HOT TOPICS IN INTERNATIONAL ARBITRATION AND INTERNATIONAL. LITIGATION - NYSBA International Section Seasonal Meeting 2004 Vienna, Austria

Transcription

1 HOT TOPICS IN INTERNATIONAL ARBITRATION AND INTERNATIONAL LITIGATION - NYSBA International Section Seasonal Meeting 2004 Vienna, Austria Program 15 Friday, October, 17 Pedro Sousa Uva * ARBITRATION IN PORTUGAL PORTUGAL AS A POTENTIAL SEAT OF ARBITRATION FOR INTERNATIONAL DISPUTES WHY? A. Arbitration in Portugal is hot but not new Arbitration has been used in Portugal as a dispute resolution mechanism for many decades. The first (and former) Portuguese Law on voluntary arbitration dates from Law No. 31/86, dated 29 August 1986 was the statutory basis for arbitration in Portugal until 13 March When enacted in 1986, this arbitration law was widely viewed as a modern law, but in recent years, and until late 2011, arbitration practitioners and academics alike became quite vocal about the need for substantial amendment of the statute. A continuous and heated debate amongst the Portuguese arbitration community led to presentation of a Bill 1 by the Portuguese Government 2 which was greatly inspired by the Portuguese Arbitration Association s 3 own bill. Law No. 63/2011, the current Voluntary Arbitration Law ( VAL ), was enacted on 14 December 2011 and entered into force on 14 March 2012; LAV repealed the former law, save for Article 1.1, which remains in force for disputes arising from or in connection with employment agreements 4. B. Portugal is an arbitration friendly country Portugal has friendly and modern legislation in arbitration and litigation. The purpose of the Portuguese government in passing a new law on voluntary arbitration was to modernize 1 Bill No. 22/XII. 2 The 9th Constitutional Government. 3 The website of APA is An English version of the website will soon be available. 4 Agostinho Pereira de Miranda / Pedro Sousa Uva, in World Arbitration Reporter, Second Edition (JurisNet LLC 2014) Portuguese Chapter. For more information about this publication please visit 1

2 arbitration in Portugal, bringing it in line with the UNCITRAL Model Law (while still tailoring it in part to the needs and particularities of the Portuguese legal system) and turning Portugal into a more attractive venue as an arbitral seat. Portugal is party to most relevant international Conventions and Treaties. On the international front, Portugal has been a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention ) since Portugal has made use of the first (reciprocity) reservation. As permitted by Article I.(3) of the New York Convention, Portugal declared that it would apply the Convention to the recognition and enforcement of awards rendered in the territory of another Contracting State, on the basis of reciprocity. As to how this reservation operates in practice, in principle, a Portuguese court will verify ex officio whether or not the Convention is applicable to the relevant arbitral award. The VAL incorporates many of the New York Convention s provisions, notably its Articles V, II, and IV, which respectively correspond to Articles 56.1, 56.2, and 57 of the VAL (Grounds for refusal of recognition and enforcement). Portugal also acceded to the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals of other States (the Washington Convention ) in August Of less importance nowadays are the 1923 Geneva Protocol on Arbitration Clauses and the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards, ratified by Portugal in 1931 and 1930, respectively. In 2002, Portugal also ratified the Inter-American Convention on International Commercial Arbitration, signed in Panama on 30 January In terms of bilateral arrangements that have a bearing on arbitration, Portugal has entered into judicial and legal cooperation agreements with various Portuguese-speaking African countries, including Angola, Mozambique, and Cape Verde, coming to a total of forty-five Bilateral Investment Treaties (BITs). On a domestic level, although there are presently no binding laws on ethics in arbitration, the Portuguese Arbitration Association drafted a Code of Ethics for Arbitrators which was approved in March 2010 and has been recently updated by APA s Ethics Committee. This Code is mandatory for members of the Portuguese Arbitration Association, whilst any authorized arbitration centers, parties in ad hoc arbitrations and arbitral tribunals may opt to follow them. Also recently, the Arbitration Center of the Portuguese Chamber of Commerce (PCCI) and Industry, the main arbitration institution in Portugal, has incorporated into its revised rules effective 1 March 2014 a Code of Ethics that is mandatory for all arbitrations under the auspices of said center and that follows very closely the Code previously adopted by the 2

