Data
- Date:
- 24-03-2022
- Country:
- Portugal
- Number:
- 27353/18.1T8LSB.L1-2
- Court:
- Tribunal da Relação de Lisboa (Court of Appeal of Lisbon)
- Parties:
- --
Keywords
FINANCIAL INVESTMENT AGREEMENT - BETWEEN A GERMAN BANK AND A SOUTH EUROPEAN FINANCIAL INVESTMENT COMPANY - REFERENCE BY THE ONE OF THE PARTIES TO PECL AND TO UNIDROIT PRINCIPLES IN ORDER TO QUALIFY THE TYPE OF CONTRACT - COURT PREFERRING TO RECOURSE TO NATIONAL LAW INSTEAD OF SOFT LAW INSTRUMENTS
Abstract
A German bank (Respondent) and a south European financial intermediary company (Appellant), with a branch in Portugal, entered into a matched principal trading for the purchase and resale of financial instruments. After purchasing Argentinean bonds from Respondent, the Appellant requested termination of the purchase contract by invoking an error on the object of the contract, since the bonds were not tradable in the US market, where the final buyer was located.
A dispute arose between the parties and the First Instance Court ruled in favour of the Respondent, condemning the Appellant to pay the price established in the bond purchase agreement.
The Lisbon Court of Appeal confirmed the first instance decision, stating that in matched principal trading there are two transactions carried out by the investment company, acquiring the financial instrument from the selling customer and (re)selling it to the buying customer. Therefore, in each of the transactions the investment company acts in its own name – that is, as a buyer vis-à-vis the first contract and as a seller vis-à-vis the second contract – and assumes all the risk connected to the single operation. The circumstance that the second negotiation stage of matched principal trading suffers from any vicissitude that makes it invalid or ineffective does not affect the validity and effectiveness of the first negotiating stage.
In stating so, the Court rejected Appellant’s argument to qualify such legal transaction as a service contract or as a mixed contract where the characteristics of the service contract and the sale contract are combined, but where the prevailing element is the provision of services. In support of this argument the Appellant referred to the Principles of European Contract Law (PECL) and the Unidroit Principles of International Commercial Contracts, together with the rules for interpreting business declarations in the Portuguese legal system (arts. 236 to 238 of the Civil Code).
The Court replied that the principles invoked by the Appellant are soft law, “since they only represent doctrinal contributions to the future implementation of supranational codified legislation in the field of civil and commercial law”, not consisting of normative instruments of law (national or supranational) which, to that extent, must be directly used for the qualification of the business relationship maintained between the parties.
According to the Court, even though the provisions of recital (17) of the Rome I Regulation affirm the need to resort to European legislation to interpret the concept of "provision of services" and "sale of goods" (and thus determine the specific contract entered into between the parties), the absence of a rule of this nature, that embodies such concepts, along with the need to resort to general principles of civil law to determine whether the transaction entered into between the parties fulfills one or the other of these contractual types, does not authorize to resort to soft law for this qualifying effect. The Court considered it more appropriate to resort to both German and Portuguese legislation, and more specifically to the rules for interpreting the business declarations that result therefrom, as a way of filling the legislative gap.
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