Litigation 2019 Second Edition

Last Updated December 05, 2019

Macau

Law and Practice

Authors



Riquito Advogados provides legal services to a diverse range of clients in various industries, but has a particular focus on corporate clients. The firm has five qualified lawyers and offices in Macau SAR and Lisbon, Portugal. Its key practice areas include corporate/M&A, contracts/contractual investment, restructuring, litigation and arbitration, IP, foreign investment, corporate finance, real estate, aviation, private equity, project finance, labour and taxation.

The legal system of Macau is based on civil law. The judicial system of Macau is composed of the courts and the Public Prosecutor’s office.

Judicial authority is entirely vested in the courts, the Public Prosecutor’s office being an independent judicial body whose main duties are to uphold the law, represent the Macau Special Administrative Region (SAR) (and other entities) in court and to direct and conduct criminal investigation.

The Macau judicial system follows an adversarial model.

The court, however, has powers to order evidence to be produced which it may find relevant to the decision, but in no circumstance can a court take the initiative to resolve a dispute unless it is requested to do so by one of the parties involved in that dispute. The court may only consider the facts submitted to it by the parties (with the exception of those that are public and evident and those it becomes aware of while performing its duties as well as those that are relevant to determine whether the parties are acting with fraudulent intent).

The adversarial principle must be observed throughout the proceedings and ensures that no decision can be taken unless the relevant parties are called to provide their views and evidence. During every stage of the proceedings, each party will have the right to form their position in respect of any of the parties’ actions and evidence submitted to the court. Naturally, there are a few exceptions to this principle, which are intended to ensure the effectiveness of the decision. In those situations, an interim decision may be made and the the party against whom that decision is taken will have the opportunity to submit its defence and evidence after the decision, which will then be reviewed by the court accordingly. 

The court acts in strict compliance with the principles of impartiality and objectiveness and its decisions are based strictly and only on the law. The parties are to be treated equally. The particular procedure will depend on the type of action sought by each party.

The initial stage of the proceedings is based on initial written submissions. The court will review the parties’ submissions and documentary evidence and in case further evidence is required, the matter will be submitted to trial. The trial hearing is fundamentally of an oral nature, where witnesses, experts and the parties' depositions are produced before the court. The court and the parties are admitted, with certain limitations, to interrogate and counter-interrogate the witnesses and seek further clarifications through the judge. Written statements can only exceptionally be admitted and final arguments on matters of fact are produced orally before the court. Closing legal arguments may be produced orally if the parties so agree, otherwise they are to be produced in writing before the final decision is issued.

All court decisions need to provide the reasons that lead to those decision and to observe a certain structure to ensure that they are clear and objective and can be reviewed by the superior courts in case of an appeal.

Criminal proceedings also follow an adversarial principle, but with a different structure. The investigation is conducted by the Public Prosecutor, which is an independent judicial body. After the investigation is completed, the Public Prosecutor’s office will determine whether an indictment is made based on the evidence collected, and will submit the matter to trial. During the investigation, the proceeding is mainly inquisitory. However, after the investigation is completed, the defendant will have the ability to contradict and dispute any indictment made by the Public Prosecutor. For that purpose, the defendant may request the indictment be reviewed by a pre-trial judge before the matter goes to trial, or simply submit its defence to the trial court.

The Macau SAR has an independent judicial system, this extends to final adjudication. The structure of the court system is regulated by Law No 9/1999, recently amended by Law No 4/2019. There are three instances in Macau: (i) the Courts of First Instance, which include the Judicial Base Court and the Administrative Court; (ii) the Court of Second Instance and (iii) the Court of Final Appeal. They are organised hierarchically for the purposes of appeals and they all have jurisdiction over the entire territory of the Macau SAR.

The Judicial Base Court is organised into different sections, based on the types of matters considered (two pre-trial criminal sections, five criminal sections, three civil sections, one small claims civil section, one labour section and one family section). The civil sections have general competence to try any matters that do not fall within the specific matters attributed to any other sections.

The Administrative Court is competent for matters of administrative law, taxation and customs.

The Court of Second Instance and the Court of Final Appeal are, as a matter of principle, courts of appeal. The Court of Second Instance is primarily a court of appeal and reviews the decisions from the Courts of First Instance (both the Judicial Base Court and the Administrative Court). It encompasses two sections: (i) a criminal section, which reviews criminal matters, and (ii) a general section, which reviews all other matters.

The Court of Final Appeal is the highest court in the hierarchy and its primary competencies are to review appeals from decisions of the Court of Second Instance and to standardise jurisprudence. It is currently composed of only one section with a panel of three judges, with competence to review all matters.

Exceptionally, however, the Court of Second Instance and the Court of Final Appeal may serve as courts of first instance in relation to certain matters, or in certain matters involving certain entities who benefit from a forum privilege. 

The proceedings are open to the public, save as otherwise provided by law. This does not mean, however, that any person can inspect the proceedings. Lawyers have the ability to inspect any proceedings and obtain copies. The parties may inspect their own proceedings and obtain copies. Other than that, any other person must have a legitimate reason to access the contents of the court filings and proceedings.

The court hearings are, however, in principle, entirely public and any person may attend.

The court may, exceptionally, establish limitations on the public nature of the proceedings and hearings when the matters involved may offend the parties’ or other person’s dignity, their privacy, public policy or prejudice the effectiveness of the decision to be issued. The law expressly states that marriage annulment proceedings, divorce proceedings, filiation proceedings and injunction proceedings can only be accessed and inspected by the parties and their attorneys. Pending injunction proceedings that should be decided ex parte can only be inspected by the applicant and its attorneys until the decision is taken.

Criminal proceedings have different rules. The proceedings and hearings are secret during the investigation and pre-trial stages. However, after the matter is submitted to trial and the trial hearing date is scheduled, the proceedings will be public, with the meaning referred to above. Any person can attend the hearings, save when, exceptionally, restrictions are imposed to preserve people’s dignity, public policy and public order. In no circumstance can any restrictions be imposed on the hearing where the verdict will be announced. 

