversarial principle guarantees the effective participation of the parties in the development of the whole proceedings by allowing them, in full equality, to influence all elements (allegation, proof and law) that are linked to the object and that at any stage of the proceedings appear to be relevant to the decision.

3.1.1 The Portuguese Arbitration Act defines the arbitration agreement as the means by which a dispute may be submitted to an arbitral tribunal (provided that the dispute does not concern inalienable rights 7 Inalienable rights are fundamental rights that cannot be surrendered, sold or transferred to someone else. These encompass, inter alia, the right to life, liberty and security, personality rights, and the right to be recognised as a person before the law. or illegal transactions). 8 Ibid, art 1(1) and (2); Civil Code, art 1249.

3.1.2 This broad definition is then divided into two different types of arbitration agreements, by reference to the objective of the arbitration agreement. 9 Portuguese Arbitration Act, art 1(3).  Hence, it is possible to have arbitration contracts which submit a specific and existing dispute to arbitration, and arbitration clauses which specify that certain future and potential types of disputes may be resolved by arbitration.

3.1.3 This dual classification is relevant in defining the minimum content of the arbitration agreement: the arbitration agreement must precisely determine the object of the dispute submitted to arbitration and must be sufficiently certain regarding those elements of the contract in relation to which a dispute can be settled by the arbitral tribunal.

3.1.4 It is also possible for the parties to agree to submit to arbitration other issues that may require the intervention of an impartial decision maker – for example, issues concerning the need to clarify, supplement and vary long-term contracts to adapt to new circumstances. 10 Ibid, art 1(4).

3.2.1 The arbitration agreement must be in writing. This formal requirement is fulfilled whenever the agreement to arbitrate is included in a written document signed by both parties, or in an exchange of letters, telexes, telegrams or other means of communication of which there is a written record. 11 Ibid, art 2(1) and (2).

3.2.2 This requirement is also satisfied if a contract refers to a separate document that contains an arbitration clause, provided that the reference is such as to incorporate that clause as part of the contract. 12 Ibid, art 2(4).

3.2.3 The Portuguese Arbitration Act also considers this requirement to be fulfilled if there is an exchange of submissions in arbitral proceedings in which one of the parties alleges the existence of the arbitration agreement and this is not denied by the other party. 13 Ibid, art 2(5).

3.2.4 An arbitration agreement which does not comply with the formalities required by law will be null and void. 14 Ibid, art 3.

3.3.1 Not every dispute may be submitted to arbitration. All disputes that do not concern economic interests or alienable rights, 15 Ibid, art 1(2). or which must be submitted legally to the state courts or mandatory arbitral tribunals, are excluded from voluntary arbitration.

3.4.1 The nullification of a contract does not necessarily result in the invalidity of an arbitration clause contained within it. The invalidity of a part of, or of a certain clause in a contract does not imply the invalidity of the whole of the contract. 16 Ibid, art 18(3); Civil Code, art 292.  The only exception is where the contract would not have existed without the invalid part or clause. Otherwise a dispute regarding the validity of the contract may be submitted to arbitration under the arbitration agreement contained within that contract.

3.5.1 A valid and effective arbitration agreement binds the parties to submit the disputes included in the agreement to arbitration and excludes those disputes from the jurisdiction of the state courts. Proceedings that are issued in the state courts regarding a dispute that the parties have agreed to submit to arbitration shall be, at the request of the respondent, declared void by the state courts on the grounds of lack of jurisdiction, except if the court determines that the arbitration agreement is patently (manifestamente) null, ineffective or unenforceable. 17 Portuguese Arbitration Act, art 5(1). However, if the respondent in a claim brought in court does not object to the court’s jurisdiction while filing its statement of defence, the court will not undertake this action of its own volition and it will retain jurisdiction to adjudicate the claim. 18 Ibid, art 5(1); Portuguese Civil Procedure Code, art 494(j) and art 495.

4.1.1 The arbitral tribunal may be composed of a sole arbitrator or several arbitrators, provided that the number of arbitrators is odd. 19 Portuguese Arbitration Act, art 8(1). Where the parties’ agreement is silent on this matter, the arbitral tribunal is composed of three arbitrators. 20 Ibid, art 8(2).

