03 Apr 2019
In the Portuguese jurisdiction the recognition and enforcement of foreign judgments is regulated in Book V, Special forms of procedure, Title XIV, The Foreign Judgment Review, article 978 et seq. of the Civil Procedure Code. In this article, we intend to briefly explain how these processes work in Portugal.
The requirements for a judgment to be capable of recognition and enforcement under the Portuguese jurisdiction are:
The process required for a foreign judgment to be recognised and enforced in Portugal, called “exequatur”. To start this process, the party must first file a claim that should be accompanied by the original or a certified copy of the following documents: the foreign judgment, legalised or apostilled; the date when the decision was rendered; a document verifying that the defendant was notified with a summoning order; a document attesting that the ruling is final and enforceable in the country of origin; translations of the documents; proof of power of attorney.
However, it must be pointed out that that the Portuguese jurisdiction distinguishes between recognition and enforcement of judgments.
Thus, the recognition is a process that gives the same effects to the judgment in Portugal as it does in the State where it was produced (the State in which enforcement is petitioned by any of the parties). This happens by introducing into the Portuguese legal order the same situation that was established in the legal order of the State of origin. On the other hand, enforcement means that a judgment can be executed before a Portuguese court, allowing the party to act coercively against the debtor in Portugal.
In practice, creditors seeking to recover a claim in Portugal will seek an enforcement order. That procedure will take place at the Court of Second Instance (Tribunal da Relação), of the registered domicile of the defendant, which is the competent court in Portugal to deal with this kind of process. If the judgment in question is an arbitral award, the competent court will be the First Instance Court (Tribunal da Primeira Instância). Besides, Article III of the New York Convention states that the procedure for recognition and enforcement of foreign arbitral judgments follows the same procedure as judicial judgments as stated in the Civil Procedure Code.
To recognise a foreign judgment, in accordance with articles 978 to 985 of the Civil Procedure Code, the main phases are the following: the claim (petição inicial); a preliminary analysis of the claim by the Court; citation of the defendant to present its statement of defence (contestação); following the presentation of the statement of defence, if any matter arises that deserves a response from the claimant, there will be place for a written response (resposta); once the written statements are finished, the parties and the Public Ministry have 15 days to plead and there is a trial and decision; the decision can be subject to appeal if any of the parties do not agree with the decision and comply with the legal requisites to appeal.
In order to enforce the judgment, the creditor must summon the other party before the court of the opposing party’s domicile or the court of the place where the enforcement is contemplated. The decision will be made by a single judge, after a period of exchange of written submissions and a hearing. The parties must be represented by a lawyer. The claim is to be accompanied by the following documents: a copy of the decision; proof of power of attorney; and other documents that are considered relevant to the enforcement proceedings.
The bailiff or execution agent proceeds with the enforcement, rendering an order stating the affected parties and the subject matter of the enforcement, as well as the investigation and research measures aimed to localise the assets of the debtor. Once the assets have been identified, they will be allocated to the creditor.
In case of opposition to the enforcement of the foreign judgment, the ruling deciding on such opposition can be subject to appeal. In case of dismissal of the enforcement without opposition, it is also possible to appeal such decision before the Appeal Court.
The Portuguese courts do not review the merits of the judgment, because the process is thought to only verify that formal requirements are fulfilled. As such, the recognition and enforcement of a judgment can only be challenged if it does not comply with the formal requirements.
A creditor can proceed with the enforcement of a judgment, with interim enforcement measures on the basis of a foreign judgment even before beginning recognition/enforcement court proceedings in Portugal, requesting the seizure of assets of the debtor when there is a threat to the recovery of the values in debt. The interim attachment will be executed by a bailiff without prior notice to the debtor and without the need for a court order. The assets will automatically be frozen upon service to the asset holder, be it the debtor itself or a third party. The attachment must then be notified to the debtor within eight days and is subject to judicial review. Unless the court orders the attachments to be lifted, the assets will remain frozen for the duration of the enforcement procedure. If the court orders the enforcement of the foreign judgment, the frozen assets will be transferred to the creditor.
The system for reviewing foreign judgments is shaped by the principle of formal review, which is based on the restriction that a decision should not be granted if it leads to a result that is manifestly incompatible with the international public policy principles of the Portuguese State, in line with the Portuguese Constitution (Constituição da República Portuguesa). Thus, the judgment can also be challenged if it is incompatible with international public policy or if it was procured by fraud.
The legal framework for the recognition and enforcement of foreign judgments normally applies to all subject matters. As an exception, foreign judgments rendered on public matters, i.e. through which the government of a foreign country relies upon its sovereign prerogatives (typically tax and criminal judgments), cannot be recognised and enforced in Portugal.
Author: Nuno Albuquerque MCIArb