Doing Business in Brazil

34. Mediation in Brazil

07/01/20

1.Mediation and the advantages of the proceeding 

In the year of 2015, Brazil faced a new legal framework in terms of dispute resolution. A new civil procedure code was enacted ‚ÄĒ but effective only in 2016 ‚ÄĒ, the successful arbitration law of 1996 was amended, and a mediation law was also enacted (Law No. 13140/2015, ‚ÄúMediation Law‚ÄĚ). The common ground for these three laws is the focus on the parties‚Äô free will to determine how they prefer to settle their disputes and incentives.¬†

The Civil Procedure Code is strongly based on the fostering of consensual solutions. It expressly provides in its article 3, paragraph 3, that judges, lawyers, public defenders and members of the Public Prosecution Office shall encourage conciliation, mediation and other alternative methods of dispute resolution. 

The Mediation Law allows for consensual resolution of any dispute over rights that can be waived or that can be subject to settlement. Mediation consists, essentially, in an assisted negotiation. The mediator will assist in the parties in exploring alternatives, bringing awareness to issues and interests and enabling the parties to create solutions with mutual gains. 

In view of the collaborative environment, it is a suitable technique for the preservation of the commercial relations. Mediation can be especially useful when, despite the impasse between the interested parties, there is an intention to give continuance to the existing contract. 

Although not having the authority to impose a certain solution to the dispute, the mediator has the primary function of identifying demands at stake and promoting an open discussion, pursuing the principles of free will and good faith. 

Among the several advantages of the mediation, it is possible to mention the active role of the parties and their control over the outcome of the procedure. Furthermore, aside from being less costly and much faster than a judicial or arbitration proceeding, with an average duration of 1 to 6 months, mediation also tends to be more effective, as it involves the execution of an agreement that is proposed by the parties themselves. 

Unless otherwise agreed, the procedure is confidential; in compliance with article 30 of the Mediation Law, information and documents produced during the mediation cannot be used by the parties in any other procedure between them. The duty of confidentiality is extended not only to the mediator and the parties, but also to the respective representatives and lawyers, to the technical experts and third parties who have, in any capacity, taken part in the procedure. 

Exception made to information related to crimes subject to public action, confidentiality also encompasses the proposal submitted by one of the parties to end the dispute and occasional acceptance by the opposing party, the confession or recognition of any fact in the course of the proceeding, as well as any document produced especially for the purpose of mediation. 

2.Institutional vs. ad hoc mediation and the appointment of the mediator 

The parties can opt for institutional mediation, meaning that the dispute will be submitted to a private chamber that will preside over the proceeding according to its own rules and table of costs, or also for ad hoc mediation, case in which the proceeding is entirely conducted by an autonomous and independent mediator. 

The mediator is jointly selected by the parties or, in case a consensus is not reached within an institutional mediation, the mediator may also be appointed by the institution that has been chosen for the proceeding. Depending on the nature and the complexity of the discussion, more than one mediator may be appointed for the same proceeding, characterizing the co-mediation. 

According to article 5 of the Mediation Law, the mediator is subject to the same rules of disqualification due to impediment or suspicion as a judge. Before being engaged, mediators must inform the parties of any situation that may, in any way, affect their impartiality to act in the conflict. 

Any person enjoying the parties’ trust can act as a mediator, as it is not necessary for the professional to be part of any type of council, class entity or association. The parties, in turn, can be represented by a lawyer or public defender during the mediation proceeding. 

3.The mediation proceeding 

Some contracts contain a so-called multi-tiered clause establishing that any dispute arising out of the contractual relationship must first be settled by negotiation and/or mediation. In this case, the parties are bound to a prior negotiation method and, only if not successful, they may, for example, initiate the arbitration proceeding. 

If expressly provided in the contract, the clause related to mediation shall, at least, contain stipulations as to the minimum and maximum term and the place for the meeting between the parties, criteria for the selection of the mediator and penalty in case of failure to attend the meeting, as set forth by article 22 of the Mediation Law. In case of institutional mediation, the contract may only indicate that the proceeding will follow the rules established in the regulation of the chosen chamber. 

Anyhow, regardless of the existence of the aforementioned multi-tiered clause in the contract, the parties may, at any time and provided that they do so by mutual agreement, also choose mediation. As a matter of courtesy and efficiency, it is advisable to proceed with the mediation with the same Arbitration Center chosen by the parties to arbitrate, also because part of the mediation costs may be deducted if the parties move forward to arbitration. 

In case mediation is initiated in the course of a judicial or arbitration proceeding, the parties shall request the judge or arbitrator to suspend the proceeding for the consensual settlement of the dispute. 

If the parties agree to submit the conflict to mediation, any or both parties may submit a Request for Mediation to the chosen institution, presenting a brief description of the dispute. It is possible that prior and informative meetings are held, especially with the purpose of delineating the controversy and defining the involved amounts. 

Once the mediator is chosen, during the first joint meeting, the parties enter into the Mediation Term, establishing how the proceeding will be conducted and indicating the object of the mediation, the starting date, planned schedule, the place and language of the proceeding, as well as a possible date for termination. The proceeding is quite flexible and can be shaped according to the parties’ interests and the peculiarities of the specific case. 

The mediator can also choose to hold individual meetings with each of the parties and their respective lawyers, requesting any information that is deemed relevant. 

These individual meetings are called caucus and, although not mandatory, may represent an important environment for communication with the mediator. Considering that the mediator has more freedom to discuss the case with the involved parties, they may obtain information that would not be disclosed in an arbitral or judicial proceeding. Therefore, the mediator is prone to identifying the zone of a possible agreement. Information shared during the private meetings may not be disclosed by the mediator with the other party, unless expressly authorized to do so. This technique is commonly used to communicate messages that would hardly be made in a direct contact between the parties. 

In case an agreement is reached, the parties then sign a final settlement, indicating the obligations of each party involved. This document has contractual nature and is considered an enforceable title by Brazilian law, meaning that it may be directly enforced if breached. 

If it is not possible to reach a consensus, mediation may also be terminated by statement of the mediator or by means of a notice issued by either party. It can also be terminated when the final deadline set forth in the Mediation Term has expired. 

The mediation proceeding ‚ÄĒ which may undergo some variations depending on the chosen institution and/or agreements between the parties ‚ÄĒ can be summarized as follows:¬†

 

Mediation costs 

Mediation costs may vary according to the chosen institution, the complexity of the dispute and amounts at stake. Moreover, the mediator is also entitled to fees, which may follow the table of expenses of the chosen chamber or, depending on the type of mediation, be agreed upon by the parties. The mediator’s fees are usually split between the parties and may be calculated based on the hours that are effectively incurred. 

As for institutional mediations, an administration fee by each of the parties is also generally due, in addition to the registration fee that must be paid when the request for mediation is submitted. 

The lawyer’s role in the mediation 

The lawyer’s role can begin even before the proceeding starts, as they may analyze any existing contract between the parties and the respective conflict resolution clause. The lawyer will also examine the feasibility and suitability of the mediation, stressing the advantages involved and the legal consequences of the adoption of the alternative conflict resolution method. 

There are several aspects that must be strategically considered by the party and its attorney before the choice concerning the dispute resolution proceeding is made. Besides the costs involved, it is necessary to consider the time that may be spent, the possibility of negotiation, the intention to maintain or terminate the business relationship, any previous negotiations, the chances of success in an arbitration or judicial proceeding, the choice of institutional or ad hoc proceeding, etc. 

Once the choice for mediation is made, the lawyer may also advise on the selection of the mediator. At this stage of the proceeding, it is extremely important to consider the professional expertise, as well as how the mediator may intervene during the negotiations. As mentioned above, the complexity of the discussions may also require the participation of more than one mediator. 

In preparation for mediation meetings, strengths and possible weaknesses should be identified, addressing what is the purpose of the mediation, as well as the parameters for negotiation. Aside from advising on these matters, the lawyer can assist in the preparation of the script and presentations to be used during the meetings. 

The presence of the lawyer during meetings with the mediator is also extremely relevant. Despite the active role of the parties in reaching a solution to the dispute, the lawyer can help his client in identifying the issues that should be shared with the mediator and should also provide assistance on the legal aspects of the discussion. The lawyer can make strategic interventions during the meetings, raising points or information not brought by the client and assisting in the search for possible alternatives. 

In case the parties settle, the client may rely on his lawyer to draft the settlement agreement. Besides encompassing the part of the conflict that has been solved, the agreement may address other issues arisen in the course of the proceeding. Attention should also be paid to the formal aspects of the document, as well as the consequences of the agreement in ongoing proceedings. 

If the parties do not reach a settlement at the end of mediation, the lawyer may assist with the disposal of the documents and drafting of the closing term. In this case, the party should also define which strategy will be adopted in the ongoing proceedings or what will be the next step for resolving the conflict. 

4. Mediation involving Public Administration 

The Mediation Law emerged as an important milestone to reinforce the possibility of settlement with the Public Administration and is in line with the current trend of growth and prestige of consensualism and negotiated solutions with public authorities. 