3 Portuguese Arbitration Association. Both the Code of Ethics for Arbitrators of APA and The Code of Ethics of PCCI expressly incorporates the International Bar Association (IBA) Guidelines on Conflicts of Interests in International Arbitration for purposes of interpretation and integration of its rules. C. Seat of arbitration The seat of arbitration has several implications under the VAL, the most relevant being the fact that, if the seat of arbitration is located in Portugal, the VAL will apply to the arbitration 5. Consequently, the proceedings will have to comply, for example, with the mandatory rules on due process set out in Article 30.1 and with the mandatory rules on the composition of the arbitral tribunal or the arbitral procedure, or else the award risks being set aside if a breach of those mandatory rules had a decisive influence on the outcome of the dispute 6. Moreover, the VAL sets forth certain mandatory rules governing international arbitration proceedings in Portugal, as follows: (a) Inadmissibility of pleas based on domestic law of a party When the arbitration is international and one of the parties to the arbitration agreement is a State, a State-controlled organisation, or a State-controlled company, that party may not invoke its domestic law to contest the arbitrability of the dispute, deny its capacity to be a party to the arbitration, or otherwise evade its obligations arising from the arbitration agreement in any way 7. (b) Substantial validity of the arbitration agreement In international arbitration, the validity of an arbitration agreement is assessed under (i) the law chosen by the parties to govern the arbitration agreement, (ii) the law applicable to the subjectmatter of the dispute (lex causae), and (iii) Portuguese law (lex fori) 8. (c) Rules of law applicable to the merits of the dispute The parties may choose the rules of law to be applied by the arbitrators, provided they have not 5 VAL, Article VAL, Article 46.3 (a) (ii) and (iii). 7 VAL, Article VAL, Article 51. 3

4 authorised the arbitrators to decide ex aequo et bono. Any choice of the law or legal system of a given State shall be understood as directly referring to the substantive law of that State (and not to its conflicts of law rules), unless otherwise agreed by the parties. Where the parties have made no provision in regard to choice of law, the arbitral tribunal must apply the law of the State with which the subject-matter of the dispute has the closest connection. Furthermore, the arbitral tribunal will take into account the contractual terms agreed by the parties and the relevant trade usages 9. (d) No appeal against the award to a State Court In international arbitration, the award made by the arbitral tribunal may not be appealed unless the parties have expressly agreed on the possibility of appeal to another arbitral tribunal and regulated the terms on which the appeal may be made. (e) International public policy An award rendered in Portugal as part of an international arbitration in which non-portuguese law has been applied to the subject-matter of the dispute may be set aside on the grounds provided for in Article 46 of the VAL. Awards made in such situations may also be set aside if they are to be enforced or otherwise take effect in Portuguese territory and their enforcement would lead to a result that is manifestly incompatible with the principles of international public policy. D. Recognition and enforcement of awards Domestic Awards Awards rendered by arbitral tribunals seated in Portugal and judgments handed down by Portuguese courts have exactly the same legal effects 10. Therefore, if the losing party does not comply with the award, the prevailing party may seek to have it enforced by a court through enforcement proceedings. No previous exequatur is required. Foreign awards Foreign arbitral awards rendered outside the scope of one of the bilateral or multilateral treaties or international conventions ratified by Portugal must be recognised and confirmed so as to be 9 VAL, Article VAL, Article 42.7; CCP, Article

