Supreme Court of Justice (Portugal) | International Public Policy | Good Will Compensation | Distribution Agreement | 23-10-2014 | Case #058

Supreme Court of Justice
Date: 23-10-2014
Case Nr. 1036/12.4YRLSB.S1
LINK DGSI

Headline:

International public policy of the Portuguese State is a vague, fluid and imprecise concept, but it can be defined as an amalgamation of basic values and dominant concepts of social, ethical, political and economic principles and rules that the decision-maker must, in each historical moment, interpret and recognize in order to assess whether they are considered to be affronted by the result reached in the award subject to recognition.

Notwithstanding the fact that Art. 33 of Law Decree No. 178/86 of 3 July 1986 has a mandatory nature and is as such part of the national public policy, that finding does not imply that the disregard of such right by the arbitral award, on account of the application of a different law, will entail a violation of the international public order of the Portuguese State.

 

Summary:

1. The recognition of an arbitral award issued by an arbitral tribunal seated in a country party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 is primarily ruled by this international treaty. The Portuguese state court before which the recognition of a foreign arbitral award has been sought must refuse to do so if the outcome of such recognition is contrary to the international public policy of the Portuguese State.

2. The concept of an international public policy is vague, fluid and imprecise, but it can be defined as an amalgamation of basic values and dominant concepts of social, ethical, political and economic principles and rules that the decision-maker must, in each historical moment, interpret and recognize in order to assess whether they are considered to be affronted by the result reached in the award subject to recognition.

3. The violation of the international public policy of Portugal must be assessed in relation to the legal effects that will be produced by the recognition, irrespective of the grounds upon which the award has been made.

4. The right of goodwill compensation of a commercial distributor set forth in Art. 33 of the Law Decree No. 178/86 of 3 July 1986 derives from an analogy with the status of the commercial agent, which cannot dispense with the factual background to ascertain on a case by case basis. Thus, one cannot affirm that the right to goodwill compensation is granted under any circumstance and, therefore, an arbitral award that has not granted goodwill compensation is not necessarily in violation of the international public policy of Portugal.

5. If the petitioner did meet all the requirements necessary for there to exist a goodwill compensation, one cannot say that an arbitral award which does not accord such right to the petitioner is necessarily in violation of the international public policy of Portugal.

6. Notwithstanding the fact that Art. 33 of Law Decree No. 178/86 of 3 July 1986 has a mandatory nature and, as such, is part of the national public policy, that finding does not imply that the disregard of such right by the arbitral award, on account of the application of a different law, will entail a violation of the international public order of the Portuguese State.

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