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Outline and explain the general structure of your country’s court system as it relates to the commercial appellate process.
Portugal’s court system is organised in three different levels. There are:
- first-instance courts;
- intermediate appellate courts; and
- the Supreme Court, which is the final appeal court.
In certain circumstances - when a party raises questions about the violation of the Constitution by the way in which the court interprets and applies certain legal provisions - the Constitutional Court will also work as an appeal court.
In terms of intermediate appeal courts, the country is divided into five regions, each of which has an intermediate appeal court:
- Lisbon (which also covers the territories of the Azores and Madeira Archipelagos);
- Coimbra; and
The Supreme Court has jurisdiction over the whole country.
The threshold for the jurisdictions of the first instance and intermediate appeal courts are €5,000 and €30,000 respectively.
Are there appellate courts that hear only civil matters?
The Supreme Court has a civil, a criminal and a social section.
All the intermediate appeal courts have a civil and a criminal section and will, depending on the level of demand and complexity of the assigned cases, have the following sections:
- family and minors;
- intellectual property;
- competition; and
When there are no specialised sections, commercial matters will fall under the jurisdiction of the civil sections.
Therefore, both the Supreme Court and the intermediate appeal courts will hear commercial, civil and criminal matters, through the competent sections.
Appeals from administrative tribunals
Are appeals from administrative tribunals handled in the same way as appeals from trial courts?
Administrative courts have jurisdiction on matters of public law and taxes and are once again organised into three different levels.
Appeals from decisions by the regulators on matters of contravention, namely the Bank of Portugal, the Portuguese Securities and Exchange Commission and the Competition and Antitrust Authority, go through the Court of Competition, Regulation and Supervision, which is located in Santarém, and has jurisdiction over all of Portugal.
Appeals against decisions of this court go through the Lisbon Court of Appeal.
Representation before appellate courts
Is there a separate appellate bar or other requirement for attorneys to be admitted before appellate courts?
There is one single bar association in Portugal, the Portuguese Bar Association.
Only law graduates who have completed the mandatory three-year internship and who have passed the bar exam are allowed to enrol in the Portuguese Bar Association to be qualified to practice law.
Qualified lawyers are allowed to practice in all courts without limitation. The practice of law by non-qualified lawyers is a criminal offence.
If separate jurisdictions exist for particular territorial subdivisions or subject matters, explain their main differences as to commercial appeals.
In Portugal, there are two separate jurisdictions: administrative courts and judicial courts. The former has jurisdiction on administrative and tax matters. The latter has jurisdiction on all other subject matters.
Within judicial courts, some subject matters are handled by specific courts or specific sections. The Court of Intellectual Property has nationwide jurisdiction over any matters involving intellectual property law. The Maritime Court has jurisdiction in mainland Portugal over any matters involving maritime law. The Court of Competition, Regulation and Supervision has nationwide jurisdiction over regulatory contravention matters. In larger cities, there are courts or court sections with jurisdiction over:
- insolvency and corporate matters;
- debt collection; and
- employment disputes.
Appeals from decisions of the Court of Intellectual Property, the Maritime Court and the courts or sections specialised in insolvency and corporate matters, or debt collection, are similar to commercial appeals. However, in insolvency and debt collection proceedings, there is only one level of appeal, save a few exceptions (namely, conflicting upper-court decisions).
Appeals from decisions of the courts or sections specialising in employment disputes are very similar to commercial appeals. However, the deadline for filing and replying to an appeal is shorter (20 days). Furthermore, appeal to the relevant intermediate appeal court is always admissible if the dispute relates to the existence and validity of employment contracts, dismissal or reinstatement of employees, work accidents and occupational diseases, inter alia.
Appeals from decisions of the regulators (eg, the Bank of Portugal, the Portuguese Securities and Exchange Commission, and the Competition and Antitrust Authority) on contravention matters are different from commercial appeals. The appeal goes through the Court of Competition, Regulation and Supervision, which will normally hold a trial hearing to reassess evidence already on record and hear new evidence. The decision of the Court of Competition, Regulation and Supervision may be subject to further appeal before the Lisbon Court of Appeal, in accordance with the rules on criminal appeals.
