Faculdade Direito Universidade Nova de Lisboa

ALTERNATIVE DISPUTE RESOLUTION

2012/2013

Mock cases

Case 1

A golf player, John A., enters a sponsorship contract with a soft drink company, Bright Bull, under the terms of which John A. shall in every professional golf championship wear the clothes provided by Bright Blue with its trademark. The parties also agreed to include in the contract a dispute resolution clause that established mediation.

In one occasion, the company delivers to John A. a transparent shirt that he refuses to wear. The company wants to sue him for breach of contract but he argues that what the company demanded infringed his image right.

1)Bright Bule initiated court proceedings. Can John ask for dismissal on the ground that the court lacks jurisdiction for the case?

2)The company argues that the dispute cannot be object of mediation. Do you agree?

3)The parties start a mediation process and they reach the following agreement: “Jonh A. shall wear whatever is demanded by Bright Bule, only excluding underwear.”

  1. Should the mediator call the parties’ attention to the fact that this settlement is not fair?
  2. May a judge homologate the agreement? What if it provided that John A. would be obliged to play only with underwear or even naked?

Case 2

  1. Is there ground for challenge the arbitrator in the following cases?
  2. The arbitrator works as lawyer at a firm, which represented one of the parties three years ago on an unrelated matter;
  3. The arbitrator is a colleague and friend of one of the parties’ lawyers.
  4. The arbitrator was a professor at the university of one of the parties.
  5. Does the arbitrator have the duty to disclose the facts above mentioned?
  6. Explain the challenge procedure applicable in these cases.
  7. If the party challenges the arbitrator, but the tribunal holds that there is no ground for refusal, can the party who lost seek for the annulment of the award after is has been rendered?

Case 3

Antunes BV and Boulangerie SA are the only two shareholders of International Telecommunications SA. The International Telecommunications Society is an important company in the telecommunications sector with business in several European countries.The headquarters is in Portugal.

Antunes BV is a company which is part of the major Portuguese business group Antunes.The group retains its family character and has interests not only in telecommunications but also in energy and finance.Antunes BV is a company based in the Netherlands whose only asset is the participation in the International Telecommunications Society.The capital of Antunes BV is wholly owned by AntunesSGPS which is based in Portugal.The group is led by Mr. Antunes, who chairs the board of directors of all group companies.

Boulangerie SA is a company established in France, which operates in the field of pastry shops and bakeries.

DurcivalFilho Ltd. is a company established in Brazil that wants to invest in the European telecommunications sector.For this purpose, is interested in controlling the International Telecommunications, gaining the participation of Antunes BV and Boulangerie.

The Antunes Group is faced with severe liquidity problems and therefore is interested in selling on their participation.The Boulangerie SA, for its part, intends to focus on their "métier" traditional and therefore also considering selling, provided that a good price.

Mt. DurcivalFilho, Chairman of the Board of Directors of Durcival Son Ltd, went to Portugal and France to present his proposal to MrAntunes and Boulangerie SA. The negotiations were led by Mr. Filhoand had the technical support of Antunes SGPS team.

After tough negotiations, the parties reached agreement on the value of the transaction. The parties further agreed that the vendors assume certain obligations relating to the absence of contingent liabilities of the International Telecommunications SA, jointly pledging to compensate the buyer if such responsibilities would materialize within a year. To formalize the agreement, AntunesBV e Boulangerie SA as sellers, and DurcivalFilho Ltd., as buyer, entered into a purchase and sale of shares and the agreed price was paid.

The purchase and sale of shares contains an arbitration agreement which reads as follows: "All disputes arising out of or relating to this contract will be definitively resolved by an arbitral tribunal.The Arbitral Tribunal shall consist of three arbitrators.The place of arbitration shall be Lisbon and the Court will apply the Portuguese law. "

After about nine months, the International Telecommunications SA is subject to a tax audit and, much to the surprise and indignation of the Mr. Durcival, significant tax liabilities are discovered, so he wants to be compensated by the sellers.
However, Mr. Durcival was informed that Antunes BV has virtually no assets and therefore unlikely to respond to any compensation.

1.Suppose that DurcivalFilho Ltd. only realizes the lack of assets of Antunes BV after the initiation of arbitration.Can she request the intervention of Antunes SGPS SA?

2.Suppose that the arbitration was initiated only against Antunes BV and Boulangerie SA and they do not proceed to the appointment of the arbitrator of their choice arguing they were unable to reach an agreement.How should they proceed to appoint the arbitral tribunal?

3.Suppose that the Boulangerie SA believes that the liability for tax contingencies in the internal relations would be the exclusively of Antunes BV. Can the party file a claim against Antunes BV in the same arbitration initiated by DurcivalSon Ltd?

4.Suppose that an Arbitral Tribunal condemns Antunes SGPSin the payment of compensation.How can Antunes SGPS react?

Case 4

Gas Natural SA plans to build a new station for receiving and gasification of LNG[1] atSines. To this end, the Gas Natural SA launched a tender in the form "turnkey" with guaranteed maximum price to perform all work necessary, including conception, design and construction. The Total Construction, GmbH, a company headquartered in Germany, submitted the best bid and won the contest.

After lengthy negotiations, Gas Natural SA and Construction Total SA signed the contract to conception, design and construction of new LNG station.

The contract contained an arbitration agreement as follows: "All disputes arising out of or relating to this contract shall be finally settled by an arbitral tribunal of three arbitrators.The place of arbitration shall be Lisbon and the Court will apply Portuguese law. "

One of the critical works of the project is the construction of tanks receiving natural gas. To this end, Total Construction, GmbH signed a contract with Tank Specialist, GmbH, a company highly specialized in this type of work.This contract also contained an arbitration agreement, as follows:"All disputes arising out of or relating to this contract shall be finally settled by an Arbitration Tribunal.The Arbitral Tribunal shall consist of three arbitrators.The place of arbitration shall be Lisbon and the Court will apply the German law. "

The new station of Gas Natural SA was not completed within the term contractually stipulated and, therefore, the Gas Natural SA applied to the Total Construction, GmbH the penalties provided for contractually.

The defendant refused to pay arguing that failure to comply with the deadline was due to design changes ordered by Gas Natural SA after the conclusion of the contract. Furthermore, the Building Totals GmbH also believes that the delay is the responsibility of the tanks Specialist, GmbH, which is delayed in the construction of tanks receiving the gas.

Given the impasse, Gas Natural SA initiates an arbitration against Total Construction, GmbH
1.Can Total Construction GmbH request the intervention of Tanks Specialist, GmbH to exercise their right of return?

2. Suppose now that Gas Natural SA signed two contracts, one with Total Construction GmbH and the other with tanks Specialist, GmbH. CanGas Natural SA initiate arbitration against Total Buildings and Tanks Specialist GmbH, GmbH?

Case 5

  1. After an arbitral award was rendered, the party who lost began an annulment proceedingalleging that the contract was concluded with bribery – the plea submitted bythe plaintiff was in truth part of a fee that the defendant was bound to deliverto the respondent, a civil servant, in order to negotiate a contract with a state entity of an Asian country. Should the judicial court annul the award?
  2. Can the arbitral tribunal apply a rule of law not alleged by the parties in the course of proceedings? Is it a ground for annulment? Would your answer diverge if previously to the issuing of the award, the tribunal had given the parties the possibility of discussing the new legal issue?
  3. If the court refuses to hear some witnesses presented by the defendant, reasoning that the facts that the witnesses would testify about are irrelevant to the case, is there a ground for annulment of the award?

[1]Gás natural liquidefeito.