Brazil is a country with a high level of litigation and judicialization, and as a result, the adoption of alternative dispute resolution mechanisms has always been necessary.
Arbitration in Brazil, as an alternative form of dispute resolution, was regulated by Law No. 9,307 of September 23, 1996, and was significantly improved by Law No. 13,129 of May 26, 2015, which consolidated important aspects of arbitration.
The law represented a milestone in the consolidation of arbitration within the Brazilian legal system.
Its main characteristic is the autonomy of the parties’ will to entrust an impartial third party with the adjudicatory authority to decide a particular dispute.
The arbitrator performs an adjudicatory function, although he or she is not a member of the Judiciary. An arbitral award has the same legal effect as a court judgment between the parties and, when it imposes an obligation on a party, constitutes a judicially enforceable instrument.
Arbitration has also proven to be particularly effective in resolving disputes arising from international trade that involve companies, suppliers, and customers from different countries.
The use of arbitration is on the rise in Brazil, driven by the heavy caseload of the judiciary and the ability to select arbitrators with specific technical expertise in the matter in dispute.
As arbitration became more firmly established and arbitral awards came to be widely recognized by the courts, the parties gained the legal certainty to include arbitration clauses in the contracts to which they are parties, encouraged by the fact that awards are rendered more quickly by arbitrators who specialize in the subject matter.
Over the years, the use of arbitration has also come to encompass various types of disputes, including some of lesser economic value, such as certain disputes arising from lease agreements. In consumer and employment-related disputes, arbitration may also be available in certain cases, but its use is subject to the requirements and limitations set forth in specific legislation.
There are several prominent arbitration chambers in the country, such as CAM-CCBC – the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce; ICC Brazil – International Chamber of Commerce; the Ciesp/Fiesp Chamber of Conciliation, Mediation, and Arbitration; and the Getulio Vargas Foundation Chamber of Mediation and Arbitration (CAM FGV), among others.
Arbitration still faces many challenges, including defining the scope of matters that may be submitted to arbitration, particularly given the requirement that the dispute involves patrimonial rights over which the parties may freely dispose, among other issues.
Arbitration has established itself as an independent and specialized mechanism for dispute resolution, whose importance stems not only from the overload on the judiciary but also from the growing complexity of economic relations and the need for technical, flexible solutions tailored to the nature of certain disputes.
In this context, arbitration continues to evolve within the Brazilian legal system, keeping pace with changes in economic and business relations and the increasing complexity of disputes. The consolidation of arbitration as a legal mechanism and the refinement of its practice demonstrate that it will continue to play a significant role among the dispute resolution mechanisms available in the country.
Authors: Maria Alice Deucher e Ângelo Vieira
De Luca, Derenusson, Schuttoff & Advogados
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