5 enforceable. The most common international convention is, undoubtedly, the New York Convention. Article 55 of the VAL reads as follows: Article 55 Need for recognition Without prejudice to the mandatory provisions of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, as well as to other treaties or conventions which are binding on the Portuguese State, the awards made in arbitrations seated abroad shall only be effective in Portugal, regardless of the nationality of the parties, if they have been recognised by the competent Portuguese State court, under the present chapter of this Law. The Court of Appeal 11 is the court with jurisdiction to entertain proceedings for the recognition and confirmation of foreign awards (Article 59.1(h) and 59.2). Recognition and enforcement of an arbitral award made in an arbitration taking place in a foreign country may be refused only (VAL, Article 56): 1. At the request of the party against whom the award is invoked, if and when that party offers evidence of the following: (i) A party to the arbitration agreement was under some incapacity or the agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was rendered; or (ii) The party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case; or (iii) The award deals with a dispute not contemplated by the arbitration agreement or contains decisions on matters beyond the scope of the arbitration agreement 12, or (iv) The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (v) The award is not yet final and binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, the award 11 Or the Central Administrative Court if the dispute falls under jurisdiction of administrative courts pursuant to Portuguese law. 12 In this case, if the decisions on matters submitted to arbitration can be separated from those not submitted to arbitration, the part of the award relating to the former may be recognized and enforced (VAL, Article 56.1(a)(iii)). 5

6 was rendered. 2. If the court itself finds that: (i) The subject-matter of the dispute is not capable of settlement by arbitration under Portuguese law; or (ii) The recognition or enforcement of the award would lead to a result clearly incompatible with the international public policy of the Portuguese State. The bilateral or multilateral treaties or conventions ratified by Portugal provide for different procedures for the recognition and enforcement of foreign awards. Therefore, there is no standard procedure for the recognition and enforcement of foreign awards in Portugal. It could nevertheless be said that the most important legal mechanisms for the recognition and enforcement of foreign awards in Portugal are those laid down by (i) Articles 55 et sequitur of the VAL, which apply to awards rendered outside the scope of one of the bilateral or multilateral treaties or conventions to which Portugal is a party; (ii) the New York Convention; and (iii) the Washington Convention. The scope of the court s review covers essentially formal and procedural aspects of the award and arbitral procedure, excluding review on the merits. As expressly referred in Article 46.9 of the VAL, in respect of grounds for setting aside, the State court may not deal with the merits of the issue or issues decided in the award, those issues to be submitted, if any party so wishes, to another arbitral tribunal for a decision. As one commentator explains, 13 even when dealing with an award that allegedly contravenes Portuguese international public policy, an arbitral tribunal may not re-examine the merits of the award due to the general principle enshrined in Article 46.9 of the VAL 14. The analysis of the award by the arbitral tribunal must limit itself to (i) a prima facie evaluation of the award and procedure and (ii) cases of apparent or evident contradictions with the principles of Portuguese international public policy. Portuguese law distinguishes between recognition and enforcement proceedings. A foreign arbitral award has to be recognised by Portuguese courts in order to be enforceable against the parties. The rules applicable to recognition proceedings may differ depending on whether there 13 José Robin de Andrade, Lei da Arbitragem Voluntária Anotada, 2012 Almedina / Direcção da APA (Associação Portuguesa de Arbitragem) /Annotated version of the VAL by the members of the Board of the PAA), p Albeit in respect of grounds for setting aside, the same line of reasoning applies to recognition and enforcement of foreign arbitral awards. 6

