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State Immunity and Arbitration

This section addresses the issue of state immunity in the Portuguese jurisdiction. 

  1. State Immunity – State immunity is not a legal rule in force in the Portuguese jurisdiction. In fact, there is no express legal provision enacting the principle that ‘par in parem non habet judicio’ (state immunity). Although Portugal is a party to the United Nations Convention on Jurisdictional Immunities of States and their Property, drawn up on 17 January 2005 in New York (Portugal acceded to the New York Convention on State Immunity by Decree of the President of the Portuguese Republic No 57/2006 of 20 June 2006, which entered into force on 14 September 2006), this international legal instrument is not yet in force.
  2. References – International Instruments: United Nations Convention on Jurisdictional Immunities of States and their Property; Vienna Convention on Diplomatic Relations of 1961; Vienna Convention on Consular Relations of 1963; Additional Protocol to the European Convention on State Immunity made in Basel on 16 May 1972.
  3. No legal instrument in force – However, the immunity of states is not a principle unknown to the Portuguese jurisdiction and has been constantly applied by the Portuguese courts.
  4. The constitutional recognition of international law – International legal instruments, whether of a public or private law nature, apply in Portugal provided that they have been duly ratified or approved, and ‘once they have been officially published, and remain so for as long as they are internationally binding on the Portuguese state’ [see article 8(2) of the Constitution of the Portuguese State (CPR)]. On the other hand, ‘the norms issued by the competent organs of international organisations to which Portugal belongs come directly into force in Portuguese internal law, on condition that this is laid down in the respective constituent treaties’ (the CRP, art 8(3)). Aligned with this provision, the CRP, art 8(4) states that ‘the provisions of the treaties that govern the European Union and the norms issued by its institutions in the exercise of their respective competences are applicable in Portuguese internal law in accordance with Union law and with respect for the fundamental principles of a democratic state based on the rule of law’.
  5. The Portuguese Courts – The Portuguese courts have been relying on international principles of law to guide their decisions. Indeed, the CRP, art 8(1) provides that ‘the norms and principles of general or common international law form an integral part of Portuguese law’. It has therefore been on the basis of those norms and principles of common international law that the immunity of the states has been upheld on several occasions in Portugal. To be more precise, the ‘escape route’ that the Portuguese courts have been following is a ‘norm and principle’ of international law of a ‘customary’ or ‘consuetudinary’ nature. 
  6. State immunity as a ‘customary’ norm and principle of international law – On a number of occasions, the Portuguese Supreme Court of Justice, after noting the importance of the fact that several countries have ratified and approved the 1979 Basel Convention (Austria, Belgium, Cyprus, Germany, Luxembourg, the Netherlands, Switzerland and the UK), considered that the immunity principle arising therefrom was of a ‘customary’ nature and accordingly, a ‘source of law’ in the meaning of article 38(1) of the Statute of the International Court of Justice. Thus, the provisions of the New York Convention of 2005 apply in Portugal as a result of the acceptance of norms and principles of a customary nature within the Portuguese jurisdiction. 
  7. The principle of limited jurisdiction – The principle that states and their property are immune to the jurisdiction of, and to the execution in, another state is subject to considerable restrictions leading to the exclusion of some types of legal relationships. For instance, commercial relationships entered into by the states are not included in the scope of the immunity. Neither are relationships of employment. However, only certain aspects of claims arising from termination of the employment relationship are excluded from immunity.
  8. ‘ius imperii’ & ‘ius gestioniis’ – There is a well-established principle of immunity from acts deriving from the ‘ius imperii’ (public acts of state). If the claim is brought in relation to rights deriving from the ‘ius gestioniis’ (commercial acts of state), the immunity will not apply. Portuguese courts have been clearly separating the cases where a state has acted in the same fashion as any other private entity, irrespective of the intended purposes of such operation, from the cases where the ius imperii underlies those acts. This rationale applies potentially to every contractual relationship of a private nature, where the state has acted without its ius imperii. Therefore, commercial relationships (such as business ventures, debt issuances, and the like) are not immune from jurisdiction and execution.
  9. The burden of proof of whether a particular act falls within or outside the scope of immunity – Considering the nature of immunity as a ‘principle of law’ and the exclusions from that principle as ‘exceptions’, it is for the claimant/petitioner to demonstrate that a particular act falls within the category of ius gestioniis.