Legal representation in court is required for most cases.

Civil actions with a tax value exceeding MOP100,000; appeals, proceedings initiated in the higher courts; and enforcement proceedings exceeding MOP1 million or (in cases where objections are raised or any other issues require the declaration form of procedure) enforcement proceedings exceeding MOP100,000, always require legal representation.

In administrative actions and criminal proceedings, legal representation is always required.

Only lawyers admitted to the Macau Lawyer’s Association (irrespectively of their nationality) are allowed to represent the parties in a court of law. All lawyers have the same rights of audience with any courts in Macau.

Trainee lawyers admitted to intervene in judicial proceedings are admitted to represent the parties in proceedings when legal representation is not mandatory, in criminal proceedings and in specific issues where no points of law are raised.

When legal representation is not mandatory, the parties can represent themselves or be represented by a trainee lawyer.

There is no provision in the Macau rules of procedure for either party to assign their liability for the payment of court costs and expenses to third parties. As result there isn’t a specific regime for third-party funding, neither is there such a legal entity as a third-party funder.

Court fees and expenses bills are issued in the name of the relevant party to the proceedings who, under the rules of procedure, is considered responsible for their respective payment. Individuals and entities other than this party may only settle them at the last day for voluntary payment.

Enforcement against unpaid court bills shall be brought against the responsible party.

The above does not prejudice out of court contractual arrangements with third parties in respect of the payment of court bills, but these are not enforceable vis-à-vis the court.

If a third party settles a court bill, that third party is legally entitled to be reimbursed by the responsible party for that amount, unless it is found that the settlement was made in bad faith.

There is no special procedure or type of lawsuit to claim for this reimbursement. Standard civil suit for the recovery of debts shall apply.

A third party may settle a court bill of either the plaintiff or the defendant, as referred to in 2.2 Third-Party Funding: Lawsuits.

There is no limit to the settlement of a court bill by a third party, when that payment is allowed (as described in 2.2 Third-Party Litigation Funding: Lawsuits). 

There is no limit as to the nature of the costs that can be settled by a third party, when that payment is allowed (as described 2.1 Third-Party Litigation Funding). 

These are not applicable to Macau jurisdiction.

This is not applicable to Macau jurisdiction.

The civil procedure code does not impose rules or procedures that the parties are required to follow before they decide to initiate proceedings. Although these actions may be required by statute, such as when a creditor seeks performance of a certain obligation, in which case the creditor must serve notification to the debtor to before starting legal action; such notification serves the purpose of converting a situation of delay into a case of non-performance of an obligation.

The standard statute of limitations to start a civil suit in Macau is 15 years, but for certain specific rights or entitlements, such as in respect of lease rents, interest or dividends, a shorter statute of five years applies.

There is a special set of statutes, the lapse of which do not prevent the plaintiff from bringing the claim to court, but render the performance of the relevant obligation as presumed. This presumption is only waived with the confession of the non-performance of the obligation by the debtor. Such statutes are of six months (for credits held by housing, food and beverage businesses, and in respect of payment for housing, food and beverages only) and two years for –eg, credits held by self-employed professionals.

The general factors that determine the competence of the Macau courts for a civil suit are the following:

  • some or all of the facts that substantiate the claim were performed in Macau;
  • the defendant is a non resident and the plaintiff a resident, but only if, in abstract terms, the courts of the defendant’s country of residency would be competent to judge similar proceedings if they were started in that jurisdiction by the defendant against the plaintiff; and
  • the right or entitlement being claimed can only be effective by means of legal action started in Macau, provided that there is a strong connection between the proceedings and the jurisdiction, in terms of the people or the assets involved.

The Macau courts' competence for certain types of actions is subject to other requisites (eg, they are competent for proceedings for the recovery of debts if the obligation was to be performed in Macau or the defendant has domicile in Macau).

Macau courts have exclusive competence to try legal proceedings, in respect of erga omnes rights, over real estate located in Macau and in respect of the bankruptcy or insolvency of entities which have their registered office in Macau.

The lawsuit starts with a statement of claim (petição inicial) that includes the court where the action is filed, the identification of the parties including their names and domicile, the forms of proceedings, the exposition of facts and the legal grounds, the requests, and the value of the claim. The plaintiff should present the documents that support the facts alleged together with the statement of claims. At this stage, the plaintiff shall also present the list of witnesses as well as request other evidence to be produced.

The party can submit additional statements (articulado superveniente) if there is any ulterior fact that constitutes, modifies or extinguishes the rights in discussion.

As a general rule, when the plaintiff submits the statement of claim and there are no grounds for preliminary rejection, the defendant will be summoned, in principle, by means of double-registered mail. The plaintiff may request, in the statement of claim, that the defendant be summoned by his or her attorney, or by another judicial representative.

In the case of unsuccessful delivery of the mail, summoning will be made directly by the court clerk before the defendant.

If the court is not aware of the defendant’s location, summoning will take place by means of edicts and announcements, which will be drafted in the presumed language of the defendant, or in the Macau official languages. 

A party can be sued outside the jurisdiction. In this case, the defendant is summoned by the court according to the international convention applicable to Macau; in case no international convention applies to Macau, the defendant will be summoned by double-registered mail. If it is not possible to summon the defendant by post, they will be summoned by rogatory letter (which shall be served with the assistance of the courts of the country of residence of the defendant).

If the defendant does not respond to a lawsuit, nor constitute attorneys or intervene in any form in the proceedings, the court shall first verify if the summons was carried out in accordance with the legal rules. The court will summon the defendant again if irregularities are found.

If the court considers the defendant duly summoned, the facts alleged by the plaintiff will be considered admitted by the defendant (with certain limitations) and the action will proceed for submission of the final arguments and judgment.