The law brought some broad concepts not only related to the possibility of mediation, but also to other alternative dispute resolution methods, such as the transaction, conciliation and the execution of a Conduct Adjustment Term (“TAC”).¬†

As provided by the Mediation Law, the Union, the States, the Federal District and the Municipalities may create chambers of administrative prevention and resolution of conflicts, either for disputes between public entities or in case of controversies between private individuals and public entities. The functioning and composition of the chambers shall be provided in the specific regulation of each federative member. 

Although there is still controversy in Brazilian case law and doctrine on the matter, the Mediation Law expressly establishes in article 32, paragraph 5, the possibility of settlement regarding the economic and financial rebalancing of contracts that have been executed between the Public Administration and private individuals. 

In addition, as already mentioned, the Mediation Law allows for consensual resolution of any dispute over rights that can be waived or that can be settled. Despite the lack of definition on the matters that may be subject to settlement by the Public Administration and as to the extent of the possibility to waive public interests, the provision contained in the Mediation Law represents a great progress, expressly repelling the false conception that rights under the protection of the State would not be susceptible of settlement. 


Authors: M√īnica Mendon√ßa Costa, Carolina Matthes Dotto e Izadora Faria Freitas Azeredo Dale¬†

TozziniFreire Advogados

Rua Borges Lagoa, 1328 04038-904 – S√£o Paulo

Phone: +55 (011) 5086-5492

E-mail: [email protected]

www.tozzinifreire.com.br 


Access to the Brazilian Judiciary and comments on the multidoor system for dispute resolution

1.Introduction

The Brazilian Federal Constitution establishes the fundamental right of access to justice, understood as both the right of any citizen or legal entity to submit their disputes for resolution by the courts and to use the several means of dispute resolution that do not exclusively depend on the Judicial Branch, including arbitration proceedings and alternative means (also known as ‚Äúadequate‚ÄĚ or ‚Äúintegrated‚ÄĚ means) of dispute resolution. Therefore, we conclude that Brazil is aligned with the most modern legislations in the world in this respect and adopts, for that purpose, a ‚Äúmultidoor system‚ÄĚ for dispute resolution.

We note, in this regard, that both the resolution of disputes by third parties and the resolution of disputes by the parties themselves are valid means of dispute resolution under the Brazilian legislation.

In the resolution of disputes by third parties, the resolution of disputes is transferred to an impartial third party, which shall provide a final and mandatory answer to the matter submitted to it for analysis. This occurs by means of the jurisdiction of the courts, which is present whenever one of the parties uses its right of action and accesses the Judicial Branch to resolve the litigation, by means of a decision rendered by an authority with coercive power (judge), or by means of arbitral jurisdiction, whenever the parties submit, pursuant to a prior agreement, to arbitration chambers or even to independent arbitrators, which usually have a high degree of expertise on the matter under discussion, to resolve the dispute.

In the resolution of disputes by the parties themselves, the decision is made by the parties themselves, without the imposition of a solution by a third party, such as arbitration chambers, independent arbitrators or the Judicial Branch. In general, it may be divided into three types, which are the negotiation, the conciliation and the mediation.

We should already state that no means of dispute resolution is better than the others, but there is actually the most adequate means for a given specific situation. Thus, each interested party should understand, with the assistance of its counsel, the nuances of the case and the cost-effectiveness involved, considering, among other issues, the time for resolution, the costs involved and the complexity of the matter under discussion, to elect the most appropriate means for that situation.

The parties are even instructed to mutually analyze and agree, whenever possible, on the most appropriate means of dispute resolution for that specific situation even before the litigation arises, such as, for example, in a business agreement that contemplates, since its formalization, the possibility of the creation of dispute boards for the internal resolution of more simple issues, and also elects the applicable jurisdiction in the event of a more significant dispute, which is usually the arbitration or the courts.

Now, we explain the main characteristics of the access to the Judicial Branch, with specific comments on the means that compose the Brazilian ‚Äúmultidoor‚ÄĚ system for the resolution of disputes.

2. Access to the Judicial Branch

In relation to the access to the Brazilian Judicial Branch, we will see, in the following items, that Brazil adopts the system of positive law, with indication of the implications of such system, as well as of the hierarchy of the rules, the division of the jurisdiction of the courts (competent jurisdiction), and the general rules relating to the procedural model and the respective procedure ‚Äď from the beginning to the end ‚Äď of a lawsuit, in order to have a broader understanding of the dispute resolution by means of the Brazilian Judicial Branch.

2.1. Positive law

The Brazilian legal system originates from the Roman and Germanic civil law tradition of positive law (Civil Law), which differs from the Common Law of the countries that adopt the Anglo-Saxon system and from the tradition of the consuetudinary law (Customary Law). Therefore, its main characteristic is the use of written and published rules, which are documented in specific instruments, commonly codified by subjects, it being understood that all rules shall be consistent with the provisions set forth in the fundamental rule, which is, in the Brazilian case, the 1988 Federal Constitution.

In this respect, in relation to general or ordinary laws, the subjects are divided according to their themes (Civil, Civil Procedure, Penal, Criminal Procedure, Consumer, and others), and a compilation of rules is created, forming a Codex for each theme, which includes the respective main material rules, the forms of redress or penalties for failure to comply with a rule, in addition to the procedural rules. In addition, each subject may be regulated in a more specific manner, by means of the following types of law: Supplementary Laws, Delegated Laws, Provisional Measures, Legislative Decrees and Resolutions.

Even if it is possible to mention the prevalence of the written rules in relation to the case law in countries using the positive law system, such as Brazil, it is possible to note a contemporary trend to grant more relevance to court precedents, as a form of settling the understandings on a same subject, in order to improve implementation of the Principle of Legal Certainty, i.e., enabling the individuals to have early and reflexive knowledge of the direct consequences of their acts, by means of previous decisions on a similar situation. 

In this respect, the courts are already required, pursuant to the applicable civil procedural law, to settle their case law and keep it stable, complete and consistent, and the judges and courts must observe and follow, within the scope of their decisions, certain qualified court precedents, such as, for example, Federal Supreme Court decisions involving concentrated control of constitutionality, repetitive theses and precedents approved by the Federal Supreme Court or by the Superior Court of Justice, in addition to guidance provided by the highest bodies of the lower Courts.

We note, in this respect, that such duty to observe the precedents does not mean that matters already decided cannot be reexamined from other perspective. However, the distinguishing or overruling mechanisms are clear and there are requirements for application thereof, we repeat, in order to guarantee the principle of legal certainty and of the persons subject to the jurisdiction themselves.

Therefore, it is clear that, in the Brazilian law, court decisions are always rendered upon application of the rule to the specific case under analysis and, differently from the Common Law, observance of the precedents is not mandatory in all cases, and they may serve, in these events, at least as a form of guidance for the decision, in order to prevent different understandings on the same matter.

2.2. Division of the Judicial Branch (Competent Jurisdiction)

The jurisdiction of the courts is exercised throughout the Brazilian territory and over all persons subject to the jurisdiction, which obviously requires a division of work among the bodies that compose the Judicial Branch, which is made based on different rules on jurisdiction for each body, as noted in the court organization rules.

To define the jurisdiction to try a given case, first it is necessary to confirm if the Brazilian Courts have jurisdiction, be it exclusive or concurrently with foreign courts. Thus, if the defendant is domiciled in the Brazilian territory, if the obligation shall be performed in Brazil, if the grounds relate to a fact or act performed in Brazil, among other events, the Brazilian courts will have jurisdiction over the case. The same occurs whenever the agreement that is the subject of the dispute contains a ‚Äúchoice of law clause‚ÄĚ establishing that the Brazilian courts are the courts of competent jurisdiction to resolve the dispute.

Second, it is necessary to confirm if the Superposition Courts have jurisdiction for trial, i.e., if the Federal Supreme Court or the Superior Court of Justice have original jurisdiction to try the case or if the case falls under the jurisdiction of the Courts of General Jurisdiction, which involve: (i) the State Courts and (ii) the Federal Courts; or, also, of the Special Courts composed of (i) the Labor Courts; (ii) the Military Courts and (iii) the Electoral Courts. 

In relation to the Courts of General Jurisdiction, the jurisdiction of the Federal Courts refer, in general, to actions involving assets or interests of the Federal Government, such as, for example, cases in which one of the parties is a foreign country or international organization; or which discuss international treaties; political crimes, human rights, and others. The jurisdiction of the State Courts, in turn, is subsidiary and defined by exclusion: it shall try all cases that do not fall under the jurisdiction of the Special Courts and of the Federal Courts. As a rule, contractual and/or business litigations are processed in the Courts of General Jurisdiction. 

Third, it is necessary to confirm if the matter to be brought to court exceptionally falls under the original jurisdiction of the respective Appellate Court (Federal Regional Court or State Court of Appeals), i.e., of the 2nd level of jurisdiction of the respective Appellate Courts or if, following the general rule, it falls under the lower-court jurisdiction of the respective Appellate Court, on which occasion it is also necessary to define the competent territorial unit (venue), which, as a rule, is defined by the domicile of the Defendant. 