4.1.2 The parties may appoint the arbitrator or arbitrators of their choice. This can be done within the arbitration agreement itself, or in a subsequent written document. The parties may define alternative methods of appointing the arbitrators, should they wish to do so. 21 Ibid, art 10(1).

4.1.3 If the arbitral tribunal is composed of three (or more) arbitrators, each party shall appoint an equal number of arbitrators. The party-appointed arbitrators then appoint the final arbitrator, who will be the chair of the arbitral tribunal. 22 Ibid, art 10(3).

4.1.4 Either party may request that the court appoints the relevant arbitrator(s) where:

• the parties have not expressly stated the arbitrator(s) to be appointed or determined a method of appointment, and the parties subsequently fail to reach agreement on this issue;
• one party does not appoint its arbitrator within 30 days of being requested to do so; or
• the party-appointed arbitrators fail to appoint the chair within 30 days of the last party-appointed arbitrator being selected. 23 Ibid, art 10(4) and 59(1).

4.1.5 Where the arbitral tribunal is to be composed of a sole arbitrator and the parties fail to agree upon the appointment of that arbitrator, either party may request that the court makes the appointment. 24 Ibid, art 10(2) and 59(4).

4.1.6 There are some restrictions as to who may act as an arbitrator. An arbitrator must be a natural person, have full legal capacity and must be independent and impartial. 25 Ibid, art 9(1) and (3). Other restrictions may also arise from the internal regulations of the arbitral institutions or other legal instruments. 26 For the criteria for the appointment of arbitrators established by the ACL, see
https://www.centrodearbitragem.pt/images/pdfs/Legislacao_e_Regulamentos/Criteria%20for%20the%20appointment%20of%20arbitrators.pdf. For example, an arbitrator may be prevented from acting where there is incompatibility between his or her functions as an arbitrator and other legal obligations.

4.1.7 An arbitrator must accept his or her appointment in writing, unless otherwise agreed by the parties. 27 Ibid, art 12(2).

Challenge of arbitrators

4.2.1 The appointment of an arbitrator may be challenged if there are justifiable doubts as to the impartiality or independence of the arbitrator or if the arbitrator does not possess the qualifications agreed upon by the parties. 28 Ibid, art 13(3).

4.2.2 An arbitrator has a continuing duty to inform the parties (and the other arbitrators if that is the case) of any subsequent circumstances that arise or that have been brought to his or her attention after accepting the appointment that would constitute a justifiable reason to doubt that arbitrator’s impartiality or independence.

4.2.3 The parties may agree on the procedure for challenging an arbitrator. 29 Ibid, art 14(1). However, a party may not challenge its own appointed arbitrator other than for reasons of which it becomes aware following the appointment. This restriction is also applicable when an arbitrator is appointed by the mutual agreement of the parties. 30 Ibid, art 13(3).

Procedure for challenging an arbitrator

4.2.4 The parties are at liberty to agree on the procedure for challenging an arbitrator. 31 Ibid, art 14(1).  In the absence of a specific agreed procedure, a party that wishes to challenge an arbitrator should submit a written statement to the arbitral tribunal setting out the grounds for the challenge. This request should be filed within 15 days from the date on which the challenging party became aware of the constitution of the arbitral tribunal or acquired knowledge of the grounds for the challenge. If the challenged arbitrator resists the challenge and remains in office, the full arbitral tribunal – including the challenged arbitrator – will decide on the challenge. 32 Ibid, art 14(2). If the challenge is not successful, the challenging party may refer the matter to the court within 15 days of receiving notice of the decision of the arbitral tribunal. The decision of the court on the challenge will be final. 33 Ibid, art 14(3).

Procedure for appointing a substitute arbitrator

4.2.5 Unless the parties have agreed to an alternative procedure, substitute arbitrators shall be appointed in the same manner as the arbitrator who was replaced. Taking into consideration the stage of the arbitral proceedings, the arbitral tribunal shall determine whether any additional procedural matters need to be addressed or repeated. 34 Ibid, art 16.

4.3.1 The Portuguese Arbitration Act sets out that if the parties have not previously agreed upon the arbitral tribunal’s fees, a written agreement between the parties and the arbitral tribunal must be entered into before the final arbitrator has accepted his or her appointment. 35 Ibid, art 17(1).