Associations or foundations, the purpose of which is related to the interests in dispute; the Public Prosecutor's office; or any citizen entitled to civic and political rights, is permitted to initiate lawsuits for protection of the following collective or representative interests: public health, environment, quality of living, cultural heritage, public domain as well as the protection of goods consumption, and services provision. All of these entities are equally able to initiate these actions. 

Court fees and costs can be estimated in advance by lawyers, depending on the nature and expected complexity of the proceedings.

At the request of clients, lawyers will also provide an estimation of their fees, the calculation of which is subject to multiple factors, such as the time spent, the complexity of the case, the importance of the services provided, the financial situation of the interested party, the results obtained and the general practice of the lawyers.

Pending proceedings, parties may request interim relief measures and they may also submit an array of specified or unspecified requests to the court, depending on the particulars of the case –eg, to submit further evidence, to claim against the decision on the facts established and not established before trial, to dismiss certain requests of the other party, to seek the annulment of certain procedural actions, and to request the intervention of other entities as parties to the proceedings.

Certain remedies are available, such as the suspension or the obstruction of a judge to the case or the request for the declaration of the other party, or its legal representative, as a mala fides party.

After the written submissions, the court may immediately make an award based on the merits of the case. It does this when it considers that the information and evidence made available up to that stage allows it to decide without further trial.

Please refer to 4.2 Early Judgment Applications.

Furthermore, a party may submit an application for the early termination of the proceedings (i) if they come to a standstill for three years due to either party’s negligence in carrying out the required actions, or (ii) if, by virtue of certain ulterior facts or circumstances, the proceedings are no longer useful to the parties.

Interested parties, not named as a plaintiffs or defendants, are allowed to join a lawsuit subject to verification of certain requisites; they can assume the position of main parties, or parties ancillary to the main parties.

Intervention as a main party is for those who share the same interest as the plaintiff or defendant; the interested party can participate on their own initiative or at the request of any existing (main) parties.

Intervention as an ancillary party is for third parties (i) against whom the defendant may have a reimbursement right, and (ii) who may have a justified interest that the final decision be favourable to one of the parties.

A third party may also request to join a lawsuit to claim his or her own right, which may be incompatible, in whole or only partially, with the claim of the plaintiff or the defendant.

There is no specified motion for security for the defendant’s costs, although it may be awarded subject to particulars.

As a general rule, the parties are requested to make a deposit for part of the fees and costs applicable to the claim and counterclaim, appeals and other submissions.

Besides the deposit for expenses, there is the initial deposit (due upon submission of the application) and the deposit for trial (due upon the scheduling of the trial, or before the issuance of a written decision). Each of these two deposits are in the amount of 25% of the applicable fees, and are payable by both the applicant and by the respondent.

As general rule, final judgment shall be issued within 20 days from the closing of the final arguments, and decisions on other applications/motions within ten days. But these deadlines are, in most cases, exceeded.

Other specific rulings may be subject to different deadlines –eg, injunctive relief shall be issued within two months or 15 days, the latter when issued ex parte.

Either party can request that the application be dealt with on an urgent basis if the circumstance gives grounds for such urgency.

There is no pre-trial discovery procedure in Macau, unlike in most common law jurisdictions. However, certain mechanisms are available within the Macau legal system to obtain evidence from the other party(ies) and/or from third parties. Depositions, interrogatories, requests for production of documents, expert evidence and judicial inspection allow the parties to obtain evidence. More generally, a request for any other evidence may be made by any party to the court, provided that it does not offend anyone’s physical or moral integrity or cause an intrusion into anyone’s private life, including their domicile, correspondence and any other forms of communication.

These mechanisms, however, are not as wide-ranging as those in common law jurisdictions, nor do they follow the same rules. In principle, each party has the burden to state the relevant facts and produce the evidence that support its pleadings. Amendments to the parties’ submissions are subject to significant limitations and, therefore, the parties are obliged to provide as much detail, and to submit as much evidence, as possible to support their allegations. Discovery mechanisms are available to produce the evidence with which a party may not reasonably be burdened. 

Depositions are used to obtain the other party’s admissions. Interrogatories are used to produce witness evidence. The depositions and witness statements are provided orally during the trial hearing.

Requests for the production of documents may be addressed to the other party(ies) and to non-parties when a party knows that a certain document is in possession of the party or a third party. The document(s) need to be identified and their relevance to the case needs to be established before the court will issue an order to the relevant party to surrender the document. This mechanism does not work, therefore, as a means of general discovery of facts and documents to support the parties’ pleadings. Refusal to co-operate with the court may be sanctioned with fines, without prejudice to other compulsory measures. Refusal by litigants will be evaluated by the court in the context of evidence and, in certain circumstances, it may lead to inverting the burden of proof in relation to certain facts. Should the party, however, claim that it does not hold the requested document, the applicant will have the burden of demonstrating that this claim is not true.

All discovery mechanisms need to be requested by the parties and are administered by the court. However, the interrogation of witnesses is made by the party that requested those witnesses to attend the court hearing, without prejudice to the court’s ability to ask any questions it finds relevant and the other party’s right to counter-interrogate the witness.

It is possible to obtain discovery from third parties not named as a plaintiff/claimant or defendant. As a matter of principle, any person (including the parties) who is aware of any facts, or is in possession of any evidence, that is relevant to establishing the truth is bound to co-operate with the court upon request by the latter. This includes, inter alia, providing witness statements and producing documents.

Witness statements are provided during the trial hearing. The party that wishes a person to testify as a witness in the case will enroll that person in its witness list, which may be submitted together with its initial pleading or later, after the court, considering both parties submissions, selects the facts that are considered to be proven and those who require further evidence. The witnesses are identified by their names, professions, addresses and other circumstances necessary for their identification.