7 is a bilateral or multilateral treaty or convention between Portugal and the country in which the arbitral award has been rendered 15. Should the applicant wish to go a step further (i.e., not only to recognise the legal force and effect of the foreign arbitral award, but also to ensure that the party against whom the award was made will carry it out, under pain of statutory sanctions) it must then seek the enforcement of the (recognised) foreign award. Regarding the procedure for having the award recognised, the VAL sets forth that the party that seeks recognition of a foreign arbitral award, particularly if enforcement in Portugal is sought, must supply the duly authenticated original award or a certified copy thereof, as well as the original of the arbitration agreement or a certified copy. If the award or the agreement is not made in Portuguese, the party that seeks recognition must supply a certified Portuguese translation of it. The opposing party must then be summoned to present its opposition within fifteen days. After the written pleadings and the procedural steps deemed indispensable by the rapporteur are taken, access to the file is granted to the parties and to the Public Prosecutor, for fifteen days, for the purpose of closing arguments. Finally, the trial is conducted pursuant to the rules applicable to appeals 16. E. Experienced Arbitral Institutions There is solid experience and a clear investment in arbitration by a large arbitral community. Amongst several existing arbitral institutions, one may say that the leading commercial arbitral institution is the Centro de Arbitragem (Arbitration Centre) of the Câmara de Comércio e Indústria Portuguesa (Portuguese Chamber of Commerce and Industry), which recently reviewed its rules (2014 rules), including rules on emergency arbitrators, a code of ethics and reference to International Bar Association s (IBA) guidelines on conflicts of interest in international arbitration. Moreover, the list of arbitrators of the major arbitral center in Portugal includes several foreign authorities in international arbitrations notably Brazilian and Spanish arbitrators. Other national arbitral institutions (no current statistics available) include: 15 VAL, Article VAL, Article 57. 7

8 Instituto de Arbitragem Comercial/Associação Comercial do Porto Concórdia Centro de Conciliação, Mediação de Conflitos e Arbitragem Centro de Arbitragem de Conflitos de Consumo de Lisboa Centro de Informação de Consumo e Arbitragem do Porto CAL Centro de Arbitragem de Litígios Civis, Comerciais e Administrativos da Ordem dos Advogados Centro de Arbitragem da Universidade Católica Portuguesa (CAUCP) Centro de Arbitragem Administrativa (CAAD) ARBITRARE Centro de Arbitragem para a Propriedade Industrial, Nomes de Domínio, Firmas e Denominações CIMPAS Centro de Informação, Mediação, Provedoria e Arbitragem de Seguros F. Costs and language Costs It is easy, and not expensive, to hold arbitrations in Portugal. The issue of costs and fees is one of the reasons why parties frequently choose the arbitration rules of the PCCI Arbitration Centre. Under these rules, the cost of arbitration includes arbitrators fees, administrative costs, and expenses incurred with the provision of evidence. The parties pay an initial advance of no more than 35% of the estimated arbitration costs, as determined by the PCCI Secretariat. During the proceedings, the secretariat requests additional advances until 100% of the estimated costs are covered. Still according to the PCCI rules, if the initial advance is not paid, the arbitration shall not proceed, and the arbitral proceedings shall be deemed to have ended; if it is the respondent that has failed to pay, the arbitration shall proceed, and the tribunal may determine inadmissibility of the answer. Should requests for advance on costs related to production of evidence not be paid, the tribunal shall not proceed with such measure. Also, non-payment of any subsequent advance shall cause the arbitral proceedings to be suspended, in the event of non-payment by the claimant; in the event of such non-payment by the respondent, the arbitral tribunal may bar respondent from taking part in the production of evidence or submitting statements. If a suspension of arbitral proceedings persists for a period of more than thirty days without 8