Bringing an appeal
What are the deadlines for filing an appeal in a commercial matter?
The general deadline for filing an appeal on the merits of a first-instance sentence is 30 calendar days.
However, the said deadline can be extended for an additional 10 days if the appeal also covers the decision of the first-instance court on the facts of the case and implies the reanalysis by the appeal court of the audio-recordings of the witness statements.
The defendant will be granted an equal deadline to present its response to the appeal.
In certain cases, however, the deadline can be reduced to 15 days. This will happen in appeals filed in urgent proceedings (eg, interim measures or requests for interim relief) or against certain interlocutory decisions (decisions on the impediments of the judge, on the suspension of the proceedings, rejection or admission of means of evidence, applying fines, etc).
Except for urgent proceedings, all deadlines will be suspended during the judicial holidays, which take place between 22 December and 3 January, between Palm Sunday and Easter Monday, and between 16 July and 31 August.
Finally, when the deadline ends on a day on which the courts are closed (ie, Saturdays, Sundays and bank holidays), its term is transferred to the following working day.
What are the key steps a litigant must take to commence an appeal?
Despite being addressed to the appeal court, the appeals are filed before the trial court.
In its submission, the appellant must indicate the type and effects of the appeal (ie, suspending or non-suspending the appealed decision), the way in which it is supposed to be submitted to the appeal court (ie, together with the full records or separately) and present the written motivation or reasoning in support of the appeal, which will conclude with a brief and synthetic summary of the reasons why the decision should be overruled.
The conclusions are of the utmost importance, since they will determine the scope of the appeal and the matters that the appeal court will be called upon to decide. Additionally, the failure to present such conclusions can lead to the dismissal of the appeal altogether.
If the appeal verses legal aspects, the motivation will contain a reference to the legal provisions that the party relies upon and considers that the ruling has breached, the sense in which the provisions the decision relies upon should have been interpreted and applied and, in case of error in the determination of the applicable legal provisions, those that the first-instance court failed to apply and should have been applied.
If the appeal also verses matters of fact, the motivation must contain the indication of the specific facts that the appellant considers to have been incorrectly judged, the specific evidence on file that imposed a different judgment and the decision that should be issued regarding such facts. If such requirements are not met, the appeal will be summarily dismissed.
Because the hearings are recorded and the Portuguese legal system provides an effective double degree of jurisdiction on the merits or facts of the case, if the party filing an appeal on the facts relies on the recorded witness statements, it must indicate precisely the parts of such recordings on which he or she relies, with reference to the recordings provided by the court. It is customary to provide transcripts of such relevant passages as part of, or as an attachment to, the motivation of the appeal. Once again, if such requirements are not met, the appeal will be summarily dismissed.
How is the documentation for appeals prepared?
In appeals against the final verdict, in which case the jurisdictional power of the first-instance court is terminated, the entire records will be sent to the appeal court, together with the motivation of the appeal and the response of the counterparty.
In case of appeals against intermediate decisions, which are submitted to the appeal court separately, the appellant must indicate at the end of its motivation which parts of the record it intends to use in support of his or her appeal. These will then be copied and compiled by the first-instance court and be sent to the appeal court together with the motivation of the appeal and the response of the counterparty (who must proceed in the same way), while the records continue with the first-instance court.
Right of appeal
Discretion to grant permission to appeal
In commercial matters, may litigants appeal by right or is appellate review discretionary?
Portuguese procedural law grants any party to a dispute the right to appeal against decisions that are detrimental to its interests or claims, as long as the value of the proceeding is above the threshold of the court (see question 1) and the decision itself is detrimental in a value equal to at least half of the applicable threshold.
However, certain categories of rulings are subject to appeal, regardless of the value of the proceeding and the value of the detrimental decision. This is the case, for example, of decisions on the international jurisdiction of Portuguese courts, on the material or hierarchical jurisdiction of the court, or on proceedings in which the validity or continuity of lease contracts for permanent residence or commercial purposes are at stake.
