Supreme Court of Justice (Portugal) | Kompetenz-Kompetenz | Negative Effect of the Arbitration Agreement | 12-05-2016 | Case #057

Supreme Court of Justice
Date: 12-05-2016
Case Nr. 710/14.5TVLSB-A.L1.S1
LINK DGSI

Headline:

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. The Supreme Court of Justice is competent to decide issues on the interpretation and application of any legal rule. The potential jurisdiction of an arbitral tribunal falls within those powers, according to Art. 5(1) of the Arbitration Act and Art. 3(3) of the Code of Civil Procedure.
  2. Art. 5(1) of the Arbitration Act provides for the negative effect of the principle of competence of the arbitral tribunal, according to which the arbitrators are the first to decide on their own competence, unless it is clear that the arbitration agreement is void, has become ineffective or is unenforceable. This effect means that state courts can only decide this matter in a subsequent appeal or challenge of the arbitral award (Art. 18(8) and (9) of the Arbitration Act).
  3. The negative effect of the arbitration agreement prevents the parties from obstructing in bad faith the conduct of the arbitral proceedings based on an arbitration agreeemnt that is patently valid and enforceable.
  4. The arbitration clause providing for that “any conflict between the partners and the company, which can not be resolved in a shareholders’ meeting, shall be settled by three arbitrators” is not manifestly null and void, nor ineffective, nor even unenforceable. The question whether any issue is included within the scope of the arbitration agreement shall be decided by the arbitral tribunal.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.