9 payment of the missing advance, the arbitral tribunal may determine that the arbitral proceedings have ended, dismissing the respondent from the proceedings without prejudice. 17 The VAL allows the parties to ask the competent state court 18 to reduce the fees, expenses, and advances determined by the arbitrators, notwithstanding any agreement on these matters by the latter. After giving the members of the arbitral tribunal the opportunity to present their views on the issue, the state court may set the sums it deems appropriate 19. If the parties fail to pay the advances on fees and expenses previously agreed or determined by the arbitral tribunal or competent state court, the arbitrators may suspend or end the arbitral proceedings after granting the parties a reasonable extension of the time limit to rectify the situation 20. Before suspending the arbitral proceedings, the arbitrators must give notice of the fact to the remaining parties so that they may, if they wish, make the advance payment within the time limit granted for that purpose 21. Regarding legal fees, arbitrators may include in the award, if deemed fair and appropriate, that one or some of the parties shall compensate the other or others for the whole or part of the reasonable costs and expenses that such party proves to have incurred due to its participation in the proceedings 22. As to Security for costs, arbitrators may request advances on their fees and expenses. If a requested advance is not paid, the arbitrators may suspend or end the arbitral proceedings after granting the parties a reasonable extension of the time limit to rectify the situation, as mentioned above. However, the VAL does not specifically address the question of security for costs regarding either Portuguese national courts or arbitral tribunals, meaning the parties and arbitrators are free to determine the applicable rules. It is common for arbitrators to demand one or more advance deposits for costs and fees, which the parties usually make. As a rule, the final award shall decide the allocation on costs directly resulting from the 17 The PCCI website has a cost calculator where the estimated costs for an arbitration may be assessed, based on the number of arbitrators and the value of the dispute. In any case, the Chairman of the Center may, under certain circumstances, increase or decrease the costs, within certain limits indicated in the rules. 18 The competent Court of Appeal (VAL, Article 59.1 (d)), which is either the Tribunal da Relação or the Tribunal Central Administrativo, depending on the matter and the nature of the dispute (judicial or administrative, respectively). 19 VAL, Article VAL, Article VAL, Article VAL, Article

10 arbitration between the parties 23. Furthermore, and as mentioned above, the arbitrators may include in the award, if deemed fair and appropriate, that one or some of the parties shall compensate the other or others for the whole or part of the reasonable costs and expenses that such party proves to have incurred due to its participation in the proceedings 24. Language Foreign lawyers and arbitrators may rely on a favorable legal system and conduct arbitral proceedings solely in English or any other language 25. The LAV 26 establishes that the parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the arbitral tribunal shall determine the language or languages to be used in the proceedings. Moreover, the arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or chosen by the arbitral tribunal. G. Arbitrability The VAL does not restrict arbitrability only to civil or commercial matters. As mentioned above, arbitration may take place in matters involving administrative legal relationships, certain types of employment disputes, and other situations specified below. Intellectual property disputes are, in general, subject to the jurisdiction of the Intellectual Property Court, which has been operating since 30 March However, different arbitration regimes apply to the two main areas of intellectual property: copyright and industrial property. In accordance with the Portuguese Copyright Code (approved by Decree-Law No. 63/85, of 14 March 1985) parties may subject any dispute to arbitration under general law provided it arises from the interpretation of the Copyright Code and does not concern inalienable rights (Article 229). Exceptions to this principle include (i) disputes involving moral rights (Article 56) and (ii) disputes regarding the protection of technological measures (which are subject to the Mediation and Arbitration Commission, created by Law No. 83/2001, of 3 August 2003). The Portuguese Industrial Property Code (approved by Decree-Law No. 36/2003, of 5 March 23 VAL, Article VAL, Article Portuguese is the sixth most spoken language in the world and the third most spoken European language. 26 VAL, Article

11 2003) allows arbitral tribunals to resolve any industrial property disputes that may be decided by a court, without prejudice to the use of any other forms of alternative dispute resolution. ARBITRARE (created by Order No /2008, of 22 October 2008) is the institutionalised arbitration centre that has jurisdiction over disputes involving (a) industrial property (such as trademarks and patents); (b).pt domain names; and (c) trade names and corporate names. Additionally, a new mandatory arbitration regime for disputes regarding brand-name pharmaceutical products and generic drugs has been in force since 19 December 2011, as per Law No. 62/2011, of 12 December Tax arbitration is another field that demonstrates how far arbitration has come in Portugal: since July 2011, certain tax disputes 27 may also be resolved through arbitration, as per Decree-Law No. 10/2011, of 20 January Disputes regarding tax matters are submitted to institutional arbitration at the CAAD Centro de Arbitragem Administrativa. Arbitration in insolvency proceedings is limited and regulated by the Portuguese Insolvency Code (PIC), which actually gives different legal effects to arbitration proceedings depending on whether they had already begun at the time of the declaration of insolvency. According to Article 87.1 of the PIC, whenever an insolvent person or company is party to an arbitration agreement governing a dispute that may affect the value of the insolvent estate, the effectiveness of that agreement is suspended, notwithstanding any applicable international treaties. Article 87.1 of the PIC seeks to prevent the institution of any arbitration that may affect the assets of an insolvent estate after a declaration of insolvency. This means that the suspension of the arbitration agreement will only affect those proceedings that may influence the value of the estate. An insolvent estate consists of an insolvent party s property, as well as rights and assets that it may acquire during insolvency proceedings. Therefore, the reasoning behind Article 87.1 of the PIC is entirely pragmatic: since cases involving the value of an estate can only be decided as part of insolvency proceedings, no arbitration that may lead to awards that could influence the value of that estate may be brought by or against the insolvent party after the declaration of insolvency. 27 The tax authorities have limited the recognition of arbitral awards to a limit of 10 million euros. Thus, any decision on a matter which is above said limit will not be complied with by tax authorities (Portaria no. 112-A/2011, of 22 March). 11