4.3.2 If the parties and the arbitral tribunal fail to agree on fees, 36 The ACL provides a calculator that can be used to determine the costs of the arbitration. The calculator is available
here.  the arbitral tribunal shall determine its fees and expenses by taking into account the complexity of the dispute, the amount of the claim and the time spent by the arbitral tribunal on the dispute. 37 Ibid, art 17(2).  In this case, any dissatisfied party may request a reduction of the arbitral tribunal’s fees and/or expenses before the court. 38 Ibid, art 17(3).

4.4.1 Once an arbitrator has accepted his or her appointment, that arbitrator will not be held liable for any damage caused by decisions or judgments that they make, except in the same circumstances in which judges can be held liable. 39 Portuguese Arbitration Act, art 9(4). Judges and prosecutors are only liable for damage caused by their rulings if they acted intentionally or with gross negligence. 40 Law 67/2007 of 31 December 2007, art 12 to 14.  In any case, an arbitrator can only be liable to the parties to the dispute.

4.4.2 Arbitrators are also liable for damage caused to the parties by an unjustified delay in deciding a dispute that has been submitted to the arbitral tribunal. The direct accountability of the arbitrator to the parties incentivises a swift outcome to the arbitration, which complements the duty to decide the dispute within the legal or agreed timeframe. 41 Portuguese Arbitration Act, art 43(4).

5.1.1 The principle of competence-competence is adopted in the Portuguese Arbitration Act. This means the arbitral tribunal has the power to decide on its own jurisdiction, either as a preliminary question or in an award on the merits. 42 Ibid, art 18(1), (8), (9) and (10).

5.1.2 A respondent may argue that the arbitral tribunal lacks jurisdiction until the moment that the defence must be presented, or within its defence. 43 Ibid, art 18(2).

5.1.3 The parties may object to the decision of the arbitral tribunal regarding its jurisdiction by means of appeal, if admissible, or may commence an action to set aside the award. 44 Ibid, art 18(9). In the event of an action to set aside or appeal a partial award concerning jurisdiction being brought, the arbitral tribunal may continue the arbitral proceedings and issue a final award. 45 Ibid, art 18(10).

5.2.1 Unless otherwise agreed by the parties, the Portuguese Arbitration Act gives the arbitral tribunal the power to grant such interim measures as the arbitral tribunal considers necessary, provided that the adversarial principle of the arbitral proceedings is assured. 46 Ibid, art 20(1). Arbitral tribunals are therefore prevented from issuing ex parte injunctions. 

5.2.2 The arbitral tribunal may modify, suspend or terminate an interim measure upon the application of any party or, in exceptional circumstances and upon prior notice to the parties, on the arbitral tribunal’s own initiative. 47 Ibid, art 24(1).

5.2.3 The decision to grant an interim measure binds the parties and, unless otherwise decided by the arbitral tribunal, it is subject to enforcement before the state courts. 48 Ibid, art 27(1) and 59(4).

5.2.4 Consistent with the Model Law (2006), 49 For the full text of the Model Law (amended in 2006) see
http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf.  and unless otherwise agreed by the parties, simultaneously with the request for an interim measure a party may, without notice to any other party, request the arbitral tribunal to make a preliminary order directing a party not to frustrate the purpose of the interim measure requested. 50 Portuguese Arbitration Act, art 22.

5.2.5 The preliminary order may be granted by the arbitral tribunal if considers that a prior disclosure of the request for the interim measure to the party against whom it is directed would risk frustrating the purpose of the measure requested. The arbitral tribunal may also require the party requesting a preliminary order to provide appropriate security, unless the arbitral tribunal considers it inappropriate or unnecessary to do so. 51 Ibid, art 24(2).

5.2.6 After the arbitral tribunal has made a determination in respect of an application for a preliminary order, all parties must be given notice of the request for the interim measure, the application for the preliminary order, the preliminary order, if any, and all other communications. In addition, any party against whom a preliminary order is directed shall be given the opportunity to present its case at the earliest practicable time. 52 Ibid, art 23(2).

5.2.7 The preliminary order is only valid for 20 days. 53 Ibid, art 23(4).  Although the parties are bound by the determination made by the arbitral tribunal, the preliminary order cannot be enforced by the courts. 54 Ibid, art 23(5).