In addition, with respect to the Small-Claims Courts, we note that both with respect to the democratization of access to the Judiciary and to the incentive to settlement, said body, which also has a division of jurisdictions (civil, criminal, federal and public treasury), operates as an instrument for the persons subject to the jurisdiction to seek resolution of the their daily disputes in a fast and efficient manner, free of charge. They try less complex cases involving lower amounts, in a speedier, more economic and effective manner, and they always encourage, even before the evidentiary stage, a conciliation between the parties.

2.3. Brazilian Civil Procedural Model

The Procedural Model adopted in Brazil by the modern and contemporary Code of Civil Procedure in effect is considered a ‚Äúcooperative‚ÄĚ model, in which the proceedings are neither exclusively determined by the parties nor shall be asymmetrically conducted by the judge. The purpose thereof is to conduct all parties to the procedural relationship in a cooperative manner.

Therefore, the judge and the parties have clear responsibilities and actively participate, cooperating with one another, in the search for the outcome of the proceedings, which is the obtainment of a fair and effective decision on the merits, within a reasonable term.

Value is placed upon the adversary proceeding, which permits that the parties actively influence the formation of the judge’s conviction, and also upon the statement of reasons, it being understood that any decision that is not duly reasoned, i.e., any decision that does not demonstrate the reasons that led the judge to that decision, is deemed null.

Due to an International Treaty ‚Äď Pact of San Jos√©, Costa Rica (American Convention on Human Rights), and also for historical reasons, the Brazilian legislation contemplates the guarantee of the two-tiered system, a principle of procedural law that ensures to all persons subject to the jurisdiction the reexamination of their proceedings by a higher level of jurisdiction, as better explained below.

2.4. Procedure

To bring a lawsuit in Brazil, except in the system of the small-claims courts, the party that wishes to submit its case to the Judicial Branch must appoint its counsel by means of a specific ad judicia power of attorney, which will grant the counsel powers to represent it in the Judicial Branch.

The document for entry in the Judicial Branch is the Complaint, in which the Plaintiff narrates its version of the facts, the grounds for its right, attaches the documentary evidence in its possession and includes its claims, informing the other proofs it wishes to produce.

If the requirements of the Complaint are met, the judge receives it and orders the service of process upon the adversary party, for it to present its defense, which may be presented in the form of an Answer, defense, and/or Counterclaim, in which it may include counterclaims, which shall be decided jointly with the claims already made by the Plaintiff. At this time, under penalty of preclusion, the Defendant shall submit all documentary evidence, as well as indicate the proofs it wishes to produce.

With both versions of the facts, the judge will be ready to prepare the case for trial, establishing the disputed issues and the undisputed issues (issues that have been admitted by both parties), and determining the proofs to be produced to eliminate the existing dispute.

In case it is possible to resolve the dispute without the production of further evidence, and if there is no procedural defect, the judge will be able to render summary judgment, deciding on the merits and resolving the dispute.

In case the production of new proofs is required, the judge will determine them, it being understood that the most common means are: the personal deposition of the parties; the exhibition of documents or things; the testimony of witnesses, the conduction of expert evidence and the judicial inspection. If there is no further evidence to be produced, the judge will try the case on the merits, after granting the parties an opportunity to pronounce.

This decision is rendered by a lower-court judge and it is called a ‚Äėjudgment‚Äô. In attention to the principle of the two-tiered system, it is possible to bring an appeal claiming reexamination of all facts and proofs by the higher court, in a trial by a panel of three judges, with render their decision and their statement of reasons in an ‚Äėappellate decision‚Äô containing their written vote.

There is a provision on new, more restricted appeals, such as, for example, Special Appeal to the Superior Court of Justice, for discussions on violations of federal law, and also Extraordinary Appeal to the Federal Supreme Court, for cases of violation of the Brazilian Federal Constitution, provided the requirements for each appeal are met.

Upon lapse of the procedural terms for appeal, and in case none of the parties has appealed, the final and unappealable resolution of the dispute is certified, thus forming the substantive res judicata, i.e., as a rule, the decision becomes unchangeable, preventing a new discussion on the same dispute. As from that time, the winning party may commence the phase of execution of the judgment and satisfaction of the claim.

We note that the civil procedural law in effect in Brazil grants the parties more autonomy in relation to the procedure, contemplating the possibility to carry out procedural legal transactions, by means of which it is possible to change the procedure, agreeing, for example, on the procedural terms, on which party shall produce evidence, on the procedural powers and duties of the parties, among other issues, it being understood, however, that the judge shall control the legality of these provisions, according to the legal system. This power created by the code of civil procedure in effect creates a general clause on procedural negotiation, the subject matter of which are the procedural situations of the parties and the procedure, modernizing the proceedings and granting it more effectiveness.

Based on these brief notes on the access to the Brazilian Judicial Branch, we note that the Judiciary may be a good means for dispute resolution, for example, since its organization is clear, its costs are much lower than those of an arbitration, for example, and its technical body is very competent, sometimes divided by expertise, which facilitates and improves the quality of the decisions rendered.

3. Arbitration.

The other means of resolution of disputes by third parties, but private, is the arbitration. It includes the figure of the arbitrator (one or more persons), who is the impartial third party freely chosen by the parties or designated by the arbitration chambers responsible for processing the arbitration, whose power and authority is granted by the parties themselves to render the decision in accordance with the provisions of the procedural law and of the substantive law also previously chosen by the parties, in the arbitration clause existing in an agreement or due to an arbitration clause executed after institution of the litigation. Even though they are not mandatory, sometimes the arbitration chambers play a very important role in the procedural conduction of the arbitration, granting security and righteousness to the procedure. 

In Brazil, the execution of the arbitral award, which has the same status as judgments rendered by the courts, is made in the Judicial Branch ‚Äď which holds the monopoly of coercive measures to cause compliance with the decision. Such execution shall be made by means of enforcement proceedings, under penalty of expropriation of assets, among others, in the event of default.

For cases resulting from complex corporate disputes, the arbitration is a very interesting means of dispute resolution, be it in view of the expertise of the arbitrations in that matter under discussion, or in view of the swiftness of the procedure and decision or due to the confidentiality, which is mandatory, although its costs are usually very high if compared to the other means of dispute resolution.

4. Resolution of disputes by the parties themselves

With respect to the other means of resolution of disputes, there is also, in Brazil, the possibility of resolution of disputes by the parties themselves, by means of which the decision is made by the parties themselves, in mutual agreement.

The resolution of disputes by the parties themselves may be divided into three types, which are, (i) the negotiation: whenever the parties consensually reach a solution, without the interference of third parties; (ii) the conciliation: whenever an impartial third party is present, interfering with relevant facts and information on the litigation, seeking the best form of resolving the dispute; and (iii) the mediation: whenever the dispute is resolved in the presence of an impartial third party, who will assist in maintaining the relationship between the parties and the dialogue, leaving the parties to find the best resolution for the dispute themselves. Be it in the event of conciliation, be it in the event of mediation, we note that the impartial third party shall operate as a tool to enable the debates and the resolution, without any coercive or decision-making duty.

On the one part, the negotiation is seen as an excellent means of social pacification, because the case neither requires the intervention of third parties nor a mandatory decision, as occurs in the jurisdiction of the courts or in the arbitration. Therefore, it values the autonomy of will of the parties in the settlement and resolution of the disputes, without the intervention of any third party.

On the other hand, the conciliation or mediation requires the presence of an impartial third party to intermediate the dispute. In the conciliation, which may occur out of court or even during a lawsuit, this third party, the conciliator, plays an active and participative role, acting as a facilitator. The conciliator may suggest the terms of a possible settlement, but has no decision-making power. 

In the event of judicial conciliation, the Brazilian Code of Civil Procedure in effect sets forth that the conduction of a prior conciliation hearing is mandatory after receipt of the complaint by the judge, but before filing of the defense by the Defendant. Said hearing shall only not be mandatory in case both parties pronounce not to be interested in the conduction thereof or whenever the right under discussion does not permit resolution of the dispute by the parties themselves. A similar procedure is already adopted by the Small-Claims Court Law for more than twenty (20) years. However, in those courts, the preliminary hearing is always mandatory before submission of the defense by the Defendant.

There is also the mediation, which seeks to resolve the conflict of the parties in a broader manner. In this case, the impartial third party is the mediator. Although mediators also do not have decision-making power, differently from conciliators, they never interfere in the terms of the settlement, they do not take any initiative to propose the settlement and they do not make any comment on the merits of the discussion, leaving the parties free to resolve the dispute without their direct intervention. The mediators work as moderators, and their goal is to facilitate the communication of the parties, leading them to an understanding on the disputed matter. The mediation is governed by a specific law and, as the conciliation, it may occur in or out of court. 

