Some Remarks on the Portuguese Law on (Voluntary) Arbitration - PowerPoint Presentation

1. Some Remarks on the Portuguese Law on (Voluntary) ArbitrationRui Pinto Duarte1July 2015

2. 21. Evolution of Portuguese legislation on arbitrationRui Pinto DuarteArbitration is as old as the countryThe three constitutions of the XIX century made references to arbitrationNeverthless, between 1841 and 1984 rules on arbitration did not respect its autonomy, connecting it with state courtsSince 1982, Portuguese current constitution makes reference to arbitration (more precisely, to arbitral courts)In 1984, was published a law modernizing rules on voluntary arbitration and giving it more autonomy vis-à-vis state courtsSuch 1984 law was declared unconstitutional, because it was not passed by the parliament (to which the constitution reserves competence to legislate on the organization and competence of courts)In 1986, was published a law (known as «Law on Voluntary Arbitration») that fulfilled the mission ascribed to 1984 law even with a more “pro arbitration” approachSuch 1986 law remained into force until being replaced by the New Arbitration Law of 2011On 14th December 2011 was published Law 63/2011, known as «New Law on Voluntary Arbitration»The 2011 Portuguese Law on Arbitration entered into force on 14th March 2012

3. Rui Pinto Duarte32. General remarks on the 2011 Portuguese Law on Arbitration («PLA»)Based on Uncitral Model Law on International Commercial Arbitration, but not entirely equal to it (mainly, because PLA has a broader scope encompassing both domestic and international arbitration and both commercial and non-commercial arbitration)Portuguese law recognizes both institutional and ad hoc arbitrationTerritorial scope (Article 61: «This law is applicable to all arbitrations that take place in Portuguese territory, as well as to the recognition and enforcement in Portugal of awards issued in arbitrations located abroad»)

4. 3. General comparison between 2011 PLA and the Uncitral Model Law4Rui Pinto DuartePortuguese LawUnitral Model LawGeneral ProvisionsChapter IChapter IArbitration AgreementChapter IIChapter IIComposition of the Arbitral TribunalChapter IIIChapter IIIJurisdiction of the Arbitral TribunalChapter IVChapter IVInterim Measures and Preliminary OrdersChapter IVChapter VConduct of Arbitral Proceedings Chapter VChapter VIThe AwardChapter VIChapter VIIRecourse against the AwardChapter VIIChapter VIII(Recognition and) Enforcement of AwardChapter VIIIChapter IXInternational arbitrationChapter XRecognition and enforcement of foreign arbitral awardsChapter XICompetent state courtsChapter XIFinal dispositions

5. 4. Arbitrators’ legal requirements 51 - The arbitrators must be individuals and have full legal capacity.2 - No person shall be precluded, by reason of that person’s nationality, from being appointed as an arbitrator, without prejudice to the provisions of article 10, paragraph 6, and the discretion of the parties.3 - Arbitrators must be independent and impartial.4 – (…)5 – (…)Rui Pinto DuarteArticle 9Arbitrators’ requirements

6. 5. Arbitrators’ legal requirements 61 - When a person is invited to act as an arbitrator, he or she shall disclose any circumstances that may give rise to justifiable doubts as to his or hers impartiality and independence.2 - The arbitrator shall, throughout the arbitral proceedings, disclose without delay to the parties and the remaining arbitrators any of the circumstances referred to in the preceding paragraph that arise subsequently, or of which he only became aware after accepting the mandate.3 - An arbitrator may only be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence, or if the arbitrator does not possess the qualifications agreed to by the parties. A party may only challenge an arbitrator appointed by it, or in whose appointment it has participated, for reasons of which it becomes aware after the appointment has been made.Rui Pinto DuarteArticle 13Grounds for challenge

7. 6. The choice of the chairperson 71 – (…) 2 – (…)3 - In an arbitration with three or more arbitrators, each party shall appoint an equal number of arbitrators and the arbitrators thus appointed shall appoint a further arbitrator, who shall act as chairperson of the arbitral tribunal.4 – (…) 5 – (…)6 – In appointing an arbitrator, the competent State court shall have due regard to any qualifications required of the arbitrator or arbitrators by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator; in the case of an international arbitration, while appointing a sole or third arbitrator, the court shall furthermore take into account the advisability of appointing an arbitrator of a nationality other than those of the parties.7 – (…)Rui Pinto DuarteArticle 10Appointment of arbitrators

8. 4. Some aspects of 2011 PLA relevant for international arbitrationDefinition of international arbitrationArticle 49Concept and regime of international arbitration1. It is deemed international the arbitration in which international trade interests are at stake.2. Safe for what is provided in the present Chapter, the provisions of this Law on domestic arbitration shall apply to international arbitration, with the necessary adjustments.8Rui Pinto Duarte