6.1.1 Unless otherwise agreed by the parties, the arbitral proceedings commence when a party receives the request of another party to submit the dispute to arbitration. 55 Ibid, art 33(1).

6.2.1 The Portuguese Arbitration Act defines some fundamental principles to be observed throughout the arbitral procedure, which prevail over the will of the parties. Both parties must be treated in conditions of absolute equality and opportunity, with a strict observance of an adversarial system, the right of the parties to present their case before the final award is given and the participation of the respondent in the arbitral proceedings. 56 Ibid, art 30(1).

6.3.1 The parties are free to agree on the seat of arbitration 57 Ibid, art 31(1). and the language to be used in the arbitral proceedings. 58 Ibid, art 32(1).  It is common for the parties to include a description of where the arbitration shall take place and the language to be adopted throughout the procedure in the arbitration agreement. If parties fail to agree on those issues, such decisions shall be made by the arbitral tribunal.

6.3.2 Regardless of the legal seat, the parties may agree to hold the hearings in any place they choose. If the parties have not agreed otherwise, the place of the hearings, evidence taking or decision making may be determined by the arbitral tribunal. 59 Ibid, art 31(2).

6.4.1 Unlike the 1986 Act, the Portuguese Arbitration Act contains provisions regarding multi-party issues.

6.4.2 Only third parties bound by the arbitration agreement may be parties to the arbitral proceedings. If a third party subsequently accedes to the arbitration agreement after the constitution of the arbitral tribunal (accession is presumed in a case where a third party intervenes with the consent of the other parties), 60 Ibid, art 36(2).  it must make a declaration that it accepts the existing composition of the arbitral tribunal.

6.4.3 The arbitral tribunal should only permit the intervention or joinder of a third party if to do so would not unjustifiably hinder the arbitral proceedings and if there are relevant reasons to allow it, notably: when there is an equivalence of interests with any of the parties regarding the object of the dispute (litisconsórcio voluntário ou necessário); compatibility of identity of claims; the interest of the respondent to have third party co-creditors (solidariedade de credores) bound by the award; and the exercise of a right of recourse (direito de regresso) arising to the respondent. 61 Ibid, art 36.

6.4.4 The intervention of third parties is only allowed in institutional arbitrations if the relevant rules of the arbitral institution ensure equal participation of all parties in the appointment of the arbitrators. 62 Ibid, art 36(6). In ad hoc proceedings, the intervention of third parties is only permitted if the arbitration agreement covers such subject matter, either directly or by reference to a set of arbitral rules. 63 Ibid, art 36(7).

6.5.1 Except if the parties agree otherwise, the arbitral tribunal has the discretion to order oral hearings or require that the arbitral proceedings are conducted by reference to written documents and evidence only. However, the arbitral tribunal is obliged to conduct an oral hearing for the examination of evidence whenever a party applies for such a hearing to take place, unless that party has previously waived this right. 64 Ibid, art 34.

6.6.1 Unless otherwise agreed by the parties or defined in the relevant institutional rules, if the claimant does not file its statement of claim within the time limits set out in the arbitration agreement or decided by the arbitral tribunal, the arbitral tribunal should terminate the arbitral proceedings. 65 Ibid, art 33(2) and 35(1).  Conversely, if the respondent fails to submit its statement of defence within the designated time limit, the arbitral tribunal shall continue with the arbitral proceedings without viewing the respondent’s default as acceptance of the claimant’s allegations. 66 Ibid, art 35(2).

6.6.2 If one of the parties fails to appear in the hearings or to submit evidence within the designated time limit, the arbitral tribunal must continue with the arbitral proceedings and make the award after taking into consideration the evidence presented to it. 67 Ibid, art 35(3).

6.6.3 The arbitral tribunal may, in any case, consider that the default of one of the parties is justifiable and allow the defaulting party to file the defaulted plea or evidence requested. 68 Ibid, art 35(4).

6.7.1 Although the parties are free to determine the rules of evidence, there is a clear trend for parties to use the same types of evidence as those used in judicial proceedings, such as documents, witnesses, experts, party evidence and so on. The parties also tend to soften the strict judicial procedural rules concerning evidence when producing the same types of evidence within the arbitral proceedings. The use of written statements is increasingly common.

