Coimbra Court of Appeal | New York Convention 1958 | Recognition of Arbitral Awards | Arbitration Clause inserted in a Standard Form Contract | 19-06-2013 | Case #0028
A party wishing to rely on an arbitration clause inserted in a standard form contract must show that that clause was subjected to bargain between the parties, under penalty of nullity.
The state court before which the recognition of a foreign arbitral award has been sought shall refuse to recognise it if the arbitration clause under which the award was made is invalidated.
Summary:
The clause “CONTRACT All other terms and conditions, not in contradiction with the above, as per FOSFA 22, with arbitration in London as per GAFTA 125 rules”, when construed as an agreement to refer to arbitration any dispute arising from the contract that contained such clause, is classified as a standard form contract, pursuant to Art. 1(3) of the Portuguese Standard Form Contracts Act set forth in Law Decree No. 446/85 of 25 October 1985 unless the party that is seeking to rely on such clause gives proof that such agreement was negotiated between the contracting parties.
Art. 1(3) of the Portuguese Standard Form Contracts Act imposes to the party that wishes to rely on such a clause the burden of proving that it was negotiated between the parties. The law presumes that the clause was drafted and proposed by the party that holds the burden of proof that the same resulted from a negotiation between the parties.
Once this clause is declared invalid, the national court before which the recognition is sought must refuse to recognise the foreign arbitral award, according to Art. V(1)(a) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, because the jurisdiction of the arbitral award relied on an arbitral clause that was declared invalid.