Finally, it is also important to note, in the current Brazilian context, the existence of Online Tools for the Resolution of Disputes (Online Dispute Resolution ‚Äď ODR). These mechanisms have been developed by large companies of the private sector that, due to the very nature of the business, normally linked to large-scale consumer markets, suffer with the very high number of disputes and lawsuits. The operational cost to manage such liabilities severely affects the provisions and results of the companies.¬†

Due to this scenario and to the incapacity of the existing methods of dispute resolution to absorb them with low cost and facilitated operation, since they require the already mentioned means of human intervention in a large number of disputes, they commenced to invest in the creation of these tools, which are customized for the specific needs and characteristics of the corporations.

By combining artificial intelligence and data science, these tools combine rules to manage these liabilities with negotiation and mediation techniques, all in a software format, rendering the management of the volume of complaints and disputes much less burdensome and the resolution thereof much faster, since the information flow is managed by the online platform, leaving for human intervention a small number of cases that escape previously determined filters, generating a large number of settlements, minimizing costs and ensuring the satisfaction of those involved.

In Brazil, due to the impacts of the COVID-19 pandemics, the government recently commenced to encourage and expand the use of these tools, participating and cooperating in the development of dispute resolution automation projects, for the purpose of expanding the resolution of disputes without an increase in the judicialization.

5. Choice of the Most Appropriate Means of Resolution of Disputes

After explaining all means of resolution of disputes listed above, there is the doubt: how to choose the most appropriate means?

To resolve this issue, we should have in mind an analysis of the specific case and which characteristics of the models better serve the fundamental interests of the parties, which shall always be preserved and observed.

Is it essential that the means of dispute resolution be fast? Be economical? Be confidential? Preserve the business relationship? Require technical analysis by an expert? Has broad means of defense/appeals? Has coercive or provisory measures? Has binding and final decisions?

For example, the conciliation method shall be preferably chosen in those cases in which there was no previous relationship between the parties. Thus, the conciliation is more appropriate for conflicts of interest that do not involve a continued relationship between the parties, which commenced a relationship exactly due to the litigation, as occurs in a car crash. Or also for those parties that have a specific previous relationship, which originated the litigation, as occurs in an agreement executed for the purchase of a product or provision of a service.

The mediation, in turn, should be preferably chosen whenever there was a previous relationship between the parties. In these cases, the parties already had some continued liaison before the lawsuit, which represents a continued relationship between them, rather than instantaneous. Therefore, the use thereof is more advised in family law, neighborhood and corporate cases.

Companies that provide services or supply products with large operations in the market and which establish numerous commercial relationships with their consumers, in turn, should analyze the use of online tools for dispute resolution, since it is a swift and economic means, with more probability of preservation of the corporate relationship, due to prompt service to the client, without the need to seek judicial relief for less complex cases.

If the company wishes to seek a method or the resolution of complex cases, which are confidential and highly specific, by a third party with know how, in a swift manner, without procedural formalities, without the possibility, strictly speaking, of reversing the decision by means of appeals, and without necessary caring for the costs of the proceedings, the arbitration is the most appropriate means.

Finally, in case the primary interest of the private institution is the availability of resources to reverse an unfavorable decision, the possibility of obtaining provisional measures advancing the outcome of the final decision or coercive measures for compliance with decisions, the Judicial Branch is the best option.


Authors: Jo√£o Paulo Balthazar Leite, Renato Xavier da Silveira Rosa, Camila Abrantes Honkis, Larissa Figueiredo Cerceau Guimar√£es

Schalch Sociedade de Advogados

Avenida Faria Lima, 4509, Itaim Bibi

Postal Code: 04538-133 – S√£o Paulo, State of S√£o Paulo.

Phone: (11) 3889-8996

E-mail: [email protected]

Internet: www.ssaadv.com.br


Mediation: An alternative that is still little used in settlement of conflicts

 

Introduction

Considering the increasing complexity of intercompany relationships and trade relationships due to the industrial and technological development seen in recent decades and considering the break of physical barriers and distances promoted by online transactions, the increase in the number of conflicts became inevitable.  

For this reason, the Brazilian civil procedural law underwent three renovation waves. In the first one, it sought to overcome the economic obstacle for the assurance of the universal access to the Judiciary Branch, which was achieved through the institutionalization of the free legal aid and through the institutional availability of legal guidance to those who need under the law.

In turn, in the second renovation wave, it sought to overcome the obstacles that hampered access to justice, which guided the promulgation of normative legislation like the Consumer Protection Code, aiming to widen the access to justice.

However, taking into consideration the massification of many disputes, the amplification, and facilitation of the access to justice resulted in the third renovation wave of the civil procedural law, since assuring the access to justice would not suffice if the decisions rendered could not provide the best solution for the controversy.

The emphasis formerly directed to the access to justice was now headed to the quality of the results obtained, encouraging the use of out-of-court means to settle conflicts and self-mediation. Within this context, as a result of the third wave, the Arbitration Act (Act no. 9307/1996) was promulgated on September 23, 1996, ensuring litigators the possibility of seeking this self-mediation modality to settle disputes related to alienable property rights. 

The Arbitration Act was a pioneer in this self-mediation modality to settle conflicts. On November 29, 2010, the Brazilian National Council of Justice promulgated Resolution no. 125, which provided in its 1st article that everyone had ‚Äúo direito √† solu√ß√£o dos conflitos por meios adequados √† sua natureza e peculiaridade‚ÄĚ (In free translation, ‚Äúthe right to resolve conflicts through means that are compatible with their nature and particularity‚ÄĚ).¬†

Indeed, even though the Code of Civil Procedure of 1973 provided for the holding of hearings to try to obtain a conciliation, it was only with the creation of the new code of civil procedure and with the promulgation of Act no. 13140, of June 26, 2015, that greater importance and highlight was given to the resolution of conflicts by the litigators themselves; however, mediation, in particular, is not duly explored by litigators yet.

In the following sections, we will address mediation as a form of resolution of conflicts by the very litigators, as well as its advantages over the arbitration proceeding as an essential tool for litigators to ensure that their disputes are settled with more agility, whether they are judicialized or not.

Mediation

Mediation is a technique to solve conflicts that privileges the restoration of the excellent relationship the parties once had to reach a satisfactory settlement through a dialogue mediated by an impartial third party who has no power to decide on the issue imperatively 1.

In the mediation process, the role of the mediator is crucial for the restructuring of the dialogue between the parties ‚Äď he/she mediator should act as a facilitator so that the very parties can build a solution for the dispute. Thus, the mediator shall operate as a facilitator of the communication for the parties to put aside personal issues that can compromise the dispute resolution, rerouting the efforts to the actual interests in dispute, since the responsibility for the formation of a consensus lies exclusively with the litigators.

The mediation technique differs, however, from the negotiation and conciliation.

Regarding the negotiation, mediation differs from it because the presence of an impartial third party to conduct the dispute is mandatory. As a general rule, in the negotiation process, the settlement of the conflicts is sought by the very litigators with or without intervention by their attorneys, but without the presence of an impartial third party to facilitate the communication between the parties.

Regarding the conciliation, the main differences lie in the type of participation of the third party and the process duration. It is because, while in the mediation process the impartial third party does not impose decisions or manifest his/her opinion on the controversy, in the conciliation, the third party has a more active role: he/she can not only display his/her belief but also suggest the terms of a settlement to be reached by the parties.

Otherwise, mediation is a process that demands several sessions in the attempt to make the parties solve the conflict by themselves, as it privileges the restructuring of the dialogue. In turn, the conciliation process generally requires only one session in an attempt to obtain a settlement.

Thus, mediation is composed of several stages 2, among which we can highlight: (i) pre-mediation, in which the first contact between the parties and the mediator is established; (ii) investigation, in which the controversy is exposed to the mediator; (iii) creation of options, in which the mediator conducts the parties to possible alternatives for the resolution of their conflict without, however, imposing decisions or manifesting his/her opinion; (iv) selection of options, where the mediator and the parties elect the best alternatives to be discussed by the parties; (v) assessment of other options, where the effects of the adoption of an opportunity are estimated; (vi) preparation of the settlement terms; and (vii) celebration of the final settlement instrument.

 

Mediation in the Brazilian legal system

As aforementioned, despite the Code of Civil Procedure of 1973 providing for the hypothesis of a settlement of conflicts by the very litigators, concerning the mediation, Resolution no. 125/2010 of the Brazilian National Council of Justice can be considered an important landmark for its introduction, being subsequently consolidated with the promulgation of the new code of civil procedure.

When Resolution no. 125/2010 was published by the Brazilian National Council of Justice, it was determined the creation of the Permanent Center of Consensual Methods for Conflict Solution and of the Judiciary Conflict Solution 3 and Citizenship Centers 4, which aimed at promoting the application of self-mediation techniques to solve controversies and reach more efficient solutions for conflicts.

The Code of Civil Procedure promulgated on March 16, 2015, finally established the promotion of an increment in the application of the self-mediation techniques when it not only provided for the application of each of these techniques but also expressly addressed the Private Chambers of Conciliation and Mediation. Their specific rules were included in Resolution no. 125/2010 of the Brazilian National Council of Justice, through the amendment no. 2, dated March 8, 2016.