6.8.1 As set out at paragraph 2.3.2 above, the parties are entitled to determine the applicable procedural rules for the arbitral proceedings. This is also the case for evidence generally and specifically the appointment of experts.

6.8.2 Unless otherwise agreed by the parties, the Portuguese Arbitration Act provides that the arbitral tribunal may appoint one or more experts, on its own initiative or upon request by the parties, 69 Ibid, art 37(1). and may require a party to give the expert any relevant information or to provide access to any relevant documents or goods for the expert’s inspection. 70 Ibid, art 37(2).

6.9.1 The Portuguese Arbitration Act is silent on the matter of the confidentiality of the arbitral proceedings. In order to compensate for this, it is common for the parties to include a confidentiality provision in the arbitration agreement or to set it out as a rule of procedure.

6.10.1 If the provision of evidence is within the control of one of the parties, or of a third party who refuses to cooperate in providing it, the interested party may apply to the relevant state court for an order that the evidence be produced before the state court. 71 Portuguese Arbitration Act, art 38(1). In order to apply for the court’s assistance, the interested party must first seek the permission of the arbitral tribunal. The evidence produced before the state court must then be communicated to the arbitral tribunal.

6.10.2 This requirement is also applicable to requests made to the relevant state court relating to arbitral proceedings that are located outside Portugal. 72 Ibid, art 38(2).

7.1.1 The arbitral tribunal will commonly apply Portuguese substantive law, or any other substantive law chosen by the parties in the arbitration agreement.

7.1.2 However, the parties may authorise the arbitral tribunal to reach a decision based on equitable terms, instead of binding its decision within the limits of any substantive law. 73 Ibid, art 39(1).

7.1.3 In the case of an international arbitration, and if the parties have not agreed on the applicable law, the arbitral tribunal shall apply the law with which the object of the dispute is most closely connected. 74 Ibid, art 52(2).

7.2.1 Unless otherwise agreed by the parties, an award must be rendered within twelve months from the date on which the final arbitrator accepted his or her appointment. 75 Ibid, art 43(1).

7.2.2 The deadline may be extended one or more times, for successive periods of twelve months each, provided that either the parties agree or the arbitral tribunal so decides. In the latter case, the arbitral tribunal must justify its decision properly and the parties may oppose this decision by mutual agreement. 76 Ibid, art 43(2).

7.2.3 Failure to notify the parties of the final award within the time limit (or if the parties jointly oppose a decision of the arbitral tribunal to extend the time limit) will terminate the arbitral proceedings and the mandate of the arbitral tribunal. 77 Ibid, art 43(3). The arbitration agreement will remain valid and a new arbitration may be commenced with a new arbitral tribunal.

7.2.4 The award must be made in writing, signed by all or a majority of the arbitrators, 78 Portuguese Arbitration Act, art 42(1).  mention the seat of the arbitration and contain the date of the award. 79 Ibid, art 42(4).  In addition, the award must be sufficiently reasoned, unless the parties have agreed otherwise or the award results from a settlement between the parties. 80 Ibid, art 42(3). See further section 7.3 below.

7.2.5 The award should also contain a determination of the amount payable and allocation of the costs of the arbitral proceedings, unless otherwise agreed by the parties. 81 Ibid, art 42(5).

7.2.6 After the award is rendered, a copy of the award that has been signed by all or a majority of the arbitral tribunal shall be delivered to each party. 82 Ibid, art 42(6).

7.3.1 If, during the course of the arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the arbitral proceedings. If requested by the parties and provided that the settlement does not violate any principles of public order, the arbitral tribunal may record the settlement in the form of an award. 83 Ibid, art 41(1).

7.4.1 If interest is claimed by a party, the arbitral tribunal may order the other party to pay the requested sum in accordance with the contractual or legal interest rates applicable to the case.

7.4.2 As mentioned in paragraph 7.2.5 above, the award should contain details of the costs of the arbitral proceedings and the liability of each party for payment, unless otherwise agreed by the parties. 84 Ibid, art 42(5).

7.5.1 There are several causes of termination of the arbitral proceedings, the most common being the issuance of the award.

