More compliance disputes going to arbitration despite cost – Serra Lopes, Cortes Martins

Though arbitration is often more costly than court proceedings, this type of alternative dispute resolution is being used more widely in Portugal, according to Dário Moura Vicente, a counsel and arbitration specialist at Serra Lopes, Cortes Martins in Lisbon.

The increase is partly due to the financial crisis – it is often used to adapt contracts, for example, in cases such as compliance disputes between companies and banks regarding financial investments, Moura Vicente explains. Meanwhile, arbitration is also used in disputes between the Portuguese government and private consortiums regarding large infrastructure projects.
As well as large commercial disputes, arbitration is also used for smaller cases, including consumer disputes, Moura Vicente says. Many cases go to arbitration in Portugal to avoid the long wait going through state tribunals implies, and this is a key factor in the increase.
The Portuguese arbitration law was reformed in 2011 using the United Nations’ Commission for International Trade Rights Model Law on International Commercial Arbitration as a blueprint. The new law widens the criteria for the possible scope of arbitration and makes the regulations more detailed, Moura Vicente said.
While arbitration is used in all areas of law, Moura Vicente cites intellectual property (IP) as one in which there has been a significant increase in cases, especially involving generic pharmaceuticals manufacturers of patented medicines. Portugal has a low penetration rate of generic medicines – which must be sold at half the price of patented ones by law – due to the number of generic brands sued for IP violation before state courts. The government decided such disputes are best solved through arbitration and this has eliminated one major bottleneck in the marketing of generic medicines.