Arbitration in Brazil
Brazil is one of the most litigious countries in the world, and as a result, the adoption of alternative dispute resolution methods has always been necessary. Arbitration in Brazil, as an alternative form of conflict resolution, was regulated by Law No. 9,307/1996 (“Arbitration Law”), characterized by reflecting the principles established by the UNCITRAL Model Law (United Nations Commission on International Trade Law). Subsequently, the Arbitration Law underwent substantial reform, promoted by Law No. 13,129/2015, which aimed to enhance the application of the institution, and at the same time, the new Code of Civil Procedure enacted in Brazil (Law No. 13,105/2015) recognized and allowed the use of arbitration.
Since the enactment of the Arbitration Law, its use has been increasingly driven each year in the country by the excessive slowness in resolving disputes submitted to the Judiciary, particularly in the absence of specialization on the part of the judge and the publicity of judicial processes, except in exceptional cases of confidentiality.
This is an extremely advanced law that brings the most modern provisions regarding the principles and guarantees of litigants. This law provided the population with an agile means to resolve disputes, with arbitrators chosen by the litigants themselves, who are impartial and independent, especially in technical matters, ensuring confidentiality, speed, and informality.
Its main characteristic is the autonomy of the parties’ will to invest a third impartial party with the prerogatives of a judge to decide a particular dispute. The arbitrator’s award has the same force as that rendered by a state judge and is unappealable regarding the merits.
Arbitration is also an effective tool in seeking judicial solutions from the State in cases of international trade involving companies, suppliers, and consumers from various countries.
As the arbitration institution consolidated and its decisions became widely recognized by the courts, parties began to have legal certainty to include arbitration clauses in the contracts in which they were involved, encouraged by the issuance of decisions in a shorter timeframe, by specialized judges on the matters submitted to them, and with the confidentiality of decisions (except for arbitrations involving Public Administration and those involving publicly traded companies).
Over the years, several Arbitration Chambers have gained prominence in the country, such as the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (CAM-CCBC), ICC Brazil, the CIESP/FIESP Conciliation, Mediation, and Arbitration Chamber, and also the FGV Mediation and Arbitration Chamber, among others, all duly approved and accredited by the CCEE Administrative Council.
Additionally, there are situations that require the submission of disputes to specialized Chambers, such as the Arbitration Chamber of the Market, whose Regulations indiscriminately obligate the following participants from the Special Listing Segments of BOVESPA: I) BOVESPA; II) Companies; III) Controllers; IV) Administrators; V) members of the Fiscal Council; and VI) Investors, as agreed according to Item 5.2.2 of the Regulations.
In the electric sector, regarding the resolution of disputes among the agents of the Electric Energy Commercialization Chamber (“CCEE”), these must be resolved by arbitration, under Law No. 10,848/2004. Moreover, since the approval of the plurality of Arbitration Chambers for resolving divergences, it is required that they be previously approved and accredited by the CCEE.
Another important evolution of arbitration in Brazil concerns the possibility of adopting the arbitration clause in contracts entered into with Public Administration. It is important to emphasize that, in this case, arbitration would not proceed under confidentiality (to respect the constitutional principle of publicity provided in Article 37 of the Federal Constitution), cannot be judged by equity (due to the principle of legality), and must necessarily be based in Brazil.
Over the years, the use of arbitration has also extended to disputes of lower value, such as those involving lease agreements, consumer relations, and labor claims, often known in the cases of Small Claims in the Courts.
Since 2022, some of the main arbitration chambers in the country, such as ICC and CAM-CCBC, have adjusted their regulations to allow written communications related to the arbitration procedure to be conducted electronically (unless agreed otherwise by the parties, in the case of CAM-CCBC), as well as the conduct of hearings in remote format.
Thus, it is evident that the use of Arbitration in Brazil has been growing over the years, and there is no doubt that this evolution is due not only to the recognition of the institution by the Judiciary but also to the excellent preparation of the main Chambers and Arbitration Centers in the country. In cases of foreign arbitration awards (issued outside Brazilian territory), it is important to highlight that Brazil has been a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) for over twenty years, according to Decree No. 4,311, dated July 23, 2002.
However, there are still many challenges that arbitration faces, including the impossibility of its use to resolve issues involving unavailable rights, among many others.
Authors: Maria Alice Deucher e Ângelo Vieira
De Luca, Derenusson, Schuttoff & Advogados
Rua James Joule, 92 – 6th floor – Brooklin
04576-080 – São Paulo – SP
Tel.: +55 (11) 3040 4040