Supreme Court of Justice
Case Nr. 2455/13.4YYLSB-A.L1.S1
Arbitrations commenced before the 2011 LAV entered into force, regardless of when the arbitral award is rendered.
Examination of the merits of the arbitral award is possible when the award is under appeal, but not under actions for setting aside, or in an action against enforcement.
- Notwithstanding the fact that the arbitral award was rendered on 02.12.2012, i.e. after the entry into force of Law 63/2011, of December 14 (LAV); its validity must be tested by way of the previous LAV, i.e. Law No. 31/86 of 29 August.
- As per the transitional provision of article 4, paragraph 1, of the current LAV (Law no. 63/2011, of December 14), together with Articles 6 of that law and 33 of the current LAV, these rules would apply only to arbitral proceedings whose request for submission to arbitration has come to the attention of the defendant after 14 March 2012.
- The time-frame determining the application of such procedure is therefore that of the initiation of the arbitration procedure, which covers both the constituent stage of the arbitration and its procedural stage.
- The previous LAV (Law nº 31/86, of August 29) contemplates the following means of challenge of the arbitration decision: a) The action for annulment of the decision of the arbitrators (within one month from the notification of the arbitration decision); b) An appeal to the Court of Appeal (if the parties have not resigned); and c) Opposition to the execution of the arbitration award.
- In the case of an appeal, the merits of the arbitration award, its meaning or effect, is questioned. Specifically, whether the arbitrators have committed an error in judgment, whether in fact or in law.
- In an action for annulment on the contrary, the meaning of the arbitral award is not disputed, at least directly. Instead, any potential oversights in the procedural process that led the arbitrators up to the sentence are discussed. This enquiry is restricted to the grounds set out in article 27 of the LAV (Law nº 31/86 of August 29).
- In this case, the parties having waived the appeal, (Article 29, paragraphs 1 and 2, of the LAV (Law no. 31/86 of August 29), and having taken no action for annulment in the month following the arbitral award, only had recourse to opposing the execution of the award.
- Decisions of the arbitrators may only be challenged, whether in annulment proceedings or in an action against enforcement, on the basis of some of the defects listed in Article 27 (1) of the LAV (Law No 31/86 of 29 August). It is not permissible to move on grounds of legality or merits of the arbitral award, since cases of illegality would constitute grounds for appeal, if they were to be admissible.
This case summary was kindly prepared by Rishabh Raheja, (email@example.com, NALSAR University of Law), Sameer Thakur (firstname.lastname@example.org, NALSAR University of Law), and Abhishek Babbar (email@example.com).