PORTUGAL Law and Practice Contributed by: João Saúde, Miguel Santos Almeida, Alexandra Valpaços and Eduarda Peixoto, Sérvulo & Associados
and a negative effect. As a rule, the arbitral tribunal has priority to decide on its own jurisdiction, including on the existence, validity, effectiveness and applicabil - ity of the arbitration agreement, and state courts must abstain from full review of jurisdiction until the arbitral tribunal has ruled on it. State courts may, however, address jurisdiction in the following two main situations. • At the outset of court proceedings: when an action is brought before a state court concerning a dispute arguably covered by an arbitration agree - ment, the court must dismiss the case upon the respondent’s timely objection, unless it finds that the arbitration agreement is manifestly null, ineffec - tive or inoperative. • In post-award or specific review mechanisms: state courts may review jurisdiction in (i) an annulment action against the final award, on grounds includ - ing that the award deals with a dispute not covered by the arbitration agreement or exceeds its scope, or that the arbitral tribunal was incompetent or irregularly constituted; and (ii) an application to set aside an interlocutory ruling by which the arbitral tribunal has declared itself competent. The case law consistently stresses that courts must adopt a restrictive approach and show reluctance to intervene pre-award. Doubts as to the validity, effec - tiveness or scope of the arbitration agreement are resolved in favour of the arbitral tribunal’s priority, and only cases of manifest nullity, ineffectiveness or inop - erability justify the state court retaining jurisdiction. Portuguese law provides a specific mechanism for reviewing positive jurisdiction rulings: where the arbi - tral tribunal issues an interlocutory decision affirming its jurisdiction, either party may challenge that deci - sion before the competent court of appeal within 30 days of notification, and failure to do so is understood as precluding later annulment on that ground. By contrast, there is no equivalent immediate review for negative rulings on jurisdiction. If the arbitral tri - bunal declines jurisdiction, the arbitration ends; the parties may then bring the dispute before the state courts, which will determine their own jurisdiction to
hear the case. In that context, the state court is not “reviewing” the negative arbitral decision as such, but is rather making its own, independent determination of jurisdiction. 5.3 Timing of Challenge A jurisdictional objection must generally be raised by the respondent before or together with its first memo - rial addressing the merits. Any objection that, in the course of the arbitral proceedings, the arbitral tribunal has exceeded or may exceed its jurisdiction shall be raised immediately after the matter allegedly giving rise to such excess of jurisdiction is introduced in the proceedings. Separately, when an arbitral tribunal issues an interlocutory decision affirming its jurisdic - tion, any challenge must be brought to the competent court within 30 days of notification; failure to do so precludes later reliance on jurisdictional objections in When dealing with jurisdictional objections, under Portuguese arbitration law, the standard of judicial review is generally deferential, reflecting the compe - tence-competence principle in both its positive and negative effect. At the referral stage, when a claim is brought before a state court in apparent breach of an arbitration agreement, the court only undertakes a limited, prima facie review, and must decline juris - diction unless the arbitration agreement is manifestly null, ineffective or inoperative. While decisions on jurisdiction are reviewable by courts, decisions on the admissibility of a claim are final and binding, unless otherwise agreed by the parties. 5.5 Breach of Arbitration Agreement annulment or enforcement proceedings. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility Portuguese courts adopt a strongly pro-arbitration stance. When a party commences state court pro - ceedings in breach of a valid arbitration agreement, the court must – upon timely objection – dismiss the case due to the court’s lack of jurisdiction, unless it concludes that the arbitration agreement is manifestly null, ineffective, inoperative or incapable of being per - formed. Since the arbitral tribunal has power to rule on its own jurisdiction, Portuguese courts generally show reluctance to entertain proceedings brought in breach of an arbitration agreement and favour allowing the
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