9. 4. Some aspects of 2011 PLA relevant for international arbitration (cont.)States and state controlled organizations and arbitral agreementsArticle 1Arbitration agreement(…)5. The State and other legal entities governed by public law may enter into arbitration agreements insofar as they are authorized to do so by law, or if such agreements concern private law disputes.9Rui Pinto Duarte

10. 4. Some aspects of 2011 PLA relevant for international arbitration (cont.)Chapter VIIRecourse against awardArticle 46Application for setting aside1. Unless otherwise agreed by the parties, under article 39, paragraph 4, recourse to a state court against an arbitral award may be made only by an application for setting aside in accordance with the provisions of this article.10Rui Pinto Duarte

11. 4. Some aspects of 2011 PLA relevant for international arbitration (cont.)Chapter VIIRecourse against awardArticle 46Application for setting aside(…)3. An arbitral award may be set aside by the competent state court only if:The party making the application furnishes proof that:One of the parties to the arbitration agreement was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under this Law; orThere has been a violation within the proceedings of some of the fundamental principles referred in article 30, paragraph 1, with a decisive influence on the decision of the dispute; orThe award dealt with a dispute not contemplated by the arbitration agreement, or contains decisions beyond the scope of the latter; orThe composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Law, and in any case, this inconformity had a decisive influence on the decision of the dispute; or11Rui Pinto Duarte

12. 4. Some aspects of 2011 PLA relevant for international arbitration (cont.)Chapter VIIRecourse against awardArticle 46Application for setting aside(…)The arbitral tribunal has condemned in an amount in excess of what was claimed or on a different claim from that that was presented, or has dealt with issues that it should not have dealt with, or has failed to decide issues that it should have decided; orThe award was made in violation of the requirements set out in article 42, paragraphs 1 and 3; orThe award was notified to the parties after the maximum time-limit set in accordance with article 43 had lapsed; orThe court finds that:The subject-matter of the dispute cannot be decided by arbitration under Portuguese Law;The content of the award is in conflict with the principles of international public policy of the State of Portugal.4. (…).5. (…).6. (…).7. (…).12Rui Pinto Duarte

13. 4. Some aspects of 2011 PLA relevant for international arbitration (cont.)Chapter VIIRecourse against awardArticle 46Application for setting aside8. The competent state court, when asked to set aside an arbitral award, may, where appropriate, and if it is so requested by a party, suspend the setting aside proceedings for a period of time determined by it, in order to give the arbitral tribunal the opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion will eliminate the grounds for setting aside.9. The state court that sets aside the arbitral award cannot go into the merits of the issue or issues decided by the award, such issues to be submitted, if any party so wishes, to another arbitral tribunal to be decided by the latter.10. Unless the parties have agreed otherwise, setting aside the award shall result in the arbitration agreement becoming operative again in respect of the subject-matter of the dispute. 13Rui Pinto Duarte

14. 4. Some aspects of 2011 PLA relevant for international arbitration (cont.)Article 52Rules of law applicable to the merits of the dispute1. The parties may choose the rules of law to be applied by the arbitrators, if they have not authorized the arbitrators to decide ex aequo et bono. Any designation of the law or legal system of a given State shall be construed, unless otherwise expressly agreed, as directly referring to the substantive law of the State and not to its conflict of law rules.14Rui Pinto DuarteInternational Arbitration - Applicable Law

15. 5. Enforcement of foreign arbitral awards in Portugal15Portugal is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York 1958)Portugal is a party to the Convention on the Settlement of Investments Disputes between States and Nationals of other States (Washington 1965)

16. 5. Enforcement of foreign arbitral awards in PortugalChapter VIIIEnforcement of the arbitral awardArticle 47Enforcement of the arbitral award(…)3. The arbitral award may be enforced even if an application for setting aside in accordance with article 46 has been made; however, the party against whom enforcement is invoked may request that such application has a suspensive effect of the enforcement proceedings, provided that such party offers to provide security. Such effect shall only be granted if and when security is effectively provided within the time-limit set by the court, being applicable the provisions of article 818, paragraph 3, of the Civil Procedure Code.16Rui Pinto Duarte

17. 5. Enforcement of foreign arbitral awards in PortugalArticle 48Grounds for refusing enforcement1. The party against whom enforcement of the arbitral award is invoked may oppose the enforcement on any of the grounds which may be used for setting aside the award foreseen in article 46, paragraph 3, provided that, on the date on which the opposition is presented, an application for setting aside on the same grounds has not already been rejected by a final and binding judgment.(…)17Rui Pinto Duarte

18. 6. Final Word18Rui Pinto DuarteInitiatives like this one are determinant to go on fostering arbitrationThank you!