In addition, the arbitral proceedings may be terminated if:

• the parties enter into a settlement;
• the arbitration agreement is revoked by all the parties, thereby reinstating their right to submit the dispute to the state courts;
• the claimant withdraws its claim, unless the respondent objects and the arbitral tribunal recognises a legitimate interest for the respondent to obtain final settlement of the dispute;
• the parties agree on the termination of the arbitral proceedings;
• the arbitral tribunal finds that the continuation of the arbitral proceedings has for any other reason become unnecessary or impossible; 85 Ibid, art 44(1) and (2). or
• an award is not made before the end of the legal or agreed deadline. 86 Portuguese Arbitration Act, art 45(3); see paragraph 7.2.3 above.

7.6.1 Following the expiry of the period in which a party may challenge the award, 87 Which see further sections 9.2 and 9.3 below. the award will have the same effect as a decision of the state courts of the lowest rank in the judicial hierarchy, and would therefore be directly enforceable. 88 Portuguese Arbitration Act, art 42(7).

7.7.1 Within 30 days of the award being rendered and received by the parties, the arbitral tribunal may correct any material or typographical errors, or any errors of a similar nature, on its own initiative or upon the application of a party. 89 Ibid, art 45(1) and (4).

7.7.2 Either party may also request the arbitral tribunal to clarify any obscurity or ambiguity in the award within this timeframe. 90 Ibid, art 45(2).

7.7.3 Unless otherwise agreed by the parties, either party may request the arbitral tribunal to make an additional award within 30 days of receiving the rendered award in relation to claims presented in the arbitral tribunal proceedings but not dealt with in the award issued. 91 Ibid, art 45(5).

8.1.1 As discussed in paragraph 3.5.1 above, if an arbitration agreement is valid and effective, the parties are not entitled to submit a dispute under that agreement to the state courts. Where this occurs, the state court will order the end of the court proceedings, on the basis that the matter is not within its jurisdiction.

8.2.1 The invocation of an arbitration agreement while proceedings are pending in a state court will not automatically cause those proceedings to be suspended. However, the Portuguese Civil Procedure Code allows for the suspension of court proceedings where there is a reasonable justification. 92 Portuguese Civil Procedure Code, art 287(1). Therefore, even if the facts in dispute are not identical, the state court may suspend the court proceedings based on the grounds of reasonable justification.

8.3.1 Preliminary rulings on jurisdictions are not dealt with by the Portuguese Civil Procedure Code. A respondent must therefore argue the lack of competence of the state court as part of its defence. A ruling will be delivered by the state court at the curative act stage or alternatively at the final judgment.

8.4.1 A court may, at any time, issue interim orders for the purposes of:

• maintaining or restoring the status quo;
• preventing or restraining a party from taking actions that are likely to cause harm or prejudice to the arbitral proceedings;
• providing means for preserving assets out of which a subsequent award may be satisfied; and
• preserving evidence that may be relevant and important to the resolution of the dispute. 93 Portuguese Arbitration Act, art 20(2).

8.4.2 The conditions for granting interim measures are:

1. the applicant has, with reasonable probability, the entitlement or right which the requested interim measure is intended to protect; and
2. the detriment resulting to the applicant if relief is not granted could not be easily remedied. 94 Ibid, art 21(1)

8.5.1 One of the few situations where the state courts may be involved in arbitral proceedings, without interfering with the arbitral tribunal’s jurisdiction, is when obtaining evidence from uncooperative parties or third parties to the arbitration. 95 Ibid, art 38(1).

8.5.2 This is not an intervention of the judicial courts in the arbitral procedure, but rather the provision of assistance by the judicial courts, which are empowered with jus imperii and have the power to order unwilling parties to cooperate with the arbitral tribunal in providing evidence. The arbitral tribunals have no similar power, as their jurisdiction is limited to the terms of the arbitration agreement and its signatories.

9.1.1 As mentioned above, the Portuguese Arbitration Act gives the same effect to an award as a state court decision at first instance. As described in detail below, the Portuguese courts will not entertain an appeal to an arbitral award unless explicitly agreed to by the parties. In this regard, the jurisdiction of the courts is therefore limited to applications to set aside, recognise and enforce awards.

9.2.1 The award is final. However, parties may stipulate otherwise in their arbitration agreement. 96 Ibid, art 39(4) and 59(1) (e).

9.2.2 However, where the parties, by means of the arbitration agreement, authorise the arbitral tribunal to adjudicate the case on equitable terms, the award may not be appealed in any circumstances. 97 Ibid, art 39(4).