Once established the promotion of the application of self-mediation techniques, on June 26, 2015, the Mediation Act was promulgated (Act no. 13140/2015), providing for the rules applicable to the mediation between private parties as a mean to solve controversies and for the self-mediation of conflicts within the scope of the public administration.

Thus, with the adoption of the current code of civil procedure, of the innovations promoted by the Brazilian National Council of Justice Resolution no. 125/2010, and of the promulgation of a norm containing the rules applicable to the mediation process, the mediation process got closer to the arbitration proceeding. However, it has undeniable advantages over the latter that was not extensively explored for the resolution of conflicts by the litigators themselves yet. 

 

Advantages of mediation over other means of conflict resolution and the recommendation for its further adoption by parties

Mediation and arbitration are conflict resolution techniques whose distinctive characteristic is the flexibility since in both the litigators are freer to establish the rules of the process development or to adopt those set by an arbitral or mediation institution.

Both the arbitration proceeding and mediation are ruled by principles that privilege, above all, respect for the parties’ autonomy, which is treated equally in a less formal and more rapid process.

The more remarkable difference between these is, however, that parties can only submit to arbitration litigations related to alienable property rights.   The spectrum of litigations that can be submitted to mediation is much broader since no decision is imposed on the parties, who count on the mediator’s aid to reach the best solution available together.

Indeed, it is possible to submit to mediation conflicts involving alienable or inalienable property rights allowing transactions ‚Äď in the last case; the consensus reached between the parties shall be ratified in court.

Still, regarding mediation, it can encompass the entire conflict or only a part of it, reason why it can be requested during the prosecution of an action filed with a judicial court or arbitral tribunal, whose prosecution shall be suspended during the parties’ mediation.

Regarding the agreement executed by the parties to submit future disputes to arbitration or mediation, both are binding and can be included in contracts or established in a separate instrument.

However, the mediation agreement does not impede the litigation from being subsequently submitted to arbitration proceedings or the judicial courts, since consensus by the parties shall reach a useful result for the controversy without the imposition of any decision by the mediator.

By agreeing to submit their disputes to arbitral proceedings, the parties can only seek judicial courts when the adoption of provisional measures is required to safeguard the claimed right 5 or when the claim involves the compliance with an obligation dispensing adverse arbitration award for the constitution of security 6 but requiring the submission of the dispute to a judicial court.

For authorizing that only a part of the conflict is submitted to mediation, observing the provisions of article 190 of the Code of Civil Procedure 7, the mediation agreement allows the parties to previously decide on issues such as the duration of the process, which topics should be submitted to mediation, who should serve as mediator, among others, thus avoiding the spending of massive amounts to submitting the controversy to other resolution procedures that can be more expensive and ultimately do not reach a satisfactory solution for both parties. 

The non-imposition of a decision on the parties is a significant advantage of the mediation process over, for example, arbitration, since, once rendered the award, no appeal is allowed ‚Äď the only option available is to request it to be rendered null in the presence of the defects listed in article 33 of Act no. 9307/1996. The award produces between the parties and their successors the same effects as a judgment rendered by the Judiciary Branch bodies and, being adverse, constitutes an enforceable instrument.¬†

Where the arbitration proceeding is not well conducted, the aggrieved party cannot claim the reversal of the award. In other words, if the award is free from defects, but the arbitration proceeding was poorly conducted, moreover, due to the lack of experience by the party, such party will be obliged to abide by the rendered decision without answering it.

Among other benefits of mediation, this process tends to be more rapid and less formal than arbitration proceedings and court actions, the reason why a possible settlement reached by the parties will mean a real saving of time and money, as, even where it only partially resolves the controversy, a part of the litigation will be solved.

Regarding the costs involved, mediation may further be more advantageous, since the prices practiced tend to be lower than those estimated for arbitration proceedings, being also essential to stress that, according to article 12-D 8 of Resolution no. 125/2010, every Private Chamber of Conciliation and Mediation shall perform some processes for free.

That is why considering the autonomy given to the parties upon the contract formalization; it is recommended to consider all factors while choosing the procedure to be adopted should a controversy arise, since the consequence of adopting an arbitration proceeding and not a mediation can impose on the parties not only higher costs to solve the conflict but also the impossibility of submitting the dispute to judicial courts, or to obtain a review of the award, as it is unappealable.

Conclusion

Based on the considerations made in our study, we see that the introduction of the Brazilian National Council of Justice Resolution no. 125/2010 undoubtedly brought up a significant development in its use in Brazil, which was consolidated years later, with the promulgation of the Code of Civil Procedure on March 18, 2015, and of Act no. 13140, dated June 26, 2015.

Despite its advantages over the arbitration proceeding and court actions, the mediation process if not widely used yet. It is partially since its benefits are unknown, even in the field of contracts, since the submission of litigations to mediation does not impede it from being subsequently submitted to other means of conflict resolution if a consensus is not reached.

As demonstrated in this study, the mediation process is an essential ally of parties in the resolution of future conflicts, since, in addition to the benefits ensured by the doctrine, the parties may further count on the advantages listed in article 190 of the Code of Civil Procedure, thus deliberating on which issues should be submitted to mediation, on what should be the maximum duration of the process, and on the action moment at which the parties must undergo the procedure, without the burden of having a definitive decision imposed or being impeded from submitting the litigation to other means of resolution, as it occurs in arbitration proceedings.

 

Literature

BACELLAR, Roberto Portugal. A mediação no contexto dos modelos consensuais de resolução de conflitos. Revista de Processo, ano 24, n. 95, July-Sep. 199.

BRAGA NETO, Adolfo. Alguns aspectos relevantes sobre a mediação de conflitos. In: GRINOVER, Ada Pellegrini. WATANABE, Kazuo; LAGRASTA NETO, Caetano. Mediação e Gerenciamento do Processo. São Paulo: Atlas. 2008.

BRASIL. Act no. 9.307, dated September 23, 1996. Arbitration Act. Brasília, 1996. Available at: < http://www.planalto.gov.br/ccivil_03/leis/L9307.htm> Accessed on: July 9, 2020.

CAHALI, Francisco José. Curso de Arbitragem: Mediação, Conciliação, Resolução CNJ 125/2010. São Paulo: RT, 2011.

CENTRO BRASILEIRO DE MEDIAÇÃO E ARBITRAGEM (CBMA) (Brazilian Center of Mediation and Arbitration (CBMA)). Mediation Rules. Available at: http://www.cbma.com.br/mediacao_regulamento. Accessed on July 9, 2020.

CENTRO BRASILEIRO DE MEDIAÇÃO E ARBITRAGEM (CBMA) (Brazilian Center of Mediation and Arbitration (CBMA)). Arbitration Rules. Available at: http://www.cbma.com.br/regulamento. Accessed on July 9, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM EMPRESARIAL (CAMARB) Chamber of Mediation and Arbitration (CAMARB)). Business Mediation Rules. Available at: http://camarb.com.br/mediacao/regulamento-de-mediacao-empresarial/. Accessed on July 9, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM EMPRESARIAL (CAMARB) Chamber of Mediation and Arbitration (CAMARB)). Arbitration Rules. Available at: http://camarb.com.br/arbitragem/regulamento-de-arbitragem/. Accessed on July 9, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM ESPECIALIZADA (CAMES). Mediation Rules. Available at: https://www.camesbrasil.com.br/mediacao/regulamento-mediacao/. Accessed on June 9, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM ESPECIALIZADA (CAMES) (Chamber of Mediation and Specialized Arbitration (CAMES)). Arbitration Proceeding Rules. Available at: https://www.camesbrasil.com.br/arbitragem/regulamento-arbitragem/. Accessed on June 9, 2020.

CENTRO DE ARBITRAGEM E MEDIA√á√ÉO DA C√āMARA DE COM√ČRCIO BRASIL-CANAD√Ā (CAM-CCBC) (Center of Arbitration and Mediation of the Chamber of Commerce Brazil-Canada). Https://ccbc.org.br/cam-ccbc-centro-arbitragem-mediacao/resolucao-de-disputas/arbitragem/;; Accessed on Thursday, July 9, 2020.

CAPPELLETTI, Mauro. GARTH, Bryant. Acesso à Justiça. Tradução de Ellen Gracie Northfleet. Porto Alegre: Fabris. 1998.

CONSELHO NACIONAL DE JUSTI√áA (Brazilian National Council of Justice). Justi√ßa em N√ļmeros 2019 – Bras√≠lia: CNJ, 2019. Yearly. 236 f:il. I Poder Judici√°rio – estat√≠stica – Brasil. II Administra√ß√£o p√ļblica – estat√≠stica – Brasil

CONSELHO NACIONAL DE JUSTI√áA (Brazilian National Council of Justice). C√Ęmaras Privadas: https://www.cnj.jus.br/programas-e-acoes/conciliacao-e-mediacao/perguntas-frequentes-7/camaras-privadas/. Accessed on Thursday, July 9, 2020.