Without prejudice to certain limitations as to the maximum number of witnesses allowed, the court will not exercise any previous control on the witnesses and their relevance to the case. The witness list may be amended until 30 days before the trial hearing. Witnesses that reside in the Macau SAR may be compelled by the court, by force if necessary, to attended the hearing and provide their witness statement, without prejudice to certain individual’s ability to refuse to testify or prerogative to provide their statement in writing. The parties have the responsibility to ensure that any witnesses living outside Macau attend the hearing to provide their statements, unless the party requests the Macau court to issue a collaboration request to the relevant foreign authorities to obtain that witness statement.

Should, during the hearing, any party become aware that any additional person may know facts which are relevant to the case, it may request that the court admit that person as a witness. In this case, however, the admission of the witness will be at the court’s discretion.

A party that is interested in obtaining a document in the possession of a third party needs to request that the court order that third party to produce the document. This request can be included in the initial submission(s) or later, together with the evidence submission, which is to be presented after the court, considering both parties submissions, selects the facts that are considered to be proven and those which require further evidence to be proved or disproved. The party needs to identify the document and explain its relevance to the proceedings. The court will decide after hearing all parties and will notify the person in possession of the document to produce it before the court.

Please refer to 5.1 Discovery and Civil Cases and 5.2 Discovery and Third Parties. There is no requirement for the parties to disclose any particular materials or make any particular admissions upfront. 

Please refer to 5.1 Discovery and Civil Cases and 5.2 Discovery and Third Parties above.

Lawyers and certain other professionals are entitled to legal privilege, which is both a right and a duty for lawyers in Macau. In particular, client-attorney privilege is well protected under Macau law and only in very limited and exceptional circumstances can the court allow testimony which breaches this privilege. The duty of secrecy may also be lifted by the Lawyers Association upon a voluntary request by the lawyer involved, when it is justified for the purposes of defending the rights and legitimate interests of the lawyer or his or her clients. 

Any evidence obtained in breach of professional privilege is considered null and thus cannot be used in court.

There is no distinction between external and in-house counsel, provided they are both lawyers registered with the Macau Lawyers’ Association. Only lawyers registered with the Laywers’ Association have the duty and benefit of legal privilege.

Documents and other materials may be refused to be disclosed when their disclosure may cause the violation of a persons’ moral or physical integrity; an intolerable violation of someone’s privacy, domicile, correspondence or other means of communication; a breach of legal privilege or secrecy; or when it implies a general disclosure of business books, which is subject to certain restrictions.

In general terms, injunctive relief measures can be awarded when there is a justified concern that a certain right may be harmed in a serious and hard to repair manner. Such measures can be of a conservatory nature, such as when the interested party seeks to arrest his or her debtor’s assets for future enforcement, or an anticipatory nature, when the interested party seeks to obtain his or her claim (in total or in part) in advance of the court’s final rule. Parties can request interim relief in either pending proceedings or before starting legal proceedings.

There are an array of interim measures provided by the Civil Procedure Code of Macau, these include: provisional restitution of certain asset(s), suspension of corporate resolutions, provisional alimony, provisional compensation, arrest of assets, deposit of assets, and embargo of works. These are the measures specifically available in Macau Law, but interested parties may seek to obtain any other (unspecified) form of injunctive relief.

The award of injunctive relief is subject to the following being evidenced in court: (i) likelihood of the existence of the claimant’s right (fumus boni juris) and (ii) likelihood of the occurrence of damage to it (periculum in mora); notwithstanding this, the relief will not be awarded if it will cause significantly more damage than it is meant to prevent. These are the general requirements for the awarding of injunctive relief under Macau civil procedure , although they may vary for the specific forms of interim relief described above.

The court may authorise the substitution of the interim relief measure for the provision of a bond deemed adequate.

Injunctive relief measures may be requested in Macau in connection with foreign legal proceedings, depending on the existence and terms of international conventions or agreements for judicial co-operation between the jurisdictions involved.

Injunctive relief proceedings are of an urgent nature, and their handling shall supersede any non-urgent actions. Its urgent nature also means that the required actions and hearings also take place during court holidays.

As general rule, injunctive relief shall be decided upon within two months from the application for it, but when the proceedings run on an ex parte basis, this time limit is reduced to 15 days.

By default, injunctive relief is not awarded without the respondent having the opportunity to submit his or her defence and being present at the hearing. That will not be the case when it may represent a serious risk for the effectiveness of the measures being requested; in such cases, the injunctive relief is decided on an ex parte basis.   

Certain forms of interim relief, specifically foreseen in the Civil Procedure Code (such as the arrest of assets), are awarded on an ex parte basis by default, irrespective of any risk to the effectiveness of the measure.

If the injunctive relief is found to be unjustified or expires because of an action or omission attributable to the applicant, he or she will be liable for damages suffered by the respondent, if the court finds that he or she (the applicant) did not act with the required prudence.

Therefore, irrespective of a request by the respondent, the judge may award the relief, subject to the provision of bond by the applicant.

Subject to the competence of the Macau courts for the main proceedings (multiple factors or circumstances justify the competence of the local courts), injunctive relief can be requested and awarded by the Macau courts.

The enforcement, in foreign jurisdictions, of injunctive relief awarded by the Macau courts, depends on international conventions or agreements for judicial co-operation between Macau and those jurisdictions.

Under special circumstances, injunctive relief measures may be awarded against individuals or entities who are not parties to the main proceedings to which the injunctive relief is ancillary (third parties). This will be the case when the assets to be arrested are in the possession of an individual who is not the debtor. This third party will be a respondent to the injunctive relief proceedings, but not to the main proceedings where the claimant will be requesting that the court convict the defendant to settle the debt.

Breach of injunctive relief entails criminal liability for qualified disobedience, which is subject to imprisonment for up to two years, or criminal fine of up to 240 days. 

Civil court proceedings start with written submissions; following these, the trial is primarily verbal and is presided over by a judge. Once all summoned are present, trial will commence with an attempt at conciliation which, when unsuccessful, will give way to the depositions from the respondent and the plaintiff, followed by the taking of evidence, expert testimonies, hearing of witnesses, and oral arguments on the facts, in that order although subject to change when deemed necessary or convenient. The court will then recall and issue the judgment on the facts, delivered in writing and read aloud in the presence of all those directly involved. It is common to adjourn the proceedings for the issuance and reading of the decision on the facts. Parties may submit complaints and clarifications against the decision on the facts. After a decision on such queries, the parties shall present their legal arguments, in writing or, subject to agreement, verbally. The judge shall then issue the final judgment.