Finally, there are also certain decisions - those that are for mere expedience or fall within the discretionary powers of the court - that are not subject to appeal regardless of the value of the underlying proceedings (for instance, the decision to grant or refuse an extension of the term to file the defence or a decision setting the date of a hearing).
Judgments subject to appeal
Can litigants appeal any ruling from a trial court, or are they limited to appealing only final judgments?
Besides final judgments, a broad scope of other intermediate decisions is subject to appeal. Examples of such intermediate or interlocutory decisions can be found in article 644 of the Procedural Code and include decisions on the impediment of a judge, decisions staying the proceedings, decisions accepting or rejecting a written pleading or means of evidence and, in general terms, decisions that if only opposed with the appeal against the final verdict would render them absolutely useless.
Security and interlocutory matters
Security to appeal
In a typical commercial dispute, must a litigant post a bond or provide security to appeal a trial court decision?
No. As a general rule, litigants are not required to post bonds or provide any sort of security in order to appeal.
However, in certain circumstances, namely when the appellant argues that the immediate enforcement of the award will cause him or her considerable damage as a means to obtain the suspension of such enforcement while the appeal is pending, he or she will have to post bond as a condition for such suspension to be granted by the court.
Are there special provisions for interlocutory appeals?
Yes. Although the appeal procedure is the same for all types of appeals (interlocutory or final), there are a few special provisions for interlocutory appeals.
Besides the examples mentioned in question 10, other decisions subject to interlocutory appeal include:
- decisions on interim measures;
- decisions on addition and substitution of parties;
- on third-party interventions, etc; and
- decisions that rule on some (but not all) of the claims or on the liability of some (but not all) of the defendants.
In general terms the deadline for filing and replying to an interlocutory appeal is shorter (15 days instead of 30 days) (see question 6).
Furthermore, there is only one level of review for interlocutory appeals, which means that the decision taken by the first-level appellate court cannot be appealed to the Supreme Court. There are a few exceptions to this rule. If, for instance, the decision of the first-level appellate court conflicts with decisions taken by other appellate courts, the losing party should be allowed to appeal to the Supreme Court.
Finally, the special provisions described above do not apply to interlocutory appeals on decisions that rule on some (but not all) of the claims or on the liability of some (but not all) of the defendants. Interlocutory appeals against such decisions follow the general procedural framework both in terms of deadline (30 days) and of possibility to appeal to the Supreme Court.
Injunctions and stays
Are there special rules relating to injunctions or stays, whether entered in the trial court or on appeal?
In addition to question 12, it is worth noting that injunctions are, in general terms, considered urgent proceedings, which have precedence over other non-urgent matters and run continuously, even during judicial holidays (see question 6).
Injunctions can be granted ex parte and are, in general terms, awarded in support of the main proceedings in which the subject matter is under debate. The decisions of the injunctions are, therefore, provisional and subject to the outcome of the main proceedings.
However, the court may, under certain circumstances - if the evidence on record allows the judge to form a firm conviction on the merits of the case and the injunction is adequate to definitively settle the dispute - invert the terms of the proceedings and exempt the claimant from filing the main proceedings, in which case it will be up to the defendant to react by filing the opposition.
Scope and effect of appellate proceedings
Effect of filing an appeal
If a litigant files an appeal in a commercial dispute, does it stay enforcement of the trial court judgment?
The general rule in the Procedural Code for commercial litigation is for appeals not to suspend or stay enforcement of awards. However, as explained above, the litigant may secure such a stay if he or she demonstrates that the enforcement would cause him or her considerable damage and offers an adequate security (eg, bank deposit, bank guarantee, in rem security) that covers principal, interest and court fees.
Scope of appeal
On an appeal from a commercial dispute, may the first-level appellate court consider the facts and law anew, or is its power to review limited?
As a rule, the first-level appellate court’s power to review covers both the facts of the case and the applicable law. However, in general terms, the appellate court’s powers are limited to the specific points of law and the findings of fact that are challenged by the appellant in its motivation and, in particular, in the final conclusions.
