A Commercial Dispute in Portugal for an Israeli Company: Courts, Arbitration, Payment Order (injunção), Enforcement of Judgments and Limitation Periods

An Israeli company working with a customer, supplier or partner in Portugal should know in advance where a dispute will be heard, under which law, and how it will collect in the end. This guide explains the structure of the courts, the arbitration option, the debt collection tools, the enforcement of judgments between Israel and Portugal and the first steps when a dispute begins. Representation in the Portuguese courts is by a lawyer licensed there.

1Which court in Portugal hears a commercial dispute?

It depends on the type of dispute and the amount. Under the Judicial System Organisation Law (Lei 62/2013, LOSJ), a civil claim of more than 50,000 euros is heard by the central civil court (juízo central cível), and a smaller claim by the local court. Insolvency and company law claims are heard by the commercial courts (juízos de comércio), in the districts where they exist.

Proceedings are conducted in Portuguese, and documents in another language are usually filed with a translation. When the contract, correspondence and invoices are in English or Hebrew, the cost of translation and the time it takes are part of the considerations already at the stage of choosing the forum.

2Do you have to try mediation before suing in Portugal?

No. As a rule, mediation in civil and commercial disputes in Portugal is voluntary, and the main law on the subject is the Mediation Law (Lei 29/2013). A contract may provide for a negotiation or mediation stage before proceedings, and then it is advisable to comply with it so as not to give the other side a preliminary objection. Where the business relationship matters, mediation through the CAC or another body can save time.

3How do you collect a debt from a Portuguese customer without a long trial?

The main tool is the payment order procedure (procedimento de injunção). It is a written procedure, without a hearing, in which the creditor files an application and, if the debtor does not file an opposition, the application acquires the force of an enforceable judgment. The procedure is available for money debts under contracts of up to 15,000 euros (Decreto-Lei 269/98), and for debts arising from late payment in commercial transactions of any amount (Decreto-Lei 62/2013).

1. Reviewing documents: contract or order, invoices, delivery or performance confirmations, and correspondence showing that the debt has not been paid.
2. Letter of demand: a written demand before proceedings, with a deadline for payment.
3. Filing an application for a payment order: through a lawyer or solicitador in Portugal.
4. Service on the debtor: according to the EU e-Justice portal, the debtor has 15 days to file an opposition.
5. No opposition: the application receives an enforcement formula (fórmula executória), and you can move to enforcement proceedings.
6. Opposition filed: a commercial debt of more than 15,000 euros moves to ordinary civil proceedings, and a smaller debt to a special procedure under Decreto-Lei 269/98.

4What are the limitation periods for a contractual claim in Portugal?

Under article 309 of the Portuguese Civil Code, the general limitation period is 20 years, as of November 2026. Certain types of debt have shorter periods: 5 years for, among others, periodic debts such as rent and interest (article 310), and 2 years as a presumption of payment for certain debts, for example those of traders for goods sold to a non-trader (article 317). The courts have held that the last article does not apply to a debt between two companies. The classification of the debt determines the period, so it is best not to wait.

5Is arbitration a good alternative to the courts in Portugal?

Often yes, especially when the parties are from different countries, when the amount is large and when it is important to conduct the proceedings in English. The Voluntary Arbitration Law (Lei 63/2011), which came into force on 14 March 2012, is based on the UNCITRAL Model Law. The Commercial Arbitration Centre of the Portuguese Chamber of Commerce and Industry (Centro de Arbitragem Comercial, CAC) is the long-established and recognised institution in the field, and it has arbitration rules, expedited arbitration and mediation.

• Advantages: choice of language and arbitrators, procedural flexibility, and international enforcement under the New York Convention.
• Disadvantages: arbitrators' fees and institutional fees are borne by the parties, and the possibilities of appeal are very limited.
• A written agreement: arbitration exists only if the parties agreed to it. A good arbitration clause specifies the institution, seat, rules, language and number of arbitrators.

6Is an Israeli arbitral award enforceable in Portugal?