Case management hearings are allowed by the Civil Procedure Code, but are not common practice in Macau, where most of the ruling is made in writing by the judges. An attempt at conciliation may take place prior to the trial, at the request of the parties or by a summons to appear before a judge. A summons to appear before a judge may also be issued at any other stage of the proceedings, provided the parties have not previously requested an attempt at conciliation and the summons is issued no more than once.

The Macau Code of Civil Procedure currently does not include the possibility of trial by jury.

Civil court proceedings are either decided at first instance by one single judge or by a panel of three judges, depending mostly on the value of the proceedings.

In the superior courts, the Court of Second Instance and the Court of Final Instance respectively, judgments are in general issued by a panel of three judges, although the presiding judge has powers to rule by himself or herself on procedural matters and, in limited circumstances, decide on the merits. 

All the relevant evidence shall be submitted or requested during the written submissions stage. The parties have further opportunity to amend and complement these requests, when the court (after the written submissions and prior to the trial) decides on the facts that are already established and those which need further judging during trial. Documents, witnesses and other evidence may be further added during trial, with limitations.

Depositions from the plaintiff and the respondent, expert testimony and the hearing of witnesses will typically take place during the trial, unless circumstances make it impossible to do so, in which case they will be produced beforehand (including in writing).

The key principle, in terms of admission of evidence, is that no evidence shall be considered without the counterparty having an opportunity to analyse and contradict it.

The court and/or any of the parties may select a subject or matter which they feel requires expert opinion or guidance due to its highly specialised nature and request that it be provided, for the purpose of which one or more experts will be appointed. In this event, although the expert’s report is produced out of court and delivered before the trial, the expert may be called to testify before the court during the trial regarding any question or request for clarification arising from his or her report.

In certain circumstances, the court may order the production of a second expert opinion.

As a general rule, hearings and trials are open to the public. Notwithstanding this, the court may decide otherwise, including at the request of any of the parties, basing its order to hear a case in camera on the need to safeguard the dignity of those involved, morality, or the normal functioning of the proceedings. Furthermore, although hearing and trial minutes are always written by the court clerk, detailed transcripts are not kept. Any testimony not made before the court is however mandated by law to be recorded, and those made before it may be recorded at the request of any of the parties or when this is ordered by a judge. The parties may, moreover, request that the trial be recorded in its entirety. Minutes and recordings will be kept in the court file and access to it is generally granted to parties, lawyers and persons with a justified interest, without prejudice to limitations when access is deemed to violate an individual’s dignity and privacy, offend morality, or jeopardise the court’s final judgment.

Stemming from four centuries of Portuguese administration, Macau’s legal system is typically inquisitorial, with great emphasis being put by the Macau Code of Civil Procedure on the court’s duty to provide for the harmonious and prompt progress of the proceedings, from inception to completion. Besides assuring the legality of the parties’ procedural actions, the judge has the power to order the actions that may be necessary to ensure the fulfilment of procedural requirements or to invite the parties to do so, as well as the power to perform or order the actions that he or she deems necessary for the establishment of the relevant facts and for a fair trial and judgment. The judge has also the power to adjust certain rules of procedure, when he or she deems this to be adequate considering the particulars of the case.

The judge is also in charge of presiding over hearings and trials, where he or she supervises all the parties and intervenients’ actions and rules where necessary or convenient to ensure their legality and keep order.

Although the Macau Code of Civil Procedure provides for strict deadlines for pleadings, procedural acts, and the like, no general timeframe for proceedings exists and their duration may differ depending on a variety of internal and external factors, such as, among others, the complexity of the subject matter, the constancy of all those involved, the absence of interruptions such as the hearing of intermediate appeals with suspensory effect.

Notwithstanding a general deadline of 20 days to issue the final judgment, counted from the day of closing of arguments, this deadline is in general exceeded by the courts.

The parties may choose to settle their differences before the judge or out of court, in which case they must, however, communicate this agreement to the court and discontinue the proceedings. In any event the judge needs to endorse the settlement by confirming each parties capacity to settle and whether the matter under discussion is available for settlement.

If a settlement is reached between the parties before the judge, as well as if its terms are communicated to the judge for endorsement, they will become part of the proceedings and therefore subject to the general rules and principles, alluded to in 7.6 Extent to Which Hearings are Open to the Public, regarding publicity. The parties may however chose to keep certain terms and conditions of the settlement confidential.

Settlement agreements are enforceable under the general terms and provisions of the Macau Code of Civil Procedure. The terms for enforcement will depend on whether the terms of the settlement were disclosed in full, or only in part, to the court. If the matter to be enforced was endorsed by the court, the enforcement will follow the rules of enforcement of court decisions; if not, it will follow the rules for enforcement of contracts.

Settlement agreements endorsed by the court as res judicata may only be set aside by means of extraordinary appeal, where the settlement will be declared null and void by a decision as res judicata.

The above does not prevent the parties from reaching an out-of-court agreement whereby they agree to settle the matter subject to the previous proceedings on a different manner. 

In civil declaratory proceedings, the court will (i) declare the existence of the claimant’s rights or entitlements; (ii) order the defendant to perform an action or fulfil a legal or contractual obligation; or (iii) declare the constitution, modification or annulment of a particular legal relationship, contract or act.

Depending on the nature and particulars of the claim, the court may order remedies such as indemnity, compensation, or restitution of assets or monies.

In certain circumstances, the court may also determine the payment by the defendant of a certain amount for each day, week or month of delay in the performance of a certain action (or omission) or the fulfillment of a certain obligation.

