Resolving Disputes in International Distribution Agreements in Portugal

Summary

This post addresses very briefly the mechanisms to solve international disputes, in Portugal, in the context of international distribution and agency agreements.

In order to solve disputes, suppliers and distributors have at their disposal all means of dispute resolution, including judicial litigation and other alternative means of resolution (e.g., arbitration, mediation or negotiation). Other remedies may include notifications to the Portuguese Competition Authority or to the Economic and Food Safety Authority.

Litigation

Under European Regulation (EU) No. 1215/2012, foreign companies may bring a judicial proceeding before the Portuguese courts if an agreement conferring jurisdiction has been concluded (according to article 25).

Such agreement attributing jurisdiction must be concluded: (a) in writing or verbally with written confirmation; (b) in a form which accords with practices which the parties have established between themselves; or (c) in international trade or commerce, in accordance with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the same type in the particular trade or commerce concerned.

However, this Regulation applies only to member state and to civil and commercial matters, in this sense points out Article 6 of the European Regulation (EU) No 1215/2012.

Arbitration

As mentioned, it is possible to resort to alternative means of dispute resolution, requiring the existence of an arbitration agreement for this purpose. As to this specific scenario, parties may agree to submit to arbitration, thus requiring the intervention of an impartial decision maker.

The arbitration agreement should adopt written form, as the requirement being deemed to be met when the agreement is contained in a written document signed by the parties. A typical advantage of arbitration is that the award is enforceable in far more countries than court judgments considering the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. When settling their disputes through arbitration in Portugal, parties are granted full confidentiality and, in general, such proceedings are faster than judicial proceedings; plus, the experience and expertise of arbitrators may contribute to a more suitable decision.

Learn more

To know more, please read the Portuguese chapter of the Lexology “Getting the Deal Through” guide “Distribution & Agency 2021”, submitted by the Portuguese team of Victoria Associates (available here).

Victoria Associates has successfully represented clients in disputes related to distribution contractual relationships and welcomes any question that may arise in this context (info@victoria.associates).

Victoria Associates

Team:

Duarte G Henriques – duarte@victoria.associates

João Nuno Frazão – joao@victoria.associates

Maria Teresa Silva – teresa@victoria.associates

Onwards to the Future…

Movies from the last century looked up to the year 2000 as the beginning of a futuristic era in which high technology is a central element of human life. Drones, smart phones, tablets, mobile payment technology, biometric devices, wearable technology, video calls, and time travel are some examples among the rich variety of frontier technology that we could only imagine through the media back in the day. And while traveling in time remains quite improbable today, the rest of the items in the list became a reality—one that outshines the most sophisticated movie props. But what’s puzzling about these (otherwise accurate) accounts about the “future” is that by and large 20th-century pop culture failed to tell a story about the major forces that give life to all modern tangible manifestations of tech: software and the internet.

This failure, however, was also our own in that we didn’t seem to anticipate the many implications that a pervasive reliance on technology would entail for our societies. Confronted with the current technological revolution, our governments and legal systems have only been able to react to the new realities, oftentimes with tardy and insufficient regulation. Thankfully, the pressure that the civil society (including the independent legal and technological communities) and academia has exerted has also informed—and to a certain extent influenced—Big Tech’s corporate social responsibility and self-regulatory efforts. Nevertheless, as a result of the lack of a more adequate legal regulatory framework, personal rights of all sorts still appear vulnerable to the unintended consequences of an industry that remains largely underregulated.

To focus on the missing narrative on software and the internet is of course an oversimplification of the problems that today lie at the intersection of law, technology, and ethics. After decades of widespread internet use (i.e., social media, e-commerce, streaming, etc.) Big Tech, service providers, and almost anyone who cares about predicting future consumer behavior didn’t miss out on the opportunity to store huge amounts of behavioral and personal data drawn from online interactions of all sorts. These stakeholders are now using the resulting body of data—Big Data—in conjunction with complex algorithms to design and train software that is capable of performing activities typically associated with humans. The result is the so-called Artificial Intelligence (AI), part of a true technological revolution in which other cutting-edge technology such as Blockchain (BC) and the Internet of Things (IoT) converge, and which have been used to disrupt entire industries and to change our lives for good… or bad.

This AI-BC-IoT triumvirate is associated with the Big Tech’s market dominance and evokes the coolest side of technology. One aspect, however, that is less often discussed is the application of these technologies to the governmental activity, the law, and the judiciary. To name a few examples, government agencies are now adapting AI solutions relying on vast databases to efficiently manage risks associated with the maintenance and upgrade of all sorts of hardware (from buildings to aircraft) and software programs (for example, firewall programs). Likewise, business parties can enter into self-enforceable “smart-contracts” on the Blockchain that can include some type collateralization (i.e., escrow) as well as blockchain-based dispute resolution clauses that provide for the efficient adjudication of amounts at stake in case of contractual breach. Finally, a handful—but growing—number of courts are employing these new technologies to classify incoming filings, extract relevant information resulting in automatic docketing of documents and a significant reduction on the average life cycle of a case.

But not everything is cool about tech. There are more than a handful of notorious examples of use cases where AI and the other technologies have gone wrong. One such example involves the use by courts of certain algorithms to determine recidivism rates among criminals in order to inform judicial decisions about whether to grant bail in specific cases. Because AI is only as good as the data it’s built upon, and because nothing really has prevented humans from transferring their old biases to the machines, AI-based systems used in the bail-setting example have discriminated among groups group of past offenders, labeling the members of certain race as more prone to recidivism than members of other groups.

The lawyers at Victoria Associates are conscious that a convergence of law and technology will soon encompass most aspects of the law and our practice. Given the inevitable dangers of this convergence for the legal system, lawyers have a double duty to embrace the tech revolution and also to influence how it is implemented in the legal field. This duty exceeds the matters that we handle and requires an interdisciplinary involvement of each of us in the current debate about the use of the new technologies in the legal system. 

In this spirit, Duarte Henriques and Luis Bergolla serve, respectively as co-chair and member, on the Task Force on Tech Disputes, Tech Companies & International Arbitration of the Silicon Valley Arbitration & Mediation Center. This task force seeks to explore the reasons for the apparent under-use of arbitration by global technology companies and to offer solutions and to offer a bundle of tools that could help the arbitration community better serve technology companies.

Miguel Salas is also leading a similar and perhaps more ambitious project in Spain. Recently launched in the middle of a global pandemic, the Foundation for the Legal Artificial Intelligence—FIAL—is an advanced tech think-tank that seeks to generate knowledge for the implementation of AI-based decision-making processes in existing judicial, administrative and conflict resolution systems. Since its inception, Duarte Henriques and Luis Bergolla both serve on FIAL’s academic advisory board.

Matheus Puppe Magalhāes and Luis Bergolla are also active independent researchers in the field of law and tech and their work focuses on disruptive technologies, cryptocurrencies, and blockchain-based arbitration.

Contact us at info@victoria.associates to learn more about our industry-specific know-how and dispute resolution philosophy.