The challenge to an arbitral award on grounds of nullity constitutes a challenge limited to specified grounds, structured in a dual rescinding and substitutive phase (fase rescindente e rescissoria), the grounds of nullity being exhaustively listed in Article 829 of the Code of Civil Procedure.
In cases of nullity of the arbitral award on account of invalidity of the arbitration agreement pursuant to Article 829(1)(1) of the Code of Civil Procedure, the court hearing the challenge may not rule on the merits of the dispute, that ground being excluded from the scope of Article 830(2) of the Code of Civil Procedure, which provides for a decision on the merits only in respect of the grounds of nullity referred to in numbers 5, 6, 7, 8, 9, 11 and 12 of the first paragraph of Article 829 of the Code of Civil Procedure.
The concept of nullity of the arbitration agreement under Article 829(1)(1) of the Code of Civil Procedure encompasses not only defects of extrinsic form but also all cases of nullity, voidability or ineffectiveness that result in the absence, whether original or supervening, of the parties' contractual will, which constitutes the foundation of the arbitrators' adjudicatory power.
Where the arbitral award is null on account of invalidity of the arbitration agreement pursuant to Article 829(1)(1) of the Code of Civil Procedure, the court hearing the challenge must confine itself to declaring the nullity of the award without proceeding to the substitutive phase (fase rescissoria), given that the absence of the arbitrators' adjudicatory power constitutes a logical prerequisite that absorbs all other questions on the merits, the parties remaining free to re-submit their claims before the ordinary courts.
In the event of nullity of the arbitral award on account of invalidity of the arbitration agreement, the court hearing the challenge is precluded from remitting the dispute to the arbitrators, the latter being devoid ab origine of adjudicatory power, as well as from remitting the case to the court of first instance pursuant to Article 354 of the Code of Civil Procedure, such remission being inconceivable in proceedings conducted in a single instance such as the challenge to an arbitral award.
As regards the assessment of costs, the court of referral to which the case has been remitted, including for the purpose of ruling on the costs of the proceedings before the Court of Cassation following the setting aside of the judgment, must apply the principle of costs following the event as assessed on the basis of the overall outcome of the proceedings, rather than on the basis of the different stages of the proceedings and their respective outcomes.