A Lisbon court has refused to listen to submissions or rule on the validity of ‘swaps’ contracts between the bank Santander Totta and the capital’s Metro company.
The court refused to evaluate the controversial agreement as the contract states that in the event of a dispute, the case will be heard and settled in England.
The Lisbon District Court said it had no jurisdiction to rule on the claim lodged by Portugal's 'Associação para a Transparência e Democracia' (Association for Transparency and Democracy) which is pressing for a ruling that will show the contracts are invalid, one sided and were signed off with government blessing despite disadvantaging many public bodies and ultimately the taxpayer.
The benefit to the government of the swaps contracts was for public companies to raise large sums of money that did not show up on the government’s ledger.
With interest rates nearing zero, the amounts payable to Santander Totta ballooned as did claims by the signatories that they had been misled by the bank and encouraged by the government.
The Lisbon judge chose to "respect the sovereign will of the contracting parties which had chosen the English courts which is correct we are dealing with international banking and finance a trade agreements so those courts are more familiar with these contracts and the applicable laws, hence this was the choice of the parties."
The Association for Transparency and Democracy had appealed to the Portuguese courts to nullify the swap contracts, "under the class action laws in defence of the public interest."
This means the UK courts now have nine such swaps contracts to consider including those signed with the Lisbon and Oporto metro operating companies.