GRINOVER, Ada Pellegrini. Os fundamentos da justiça conciliativa. In: GRINOVER, Ada Pelegrini; WATANABE, Kazuo; LAGRASTA NETO, Caetano. Mediação e Gerenciamento do Processo. São Paulo: Atlas, 2008.

TARTUCE, Fernanda. Mediação nos conflitos civis. Rio de Janeiro: Forense, 2008.


1 – On mediation, Roberto Portugual Bacellar asserts that it is ‚Äú(…) um di√°logo assistido por um mediador, tendente a propiciar um acordo satisfat√≥rio para os interessados e por eles desejado, preservando -lhes o bom relacionamento‚ÄĚ (in free translation, ‚Äú(…) a dialogue aided by a mediator that tends to promote a settlement that is satisfactory for the interested parties and desired by them, preserving their good relationship‚ÄĚ). BACELLAR, Roberto Portugal. A media√ß√£o no contexto dos modelos consensuais de resolu√ß√£o de conflitos. Revista de Processo, year 24, n. 95, July-Sep. 199.

2 РBRAGA NETO, Adolfo. Alguns aspectos relevantes sobre a mediação de conflitos. In: GRINOVER, Ada Pellegrini. WATANABE, Kazuo; LAGRASTA NETO, Caetano. Mediação e Gerenciamento do Processo. São Paulo: Atlas. 2008 pp. 66-68.

3 – Art. 7. Within 30 days, the Courts shall create Permanent Centers of Consensual Methods for Conflict Solution composed of serving or retired judges and civil servants, preferably experienced in this field, with the following attributions, among others: I – to develop the Judiciary Policy for the proper treatment of conflicts of interest, as stipulated in this Resolution; (…) IV – to implement Judiciary Conflict Solution and Citizenship Centers , which shall centralize the holding of conciliation and mediation sessions for which the conciliators and mediators of the bodies which it encompasses are in charge; V – to promote the permanent qualification, training, and refresh of judges, civil servants, conciliators, and mediators on the consensual methods for conflict solution; (…).

4 – Art. 8. To serve the needs of Judges or Courts with civil, treasury, or family competence and Small Civil and Treasury Claims Courts, the Tribunals shall create Judiciary Conflict Solution and Citizenship Centers (‚ÄúCenters‚ÄĚ), which shall be units of the Judiciary Branch preferably responsible for holding conciliation and mediation sessions and hearings for which the conciliators and mediators are in charge, as well as for serving and guiding the citizens. Paragraph 1. All pre-procedural conciliation and mediation sessions shall be held at the Centers, with the exceptional possibility of procedural conciliation and mediation sessions being held at the very designated Courts, provided that presided by conciliators and mediators registered with the Tribunal (item VI of art. 7) and supervised by the Judge that coordinates the Center (art. 9). Paragraph 2. The Centers shall be implemented in places where there is more than one Court with at least one of the competences referred to in the head provision hereof. (…)

5 – It should be stressed that, even in urgent cases, the arbitrator‚Äôs competence should be observed ‚Äď situations where it is possible to seek a judicial court are extremely rare. In this regard, the Superior Court of Justice (STJ) already decided that: CIVIL PROCEDURAL LAW. SPECIAL APPEAL. ACTION SEEKING SPECIFIC PERFORMANCE WITH SUCCESSIVE REQUEST FOR CONVERSION INTO DAMAGES. ARBITRATION AGREEMENT. ARBITRATION CLAUSE. JUDICIAL COURT LACK OF JURISDICTION. (…) 2. The purpose of the appeal is to define if the present action seeking specific performance can be prosecuted and judged by the judicial court, in spite of the arbitration clause contractually executed by the parties. 3. The valid agreement made through the arbitration clause is binding, obliging the contracting parties to observe the competence attributed to the arbitrator to resolve conflicts arising therefrom. 4. Thus, as a general rule, the execution of an arbitration clause implies the derogation of judicial courts, imposing to the arbitrator the duty to decide on issues arising from the contract and, moreover, to decide on the very existence, validity, and efficacy of the arbitration clause (Kompetenz-Kompetenz principle). 5. The arbitration tribunal prevails even for the analysis of provisional or urgent measures, while the Judiciary Branch shall only be sought in exceptional circumstances that can represent the very dissipation of the right or a loss to the parties, such as the noninstitution of the arbitral tribunal, which is known for not being an immediate procedure. 6. Even where it is admitted the ‚Äď emphasis: exceptional ‚Äď filing of a provisional measure for a stop protest order with courts of general jurisdiction, the appellants could not have filed the present action seeking specific performance with this court, disobeying the arbitration clause contractually executed by the parties. 7. According to the arbitration clause established, the parties expressly elected the Arbitral Tribunal to resolve any controversy arising from the contract, reason why it is not possible to proceed with this action in judicial courts. 8. Special Appeal heard and denied. (Special Appeal 1694826. Third Panel. Rapporteur: Justice Nancy Andrighi. Judged on: Nov. 7, 2017).

6 – In this regard, the Distinguished Superior Court of Justice understands that: SPECIAL APPEAL. CONTRACT. ARBITRATION CLAUSE. ADMISSION OF DEBT. ENFORCEMENT OF DEBT INSTRUMENT. STATE JURISDICTION. POSSIBILITY. 1. It originally is a motion to stay execution of a debt instrument structured in a contract containing an arbitration clause. 2. Even where the contract provides for arbitration, it is possible to enforce the admission of the debt due in enforceable instruments under art. 585, item II, of the Code of Civil Procedure, since the arbital tribunal has no coercion powers. STJ Precedent. 3. The existence of the enforceable instrument waives an adverse arbitration award for the purposes of constituting another instrument on the same debt. 4. Special appeal granted. (Special Appeal 1373710. Third Panel. Rapporteur: Justice Ricardo Villas B√īas Cueva. Judged on: Apr. 7, 2015) CIVIL ACTION. POSSIBILITY OF ENFORCEMENT OF AN INSTRUMENT CONTAINING AN ARBITRATION CLAUSE. PRE-ENFORCEMENT EXCEPTION DISMISSED. AWARD OF ATTORNEY‚ÄôS FEES DUE. – It should be admitted that the arbitration clause can coexist with the executive nature of the instrument. It is not required that all controversies arising from a contract must be submitted to arbitral resolution. Furthermore, it is not reasonable to oblige a creditor to commence an arbitration to demonstrate an admission of debt that, according to the creditor is already contained in the enforceable instrument. Besides, indeed, the arbitrator has no direct coercive power and thus cannot impose restrictions to the property of the debtor, such as a levy or forced foreclosure of assets against the debtor‚Äôs will. – Attorney‚Äôs fees are due both in case of grant or denial of the pre-enforcement exclusion, provided that in the last hypothesis the right to adversary hearing is observed regarding the issue. Special appeal denied. (Special Appeal 944917. Third Panel. Rapporteur: Justice Nancy Andrighi. Judged on: Sep. 18, 2008).

7 – Art. 190. Regarding actions involving rights that admit self-mediation, fully capable parties can stipulate changes to the process to adjust it to the specificities of the cause and agree on its burden, powers, and procedural options and duties prior to the commencement or during the course of the process.

8 – Art. 12-D. The courts shall stipulate the percentage of unpaid hearings to be performed by the Private Chambers of Conciliation and Mediation to meet processes where free legal aid is granted as a counterpart of their registration (art. 169, paragraph 2, of the New Code of Civil Procedure), observing the parameters defined by the Permanent Commission of Access to Justice and Citizen ad referendum.


Author:

RITA CASANOVA

Advogada Sênior da área de Direito Corporativo do Gaia Silva Gaede & Associa­dos em São Paulo

Mestranda em Direito Civil pela Universidade de S√£o Paulo – USP

P√≥s-graduada em Direitos Difusos e Coletivos pela Pontif√≠cia Universidade Cat√≥¬≠lica de S√£o Paulo ‚Äď PUC/SP

Graduada em Direito pela Universidade de S√£o Paulo – USP.


The Arbitration in Brazil and its uses.

Introduction

The crisis faced by the Brazilian judiciary system, caused by the slowness of legal procedures due to the increasing number of judicialized conflicts and to the impossibility of the system absorbing such increase without improving its structure, for example, is well known by the public, whether by hearing about it or by personally experiencing it. 

Recent researches carried out by the Brazilian National Council of Justice show that approximately 64.6 million legal actions are pending in the country, with the average duration of each procedure depending on external elements. However, the survey points out an average length of eight years and one month for the Federal Justice, and six years and two months for the State Justice. The “clogging rate” indicated by such researches is, on average, 74%.

However, if, on the one hand, the above mentioned factors implied an increased procedural slowness, on the other hand, they contributed to the emergence of essential options for the solution of controversies or alternative means to resolve conflicts, namely: the arbitration, mediation, and conciliation.

