Supreme Court of Justice (Portugal) | IBA Guidelines Conflicts of Interest |12-07-2011 | Case #001

Portuguese Supreme Court of Justice
Date: 12-07-2011
Case Nr. 170751/08.7YIPRT.L1.S1
LINK DGSI

Headlines

  • Consideration of the IBA Guidelines on Conflicts of Interest.

  • Independence and impartiality of the arbitrators.

  • The state court may decide upon the validity of an arbitration agreement that provides for a mechanism to appoint the arbitrators that is manifestly null and void.

Summary:

1. It follows from the constitutional framework that arbitral tribunals are equated to state courts and, once constituted an arbitral tribunal, the essencial characteristics of a state court must be observed, inter alia the impartiality of the decision maker, including those appointed by the parties.

2. The arbitration proceeding, although flexible and tailor made, comprises a true catalog of procedural rules that allow the fair resolution of the dispute, in obedience to the fundamental principles of equality of the parties and of the right to be heard. That is a corollary of the fundamental right of access to justice and to courts. A proceeding where one or more “decision makers” were deprived from the essencial characteristics of independence and impartiality would not warrant a fair and equitable decision.

3. It does not guarantee the independence and impartiality of the arbitration proceeding an arbitration agreement which provides that the large majority of its members (4 out of 5 arbitrators) should be appointed by one of the parties and where the appointed arbitrators were connected to one of the parties through mandate and services agreements. It does not guarantee such independence and impartiality either a situation where the arbitrators where previously deeply involved in the subject matter of the dispute. It is up to the courts to assess such a defect, which is essential to decided upon a preliminary objection raised before the state court, since it is manifestly impossible to constitute an arbitral tribunal under those circumstances.