12 Moreover, Article 87 explicitly refers to applicable international treaties, insofar as its application cannot, for instance, contravene the provisions of the New York Convention. On the other hand, Article 87.2 states that any arbitration already pending when the declaration of insolvency takes place may proceed; in such cases the insolvency administrator will take the place of the insolvent party in the proceedings, regardless of whether or not the other party agrees to the replacement. E. Pro-arbitration Courts Portuguese State Courts have experience in (i) deciding on challenge of arbitral awards proceedings; (ii) resorting and applying the International Bar Association (IBA) guidelines, notably on conflict of interests in international arbitration; (iii) declining a review on the merits of arbitral awards; (iv) assisting arbitral tribunals by means of interim relief (new Civil Procedure Code). Regarding the Interaction of national courts and tribunals, one should refer that the competence-competence principle is seen in Portugal as having two sides: a positive effect and a negative effect. The positive effect consists of the arbitral tribunal s authority to determine its own jurisdiction. The negative effect is that state courts have no jurisdiction to make a ruling on a dispute covered by a valid arbitration agreement. Accordingly, any state court faced with a claim concerning a matter which is the object of an arbitration agreement must dismiss that claim if the respondent requests its dismissal not later than when submitting its first statement on the substance of dispute. The only exceptions to this rule are where the state court finds that the arbitration agreement is manifestly invalid, inoperative, or incapable of being performed 28. Arbitral proceedings may be instituted or continued, and an award may be rendered, while the issue is pending before the state court 29. This negative effect precludes parties from exercising their right to file a separate claim with, or seek interim relief from the competent state court. It also effectively forbids them to raise questions as to whether the arbitration agreement is valid, operative, and capable of being performed with the purpose of hindering the constitution or operation of the arbitral tribunal 30. This means that anti-arbitration injunctions are not allowed in the Portuguese legal system, as mentioned above. 28 VAL, Article VAL, Article VAL, Article

13 An arbitral tribunal s lack of jurisdiction constitutes grounds for annulment of the award, and the right to seek such annulment may not be waived 31 However, a party may not raise the tribunal s lack of jurisdiction as grounds for seeking annulment of an award if that party became aware of the fact during the arbitral proceedings and, having had the opportunity to raise it then, failed to do so 32. Courts may be called upon to review an award on jurisdiction as the result of an appeal, a challenge of an interim award made by the arbitral tribunal on its own jurisdiction, a challenge to set aside an arbitral award, an opposition to enforcement, or an opposition to the recognition of a foreign arbitral award 33. F. Portugal as a strategic platform for resolving disputes amongst Portuguese Speaking Countries: Arbitration in Africa ANGOLA Arbitration is the dispute resolution mechanism which is most often provided for in agreements entered into by foreign companies and entities with projects in Angola. Over the years, there has been an increasing number of arbitrations taking place in Angola, although most of them of adhoc nature since only recently have arbitration institutions been set-up in the territory 34. One of the common elements for cooperation of Portugal with certain African Countries, notably Angola, is the Language and the Law. Angola was a Portuguese overseas territory for almost five hundred years. For this reason, the history and legal framework of Arbitration in these countries is coincident until 1975, when Angola became an independent State. The current Angolan Voluntary Arbitration Law presently in force is Law 16/03, of 25 July 2003 (AVAL). As happens with a significant number of legislative acts enacted after Angola s independency, said law is largely inspired in the former Portuguese legal regime, i.e., the former Portuguese Voluntary Arbitration Law. 31 VAL, Article VAL, Article New York Convention; VAL Article 59 (e), (f), (g), and (h) and Article Agostinho Pereira de Miranda / Cláudia Leonardo, in World Arbitration Reporter, Second Edition (JurisNet LLC 2011) Angolan Chapter. For more information about this publication please visit 13