If a party is dissatisfied with the outcome of the first-level appeal, is further appeal possible?
The thresholds for the jurisdiction of the first-instance and intermediate-appeal courts are €5,000 and €30,000 respectively, meaning that in commercial disputes between €5,001 and €30,000, there is only one level of appellate review.
In commercial disputes worth more than €30,000, there are two levels of appellate review.
The first-level appellate court may re-examine points of law as well as findings of fact.
The second-level appellate court (ie, the Supreme Court) only decides on points of law.
For proceedings above the €30,000 threshold, if the first-instance judgment is upheld by the first-level appellate court on broadly similar grounds and without any dissenting opinions, then the appellant is not entitled to appeal to the Supreme Court.
In exceptional cases, the Supreme Court will accept an appeal if the appellant is able to demonstrate that either:
- the case raises points of law that clearly need to be decided for the correct application of the law;
- the interests at stake are particularly material for the community; or
- the decision of the first-level appellate court conflicts with decisions taken by other appellate courts.
Duration of appellate proceedings
How long do appeals typically take from application to appeal to a final decision?
According to the 2017 EU Justice Scoreboard, the average time for a first-instance court to rule on a commercial or civil case in Portugal is just over 700 days. This means that it is common to see cases in first-instance courts drag on for three to four years, or even more.
This is because of inefficiency of the system as a whole and a high number of pending cases.
According to the Scoreboard, Portugal is among EU countries with the highest score in the number of pending civil and commercial cases, with 12 cases per 100 habitants, against just two in France and six in Italy.
On the other hand, Portugal scores very low when it comes to investment in the court system when compared with other EU countries, with a mere €56 per inhabitant, against €85 in France or €100 in Italy. The result is a slow and inefficient court system.
The Lisbon Commerce Court is one of the busiest, and therefore slowest, courts in the country.
When it comes to appeals, the situation is not much better. The average time for an appeal in the intermediate appeal courts to be decided in Portugal varies considerably, depending on the competent appeal court on the one hand, and the complexity of the appeal on the other.
Given the absence of reliable official data - the available public statistics indicate that the average time for an appeal to be decided is a mere three months - based on our experience, the average time for an appeal in a complex commercial case, involving both matters of fact and law, is between 10 and 18 months.
Submissions and evidence
What is the briefing and argument process like in a typical commercial appeal?
Further to question 7, in commercial appeals, the appellant has to file a written motivation or reasoning in support of the appeal, setting out all the reasons why the decision should be overruled. The statement of appeal is filed in the same court that issued the decision and has to be served on the respondent by the appellant itself. The respondent is entitled to file a statement of reply setting out all the reasons why the decision should be upheld.
The parties are not allowed to submit documents with their statement of grounds, except under exceptional circumstances (documents that the party was unable to present during the discussion of the case before the first-instance court).
The parties may, however, submit legal opinions together with their submissions.
In principle, the parties are not allowed to file any further briefs in support of their arguments.
Are appeals limited to the evidentiary record that was before the trial court, or can new evidence be introduced on appeal?
Further to questions 7 and 18, as a rule, parties are not allowed to introduce new evidence on appeal.
In exceptional cases, a party may introduce new documents, provided that it demonstrates that it was unable to obtain or retrieve them beforehand.
New evidence of wrongdoing
If litigants uncover new evidence of wrongdoing that they believe altered the outcome of a trial court judgment, can they introduce this evidence on appeal?
In general terms, the parties are limited to the evidence that is in the record (see questions 18 and 19).
The only additional evidence that can be submitted during appeals to the intermediate appeal courts is documentary evidence, provided the requirements in question 19 are met.
The appellate process for commercial arbitration does not contemplate additional witness evidence.
It is also possible, in exceptional circumstances, to file an appeal of revision against a definitive ruling, if subsequent evidence of wrongdoing is uncovered (for instance, if the evidence produced during the proceedings and upon which the ruling was issued is found to be false).
Such an appeal must be filed before the court that issued the decision under revision within five years of the decision and, in any case, within 60 days of the date upon which the party became aware of the new relevant facts.
