Multi-Party Arbitrations In Portugal

The Portuguese Arbitration Act (Lei de Arbitragem Voluntária), similar to many others, does not address the issue of multiparty disputes. Moreover, the act is clearly designed to accommodate disputes between only two parties – a claimant and a defendant.

This gives rise to serious problems. In some cases, multi-party arbitration is indispensable to settle disputes, such as in situations in which an arbitral award must necessarily be binding on more than two parties (e.g., separation of property owned by three tenants in common). In other cases, although multi-party arbitration is not necessary, it may be highly advisable to: save time and money; avoid conflicting decisions on the same issues of law and fact; allow a defendant to pass on the liability to third parties (e.g., suppliers, sub-contractors); or to provide flexibility when the claimant is unsure which defendant the claim should be directed to (e.g., when it is unclear which of two parties is responsible for