Supreme Court of Justice (Portugal) | Public Policy | New York Convention 1958 | 09-10-2003| Case #025

Supreme Court of Justice (Portugal)
Date: 09-10-2003
Case Nr. 03B1604
LINK DGSI

Headline:

A foreign arbitral award may be refused recognition only in the cases set forth in Article V of the New York Convention 1958— for instance, when such recognition would be contrary to the “international public policy” of the Portuguese State.

The international public policy of Portugal is comprised of those fundamental structuring principles of Portugal’s presence within the international community, such as ‘pacta sunt servanda’.

Summary:

  1. According to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, the recognition and enforcement of any arbitral award made in any of the contracting States may only be refused in the territory of another contracting State in the cases provided for in Art. V of the Convention, inter alia ‘if contrary to the public policy of that State”.
  2. The law understands this “public policy”, as “international public policy”, that is, those fundamental structuring principles of Portugal’s presence within the international community. These would include the principle of ‘pacta sunt servanda’.
  3. Based on this principle, a commercial entity cannot resist the enforcement of an award on the ground that it should have received free legal aid to bring its claim before an arbitral tribunal, when it has freely and consciously agreed to submit its contractual disputes to an arbitral tribunal that entails costs and expenses.
  4. The provisions of the New York Convention are of international law, and according to Art. 8 of the Constitution of the Portuguese Republic prevail over both previous and subsequent domestic laws. Thus, they prevail over Art. 1100 and 1096(e) of the Portuguese Code of Civil Procedure.

 

This case summary was kindly prepared by Sameer Thakur (sameerthakur@live.in, NALSAR University of Law), Rishabh Raheja, (rishabharaheja@gmail.com, NALSAR University of Law), and Abhishek Babbar (abhishekbabbar1996@gmail.com).

 

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