It is assumed that a judgment given by the Supreme Court of Justice on 23 October 2014 has put an end to the discussion about the goodwill indemnity due to the commercial agent by the principal when termination of the commercial agency contract is not ascribed to the commercial agent and about the obligation to compensate the commercial agent for the clientele that the agent obtained for the principal as a result of performing the contract.
This regime was introduced into the EU legislation by Directive No. 86/653/EEC and the Portuguese law which implemented that Directive was Article 33 of Decree-Law No. 178/86, dated 3 July.
Uniform jurisprudence by higher Portuguese courts has extended this regime to the distributor of a distributorship contract.
The above-mentioned Portuguese law imposes mandatory application of the Portuguese law that entitles the commercial agent, and by analogy the distributor, to the goodwill indemnity and does not allow for the parties to agree otherwise nor that any other foreign legislation chosen by the parties provide otherwise as to any contract of the kind. These rules are the well-established lois de police that imposes a given law over any other law of a different country.
It had been debated whether this legal regime, once an arbitration award or court judgment has been adjudicated in a foreign country, will be recognized or not by the courts of another state where a party intends to obtain the exequatur to enforce it in that country.
This Supreme Court judgment has decided that since such foreign award has become res judicata and there is no ground to refuse it under the 1958 New York convention, there is no violation of Portuguese international public policy if the award does not entitle the agent or distributor to a goodwill indemnity.
As a matter of fact, Portuguese international public policy applies when a compensation of this kind is adjudicated despite the mandatory regime of Portuguese law, and does not infringe on the most essential values of Portuguese economic, social and moral principles or interests of Portuguese legal system.