14 The VAL is not based on the 1985 UNCITRAL Model Law. In contrast to the Model Law, the VAL (i) does not address the issue of preliminary decisions; (ii) does not expressly distinguish between different types of awards; and (iii) allows for appeals on the merits to be lodged against domestic arbitral awards unless otherwise agreed between the parties. Despite this new regime, arbitration in Angola is still not yet in line with the best international arbitration practice. Further, Angola is not a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention ). Nor is it a party to the Washington Convention of 1965 on the Settlement of Investment Disputes between States and Nationals of other States (the Washington Convention ). Angolan Ministries of Justice and Foreign affairs made public that negotiations towards the accession of Angola to the New York Convention have finally been initiated. Angola is a party to bilateral investment treaties (BITs) with Cape Verde, Germany, Italy, Portugal, Russia, South Africa, Spain and the United Kingdom, but only four of these BITs are currently in force (Cape Verde, Germany, Italy and Russia). Seat of arbitration The primary consequence of the seat of arbitration being located in Angola will be that the AVAL will apply to the arbitration. Proceedings will consequently have to comply with the mandatory procedural rules provided in its Article 18. The award rendered will also have to be deposited with the secretariat of the Provincial Court of the seat of arbitration (AVAL, Article 30(4)). The seat of arbitration is also important for purposes of determining which court will have jurisdiction on matters related to prospective appeals (AVAL, Article 36), setting aside of the award (AVAL, Article 35) and enforcement of the award (AVAL, Article 38). The parties are free to agree on the place of arbitration provided they do so in a written agreement. If the parties fail to determine where the arbitration should take place, the choice will be at the tribunal s discretion (AVAL, Article 17(1)). Despite the chosen seat of arbitration, and unless otherwise agreed by the parties, the arbitral tribunal may hold meetings and hearings wherever it considers appropriate (AVAL, Article 17(2)).The theory of the implied choice of place of arbitration based on the choice of procedural rules is not applicable under the AVAL, 14

15 since Article 17(1) expressly requires a written agreement. 35 If the arbitration is undertaken under any institutional rules, the place of arbitration will be determined according to such rules. Appeal on the merits The VAL contains distinct provisions for domestic and international arbitration. An appeal on the merits is admissible for domestic arbitration provided that parties have not waived its right thereto (AVAL, Article 36(1)). In this case, the parties will have a time limit of 15 days to appeal the award. The judicial court having jurisdiction to decide the appeal will be the Supreme Court and the rules of procedure applicable to appeals against judicial court decisions will apply (AVAL, Article 36(2)). Differently, for international arbitration, the rule is that awards are final and binding on the parties, and are not subject to appeal, unless the parties agree otherwise and provide for the rules applicable to the appeal (AVAL, Article 44). Should the parties agree on subjecting the award to appeal, they are further required to agree on the terms and conditions of such appeal. Pursuant to Article 36(1) of the AVAL, arbitral awards are subject to the same appeals as if they had been rendered by a Provincial Court. The provision shall be construed as referring both to type of appeal and grounds for appeal, this meaning that an appeal due to the tribunal failing to or inappropriately applying the applicable law will be admissible. In domestic arbitration, the parties are allowed to waive their right to appeal on the merits of the awards (AVAL, Article 36(1)). However, both parties have to waive such right. Waiver by one of the parties only is inadmissible. If the parties agree that the tribunal is to decide ex aequo et bono, their right to appeal on the merits of the award is deemed to be automatically waived (AVAL, Article 36(3)). It turn, in international arbitration, the general rule is that the award is not subject to appeal, unless parties agree otherwise (AVAL, Article 44). Enforcement of arbitral awards in Angola. Angola is neither a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards nor a party to the 1965 Washington Convention on Settlement of Investment Disputes between States and Nationals of other States (ICSID). 35 Luis de Lima Pinheiro, Arbitragem Transnacional A Determinação do Estatuto da Arbitragem (Transnational Arbitration Determination of the Status of Arbitration), 2005, p

