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Supreme Court of Justice (Portugal) | New York Convention 1958 | Recognition of Arbitral Awards | Arbitration Clause inserted in a Standard Form Contract | 18-02-2014 | Case #0036

Supreme Court of Justice
Date: 18-02-2014
Case Nr. 1630/06.2YRCBR.C2.S1
LINK DGSI

RELATED CASE #28 (Coimbra Court of Appeal)

Headlines:

The NYC applies to the recognition and enforcement of foreign arbitral awards in Portugal.

Standard form contracts are characterized by three fundamental elements: they are generic, pre-formulated and not subject to modification.

If a set of contractual terms and conditions has been subject to the analysis and bargain of the counterparty, the arbitration agreement contained in that set may not be classified as a “standard form contract” even though it has not been subject to any proposal for modification or amendment.

Summary:

  1. The New York Convention of June 10, 1958 applies to the recognition and enforcement of foreign arbitral awards, and Portugal has made the reservation provided for in the first part of paragraph 3 of art. I, under which it applies only to the recognition of awards rendered in the territory of another Contracting State.
  2. A foreign arbitral award is not automatically enforceable in Portugal without first being subject to a review and confirmation procedure before the competent state court, regardless of whether it is covered by the NYC1958.
  3. Standard form contracts are characterized by three fundamental elements: they are generic, pre-formulated and not subject to modification.
  4. In order to assess the validity of alleged standard form contracts, the party that intents to benefit from its legal regime must show that they are “standard”.
  5. In any contractual bargain, the parties are free to change, modify or amend the set of terms and conditions that are presented to them, and they are free to accept or reject those terms and conditions by omitting or expressing their, opposition to those terms and conditions, respectively (see Art. 224 of the Code Civil).
  6. 6. Where one of the parties has submitted to the other an initial draft of the contracts for the purpose of “analyzing and proposing amendments”, and the counterpart has made changes to one of the clauses, but not to others, namely the clause containing the arbitration agreement, one must conclude that a bargain process existed with respect to both clauses (those amended and those accepted). Consistently, such arbitration agreement many not be classified as a “standard form” clause.
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