Portugal / 04 October 2007 / Portugal, Tribunal da Relação de Évora (Evora Court of Appeal) / 1725/07-2
|Portugal, Tribunal da Relação de Évora (Evora Court of Appeal)
|04 October 2007
|Applicable NYC Provisions
|II | II(3)
http://www.dgsi.pt (official website of the Instituto de Gestão Financeira e Equipamentos da Justiça I.P.)
|Companies A, B, and C entered into a preliminary contract for the purchase and sale of real estate. The contract contained an arbitration clause providing for arbitration in Switzerland. A dispute arose between the parties and Company C claimed specific performance of the contract before a Tribunal de Primeira Instância (Court of First Instance). Company A challenged the jurisdiction of the Tribunal de Primeira Instância on the ground that the contract contained an arbitration agreement. The Tribunal de Primeira Instância refused to enforce the arbitration agreement holding that, pursuant to the Portuguese Code of Civil Procedure, Portuguese courts have exclusive jurisdiction over disputes concerning rights in real property. Company A appealed to the Tribunal da Relação de Évora (Évora Court of Appeal) on the grounds that (i) the Tribunal de Primeira Instância should have enforced the arbitration agreement and referred the parties to arbitration unless it found that the arbitration agreement to be manifestly null and void, and (ii) the dispute before the court concerned the parties’ contractual obligations and not rights in real property. The Tribunal da Relação de Évora reversed the decision of the Tribunal de Primeira Instância and found that the Tribunal de Primeira Instância lacked jurisdiction. The Tribunal da Relação de Évora noted that the preliminary contract did not deal with rights in real property, but with a contractual promise of a future purchase and sale, which was capable of settlement by arbitration. The Tribunal da Relação de Évora held that because Switzerland and Portugal are both parties to the NYC, the NYC applied to the dispute. Furthermore, relying on Article II(3) NYC, which mandates courts of Contracting States to refer the parties to arbitration, the Tribunal da Relação de Évora held that pursuant to the principle of Kompetenz-Kompetenz, a national court must defer the decision on the arbitral tribunal’s competence to the arbitral tribunal, such ruling being controlled at the award enforcement stage.
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