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1. What is arbitration?

Voluntary arbitration is an alternative means of settling a dispute. It involves assigning, through an agreement between the parties, a third party or parties – arbitrators –, the power to decide a dispute.

Arbitrators are independent and impartial in relation to the parties and do not act as their representatives.

The agreement between the parties to submit one or more disputes to an arbitration decision is known as an "arbitration agreement" and may refer to future disputes as well as current ones.

In Portugal, arbitration is essentially governed by Law no. 63/2011 of 14 December. Voluntary Arbitration Law[Incluir link]

Choosing between arbitration and state jurisdiction requires consideration of several factors and depends on the characteristics of each case. In any event, in comparison with state courts, arbitration typically has several advantages, specifically:

  • Greater speed, since a final decision is usually obtained in a substantially shorter period of time [Incluir link para FAQ sobre prazo];
  • Greater flexibility, including, among other aspects, the possibility for the parties to choose arbitrators with the most suitable profile for the characteristics of the dispute and set procedural rules according to their interests;
  • Greater efficiency, since it is normally possible to adapt the proceedings to the characteristics of the dispute and concentrate the steps in a shorter period of time;
  • Lower costs, since, in high-value cases, the costs for arbitration can be substantially lower than the court costs in state courts.

In international cases, arbitration has the added advantage, among others, of neutrality in relation to the courts of any of the states involved.

2. What is the value of the arbitral award?

Under Portuguese law, arbitration may be used in any dispute that respects patrimonial or non-patrimonial interests of which the parties may freely dispose.

Resolving disputes through arbitration is therefore admissible in several domains, including most commercial disputes and disputes related to contractual and extracontractual liability.

3. What is an Arbitration Centre?

An Arbitration Centre is a specialised, permanent institution that organises and manages arbitration, and is governed by its own rules. It should not be confused, however, with an arbitral tribunal, since it does not have the competence to decide disputes or propose ways of settling them. The Arbitration Centre performs administrative support duties relating to the organisation and running of the arbitral proceedings, specifically making certain decisions before the arbitral tribunal has been constituted, financially managing the arbitration costs, summoning the respondent(s) and notifying arbitral decision, as well as providing secretariat services to the tribunal and rooms for hearings.

Arbitration supported in this way within a permanent administrative structure is known as institutional or institutionalised arbitration.

Creating an institutional arbitration centre in Portugal is subject to authorisation from the Minister of Justice.

The CAC is the oldest and most experienced arbitration centre currently operating in Portugal.

4. What distinguishes institutional arbitration from ad hoc arbitration?

Arbitration may be institutional or ad hoc, depending on whether the parties entrust the organisation of the arbitration to a specialised institution (Arbitration Centre), with its own rules, or dispense with the intervention of any institution and organise and regulate the arbitration themselves.

Using institutional arbitration may be provided for in the arbitration agreement or may be agreed upon later, when the dispute arises.

5. What are the advantages of using institutional arbitration?

Institutional arbitration, specifically under the aegis of the CAC, has several advantages in comparison with ad hoc arbitration:

  • Simplified drawing up of the arbitration agreement, since submitting a dispute to the CAC involves accepting its rules as an integral part of the arbitration agreement
  • ­Greater security and predictability as the result of applying tested arbitration rules produced by specialists and designed for general application
  • Possibility for decision-making by the Chairman of the CAC on certain matters, including, among other aspects, appointing the arbitrators that the parties do not appoint, refusing and replacing arbitrators, deciding on intervention by third parties and on consolidation of cases
  • Added guarantees of impartiality and independence of arbitrators
  • Efficiency and speed arising specifically from the monitoring and support provided by the CAC in terms of developing the arbitral process
  • Suitability for complex arbitrations
  • Control of arbitration costs
  • Possibility of interim measures being ordered before the arbitral tribunal has been constituted by the Chairman of the CAC by naming an emergency arbitrator

6. What is the Arbitration Centre of the Portuguese Chamber of Commerce and Industry?

The Commercial Arbitration Centre is the arbitration centre created by the Lisbon Commercial Association – Portuguese Chamber of Commerce and Industry, duly authorised by Order of the Minister of Justice, under Executive Law no. 425/86 of 27 December 1986. With this Order, it promotes and carries out institutional arbitration and provides services related to arbitration and alternative dispute resolution.

7. How does it work and who manages it?

The Commercial Arbitration Centre operates within the framework of the Portuguese Chamber of Commerce and Industry, with administrative and financial autonomy, and has its own Management, which is separate from the Chamber of Commerce. The Centre's Management, appointed by the Chamber of Commerce Management, is named the Commercial Arbitration Centre Board, and is composed of nine members: a Chairman, two Vice-Chairmen and six Members. It also has a secretariat, coordinated by a Secretary-General, and technical and administrative staff.

8. Does the Centre only intervene in institutional arbitration or does it also intervene in ad hoc arbitration?

As well as in institutional arbitration, the Centre can also intervene in ad hoc arbitration, providing secretariat and case management services.

