Arbitrage Manipulation
In the second half of 2018 Jan van Es, the owner of the Almegue project (chalets and project lands) started a special legal process (Kort Geding) against Fidelidade in the Breda court of the Netherlands in order to get the damage paid caused by the wildfire of June 2017 in Portugal.
Reason for the process: Fidelidade so far in spite of various requests refused to pay the damage resulting from the wildfire without providing any reason, and by this short legal process in the Breda court the usual long lasting legal process in Portugal could be avoided.
In the initial petition (IP) of the following legal case in the Castelo Branco court at the beginning of 2019, within one month after the Breda sentence of the 18 of December and the following usual legal appeal period, Fidelidade and its lawyers are referring to the results of this legal process in Breda by including three separate legal process files into the Initial Petition of their own process in the Castelo Branco court, including:
Document 6, the letter of default (in English) send by the Dutch lawyer of Jan van Es on the 8 of June 2018 announcing the legal process in case Fidelidade kept blocking the payment of the insurance claim. Fidelidade added a translation from English into Portuguese.
Document 7, the Initial Petition (in Dutch) made by the Dutch lawyer of Jan van Es with the claimed damage, – the reconstruction costs updated to its level in 2018 – on the basis of the five by the Santarem court restored insurance contracts and based on the general contract conditions of 2002, send to the Dutch court. Also here Fidelidade added a translation from Dutch into Portuguese.
Document 8, the sentence of the Judge of the Breda court from 18 December 2018. But that crucial legal document in Dutch, legally clarifying and legally motivating the sentence, was not translated by Fidelidade and its lawyers from Dutch into Portuguese.
Finally, another important document, the defense document made in Dutch by the Dutch Lawyers of Fidelidade and send to the court, was not included at all.
Main Question: What was the reason for that?
The answer becomes clear in the annex attached to this evaluation with the highlights of the sentence of the Breda court translated from Dutch into English and Portuguese. translations so far not available in Portugal and certainly not in time available for the legally requested defense reactions in 2019.
The Dutch sentence made it very clear that Fidelidade and its lawyers did not have the legal right to start this legal process in the Castelo Branco court, as it was not allowed in accordance with the arbitrage clause (article 39) of the General contract conditions. It is a deliberate serious violation of the insurance contracts, but also a serious violation of the sentence of the Dutch court based on EU ruling EEX-Vo; A ruling accepted by the Netherlands and Portugal as member states of The EU. (article 3.6 of the Breda sentence).
It is very clear now why Fidelidade and its lawyers were hiding purposely the impact of the arbitrage clause of article 39 of the General contract conditions of 2002 on the outcome of the Breda sentence, as it would made the start of their own legal process in the Castelo Branco court a few weeks later in 2019 legally impossible. In other words the start of an illegal process
The EEX-Vo of the EU, on which the legal process in the Breda court was based, is not applicable for arbitrage cases.
Article 39 of the general conditions of the insurance contracts for the year 2002 (applicable conform the Santarem sentence of 23 April 2013), states that:
First, all disputes that may arise within the scope of the insurance contracts must be settled by arbitrage under the statuary conditions (article 39 of the General contract conditions of 2002), agreed and signed by both parties and confirmed by the court in Santarem;
It was explicitly claimed by Fidelidade in its written defense to the Breda court in this legal process; the missing legal document, next to the missing translation of the Breda sentence.
The English translation of the critical element from the missing Defense document of the Fidelidade lawyers:
If Van Es is unexpectedly regarded as an insured person, an arbitration clause has been agreed in the insurance contracts, as a result of which art. 11 paragraph 1 sub b Brussels l-bis Regulation then does not apply)
In the legal process, started in the Castelo Branco court, within 1 month after the Breda sentence (+ appeal period) , Fidelidade and its lawyers hide deliberately the details of the Dutch sentence for the Portuguese Defense lawyers (Dutch legal documents not available in Portugal in the Portuguese language ) at the time the defense documents had to be provided to the court.
By starting this process in Portugal, Fidelidade and its lawyers violated seriously article 39 of the General conditions of the insurance contracts of 2002, as confirmed by both the Santarem and the Breda court.
Therefore, the legal process started by Fidelidade in the Castelo Branco court in 2019, apart from other reasons, such as the inclusion of invalid insurance claims to justify the chosen process form, is definite invalid and should be, in the same way as in the sentence of the Breda court, rejected by the court of Castelo Branco.
Translation in English: Major articles Sentence Breda Court of 12 December 2018
3.6 Now that the Netherlands and Portugal are both member states of the European Union and the claimant has based his claims on written insurance contracts, the recast EEX-V0 is binding and directly applicable and jurisdiction must be assessed on the basis of this recast EEX-Vo. However, if it is established that the parties have agreed to an arbitration clause, this Regulation does not apply, in view of the provisions of Article paragraph 2 of the recast EEX-Vo. First, it must be assessed whether the parties have agreed to an arbitration clause. .
3.7. Although the plaintiff took the position at the hearing that the policy conditions from 2008, which do not include an obligation to arbitrate,
but only the possibility to do so – has become applicable, he has in no way substantiated this position, which was contested by the defendant. The preliminary relief judge establishes that the plaintiff has relied on the policy conditions from 2002, as Exhibit 5 submitted with the summons, to substantiate his statements in his summons. It also appears from the judgment of the court in Santarem, translated (by or on behalf of the plaintiff), Portugal, from April 23! 2013, in which the defendant was ordered to reinstate and maintain the insurance contracts under the same policy conditions, that this court bases its assessment on the applicability of the General Terms and Conditions of the Multi-risk insurance Commercial and services (version 20C2); In addition, the plaintiff has not challenged those conditions from 2008 and the defendant has denied their applicability to the insurance relationship in question. In view of this, the preliminary relief judge is of the opinion that, within the context of summary proceedings, it has been sufficiently demonstrated that the policy conditions from 2002 apply to the insurance contracts on which the claim is based.
3.8. Now that Article 39 of the policy conditions from 2002 stipulates that all disputes that may arise within the scope of the contract will first be settled by arbitration under the statutory conditions, the preliminary relief judge is of the opinion that he, as a Dutch preliminary relief judge, on the basis of the rearranged EEX-Vo has no jurisdiction to hear the dispute between the parties
3.9. The claimant’s defense that the arbitration proceedings included in the policy conditions are unreasonable on the basis of Article 6:233 of the Dutch Civil Code and Article 3 of Directive 93/13/EC.
is objectionable, cannot lead to a different judgment. It is not in dispute that Portuguese law applies and not Dutch law. It has not been stated, or at least insufficiently, that under Portuguese law, or a directive-compliant interpretation under Portuguese law, there would be an (unreasonable or unfair) arbitration clause that is eligible for annulment. Moreover, it is established that the contracting parties to the insurance contracts are the defendant and a Luxembourg company, but it is not immediately clear why the claimant can derive rights from that contract on this part.
3.10 Now that it has been established that the recast EEX-Vo does not apply in arbitration cases and the jurisdiction of the Dutch court cannot therefore be based on that regulation, it must be examined whether the Dutch court in this case is based on any provision of the Code of Legal Procedure jurisdiction. The answer is negative, because there is no such provision.