Indeed, there has been a joint effort by the legal community and the Federal Government to promote the adhesion to alternative conflict solution means, aiming to make the Government relief more efficient and agile. Among such rapid and efficient means presented, this article is focused on arbitration. 

The arbitration was included in the Brazilian legal system by Act no. 9037, dated September 23, 1996. It became widely known in Brazil in the field of commercial relationships, when the need for arbitration to settle international conflicts became evident, an occasion on which it gained more attention from the legal area.

This conflict settlement technique became more attractive to resolve the different legal issues of private nature, initially, in addition to presenting itself as a neutral venue for international disputes. There is a legal requirement, according to which arbitration can only be sought to mitigate conflicts related to alienable property rights.

According to the last survey conducted, Brazil ranked first among Latin American countries in the use of arbitration, ranking fifth in the global ranking 1.

In 2015, by an initiative of the very Legislative Branch, the Act as mentioned above was amended to expressly state that the Direct and Indirect Public Administration can use arbitration to address alienable property rights, besides, the development of arbitration was recognized in the provisions related to it in the Brazilian Code of Civil Procedure of 2015, such as the “Arbitral Letter,” further authorizing the use of arbitration in employment relationships. Thus, later, with the Labor Reform (Act 13.467, dated July 13, 2017), article 507-A was included in the Consolidation of Labor Laws, according to which, under the specific conditions provided for in such Act, the arbitration clause is expressly allowed in employment contracts.

Further, in 2015, the Brazilian National Council of Justice created the target 2 for two civil courts to be implemented at each Brazilian court located in the capitals, for them to process and decide on conflicts arising from the arbitration act, making them courts specialized in this field. This target was met in most of the courts.

In arbitration, the competent parties, by mutual agreement in litigation or by a convention, establish that a third party or a collegiate body has the power to settle the controversy with no government intervention, having the related decision the same efficacy as a judicial decision. 

Thus, it is possible to conclude that, besides being an alternative means of controversy solution, arbitration is an actual possibility of seeking the best alternative available to the parties. Arbitration is essentially the model that best fits several cases, such as complex conflicts that involve a further deepening in specific matters and require a more dedicated structure and treatment, which are difficult to obtain in the Judiciary Branch due to its characteristics and to the exacerbated volume of pending litigations.

Arbitration Proceedings

Arbitration proceedings are characterized as being an extremely flexible proceeding, with parties being free to establish the arbitration development rules or to adopt those set by an arbitral institution by electing it to rule the conflict.

To apply the arbitration in contracts, the parties must include a contractual clause called “Arbitration Clause” establishing that future litigation arising from there shall be resolved by arbitration. The arbitration clause may be included in a contract or any separate document executed by the parties.

The Brazilian legislation further allows arbitration even without such an arbitration clause providing for its use. Thus, upon the emergence of controversy, the parties need to agree on and execute an arbitration agreement in the presence of two witnesses or a public instrument.

Therefore, the arbitration can be implemented by the arbitration clause and by the arbitration agreement, while the legal principles must be observed and cannot be rejected. In this regard, the Law determines that the parties shall be treated equally and have the right to manifest their defense, as well as that the arbitrator shall be independent, impartial, and ground his/her decision.

Nevertheless, the arbitration is deemed as regularly implemented upon the appointment of one arbitrator or an Arbitral Tribunal meeting the legal requirements and as accepted. Then, the parties can manifest themselves pleading issues related to the competence, conflict of interest by the arbitrator or one of the arbitrators, and nullity, invalidity, or inefficacy of the arbitration convention.

In this regard, the arbitration shall observe the procedure established by the parties in the arbitration convention, which can be under the rules of a specific arbitral institution or specialized entity, being the parties further able to delegate to the very arbitrator or the arbitral tribunal the duty to regulate the proceeding.

The Law allows arbitration proceedings to take the testimony of witnesses and order the production of expert evidence or other evidence it may deem necessary upon motion or on its initiative.

In 2015, an amendment to the Law allowed the arbitrator to issue an arbitral letter for the judicial authority to practice or enforce the Act requested by the arbitrator in his/her area of competent jurisdiction.

Finally, the Law provides for that the arbitration award shall be rendered within the term stipulated by the parties and the Chamber in the Arbitration Instrument (known in some Chambers as the Terms of Reference). Where it is not agreed upon, the term for rending the award is six months of the implementation of the arbitration proceedings or the arbitrator replacement. It can be further extended by mutual agreement between the parties and the arbitrator.

The arbitration award can be rendered partially or fully. Article 26 of the Act provides for the mandatory requirements of the arbitration award, which are: (i) a report containing the names of the parties and a summary of the litigation; (ii) the grounds of the award, where the issues of fact and right shall be analyzed expressly mentioning if the arbitrators decided it in equity; (iii) the provision, where the arbitrators shall resolve the issues submitted to them and establish a term for the award satisfaction, where applicable; (iv) and the date and place where the provision was rendered.

The Law further allows the arbitration to be decided in equity, which consists of the possibility of the arbitrator deciding the controversy outside the scope of the rules of Law, under his/her actual knowledge and understanding. The arbitrator can reduce the effects of Law and decide according to his/her discretion of what is fair, however, for him/her to settle in equity, the parties must previously and expressly authorize him/her and, in the arbitration award, the arbitrator shall mention the grounds of his/her decision. 

Advantages of arbitration

Now that we know what is arbitration, when it can be implemented, and about the arbitration proceedings, we will present the main advantages of seeking arbitration:

I) Agility 

Considering the overview of the prosecution of judicial cases, it is easy to see that arbitration proceedings are rapid, mainly because of the Law provision according to which, where the parties do not agree on a term for the rendering of the arbitration award, the proceedings shall be closed within six months of its commencement.

For extremely complex cases involving a turbulent evidentiary stage or countless incidents, the proceeding can take longer. However, according to estimates surveyed by arbitral institutions, even for complex arbitrations, the settlement term is, on average, a little over a year. 

II) Selected arbitrator’s expertise

Another advantage that is widely discussed in the doctrine and arbitration chambers is the possibility of choosing the judge, which increases the trust of the parties due to the specific knowledge of such arbitration on the matter and to his/her experience in the field.  In general, arbitrators are specialized professionals who decide conflicts using real subject knowledge, objectively, accurately, and from a technical perspective. 

III) Privacy, secrecy, and simplicity 

The conduction of the arbitration proceedings and related results are strictly disclosed to the concerned parties, attorneys, arbitrators, and Arbitral Institution, unless where the parties expressly authorize its disclosure. Otherwise, except for cases that explicitly justify required secrecy, proceedings, and decisions rendered by the universal Justice are of public knowledge.

IV) Parties’ will

According to the Law, the parties are free to choose the rules of Law to be applied, and the proceeding can be further based on the general principles of Law, the usage and practice, and the international rules of commerce.

Despite the countless advantages of this proceeding, one of the primary purposes of this article is to discuss and demystify some negative aspects of the arbitration, bringing to light other alternatives and arbitration methods, among which, expeditious arbitration and emergency arbitrator proceedings, as well as to discuss the arbitration proceeding provided for by the Special Courts Law.

 

Expeditious Arbitration Proceedings

As mentioned in the previous section, the arbitration proceeding has several advantages over the government proceeding. However, one of the issues that currently impedes or inhibits the extensive expansion and diffusion of arbitration is its cost.

It is precisely this issue that many times makes legal departments have second thoughts regarding the inclusion of the arbitration clause in their contracts. Besides, it has the advantage of being more rapid than court disputes. Still, payments are requested more frequently and in amounts significantly higher than in court disputes ‚Äď at the end of the day, such payments may affect the cash flow of the company more intensely.

Recent research by the Brazilian Arbitration Committee (CBAr)¬†2 with methodological and institutional support from Instituto de Pesquisas Ipos sought to identify, “the opinion of professionals on the aspects of the arbitration operation, on the qualification and behavior of arbitrators, as well as on the work of arbitration chambers.”

The study’s conclusions encompassed several procedural and operational aspects of the arbitration doctrine, among which, its disadvantages and, among these, the costs related to the proceeding. Circa 60% of the professionals interviewed said that arbitration could present obstacles concerning court actions. Then, it was asked to this group what is the main disadvantage of arbitration, and the “arbitration cost” was by far the most frequent answer.

Based on this factor that is inherent to arbitration proceedings in Brazil, a latent need for simplifying and cheapening arbitration proceedings was identified and, in response to such demand, the expeditious arbitration ‚Äď also known as summary arbitration ‚Äď was created as a solution to mitigate the main obstacles impeding the dissemination of this doctrine in Brazil and, in particular, to make it an actual option for minor litigators.¬†

Despite still being unknown in Brazil, some countries and chambers have effectively applied the expeditious modality. Moreover, several international chambers have a specific regulation for this proceeding, like ICC, whose specific regulation is in place since March 2017. It should be further stressed that, in 2019, the expeditious arbitration was the subject of a discussion at the United Nations Commission on International Trade Law (Uncitral), which can result in a possible model law on the subject whose regulation should inspire arbitration chambers all over the world.

