Lisbon Court of Appeal | Kompetenz-Kompetenz | Financial Distress of one of the Parties does not render the Arbitration Clause Inoperative | 22-09-2015 | Case #007

Lisbon Court of Appeal
Date: 22-09-2015
Case Nr. 1212/14.5T8LSB.L1-7
LINK DGSI 

Related CASE: Decision of the Supreme Court of Justice of 26-04-2016 HERE

Headlines:
The arbitral tribunal is competent to decide the validity of the arbitration agreement, unless such invalidity is blatant.
The circumstance that the petitioner is under a restructure procedure does necessary mean that it is not capable of lying the arbitration costs.

Summary:
1. When the existence of an arbitration agreement has been invoked by one the parties, the state court judge can only avoid the dismissal of a case brought before him or her, when it is clear and undisputable that the agreement agreement is null or inoperative or if the dispute does not blatantly fall within the scope of that agreement.
2. In other words, pursuant to Art. 21(1) of the Arbitration Act (old Law Nr. 31/86, of 29 August 1986), the parties are prima-facie bound by an arbitration agreement and must therefore be referred without further ado to arbitration.
3. In this case, the interpretation of the arbitration agreement points out to an arbitration agreement, because it foresees possible and future litigation arising from a concrete and specific contractual relationship (see Art. 1(2) of the Old Arbitration Act). The interpretation of an arbitration clase must be made giving relevance to the pre-contractual declarations of the parties, pursuant to Arts. 236 to 238 of the Civil Code.
5. The arbitration agreement covers all practical and legal disputes arising out of both the master agreement and the financial transactions to be established between the parties under that contractual framework. This framework includes the contractual terms under which both the financial exchanges (swaps) and interest rate swaps are performed.
6. Come what may, commercial companies are obliged to pay the costs of litigation, either before state courts or arbitral tribunals, and the arbitration agreement will be enforceable in any event and regardless of the financial conditions of the parties.
7. The circumstance that the petitioner is under a restructure procedure does necessary mean that it is not capable of lying the arbitration costs.

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