Government measures in key jurisdictions 5th edition - Flipbook - Page 107
Portugal
Insolvency
The suspension of procedural terms and authorised judicial proceedings referred to below is
also applicable to insolvency proceedings, notably as regards the term for a debtor to file for
Has the
insolvency. This suspension, however, does not prevent the courts from ordering the
government made performance of any judicial steps that are necessary to prevent irreparable damage to the
legitimate rights and interests of debtors.
any changes
to insolvency
As regards insolvency law, an exceptional and temporary regime was created, under which:
legislation?
•
the deadline for concluding negotiations on the approval of a recovery plan or payment
arrangement was extended and a deadline has been granted for adapting the proposed
insolvency plan in connection with the Covid-19 pandemic;
•
the general movable credit privilege granted to creditors who, in the course of the
proceedings, finance the companies activity by providing them with capital for their
revitalization, was extended to shareholders or any other specially connected persons who
finance the activity of the companies during the Special Revitalisation Process;
•
companies that are in a state of insolvency as a result of the Covid-19 pandemic are
subject to the Extrajudicial Company Recovery Scheme;
•
an extraordinary process for the viability of companies affected by the economic crisis
resulting from the Covid-19 pandemic was set up;
•
an obligation to carry out partial apportionments in all pending insolvency proceedings in
which there are liquidation proceeds deposited for a value above Ä10,000 was set out; and
•
priority must be given to the processing of applications for the release of collateral or
guarantees provided in the context of insolvency proceedings, special revitalisation
proceedings or special proceedings for payment agreements.
The aforementioned exceptional and temporary regime is applicable between 27 November
2020 and 31 December 2021. For more information please visit here.
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
•
Other than other measures already mentioned herein, there have been limited cases where
specific measures aimed at reinforcing contracts have been put in place. It’s worthwhile
noting that, in relation to public-private partnerships, during the state of emergency,
contractual mechanisms allowing financing rebalancing are suspended (such financial
rebalancing arising from the pandemic will result in the extension of the duration of the
relevant contract).
•
With the exception of the abovementioned measures, the Portuguese Government has not
taken any further measures to specifically reinforce contracts and, therefore, the normal
rules would apply.
•
It should be taken into account that the force majeure term relates to the impossibility of the
parties to perform their obligations as a result of an event that could not have been foreseen or
that, if foreseen, would be inevitable. In this respect, the scope and applicability of force
majeure would be subject to the specifics of each case, which shall be, in last instance,
examined and determined on a case-by-case basis by judicial courts.
•
Likewise, it should be considered that there is a provision on the Portuguese Civil Code that
allows contracts to be reviewed or terminated whenever the circumstances in which the
parties based their decision to contract have suffered an abnormal change. However, it
should also be noted that Portuguese courts tend to apply this provision very cautiously
and the impact on the performance of each contract should always be examined on a caseby-case basis.
In the specific case of the impacts generated by the Covid-19 outbreak we are witnessing several cases but
no judicial decisions have been issued yet.
Government measures in key jurisdictions
107
