Caught in the Clause: Extending Arbitration Agreements to Non-Signatories in Portuguese and Comparative Perspective

1. Introduction

The question of whether arbitration agreements may bind non-signatories is a matter of considerable controversy in arbitration law. While arbitration rests on the principle of party autonomy and requires consent, contractual practice and corporate structures often raise the issue of whether a third party may be compelled to arbitrate or may itself invoke an arbitration clause.

In Portuguese law, the prevailing position is cautious: arbitration agreements bind only their signatories. Nevertheless, jurisprudence and doctrine have carved out limited exceptions, particularly in cases of contractual succession or where express or implied consent can be demonstrated.

2. Legal Framework

The Portuguese Voluntary Arbitration Law (Law no. 63/2011, hereinafter “LAV”) does not provide for the extension of arbitration agreements to non-signatories. On the contrary, the statute consistently refers to “the parties” in relation to both the conclusion of arbitration agreements and arbitral proceedings, suggesting a closed subjective scope.[1] To this author’s knowledge, only the Peruvian Arbitration Law (Legislative Decree No. 1071 of 2008, Article 14) contains an express statutory provision allowing for the extension of the arbitration agreement to non-signatories, covering cases such as assignment, succession, groups of companies, and situations governed by good faith and legitimate expectation.

Article 36 LAV allows for the intervention of third parties in arbitral proceedings, but only if they are already bound by the arbitration agreement, either ab initio or by subsequent adhesion. Such adhesion requires the consent of all signatories.[2] Accordingly, Portuguese law maintains consent as the foundation of any extension.

3. Doctrinal Approaches

Portuguese doctrine distinguishes between “false third parties” (successors, assignees, heirs, subrogated parties) and “true third parties” (shareholders, group companies, guarantors). The former are generally bound because the arbitration agreement is transmitted with the contract. The latter, however, may only be bound through clear adherence, express or tacit.

As noted by Mariana França Gouveia and Jorge Morais Carvalho, extension requires “manifest and unequivocal will,” without which party autonomy would be violated.[3]

This author likewise emphasized that tacit adhesion must emerge from facts leaving no reasonable doubt, not merely from corporate group membership.[4]

António Menezes Cordeiro suggests that implied consent can be established under Articles 217(1) and 406(2) of the Civil Code, through an objective interpretation of conduct.[5] Similarly, Manuel Pereira Barrocas stresses that the core principle remains consent, with exceptions carefully circumscribed.[6]

4. Case Law

Portuguese courts have generally adhered to the principle that arbitration agreements bind only their signatories, while recognizing limited exceptions.

The Supreme Court of Justice has twice articulated the central rule. In its decision of 8 September 2011, the Court confirmed that an arbitration clause binds only the contracting parties, though it may extend to assignees or other successors.[7] Later, in 15 January 2019, the Court admitted extension to a company within the same group, on the basis of implied consent inferred from its conduct, by reference to Articles 217(1) and 406(2) of the Civil Code.[8]

The Courts of Appeal have been cautious in applying such exceptions. The Lisbon Court of Appeal, in 24 March 2015, held that tacit adhesion must be demonstrated through clear evidence of knowledge and acceptance of the arbitration clause, rejecting mere participation in negotiations or performance.[9] The Porto Court of Appeal, in 8 March 2016, accepted that a non-signatory could in certain circumstances compel arbitration where denial would amount to abuse of rights.[10] More recently, the Porto Court of Appeal in 21 June 2022 reaffirmed that signatories alone are bound, save for unequivocal proof of adhesion.[11] Finally, the Lisbon Court of Appeal in 22 May 2025 underlined that corporate group membership is insufficient by itself to justify extension.[12]

5. Criteria for Extension

From the combination of statutory provisions, doctrinal writings, and case law, it is possible to identify a coherent set of principles governing the extension of arbitration agreements to non-signatories in Portuguese law. The general rule remains that arbitration agreements bind only the signatories. Exceptions are admitted where the contractual position is transmitted, whether by assignment, inheritance, or subrogation, since in such cases the arbitration clause follows the underlying contract. A further exception arises where there is either express or implied adhesion to the arbitration agreement, provided that such adhesion is demonstrated through unequivocal evidence that the third party knew of and accepted the clause. In addition, Article 36 of the LAV permits the intervention of third parties in arbitral proceedings, but only when those parties are already bound by the arbitration agreement and the signatories consent to their participation. Conversely, certain situations are excluded: neither mere involvement in negotiations or performance of the contract, nor the fact of belonging to the same corporate group, suffices in itself to justify an extension of the arbitration agreement.

6. Comparative Perspectives: United States, United Kingdom, and France

A comparative analysis shows that other leading arbitration jurisdictions have taken distinct approaches to the extension of arbitration agreements to non-signatories.In the United States, courts adopt a relatively flexible approach. Under the Federal Arbitration Act, non-signatories may be bound by or invoke arbitration agreements under traditional contract and equity doctrines. In Arthur Andersen LLP v. Carlisle (2009), the Supreme Court confirmed that doctrines such as equitable estoppel may allow a non-signatory to enforce arbitration.[13] Likewise, in GE Energy Power Conversion France SAS v. Outokumpu (2020), the Court held that the New York Convention does not preclude non-signatories from invoking arbitration under domestic doctrines.[14] The leading Second Circuit case Thomson-CSF v. American Arbitration Association (1995) outlined the main bases: incorporation by reference, assumption, agency, veil-piercing, and estoppel.[15] While application varies among circuits, the US approach is fact-intensive and pragmatic.