16 According to the AVAL domestic arbitral awards have the same effects as judicial awards. As such, if the losing party does not comply with the award, the winning party may seek the direct enforcement thereof in a state court through judicial enforcement proceedings. No previous exequatur is required. Further to the grounds generally admissible in the CCP, the enforcement of an arbitral award may be refused on the same grounds as those provided for setting-aside proceedings. Moreover, courts may ex officio refuse the enforcement if the dispute at stake either: is not arbitrable; falls under the exclusive jurisdiction of state courts; or is subject to statutory (as opposed to contractual) arbitration. Now, for foreign awards, the Angolan civil procedure rules establish that no decision issued by a foreign court may produce effects in the territory without being previously subject to a process of confirmation and recognition (CCP, Article 1094). The CCP expressly states that arbitral awards are also subject to confirmation and recognition procedures (CCP, Article 1097). The Court having jurisdiction to entertain the confirmation and recognition proceedings is the Civil and Administrative Chamber of the Supreme Court. Recognition and confirmation will not be granted to a foreign award if it does not meet all of the following statutory requirements (CCP, Article 1096, and Articles 771(a), 771(c) and 771(f) ex vi Article 1100(1)): (i) The authenticity of the document containing the award having been established; (ii) The award being valid and binding under to the law governing the arbitration proceedings (i.e. the law of the seat of arbitration); (iii) The award arising out of a valid arbitration agreement; (iv) The same dispute not being pending in Angolan courts, nor having a final decision on the same dispute been rendered by Angolan courts; (v) The parties having had the opportunity to present their case in the arbitration and having been equally treated by the arbitrators; (vi) The recognition and enforcement of the award not being contrary to Angola s international public policy; (vii) The award containing a decision that can be understood (a Portuguese translation is often required); (viii) The award not having been rendered by a corrupted arbitrator, convicted by a court of law; 16

17 (ix) The losing party not having produced documentary evidence of which it had no prior knowledge, or could not have used for any other reason during the arbitration, when such documentary evidence is capable of changing the decision of the arbitrators and favour the loosing party s interests; (x) The award not being in contradiction with another res judicata award or decision previously rendered by a tribunal or court in a case between the same parties. The application for the confirmation and recognition of an award must contain the decision to which it refers to (CCP, Article 1098). The counter-party will be summoned to respond within 10 days and the applicant is allowed to reply to counter-party s opposition within 8 days. The court has the ex officio duty to verify if the award fulfils the abovementioned requirements. G. Conclusion The scenario described above may turn Portugal into a more interesting seat for international arbitrations. Much has already been done in terms of creating the right environment for international arbitrations to take place in Portugal. It is now time for lawyers and arbitrators all over the world to contemplate new friendly venues with capacity to host complex arbitral disputes, with affordable prices and with good infrastructures. The VAL, the new Rules of the PCCI, the Code of Ethics for Arbitrators of APA, the expansion of arbitration to other areas of the law, the friendly judicial approach toward arbitration, amongst other factors, may well lead to the conclusion that Portugal is indeed a good option. * Materials Portuguese Voluntary Arbitration Law Law No. 63/2011, of 14 December Angolan Voluntary Arbitration Law - Law 16/03, of 25 July