As general rule under Macau law, a successful party cannot be awarded in excess of the damages suffered as a result of breach of legal or contractual rights or obligations. The scope of indemnity is defined by causation: it comprehends any and all damages that were caused by the relevant illegal and faulty actions (principle of adequate causation).

Both losses – which includes pecuniary damages (danos patrimoniais) and personal damages (danos não patrimonais) – and loss of profits (which is the net increase of the claimant’s assets that he or she fails to obtain due to the injury event) are included in the legal scope of indemnity.

Losses and loss of profits can be present or future, but the latter are only subject to indemnity when it can be established that they will effectively occur in the future (if the respective amount cannot be determined at the time of the issuing of the award, its liquidation shall be referred to a later stage, when such losses become determinable).

The parties may, however, agree in advance to the amount of compensation to be paid in case of default, delay or defective performance of certain obligations, in which case the compensation to be awarded may be higher or lower than the damages that would result from the application of the principle of adequate causation, unless the court finds them excessive.

Furthermore, the successful party may be entitled to further compensation if the counterparty acts in the proceedings in bad faith, which is the case when the unsuccessful party, with fault or gross negligence:

  • submits a claim or defence being aware of the lack of respective merits;
  • changes or omits facts relevant for the decision;
  • commits a serious offence to the obligation to co-operate with the court; or
  • uses the proceedings or certain procedural mechanisms for censurable purposes.

Notwithstanding the above; court orders in general, and in indemnity claims in particular, are limited to the request made by the successful party. In order words, they cannot rule in excess of the party’s claim, either in the nature or in the specific amount of damages requested.

In respect of pecuniary obligations, interest is due from the day the debtor is considered to be in delay (mora) of the delivery of the obligation. Therefore, if the debtor is considered to have been in delay since before judgment, pre-judgment interest will be available.

If the obligation needs to be liquidated by the court, such as in the case of an indemnity claim (where the court has to assess the damages subject to indemnification pursuant to the principles described in 9.2 Rules Regarding Damages), interest will only be due post-judgment.

Judgments and orders are enforced by further court procedures and, where necessary, by court officials. There is no procedure for direct enforcement (ie, not involving the court) by the successful party against the counterparty. In the case of non-voluntary compliance with an award, the successful party must initiate enforcement proceedings, as the court will not enforce a judgment automatically.

The nature of enforcement proceedings will vary in accordance with the particulars of the judgment or order to be enforced.

Enforcement proceedings will proceed according to the following steps:

  • submission of claim for enforcement based on court order/judgment;
  • submission of defence to enforcement proceedings within 20 days;
  • enforcement through –eg seizure of assets, rights or entitlements; and
  • discharge of judgment/order.

Depending on the type of order or judgment to be enforced, the main means of enforcement may consist of:

  • seizure and auctioning of assets (the assets can also be sold through negotiation by an expert appointed by the court) if a third party is liable for the debt the court proceedings for the enforcement have to be commenced against that third party;
  • seizure of earnings;
  • forced sale;
  • charging orders;
  • periodical penalty payments; or
  • attachment of a third-party debt owed to the debtor (eg, a debtor's bank account).

Unless otherwise provided for in international agreements in force in Macau, judgments and arbitral awards from a foreign country can only be enforced in Macau after revision and confirmation by the Macau courts.

Such confirmation is not necessary when the foreign judgment is used in Macau only as evidence of certain fact in court proceedings.

Confirmation is subject to the following requirements:

  • the document is authentic and the decision is written plainly;
  • the judgment is res judicata in the country of issuance;
  • the matter does not fall within the exclusive competence of the Macau courts and the issuing court’s competence was not fraudulent;
  • the matter wasn’t previously submitted to litigation in Macau, neither has it been previously decided as res judicata by the Macau courts;
  • verification of the regular summoning of the defendant and that the due process principles have been observed; and
  • that the decision will not cause a result that goes against public policy.

The defendant is summoned and has 15 days to submit its defence, to which the claimant may submit rejoinder within ten days.

Besides the non-verification of any of the above requirements, the defendant may also oppose the confirmation on the following grounds:

  • there is a judgment as res judicata deciding that the award pending confirmation was issued under prevarication or corruption of the judge;
  • there is a document that the defendant was not aware of or was unable to use during the initial proceedings, which would by itself be sufficient to lead to a decision more favourable to him or her; or
  • there is a previous judgment decided as res judicata which is contrary to the decision under confirmation.

Before submission to trial, the proceedings are further analysed by the public prosecutor.

The Macau Code of Civil Procedure provides for ordinary and extraordinary appeals. Two types of ordinary appeals exist: an appeal can be filed to the Court of Second Instance from a judgment by a Court of First Instance, and to the Court of Final Appeal from a judgment by the Court of Second Instance. Beyond these are found so-called extraordinary appeals, in the form of a petitions to review a judgment (eg, when a defendant’s confession is found to be null and void by a later judgment, although it served as justifying grounds for a previous one) and opposition by a third party; in the event of collusion between the original complainant and plaintiff with the goal of being granted a favourable judgment, under false pretexts and at the expense of someone who was not directly involved in the proceedings.

An ordinary appeal can only be filed provided that (i) the value of the lawsuit is superior to the value of the jurisdiction of the court (alçada) whose judgment is under appeal (as of today, MOP100,000 for a Court of First Instance and MOP1 million for the Court of Second Instance) and (ii) the value of the losses incurred by the losing party is superior to half of the value of the jurisdiction of the court whose judgment is under appeal. However, should the Court of Second Instance uphold the judgment of the Court of First Instance, irrespective of the reasons, no further appeal can be filed with the Court of Final Appeal, unless that judgment is against previous mandatory jurisprudence of the Court of Final Instance.

The right to appeal on certain matters, such as in respect of the court's jurisdiction for the proceedings or on grounds of breach of mandatory precedent, is not subject to the limitations set out above.

