Porto Court of Appeal | Kompetenz-Kompetenz | Negative Effect of the Arbitration Agreement | 13-04-2015 | Case #056

Porto Court of Appeal
Date: 13-04-2015
Case Nr. 471/14.8TVPRT.P1
LINK DGSI

Headline:

The court judge shall dismiss the procedure in accordance with Art. 5(1) of the Arbitration Act if a party invokes the existence of an arbitration agreement, unless such agreement is manifestly null and void, ineffective or unenforceable.

According to Art. 18(3) of the Arbitration Act, the jurisdiction of the arbitral tribunal includes the power to decide on the validity of the arbitration agreement.

 

Summary:

  1. Given that the parties entered into a ‘master agreement’, with the aim of setting forth the general conditions applicable to every financial transaction to take place between the parties, it should be understood that they intended to apply the clauses of that agreement to the ‘Interest Rate Swap Agreement’ which they entered into later.
  2. This conclusion is underscored by a stipulation according to which “the set out in this contract is part of the whole framework and applies to every financial transaction to be carried out between the parties, unless otherwise agreed by the parties in writing”.
  3. It should be interpreted as submitting to arbitration any dispute arising between the parties the clause according to which “all disputes which may arise between the Parties under this contract shall be settled by an arbitral tribunal which shall decide according to the law and from whose decision there will be no appeal”.
  4. If an arbitration agreement is invoked by one party, the court must dismiss the procedure in accordance with Art. 5(1) of the Arbitration Act, unless the court judge finds that the arbitration agreement invoked is manifestly null and void, ineffective or unenforceable. Such invalidity must be shown in a blatant fashion, without the need for any further evidence.
  5. According to Art. 18(3) of the Arbitration Act, the jurisdiction of the arbitral tribunal includes the power to decide on the validity of the arbitration agreement.

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