9. How can I find out the arbitration costs and who is liable to pay them?

The arbitration costs include the arbitrators’ fees and expenses, the administrative costs and the expenses incurred in the production of evidence. The amount of the fees and administrative costs are set according to the value of the arbitration and according to the tables attached to the Rules of Arbitration (that may be obtained from the website, which includes a simulator for that purpose). The travel expenses for the arbitrators and those related to producing evidence are calculated in accordance with their actual cost.

The responsibility for paying the arbitration costs is determined by the arbitral tribunal in its decision.

10. How and to whom can I ask more questions?

Any questions about the operations of the Arbitration Centre or about arbitral proceedings can be made in writing, by telephone or by e-mail or any other means of communication directed to the Centre's Secretariat.

11. Who can be an arbitrator?

Any fully capable natural person (who is over the age of majority and who does not have any legal limitation in terms of exercising his or her rights). Arbitrators may be Portuguese or foreign. The parties may, nonetheless, arrange for arbitrators to have certain characteristics/qualifications. In that case, only persons who respect those characteristics may be appointed arbitrators.

12. Who appoints arbitrators?

In a CAC arbitration, the parties may choose between having only one arbitrator or three. If they are not in agreement as to the number of arbitrators, normally the arbitration will have only one arbitrator. But the Chairman of the CAC, if he believes it is appropriate in a specific case, may decide that three arbitrators shall be used, after first hearing the opinion of the parties.

The parties are free to decide how the arbitrators should be appointed. If it has been agreed that only one arbitrator shall be involved, that arbitrator should be chosen by the parties in agreement. If the parties are not able to come to an agreement on who the arbitrator should be, then the Chairman of the CAC appoints the arbitrator.

If it has been agreed that three arbitrators shall be involved, and the parties do not come to agreement as to who the arbitrators should be, each party chooses one arbitrator and afterwards the two arbitrators choose a third, who shall be the chairman of the arbitral tribunal.

Whenever one of the parties does not appoint an arbitrator that it should, or the parties do not reach an agreement on the arbitrator who should be appointed by agreement, the Chairman of the CAC shall choose that arbitrator. The list of arbitrators from which the Chairman of the CAC normally makes its choice in those cases is available on the CAC website. That list can also be useful to guide parties who need to appoint an arbitrator.

Some special rules, such as in the event of multiple claimants and respondents, can be found in the Rules.

13. What are the duties by which the arbitrators are bound?

Once a person agrees to be an arbitrator, he or she cannot turn back unless a situation arises after acceptance that makes it impossible for him or her to perform his or her functions, and such justification is recognised by the Chairman of the CAC. Any arbitrator that does not respect this duty may be held liable for the damage caused.

All arbitrators, whether they are appointed by the parties or appointed by the Chairman of the CAC, must be independent in relation to the parties and in relation to the dispute. They should also always act impartially. They must, similarly, always be available for the cases to which they are appointed.

All arbitrators have, therefore, the duty to disclose – when they intend to accept an appointment – any circumstances that may lead the parties to have justified doubts about their independence, impartiality or availability, in a declaration provided by the CAC. They should also give that information if a situation arises after they have been appointed.

If any party has doubts about the independence, impartiality or availability of an arbitrator, it may present the issue to the chairman of the CAC, who will decide if the arbitrator can be maintained or not.

14. How to start an arbitration process at the Arbitration Centre

To start an arbitration procedure, the party that wishes to do so should submit a request to the CAC Secretariat in which it should:
  1. Identify the parties involved in the dispute, providing addresses and, if possible, e-mail addresses;
  2. Give a brief description of the dispute;
  3. State what it wishes the arbitral tribunal to decide, indicating the amount, even if estimated, that it believes is in question;
  4. Provide the name of the arbitrator it wishes to appoint, if it is responsible for making an appointment (link para Quem nomeia os árbitros), or any other relevant instructions about the way in which the arbitral tribunal should be constituted;
  5. Indicate any other circumstances it believes important.

The request should be submitted together with either the existing arbitration agreement (for example, a copy of a contract that contains an arbitration clause) or if it wants arbitration that was not provided for, a proposal for an arbitration agreement. NB: if the other party does not agree to this proposal, the arbitration cannot proceed.

15. Where does arbitration take place? Is it always at the Arbitration Centre headquarters?

The parties may decide where they would like the arbitration to take place, whether it is in Portugal or abroad. It does not necessarily have to take place at the CAC headquarters or even in Lisbon.

If the parties do not reach an agreement, the arbitral tribunal shall decide on the place of arbitration once the tribunal has been constituted.

Regardless of the location where the arbitration takes place, the arbitral tribunal may, on its own initiative or following a suggestion by any of the parties, decide to carry out meetings, hearings or any other steps necessary in any other place.

16. How long do proceedings take?

There is no rule about how long arbitral proceedings take, and every case is different. It will depend on several factors, such as whether it is a simple dispute or a more complex one, whether expert testimony is needed, or many or few witnesses are heard, etc. Nonetheless, according to CAC statistics, the average duration of arbitral proceedings is around 15 months.

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