Objection to the State Court’s Jurisdiction | Extension of the Arbitration Clause | Escrow Agreement | ICC
Supreme Court of Justice
Case No.
13951/22.2T8LSB-A.L1.S1
Date: 13 March 2025
Link to DGSI website HERE
Keywords: Objection State Court Jurisdiction
Summary:
I. An arbitration clause contained in a share purchase agreement, providing that “Any disagreement, dispute or claim arising out of or relating to this Contract shall be resolved by the International Chamber of Commerce (ICC), by one or more arbitrators appointed in accordance with its rules, and the seat of arbitration shall be Lisbon, Portugal”, is binding upon the parties to the agreement. It may therefore be relied upon to raise the plea of lack of jurisdiction of the state courts on account of subject-matter incompetence, given the precedence of the arbitral tribunal, in an action brought before state courts.
II. The fact that the Claimants allege joint and several liability of another entity — the second Defendant — which was not a signatory to the share purchase agreement and therefore not covered by the arbitration clause, but was a party to a different contract, named as escrow agreement, whose breach is also alleged, does not exempt the Claimant from complying with the arbitration clause in relation to the contracting party bound to the arbitral tribunal.
III. With respect to the party not bound by the arbitration clause, the jurisdiction to adjudicate the claim lies with the ordinary state courts. There is nothing to prevent the dispute from being divided, with the arbitral tribunal ruling on the claim against one co-debtor and the state courts on the claim against the other.
About Us
ArbitrationPortugal.com is powered by Victoria Associates, an international law firm dedicated to arbitration and dispute resolution.
Have questions or want to discuss arbitration in Portugal? Drop us a line — we’d be happy to hear from you.