Lisbon Court of Appeal
Case Nr. 955/12.2YRLSB-7
The 2011 LAV cannot apply to arbitration proceedings initiated before its entry into force, unless all the parties to the arbitration expressly or tacitly agree to its application.
1. Article 4 (2) of Law No 63/2011, which approves the 2011 LAV, contains a transitional provision which regulates the temporal application of the LAV. According to this provision, the 2011 LAV is applicable to arbitration proceedings initiated before its entry into force, provided that both parties to this agreement agree thereto, or one of them makes such a proposal and the other does not oppose it within 15 days of receiving it.
2. When Article 4 (2) refers to the agreement of both parties and the proposal made by one of them to the other, it is limited to the principle of duality of parties, that is, that in most cases, there are two parties in dispute. However, as is well known, often, the case has several plaintiffs, or is brought against two or more defendants.
3. Accordingly, the fact that Article 4 (2) refers to only two parties does not mean that it does not intend to cover all the parties involved in the proceedings. Only a purely literal interpretation which does not take into account legislative thinking can justify a contrary understanding. Thus, the only appropriate interpretation of Article 4(2) is that the express or tacit consent of all parties to the arbitration can lead to the application of the 2011 LAV when arbitration proceedings are initiated before its entry into force.
4. In the present case, as the application of the 2011 LAV was not accepted by all the defendants as required by Article 4(2), the regime to be applied is the 1986 LAV, which was in force when the present arbitration proceeding was initiated.
5. Article 17(3) of the 2011 LAV empowers State Courts to reduce the fees or expenses of the arbitrators, while the 1986 LAV does not contain a provision that empowers State Courts to undertake such a function.
6. Article 17(3) of the 2011 LAV cannot apply in the present case either directly, or by analogy. It cannot apply directly as it is the 1986 LAV and not the 2011 LAV that applies to the present case. It cannot apply analogously, as the use of analogy presupposes a lacuna in the law. The power of intervention of State Courts in reducing arbitrators’ fees was not present in the 1986 LAV, and this is not a lacuna but the position of law under that regime.
This case summary was kindly prepared by Sameer Thakur (firstname.lastname@example.org, NALSAR University of Law), Rishabh Raheja, (email@example.com, NALSAR University of Law), and Abhishek Babbar (firstname.lastname@example.org).