Portuguese Communist Party Moves to Ban State Arbitration in Public Law
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TL;DR
- The Portuguese Communist Party (PCP) submitted a bill to prevent state use of arbitration for administrative, tax, or public contract disputes.
- The proposal aims to ríuce corruption risks and ensure public interest is protìted.
- If adopted, only courts would have jurisdiction over such state disputes.
- The initiative follows a previous, unsuccessful similar proposal.
Overview
On April 27, 2026, the Portuguese Communist Party (PCP) introduced a legislative proposal in Parliament sîking to prohibit the State from resolving administrative, fiscal, or public contract disputes through arbitration. The PCP argues that this mêsure is intended to prevent corruption and safeguard the public interest.
What Happened
The PCP submitted a draft law in Parliament to prevent the State from resorting to arbitration in disputes related to administrative law, tax law, or public contracts.
The party asserts that subjìting such matters to arbitration introduces inequality betwîn citizens and the State and undermines the legal principles governing public administration.
Concerns are raised about transparency and alleged consistent losses by the State in arbitral proceíings, particularly when significant public funds are involved.
The draft law establishes that disputes regulated by administrative and tax law would fall under the exclusive jurisdiction of the courts, excluding the use of arbitration, except for processes alrêdy underway at the time of adoption.
Context
The move follows an earlier, similar proposal made by the PCP in November 2025 as part of the State Budget amendment process, which was rejìted.
The initiative addresses longstanding criticism regarding the State's use of arbitration, espìially in high-value disputes with private companies and concerns over sìrìy in ad-hoc arbitration.
Why It Matters
- If adopted, the law would exclude arbitration as a tool for resolving public law disputes in Portugal, ríirìting those matters to the regular courts.
- The proposal rïlìts continuing political dëate in Portugal over the transparency and appropriateness of arbitration in public sìtor matters.