By contrast, the United Kingdom has taken a strict stance on consent. English courts reject the “group of companies” doctrine. In Peterson Farms v. C&M Farming (2004), the Commercial Court made clear that only parties who actually consented may be bound.[16] Similarly, the Supreme Court in Dallah Real Estate v. Pakistan (2010) emphasized that courts at the seat may review jurisdiction in full and will not bind a non-signatory absent evidence of an intent to arbitrate.[17] English law therefore upholds privity, permitting extension only through orthodox mechanisms such as assignment, novation, agency, or estoppel.The French approach is more expansive, grounded in a substantive rule of international arbitration law focused on the parties’ common intention. The landmark ICC award in Dow Chemical v. Isover Saint-Gobain (1984) endorsed the extension of arbitration agreements to non-signatory group companies actively involved in contract performance.[18] The French Cour de cassation later confirmed this approach, holding in cases such as Alcatel Business Systems v. Amkor (2007) that arbitration agreements extend to parties “directly involved in the performance of the contract and who knew of and tacitly accepted the clause.”[19] French courts have also recognized the automatic transmission of arbitration clauses in chains of contracts.[20] Thus, French jurisprudence is notably more receptive to extension, privileging commercial reality and participation over formal signature.

7. Conclusion

Portuguese law reflects a cautious but balanced approach: arbitration agreements bind only their signatories, but exceptions may be admitted where genuine consent—express or tacit—can be demonstrated.

The 2019 decision of the Supreme Court shows openness to extension within group structures, yet the general tendency remains restrictive, as confirmed by the Lisbon Court of Appeal in 2025. Portuguese doctrine reinforces this balance, aligning domestic law with international best practices in respecting autonomy while addressing the complexities of multiparty disputes.

In comparative perspective, Portuguese law stands between the strict stance of the UK and the more liberal French position, closer in spirit to the US approach in recognizing the role of implied consent and equitable doctrines, but more conservative in their application.

References:

[1] Law no. 63/2011, Arts. 1, 2, and 36.

[2] Ibid., Art. 36

[3] Mariana F Gouveia & Jorge M Carvalho, “Arbitragens Complexas: Questões Materiais e Processuais,” Revista Internacional de Arbitragem e Conciliação (2011).

[4] Duarte G Henriques, “A extensão da convenção de arbitragem no quadro dos grupos de empresas e da assunção de dívidas,” Revista da Ordem dos Advogados (2014/2015) and Duarte G Henriques, “The Extension of Arbitration Agreements: A ‘Glimpse’ of Connectivity?”, ASA Bulletin, vol. 32, no. 1, pp. 18 (2014).

[5] António Menezes Cordeiro, Tratado da Arbitragem (Almedina, 2015), pp. 233–235.

[6] Manuel Pereira Barrocas, Manual de Arbitragem, 2nd ed. (2013).

[7] STJ, 8 September 2011.

[8] STJ, 15 January 2019, proc. 28/14.3TBOHP.C1.S1

[9] TRL, 24 March 2015

[10] TRP, 8 March 2016.

[11] TRP, 21 June 2022.

[12] TRL, 22 May 2025.

[13] Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009).

[14] GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020).

[15] Thomson-CSF, S.A. v. American Arbitration Ass’n, 64 F.3d 773 (2d Cir. 1995).

[16] Peterson Farms Inc v. C&M Farming Ltd, [2004] EWHC 121 (Comm).

[17] Dallah Real Estate and Tourism Holding Co v. Pakistan, [2010] UKSC 46.

[18] Dow Chemical v. Isover Saint-Gobain (ICC Case No. 4131, Award 1984).

[19] Cour de cassation, 27 Mar. 2007, Alcatel Business Systems v. Amkor Technology.

[20] Ibid.

About the Author:

Duarte Henriques is a lawyer and arbitrator based in Lisbon – Portugal, and partner at Victoria Associates. Since 1990, he has acted as both counsel and arbitrator in a number of litigation and arbitration cases related to tech companies and tech disputes, investment disputes, banking & finance, corporate, commercial, distribution and construction disputes.

He serves as sole arbitrator, chair or member of tribunals in domestic and international arbitration proceedings, and as counsel in domestic and international arbitration proceedings, both institutional and ad hoc. Duarte Henriques also provides services in domestic and international litigation, and regularly works with other international law firms in dispute resolution.

As partner of Victoria Associates, Duarte Henriques advises major banking and finance institutions, insurance companies, and technology / software solution providers in litigation and arbitration disputes. In the tech-sector, he advises companies and deals with disputes related to a number of technologies and companies (Microsoft, Oracle, Autodesk, Accenture, Delloite, Conceptwave, Microstrategy, Eli Lilly, Cisco, Vignette, Portuguese Postal Services – “CTT”, Novabase, Portugal Telecom IT, Link Consulting, INESC, to name a few).

Duarte Henriques specializes in Banking and Finance Law, Business & Commercial Law, Mergers and Acquisitions, Agency and Distribution, Intellectual Property, and Third Party Funding.

He is affiliated and listed with the China International Economic and Trade Arbitration Commission (CIETAC), HKIAC (Panel of Arbitrators and IP Panel), ICC Arbitration, London Court of International Arbitration (LCIA), Singapore International Arbitration Centre (reserve panel), and the World Intellectual Property Organization – WIPO (Geneva).

Duarte Henriques is a member of several international associations, including LCIA, IBA, ICC, and ICCA. Duarte Henriques is a member of the ICC Task Force on Financial Institutions and International Arbitration and of the Task Force on Third-Party Funding in International Arbitration of the International Council for Commercial Arbitration (ICCA) & Queen Mary University of London Law School – London. Duarte Henriques authors several works regarding arbitration and international arbitration.