Within ten days after being notified of the final judgment, the losing party must apply for a leave to appeal with the issuing court. Provided all requisites are met, the court issues an order to that effect and duly notifies the appellant, who will then have 30 days to file the statements of appeal. The appellee enjoys a further 30 days to file the counter-statements of appeal.

The primary goal of an appeal is to provide for the review of a lower court’s judgment and the appellant is accordingly limited to what was brought before that lower court by both plaintiff and respondent during the original proceedings. When hearing an ordinary appeal, the Court of Second Instance, although in principle bound to the statements of appeal’s subject-matter, enjoys broad room for manoeuvre and may examine and decide on matters of fact and matters of law. It can choose to alter the judgment of the Court of First Instance, declare it null and void or order its grounds be further substantiated, should they be incomplete or missing, and order the retaking of evidence when deemed necessary to ascertain the truth.

The Court of Final Appeal is also bound to the statements of appeal’s subject-matter and the scope of its revision is generally limited to legal arguments such as situations of wrongful interpretation or application of the law by the Court of Second Instance, in case the judgment is null and void, or where any lower court’s judgment was decided against a mandatory precedent. The revision of the facts established, and not established, is not included per se, but only when it is argued that a certain fact was judged as established, or not, in breach of legal provisions.

The right to appeal is only subject to the requirements/limitations expressly provided for in the Macau Code of Civil Procedure and described in 10.2 Rules Concerning Appeals of Judgments.

Appeals are granted, or not, based on the facts established and not established at the time of their issuance. If the appellate court believes such facts require further substantiation, or that there are other facts that must be considered, it shall order further trial to determine those facts.

Depending on the findings of the appellate court regarding the lower court’s judgment, it may decide to overturn it; to order its reform; or to order the execution of further procedural steps deemed necessary, including the retaking of evidence, the taking of further evidence, or even to order the repetition of the trial before the same court.

As general rule the court costs and fees are paid by the losing party, or, in the event that neither party won, by the party who has benefited from the proceedings.

The successful party is entitled to have their court fees – and costs paid in advance – reimbursed, as well as some compensation for legal fees incurred. Unless the court finds that a party has acted in bad faith, this compensation is determined by the court in an amount up to half of the total court fees. If a party is found to have acted in bad faith, the court may determine the compensation for the legal fees incurred by the other party in full, as well as compensation for other costs and damages suffered as a result of those actions.

The outcome of the proceedings is the most relevant factor to be considered when awarding costs. Costs are paid by the losing party.

If the proceedings terminate pending judgment, an array of factors may determine the responsibility for the costs, such as whether either party has yet benefited from the proceedings, or if the termination is a result of an action attributable to one of the parties. In cases of settlement, without prejudice to an agreement otherwise, the costs shall be settled in equal parts. If either party withdraws or confesses the claim, the costs shall be paid by that party.

Actions which are deemed to have been useless shall be paid for by the requesting party.

Court costs are subject to interest after expiry of the deadline for voluntary payment (20 days from the notification of the bill of costs).

Such interest is in the amount of 1% per month of the unpaid costs.

The main alternative dispute resolution mechanism currently available in Macau is arbitration. Although certain legislation refers to mediation, it does not regulate mediation or conciliation as standalone processes.

However, certain institutionalised arbitration centres provide mediation and/or conciliation processes, and almost every arbitration regulation provides for a conciliation hearing where a settlement is attempted before the matters go to trial. For example, the WTC Macau Arbitration Centre provides autonomous mediation in relation to disputes arising in the context of the Closer Economic Partnership Arrangement (CEPA) on trade services between Macau and the People’s Republic of China as well as an autonomous conciliation process to which any matters can be submitted; the Real Estate Administration Arbitration Centre provides for a mandatory conciliation phase before the matter is finally referred to arbitration.

In the existing framework, there are neither general compulsory arbitration provisions nor sanctions for unreasonable refusal of ADR.

There are currently five institutional arbitration centres in Macau: the Consumer Conflicts Arbitration Centre, the WTC Macau Arbitration Centre, the Lawyers’ Association Arbitration Centre, the Insurance and Private Funds Conflicts Arbitration Centre and the Real Estate Administration Arbitration Centre.

The WTC Arbitration Centre and the Lawyers’ Association Arbitration Centre are able to take arbitrations on any matters that may be submitted to arbitration while the others are limited to specific matters and, in certain cases, by the value of the dispute (the Consumer Conflicts Arbitration Centre and the Private Funds Conflicts Arbitration Centre can only accept arbitrations for disputes not exceeding MOP100,000).

Resources for arbitration are currently limited in Macau. The legislation currently being drafted intends to encourage its use as well as to effectively create the legal infrastructure to make it more attractive and to make other ADR mechanisms available; with the aim of establishing Macau as an international arbitration centre, in particular, between the People’s Republic of China and Portuguese speaking countries.

A new arbitration law was gazetted on 5 of November 2019 (Law 19/2019). The new law is fundamentally inspired by the UNCITRAL Model Law on international commercial arbitration with the amendments approved in 2006 and will revoke and unify the currently existing dual arbitration regimes in Macau.

This law will come into force on 3 May 2020 and will apply to arbitrations commenced after that date, unless the parties agree for it to apply to any arbitrations commenced before that date or one of the parties makes a proposal in that direction and the other party does not oppose it within 15 days from receiving such a proposal.

Until then, and/or when there is no agreement in respect of the application of the new law, the current arbitration laws will still apply. There are two existing parallel regimes regarding arbitration: the Domestic Arbitration Law (Decree Law No 29/96/M) and the International Commercial Arbitration Law (Decree Law No 55/98/M). The latter was inspired by the original version of the Model Law approved in 1985, but it does not yet include the recent initiatives and standards proposed by the amendments introduced to the Model Law in 2006.

