General counsel questioning complexity of Portuguese arbitration

In-house lawyers questioning who leads the arbitation process, the General Counsel, external law firm or arbitrators?

Portuguese in-house lawyers discussed the
challenges of managing the arbitration process,
at a recent meeting hosted by Iberian Lawyer’s
In-House Club in Lisbon.

The event, one of many across Spain and Portugal
for lawyers working within businesses, was
sponsored by the law firms PLMJ and Barrocas
Advogados.

Faced with the perceived complexities of
arbitration and different procedural and award
processes when compared to traditional litigation,
General Counsel are often unsure of the steps they
should follow, participants heard. Above all, is it
they who should be driving the process, or passing
control over to their external lawyers?

Introducing
the debate, Rui
Mayer, General
Legal Counsel
and Company
Secretary of
GALP, suggested
that arbitration is
increasingly
regarded as a
satisfactory,
timely and cost
effective way of
resolving both
complex
domestic and
international disputes.

But while much of the writing on arbitration
focuses on the relevant legal framework, or the role
of the arbitrators in the process, there remains a
shortage of information regarding the role of the
General Counsel; who, at the end of the day, has
the ultimate responsibility for the outcome of the
process.

“Arbitration is of course very demanding” Jose
Miguel Judice, Head of the Arbitration practice at
PLMJ, told participants.

“External lawyers need to work as a team with
the in-house lawyers. This means knowing the
documents well, analysing the facts and preparing
all the aspects of the case in detail, such as
speaking to the witnesses and making sure they
are prepared for cross examination.”

This was a view mirrored by Mireille Bouzols-
Breton, currently a judge in the International
Chamber of the Commercial Court in Paris and
until recently the Group Senior Vice President
Legal at Technip, where she led a legal team of
over 50 lawyers.

“It is always good to ensure that senior
management are actively involved in the case,” she
said. “My advice on major arbitrations is that you
should organise an internal team from across the
business including, say, a project engineer, who
may in fact be initially reluctant, to get involved in
the case.”

Businesses need also to have special internal
procedures, especially regarding any financial
provisions for
potential awards
or losses, she
suggested.
“And, of
course, you have
to consider if and
where parties
have assets in
case you have to
seize them.”

In Portugal the
interaction
between
arbitration and
civil process is a
particular challenge, participants heard.
“Portugal’s Civil Procedure Code can create
confusion and added complexity which does not
help the arbitration procedure”, explained Manuel
P Barrocas of Barrocas Advogados. “A party can
appeal an award on the merits of the case but
when drafting arbitration clauses parties need to be
aware of this risk, taking the appropriate steps to
avoid it.”

Such grounds of appeal are not however
possible in the case of international arbitrations
where arbitrators enjoyed more autonomy from the
courts, Barrocas nonetheless cautioned. “There is
also emerging now in certain legal circles some
discussion regarding the potential for reforming
the current domestic approach, and to bring it into
line with international practice.”