Lisbon Court of Appeal
Case Nr. 871/15.6YRLSB-7
An arbitral award may only be set aside if extremely exceptional circumstances occur, such as the violation of fundamental principles of due process that may have had an influence in the outcome of the case.
An arbitral award is sufficiently motivated if it states the facts that were established and the legal reasoning leading to the decision.
The fundamental difference between arbitral proceedings applying “ex aequo et bono” and judicial procedures before state courts, is that the former is extremely simplified and streamlined, whereas the latter is based on a strict compliance with procedural rules and the absolute safeguard of every procedural right of the parties.
- The independence and autonomy of the arbitral tribunal is shown by the very exceptional circumstances allowing a state court to annul an arbitral award.
- The special lawsuit aimed at setting aside an arbitral award deals only with serious procedural irregularities that may have had a decisive influence in the outcome of the case.
- Therefore, only serious breaches of the most basic and structuring principles of the arbitration proceedings, such as the equality of the parties and the respect for the adversarial proceeding, may be considered in a setting aside lawsuit.
- When assessing the evidences produced before it, the arbitral tribunal is not bound to take into consideration the witness statements filed by the defendant, especially if those witnesses did not confirm their statement during the hearings.
- Art. 42 of the Arbitration Act only requires that the arbitral award must be rendered in writing and signed by the members of the tribunal. When the motivation has not been dispensed with, the tribunal is only required to state the facts that were proven and the legal motivation.
- The motivation of the arbitral award shall be sufficient if it is supported by the “documents filed by the parties” and the witness statements that confirmed those documents. Albeit too short and perhaps inadmissible under the judicial procedure criteria, which provides for a higher level of formalities and procedural guarantees, it shall not be deemed insufficiently reasoned an arbitral award where the arbitrators have considered a number of facts as “irrelevant for the outcome of the case” and others not “proven”. This is so particularly given that the vast majority of the facts required document evidences to be considered as proven, and that the arbitrator were allowed to decide the case “ex aequo et bono”.
- The fundamental difference between arbitral proceedings applying “ex aequo et bono” and judicial procedures before state courts, is that the former is extremely simplified and streamlined—a kind of “simplex” proceeding—whereas the latter is based on a strict compliance with procedural rules and the absolute safeguard of every procedural right of the parties, to its fullest extent. The procedure before state courts does not dispense with those rules and guarantees, in any circumstance.