New legal arguments
May parties raise new legal arguments on appeal?
No. Parties are limited to raising the arguments that were made before the first-instance court.
Costs, settlement and funding
What are the rules regarding attorneys’ fees and costs on appeal?
The losing party has a duty to reimburse the attorneys’ fees and costs incurred by the winning party up to 50 per cent of the aggregate court fees paid by both parties. Court fees on appeal are calculated on an ad valorem basis.
Settlement of first instance judgment after appeal lodged
Can parties enter into a settlement agreement to vacate the trial court judgment after an appeal has been taken?
Yes. The parties can enter into a settlement agreement to vacate the trial judgment after filing an appeal.
Limits on settlement after commencement of appeal
Are there any limits on settlement once an appeal has been taken?
No. The fact of filing an appeal does not affect or limit the parties’ right to enter into a settlement agreement.
May third parties fund appeals?
In general, Portuguese law does not contain provisions on the appellant’s funding sources. So, theoretically, it could be possible to use litigation funders, although it is not common practice in Portugal.
Disclosure of litigation funding
If litigation funding is permitted in an appeal, must funding sources be disclosed to the court or other parties to the litigation?
There are no specific rules governing such cases (see question 25). Therefore, in principle, no disclosure is mandatory.
Judgments, relief and non-parties
Must appellate courts in your country write decisions explaining their rulings? Can the courts designate the precedential effect of their decisions?
Appellate courts in Portugal are required to motivate their rulings. Indeed, the lack of motivation is cause for nullity of an award.
Note, however, that under Portuguese Law, court decisions do not have precedential effect, except for the decisions rendered by the plenary of the civil sections of the Supreme Court for the specific purpose of resolving conflicting interpretations of the law.
However, this does not mean that the appellate court cannot refer to previous decisions on the same subject matter as a means to motivate its decision. This will normally happen when the court considers that the underlying matter is simple and has been judged repeatedly in the same manner, in which case it can refer specifically to such precedents and provide copies thereof.
Will the appellate courts in your country consider submissions from non-parties?
No. As a general rule, the appeals must be filed by the party that is faced with an adverse decision that exceeds the thresholds of the court’s jurisdiction (see question 9).
However, there are exceptions to this rule, allowing third parties that are directly and effectively harmed by judgments, to appeal against them. For instance, when a judgment has been issued as a result of collusion between a claimant and a defendant to obtain what would otherwise be an illegal result, any third party may appeal such a judgment.
What are the ordinary forms of relief that can be rendered by an appellate court in a civil dispute?
There are no specific limitations as to the relief that can be rendered by an appellate court. Apart from exceptional situations where the court has the power to investigate matters without having to rely on the parties’ impulse, the general rule is that the courts will be limited to the specific questions raised and relief requested by the parties in their written submissions.
Update and trends
Are there any current developments or emerging trends that should be noted?
The inefficiency of the Portuguese legal system - including the appeal courts - is well known to practitioners and investors alike.
According to the statistics made available by the Department for Justice Policies (www.dgpj.mj.pt/sections/siej_pt/destaques4485/os-numeros-da-justica/downloadFile/file/Os_numeros_Justica_2016.pdf?nocache=1513263455.49), the number of appeals that are finalised each year in Portugal’s appeal courts has slightly risen from 33,930 in 2013 to 35,776 in 2016. The figures for 2017 are not yet available.
During the same period, however, the number of cases that have entered the system has increased from 33,634 in 2013 to 36,661 in 2016.
As a result, the number of pending cases at the end of each year has increased from 8,377 in 2013 to 10,312 in 2016.
In other words, the efficiency improvements are seen as weak and are outweighed by the increasing demand, fuelled by years of economic stagnation within Portugal.
Although practitioners, politicians and investors agree that the inefficiency of the court system impairs investment and growth, it seems unlikely that the reforms and investment needed to turn the situation around are close at hand, which has led to the increase in alternative means of dispute resolution, such as arbitration, particularly for complex, high-value transactions.