Annulment | Motivation Arbitral Award | Impartiality Arbitrators | International Public Policy | Due Process
Lisboa Court of Appeal
Case No. 2394/22.8YRLSB-2
Date: 13 February 2025
Link to DGSI website HERE
Keywords: Annulment | Motivation Arbitral Award | Impartiality Arbitrators | International Public Policy | Due Process
Summary:
I. An application for annulment of an arbitral award does not allow a broad review of the merits of the decision; the state court must limit itself to verifying the specific grounds invoked for annulment.
II. If the parties fail to raise an objection immediately, or within any time limit established for that purpose, based on the violation of a provision of the Voluntary Arbitration Law (LAV) that may be derogated from, or any condition set out in the arbitration agreement—particularly regarding the overall time limit of the arbitration—such invalidity amounts to waiver.
III. Article 42(3) of the LAV requires the arbitral award to include reasoning, unless the parties have waived this requirement or the award results from a settlement between the parties under Article 41 of the same statute.
IV. A lack of reasoning in an arbitral award that is not subject to appeal must be assessed by the criterion of intelligibility. This defect only exists when the parties cannot understand the grounds of the decision—that is, when they cannot comprehend what motivated the tribunal’s ruling.
V. Article 30(1)(b) of the LAV requires arbitral proceedings to respect the principle that parties are treated equally and to give them a reasonable opportunity to present their case, in writing or orally, before the tribunal renders its final award.
VI. A “surprise decision” occurs when the tribunal adopts a solution to an issue not raised by a party and which the party, acting with normal diligence, had no obligation to anticipate. Such a decision violates due process.
VII. Article 39(1) of the LAV prevents the Arbitral Tribunal, when subsuming established facts under applicable law, from resorting to ex aequo et bono unless the parties have expressly agreed. Relying on ex aequo et bono without such agreement violates the arbitration agreement and triggers annulment of the award under Article 46(3)(a)(iv) of the LAV, except in cases where law itself mandates ex aequo et bono.
VIII. Article 39(1) of the LAV places no restriction on the tribunal’s evaluation of evidence to determine proven facts.
IX. The right of access to courts implies the right to a fair trial, and voluntary arbitration constitutes a form of exercising that right. Thus, arbitral proceedings must meet fair trial standards, including the independence and impartiality of arbitrators, as required by Article 9(3) of the LAV.
X. Impartiality requires arbitrators to remain detached from the parties’ interests and to decide freely, without constraints.
XI. Article 46(3)(b)(ii) of the LAV allows annulment of an arbitral award if the court finds that its content violates principles of the international public policy of the Portuguese State.
XII. A violation of the international public policy of the Portuguese State requires a gross disregard or distortion of fundamental principles, not a mere error in their interpretation or application.
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