The commercial international arbitration regime is designed for arbitrations involving business transactions where the parties, or their agreements, have certain connections with more than one jurisdiction. An arbitration is qualified as international in the event the parties expressly agree that the object of the arbitration is connected with more than one state or territory; when their businesses are located in different states or territories; or when the place where their business is located is different from either that of the arbitration, the place where the substantial part of the obligations are to be delivered or the place to which the dispute is most closely connected. The international arbitration regime applies to commercial disputes, which include practically any professional business-related transactions and other disputes of a commercial nature.

The recognition and enforcement of foreign arbitration awards is currently governed by DL 55/98/M and by the Macau Civil Proceedings Code. There are, however, specific agreements for the recognition and enforcement of arbitration awards between Macau and Hong Kong as well as between Macau and the PRC.

The new arbitration law will also cover the recognition and enforcement of foreign awards.

The following matters cannot be submitted to arbitration:

  • disputes whose respective objects involve inalienable rights (ie, rights in respect of which the parties may not surrender, negotiate or transfer (such as parental relations));
  • matters that are by law submitted to the jurisdiction of the judicial courts, such as matters in relation to real estate rights over land located in Macau and the bankruptcy and insolvency of corporations with registered office in Macau;
  • the effective enforcement of any awards;
  • matters that have already been decided by a res iudicata award (except in relation to aspects of its implementation which are not covered by the award); and
  • matters in relation to which the Public Prosecutor has to intervene in representation of individuals who lack legal capacity to act.

The arbitration award issued in domestic arbitration proceedings (DL29/96/M) can be challenged on grounds of nullity or by annulment. The domestic arbitration award is null and void on the following grounds:

  • if the matter could not have been submitted to arbitration due to being related to inalienable rights;
  • when the defendant has not been summoned to submit their defence, in cases where he or she has not intervened in the proceedings;
  • when the arbitration tribunal has exceeded the scope of the arbitration agreement or did not decide matters it should have decided; or
  • when the decision infringes public policy.

The nullity of the awards can be invoked at any time by any interested party or by the Public Prosecutor and may be declared ex officio by the judicial courts.

The arbitration award issued in domestic arbitration proceedings can be annulled on the following basis:

  • when any of the parties would lack capacity to enter into the arbitration agreement or when any of the parties should have been represented by the Public Prosecutor due to lack of capacity to act;
  • when the arbitration court was not competent or was irregularly constituted;
  • when a breach of due process principles has been relevant to the decision;
  • lack of the arbitrator(s)’ signatures; or
  • the award not containing the reasons that led to the decision.

The deadline for annulment of the domestic arbitration award is 30 days from the date the decision was notified to the parties.

The arbitration award issued under the international arbitration regime can only be annulled. The grounds for annulment are limited to the following:

  • lack of legal capacity of any of the parties to enter into the arbitration agreement;
  • invalidity of the arbitration clause;
  • not being properly informed of the appointment of the arbitrator or of the arbitration process or that it was impossible, for another reason, to exercise respective rights in the arbitration proceedings;
  • the award falling out of or exceeding the scope of the arbitration agreement;
  • the constitution of the arbitration tribunal not being made in accordance with the arbitration agreement unless the provision that was not observed was not compliant with the law;
  • that the decision offends public policy; or
  • the subject matter of the decision could not have been submitted to arbitration in accordance with Macau Law.

The annulment proceedings need to be submitted within three months from the date the award has been notified to the relevant party or, if any rectification, interpretation, clarification or additional complementary decision has been requested, from the date a decision on that request has been issued. 

The new arbitration law will fundamentally maintain the same regime as that currently existing for international arbitration.

The recognition and enforcement of foreign arbitration awards take place through separate proceedings.

The recognition process falls within the competence of the Court of Second Instance. The general requirements for confirmation of the award are fundamentally of a formal nature, but there are a few exceptions, which include:

  • the matter having been previously submitted to litigation in Macau or having been previously decided as res iudicata by the Macau courts;
  • the matter not falling within the exclusive competence of the Macau courts;
  • verification of the regular summoning of the defendant and that the observation of due process principles; and
  • that the decision will cause a result that goes against public policy.

The defendant may oppose the confirmation proceedings on the following grounds:

  • lack of legal capacity of any of the parties to enter into the arbitration agreement;
  • invalidity of the arbitration clause;
  • not being properly informed of the appointment of the arbitrator or of the arbitration process or that it was impossible for another reason to exercise respective rights in the arbitration proceedings;
  • the award falling outside of or exceeding the scope of the arbitration agreement;
  • the constitution of the arbitration tribunal was not made in accordance with the parties agreement or, in the absence of an agreement in that respect, in accordance with the law of the place of the arbitration;
  • the arbitration award not yet being mandatory for the parties or having been suspended; and
  • if the defendant is a Macau resident, he or she may also oppose the confirmation on the grounds that the award would be more favourable to him or her if the matter had been tried in accordance with Macau law when, in accordance with its rules on conflicts of laws, Macau law would have been applicable to rule on the matter.

The court may also reject the confirmation if:

  • the subject matter of the decision could not have been submitted to arbitration in accordance with Macau Law; or
  • the state or territory where the award has been granted would not recognise an arbitration award issued in Macau.

After being confirmed by the Court of Second Instance, the award may be enforced through the Court of First Instance. The proceedings will commence with the seizure of the defendant’s assets before the defendant is called to oppose the enforcement or the seizure of certain assets.

The enforcement of domestic arbitration awards does not require any previous confirmation by the Macau courts and they are considered equivalent, for enforcement purposes, to judicial awards.

The new arbitration law will not change substantially the existing legal framework in respect of the recognition and enforcement of foreign and domestic arbitration awards.

RIQUITO ADVOGADOS

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Law and Practice

Authors



Riquito Advogados provides legal services to a diverse range of clients in various industries, but has a particular focus on corporate clients. The firm has five qualified lawyers and offices in Macau SAR and Lisbon, Portugal. Its key practice areas include corporate/M&A, contracts/contractual investment, restructuring, litigation and arbitration, IP, foreign investment, corporate finance, real estate, aviation, private equity, project finance, labour and taxation.

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