PORTUGAL Law and Practice Contributed by: Leonor Futscher de Deus, Broseta Abogados, SLP
9.4 Enforcement of Judgments The enforcement of judgments issued by a court in disputes relating to the performance and/or interpre- tation of an insurance contract is carried out pursuant to the same procedural rules that govern the enforce- ment of judgments in other civil matters. The recognition of judgments issued by courts of law in the EU is ruled by Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012. Foreign judgments may be enforced within the Portu- guese jurisdiction, provided that the court in which the proceedings were conducted has complied with the fundamental rules and principles of the Portuguese Constitution, both with respect to the procedural safe- guards observed and the substantive judgment ren- dered, including the legal provisions applied. 9.5 Enforcement of Arbitration Clauses Arbitration clauses are admissible in insurance con- tracts and they are enforceable. Any disputes arising from the validity, interpretation, performance and breach of insurance contracts may be settled by arbitration, including in cases where the issue concerns compulsory insurance within the Por- tuguese legal system or the application of mandatory provisions under the Insurance Contract Law. Arbitration regarding insurance contracts shall follow the general rules of Portuguese arbitration law. 9.6 Enforcement of Awards Under the Portuguese Civil Procedure Code, an arbi- tration award has the same value as a court-of-law judgment. Arbitration awards issued in other jurisdictions can also be enforced by Portuguese courts if certain legal requirements are met. Portugal is a party to several international treaties and conventions, specifically with Portuguese-speak- ing countries and the Macau Special Administrative Region of the People’s Republic of China (due to historic special connection). It is also a party to the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Conven- tion”). 9.7 Alternative Dispute Resolution Alternative dispute resolution (ADR) mechanisms may prove highly effective in resolving insurance-related disputes – particularly in the context of consumer insurance contracts – as they enable consumers to obtain a resolution sooner and at a lower cost than through judicial proceedings. There are several ADR entities located in various areas of Portugal that resolve consumer disputes through mediation, conciliation and arbitration procedures, free of charge or at reduced costs. In particular, there is an entity specialised in arbitration and mediation concerning insurance contract disputes named CIM- PAS – Centro de Informação, Mediação, Provedoria e Arbitragem de Seguros . 9.8 Penalties for Late Payment of Claims If an insurer fails to respond to a claim in a timely man- ner or makes payment after the due date, it shall be liable for any damages incurred by the insured and/or the beneficiary as a result of such delay. In the event of late payment, interest is likewise payable at the applicable legal rate in force at the time the payment is made. 9.9 Insurers’ Rights of Subrogation When an insurer pays a claim on behalf of the insured, it becomes subrogated, to the extent of the amount paid, in the rights of the person who received pay- ment, including the right to pursue a claim against the insured or third party responsible for the claim. The policyholder/insured shall be liable for any act or omission that prejudices said subrogation up to the limit of the compensation paid by the insurer. Subrogation clauses are very common in non-life insurance, in particular liability insurance policies.
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