Usually yes. Portugal acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 18 October 1994, and the Convention has been in force for it since 16 January 1995. Portugal declared that it will apply the Convention only to awards made in the territory of another contracting state, and Israel has been a party to the Convention since 1959. The Convention lists a closed set of grounds for refusal, including an invalid arbitration agreement, denial of the right to be heard and public policy. In Israel, section 29A of the Arbitration Law, 1968 refers to the provisions of the Convention.

7How do you enforce an Israeli judgment in Portugal?

Not automatically: an application for recognition of the foreign judgment is filed with the Court of Appeal (Tribunal da Relação). A judgment from a non-EU country, such as Israel, must go through a recognition procedure in Portugal (revisão e confirmação de sentença estrangeira) under articles 978-985 of the Code of Civil Procedure. The application is filed with the Court of Appeal (Tribunal da Relação), and the review is formal: the court does not reopen the merits of the dispute, but checks the conditions in article 980.

• The authenticity and intelligibility of the document.
• The judgment is final under the law of the state that gave it.
• The foreign court had jurisdiction, and the matter is not within the exclusive jurisdiction of the Portuguese courts.
• There are no pending proceedings or conflicting judgment in Portugal.
• The defendant was duly summoned, and the principles of hearing both parties and equality between them were observed.
• The outcome does not conflict with Portugal's international public policy.

According to Portuguese case law, some of the conditions are presumed to be met, and the opposing party must prove otherwise. Even so, the procedure adds time and cost, so when the other side's assets are in Portugal, it is worth considering arbitration or Portuguese jurisdiction already in the contract.

8How do you enforce a Portuguese judgment in Israel?

Under Israel's Foreign Judgments Enforcement Law, 1958, an Israeli court may declare a foreign judgment enforceable if it was given by a competent court, is no longer appealable, is enforceable in the state that gave it and does not conflict with public policy. The law also requires reciprocity, and the application is usually filed within five years of the date of the judgment. We did not locate a bilateral treaty between Israel and Portugal on the recognition and enforcement of judgments. Israel signed the 2019 Hague Judgments Convention, which has bound the European Union and Portugal since September 2023, but according to the Hague Conference status table it has not entered into force for Israel. See also arbitration or court in a dispute abroad.

9What should the contract say about jurisdiction and governing law?

The contract should include both a jurisdiction or arbitration clause and a governing-law clause, and the forum should be chosen according to where the other party's assets are located. In Portugal, as throughout the EU, Regulation 1215/2012 (Brussels I recast) applies to jurisdiction, and Regulation 593/2008 (Rome I) to the law applicable to contracts. Rome I allows the parties to choose the governing law, and a Portuguese court will apply the chosen law, subject to mandatory provisions. Article 25 of Brussels I recast respects a jurisdiction agreement in favour of the courts of a member state, regardless of where the parties are domiciled. A jurisdiction agreement in favour of the Israeli courts is not subject to these rules, and is examined under Portuguese law.

10What do you do in the first weeks of a dispute?

In the first weeks, gather the documents, read the dispute clauses in the contract and check the deadlines, and only then choose a route: injunção, a lawsuit, arbitration or mediation. The practical sequence:

1. Gather all the documents: contract, annexes, orders, invoices, proof of performance and correspondence.
2. Read the dispute clauses: jurisdiction, arbitration, governing law, notices and a mediation stage if one was agreed.
3. Check deadlines: limitation, contractual deadlines for notice of a defect or breach, and opposition deadlines if proceedings have been received.
4. Check the other side: an up-to-date commercial registration certificate (certidão permanente), registered address, directors, and whether there are signs of insolvency.
5. Send a written notice: to the address set in the contract, in a way that can be proved.
6. Consider interim relief: where there is a concern that assets will be moved, through a lawyer in Portugal.
7. Choose a route: injunção, an ordinary claim, arbitration or mediation, according to the amount, the contract and the location of the assets.

For a broader picture of what to do when a deal abroad goes wrong, see when a deal abroad goes wrong.

This guide is general information as of November 2026 and is not legal advice, and every case is examined on its merits with a lawyer in Portugal.

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