New York Convention 1958 | International Public Policy | Recognition Arbitral Award
Lisboa Court of Appeal
Case No. 1999/24.7YRLSB-2
Date: 27 February 2025
Link to DGSI website HERE
Keywords: International Public Policy | New York Convention 1958 | Recognition of Arbitral Award
Summary:
I. The Voluntary Arbitration Law (Law 63/2011) devotes a chapter to the recognition and enforcement of foreign arbitral awards, applicable without prejudice to the mandatory provisions of the 1958 New York Convention on the Recognition and Enforcement of such awards, as well as to other treaties or conventions binding on the Portuguese State (Article 55).
II. The provisions contained in the chapter of the Voluntary Arbitration Law on the recognition and enforcement of foreign arbitral awards have a residual scope of application, essentially applying to arbitral awards originating from States that have not ratified the New York Convention and with which Portugal has not entered into other international conventions on this matter.
III. Under the Voluntary Arbitration Law (Article 56(1)(b)(ii)), recognition of an arbitral award rendered in a foreign-seated arbitration may be refused if the court finds that it leads to a result manifestly incompatible with the international public policy of the Portuguese State.
IV. International public policy is narrower, with fewer rules and/or principles, than domestic public policy. It acts as a break on the law, decisions, orders, and acts of foreign origin only when their application or validation would lead to an intolerable situation in light of the fundamental legal principles of the State that would apply or validate them. Where the application of foreign law or the recognition of foreign decisions is at issue, there is greater tolerance towards the rules of the foreign legal system.
V. The New York Convention (Article V(2)(b)) allows refusal by the competent authority of the country where recognition is sought if it finds that such recognition would be contrary to the public policy of that country; this is to be understood as the international public policy of that country.
VI. A decision awarding, as compensation due to the buyer for the seller’s definitive and total non-performance, the difference between the contractually agreed price and the (higher) market price at the date of the breach does not violate any rule of Portuguese public policy.
VII. The nationality privilege conferred by Article 983(2) of the Portuguese Code of Civil Procedure presupposes, among other requirements, that, according to the Portuguese conflict-of-laws rule, Portuguese law should apply — which is not the case in the matter under review.
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