9.2.3 In an international arbitration, the parties are also not entitled to appeal an award, unless the parties have expressly agreed to the possibility of appeal to another arbitral tribunal and have regulated its terms and conditions. 98 Ibid, art 53.

9.2.4 The rules of most arbitral institutions in Portugal confirm the finality of the award. 99 See Portuguese Chamber of Commerce Rules of Arbitration, art 31 [see
http://en.acl.org.pt/Files/Documents/ ArbitralTribunal.pdf]

9.3.1 Apart from appealing against the award, the parties may bring a legal action for the annulment or setting aside of the award, on one or more of the following bases:

• a party to the arbitration agreement was under some incapacity;
• the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any specification of that law, under the Portuguese Arbitration Act;
• a mandatory principle of the procedure has been breached;
• the award deals with a dispute not contemplated by or not falling within the terms of submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration;
• the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties;
• the subject matter of the dispute is not capable of settlement by arbitration under Portuguese law;
• the award is in conflict with the public policy of Portugal; or
• the award does not include the necessary signatures of the arbitral tribunal or is insufficiently reasoned. 100 Portuguese Arbitration Act, art 46(3). In a recent case, the Lisbon Court of Appeal, Case nº 2794/18.8YRLSB.L1-2, ruled that an award cannot be challenged when the reasoning is merely “insufficient or unconvincing”. According to Art. 42(3) of the Portuguese Arbitration Act, only an arbitration agreement which lacks reasoning shall be considered null and void. In the mentioned case, the judge considered that there was a critical assessment of the evidence produced, albeit superficial and adapted to the informal nature of the arbitration procedure.

9.3.2 The action seeking annulment must be filed within 60 days of the notice of the award to the parties or, if a request has been made to the arbitral tribunal to clarify any obscurity or ambiguity of the award, from the date on which the arbitral tribunal has decided on that request. 101 Ibid, art 46(6).

9.3.3 The right to apply for the annulment of the award is a mandatory provision of the Portuguese Arbitration Act that cannot be excluded by agreement between the parties and will prevail over any clause of the arbitration agreement that states otherwise. 102 Ibid, art 46(5).

10.1.1 Awards made in domestic arbitrations are enforced on the same terms as judgments of state courts. Therefore, the enforcement takes place within the state courts of first instance, without the need for any recognition or confirmation procedure. 

10.2.1 The recognition and enforcement of foreign awards follows the New York Convention 103 For the full text of the New York Convention (1958) see
https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf. rules if the country of origin is a signatory, resulting in fewer opportunities to refuse to recognise and enforce the award.

10.2.2 Where a country is not a signatory to the New York Convention, 104 Ibid. or any other treaties, conventions or European Union regulations that bind Portugal, these awards must undergo an internal procedure within the Portuguese state courts in order to be recognised and confirmed. Only after this procedure may such awards be enforced in Portugal. 105 Portuguese Arbitration Act, art 55; Civil Procedure Code, art 1094(1). The grounds for refusal of recognition and confirmation are wide but a review of the merits is still not admissible even in such cases.

10.2.3 The recognition and enforcement of a foreign award must not lead to a result which noticeably conflicts with international public policy. 106 Portuguese Arbitration Act, art 54.

Apart from the general scope of the Portuguese Arbitration Act, there are some specific arbitration regimes in different areas. These include mandatory and necessary arbitration in certain labour matters; 107 Decree-Law no 259/2009, published on 25 September 2009. matters concerning the consumers of essential public services; 108 Law no 23/96, published on 26 July 1996, art 15. arbitration in tax matters; 109 Decree-Law no 10/2011, published on 20 January 2011. and arbitration in expropriation procedures, where the parties fail to reach agreement on the amount of the indemnity due to the expropriated party. 110 Expropriation Code, art 38 to 53. There are many arbitral institutions in Portugal, dealing with various issues. However, the largest and most relevant to international commercial arbitration remains the Arbitration Centre of the Portuguese Chamber of Commerce and Industry – ACL. 111 The ACL contact details are: Rua das Portas de Santo Antão, N. 89, 1169-022 Lisboa, Portugal. The ACL website is availabe at:
http://www.centrodearbitragem.pt/