Supreme Court of Justice
Case Nr. 10758/01.4TVLSB-A.L1.S1
The Old Arbitration Law (1986) will apply to enforcement procedures initiated before the New Arbitration Law came into force.
The Old Arbitration Law provided for the following mechanisms to challenge an arbitral award: (a) annulment procedure; (b) appeal before the Court of Appeals; (c) opposition to the enforcement of the arbitral award.
Whereas in the case of an appeal the state court may revise the merits of the award (“error in judicando”), in the annulment the court may only look at the “error in procedendo”.
In opposition against the enforcement of the arbitral award where there is a need for the implementation of that award as regards to the amount owed to the award creditor, there can be no revision on the decision related the existence of those damages, notwithstanding that they were not quantified, because that previous decision benefits from the “res judicata” effect.
- Given the date when the arbitral proceedings and the enforcement of the arbitral award procedure commenced (05-04-2000 and 06-11-2001 respectively), the old Arbitration Law applies (Law Ne. 31/86 of 29 October 1986), being irrelevant the dates of the court decision on the implementation of the arbitral award and the subsequent decision of the Court of Appeal on these procedures (14-11-2006 and 11-05-2017, respectively).
- The old Arbitration Law (Law Nr. 31/86) provided in its Arts. 28, 29(1) and 31 for the following mechanisms to challenge an arbitral award: (a) annulment procedure (to initiate within one month after the arbitral award notice to the parties); (b) appeal before the Court of Appeals (should the parties have not waived that right); (c) opposition to the enforcement of the arbitral award.
- The difference between the mechanisms of (a) and (b) lies in a number of aspects, not only related to the fact that the former is a lawsuit and the latter an appeal.
- In the case of the appeal, the court will assess the merits, the meaning and the effects of the arbitral award in order to ascertain if the arbitrators committed an “error in judicando” (either on points of law or points of fact).
- To the contrary, in the annulment lawsuit, the court of appeal will not directly scrutinise the meaning of the arbitral award; the discussion therein will address any potential defect in the proceedings until the final decision was reached. In this lawsuit, it is the “error in procedendo” that is at stake, by reference to the arbitral proceedings.
- The party resisting the enforcement of an arbitral award shall only invoke the grounds that are required for obtaining the annulment of the award and that pertain to formality issues (error in procedendo) but not the merits (error in judicando), the latter being only the subject of a potential appeal.
- The implementation of the arbitral award aims at determining the specific amount to be paid by the award debtor.
- This implementation aims only at specifying the object of the amount awarded in a generic manner, always taking in due consideration the limits of the res judicata of the arbitral award. In this implementation procedure, the debtor may not re-open the discussion surrounding the dispute that originated the arbitration, and therefore the court is not allowed to enter into that discussion.
- Given that the subject matter of the implementation procedure is limited to the quantification of the damages arising out of a contractual breach (present and future damages), the discussion in this procedure is restricted to the quantification of the damages, with due respect to the facts that were established. The award debtor may not discuss the existence of the damages that will be quantified in the implementation procedure.
- On the other hand, and regarding the pre-judgement interest over the amount to quantify, if the arbitral tribunal determined in its award the commencement date of the interest computation, this d