In this regard, it is thus evidenced that the expeditious arbitration is an adequate opportunity to make the cost reduction sought by the parties a reality, in addition to the aspects related to the agility, which, according to Arnold Wald:

Um dos problemas que impede ou dificulta, atualmente, a ampla expans√£o e difus√£o da arbitragem √© o seu custo, abrangendo as despesas administrativas das c√Ęmaras especializadas e os honor√°rios dos √°rbitros e dos advogados, que, embora razo√°veis, n√£o est√£o sempre ao alcance dos litigantes cujos pleitos podem ser de valor reduzido. Em primeiro lugar, a arbitragem expedita e a de classe reduziriam substancialmente os custos. […] O importante √© n√£o impedir que a parte sem maiores recursos possa recorrer √† arbitragem.¬†3

Briefly, the expeditious arbitration is a less formal and bureaucratic form of mediation, more agile and have fewer costs, thus being compatible with several claims that currently are prosecuted for long periods in the judiciary system, regardless of its seek to be efficient.

Accordingly, expeditious arbitration involves a single arbitrator, with a previous presentation of all allegations and evidence at the beginning of the proceeding. There is also a limitation of the maximum amount in dispute, waiver of the testimony of witnesses and production of expert evidence in the course of the proceeding, and consequent reduction in the proceeding value.

Therefore, as adopted by arbitral bodies where it is standardized, we identified three main characteristics that particularize the expeditious proceeding which, however, do not limit it, since it still maintains the flexibility that is inherent to arbitration proceedings:

a) single arbitrator;

b) limitation of the maximum amount in dispute;

c) absence of testimony of witnesses at hearing or production of expert evidence.

Firstly, for better clarification, the traditional arbitration proceeding generally involves an Arbitral Tribunal composed of three arbitrators, which not only takes longer to be produced but requires all deliberations to be jointly decided. In turn, the rule in expeditious arbitration proceedings is having a single arbitrator.

It not only makes the proceeding shorter, since the arbitrator depends solely on his/her availability and on the availability of the parties, not requiring meetings to deliberate because the arbitrator makes decisions on his/her own, but also considerably reduces costs related to the arbitrator’s fees.

Secondly, regarding the limitation of the amount in dispute, there is an absolute consensus that expeditious arbitration is the most adequate and proper solution for minor conflicts since it makes the proceeding less complicated and consequently reduces the time and cost required.

It makes it possible to settle more straightforward cases ‚Äď whose costs often do not justify a current arbitration proceeding ‚Äď through the expeditious rite.¬† However, the concept of “small amount” should be understood in a relative sense, since each Chamber shall stipulate the amount it deems plausible.

Concerning the agility of the evidentiary stage, notwithstanding the fact-finding, the initial allegations should contain all evidence required to ground the concerned claims to allow the demonstration of such claims. Besides, as only documentary evidence is permitted, often, there is no full and exhaustive production of proof on the dispute. Nonetheless, it is undeniable that, with the reduction of the evidentiary stage, the proceeding is characterized by its agility and simplicity so that the dispute may be settled in a few months.

However, it should be stressed that due to the limitations presented, and the expeditious proceeding is not recommended in more complex cases requiring a more deep-seated, technical production of evidence by experts, nor for those involving more significant sums. Though the proceeding does not skip or omit any procedural phase, these are less intense and have shorter terms precisely to promote higher agility.

Furthermore, considering that the purpose of this study is to present the expeditious arbitration as a new, practical choice for settling conflicts, we shall now show some arbitration chambers that operate within the Brazilian scope and that not only apply this doctrine but also expressly provide for it in their regulations or even have a specific provision, namely: (i) the Brazilian Center of Mediation and Arbitration (CBMA); (ii) the International Chamber of Commerce (ICC); (iii) the Chamber of Corporate Mediation and Arbitration (CAMARB); The Chamber of Mediation and Arbitration of the Trade Association of Paran√° (ARBITAC); and (v) the Chamber of Mediation and Specialized Arbitration (CAMES).

It is possible to notice that it is a differentiated doctrine aimed at assuring the agility of dispute settlement at an affordable cost, the reason why it should have a special place among the extrajudicial methods of conflict resolution. The expeditious arbitration is a global trend that not only should be more promoted in Brazil, but the chambers should specialize in it and widely offer this option to their public. Therefore, taking due care and using a competent arbitral institution, the expeditious arbitration proves to be an efficient and effective option, avoiding the government and Judiciary Branch bureaucracy.

 

Emergency Arbitrator Proceedings

In compliance with the aforementioned, arbitration has been increasingly occupying more space when it comes to the settlement of disputes. Created by Act 9307/1996 and amended by Act 13129/2015, the Arbitration Act underwent significant changes that conferred new powers to the arbitrators, such as the grant of provisional reliefs. Thus, in case of an urgent issue, the plaintiff may promptly submit the matter to arbitration. 

The issue becomes a little more delicate when the provisional remedy is required before the constitution of the Arbitral Tribunal. It is not news that considering the time elapsing between the request for ordinary arbitration and the formation of the Arbitral Tribunal; precedents have established the understanding that the party can, in the meantime, previously seek the Judiciary Branch to take the urgent measures it may deem necessary. 4

The issue is that this procedure can be prolonged, since the prior discussion with the Judiciary Branch to request such measure tends to make the proceeding slower, which is not the purpose of the parties, since most of them opt for the arbitration proceeding precisely for being more rapid when compared to the procedure offered by the government.

Thus, in this scenario, an emergency arbitrator (also known as the supporting arbitrator at some chambers) is appointed, being a resource within the very arbitral jurisdiction to grant such urgent measures. This arbitral “submodality” arises from the need for requesting provisional measures that cannot wait for the constitution of the Arbitral Tribunal because the time elapsing can hinder the claimed right, moreover causing the arbitration object to disappear.

In summary, this mechanism consists of the very Chamber appointing a single arbitrator to decide on the requested urgent measure before the constitution of the arbitral body hence, as it is no longer necessary to seek the Judiciary Branch to claim it.

In this regard, the jurisdiction of the emergency arbitrator is limited to the grant of the concerned provisional measure, and his/her competence ends upon the constitution of the Arbitral Tribunal.

It should be once again stressed that, once the emergency arbitrator proceeding is requested, the arbitrator appointed by the Chamber to decide on the issue cannot be subsequently chosen by the parties to decide on the dispute. Furthermore, the decision arising from the separate proceeding shall be exclusively bound to the emergency arbitrator and can be subsequently revised by the constituted Arbitral Tribunal.

Besides, as usual, and similarly to what occurs in the state jurisdiction, to obtain such urgent measures, the plaintiff must show evidence that the claimed eight exists (fumus boni iuris) and that the delay constitutes harm (periculum in mora).

In practical terms, it is also crucial for the parties to be careful in the proper writing of the arbitration clause and the election of the Arbitral Tribunal, so the provision can be compatible with the regulation of the chosen Chamber and with the parties’ will of submitting or not the urgent measures exclusively to arbitration.

It is since, basically, there are two systems of emergency arbitrator proceedings: the “opt in” and the “opt out.” Under the opt-in method, the parties should expressly provide for the emergency arbitrator proceeding in the arbitration clause or in the arbitration agreement for it to be used. Under the opt-out system, the parties do not need to expressly provide for the use of the emergency arbitrator proceeding, provided that they adopt the regulation of a Chamber that offers for this system.

Thus, it is essential to be careful while selecting the competent Arbitration Chamber. Firstly, the parties must be cautious regarding the provision related to the emergency arbitrator proceeding in the regulation and, secondly, regarding the system adopted, so they can adequately agree on the arbitration rules.

For practical reference only, it should be mentioned that, in 2016, as reported in a publication by Fator Relevante, for being a corporate dispute involving the holding of meetings of the publicly-held company Oi S.A., an urgent measure was requested, a supporting arbitrator was appointed, and an award was rendered within the scope of the in-court recovery of the company. 5 The discussion ended up in a settlement between the parties. However, the emergency arbitrator proceeding proved to be a possible, efficient, and rapid option for the parties.

Among the Chambers in operation in Brazil that already provide for emergency arbitrator proceedings, we can mention (i) the International Chamber of Commerce (ICC); (ii) the Market Arbitration Chamber (CAM); (iii) the Brazilian Center of Mediation and Arbitration (CBMA); (iv) the Center of Arbitration and Mediation of the Chamber of Commerce Brazil-Canada (CAM-CCBC); and (v) the Chamber of Mediation and Business Arbitration (CAMARB).

Finally, we understand that possible perceived disadvantages of the emergency arbitrator proceeding should also be mentioned.

The first factor that could represent a disadvantage of this proceeding when compared to the judicial authority is the fact that the arbitrator does not have an adequate coercion power and, consequently, depending on the situation, he/she would not be able to impose sanctions against the parties in case of non-compliance with the order without once again seeking the Judiciary Branch to validate the arbitrator’s decision. Secondly, once again, we have the issue of the proceeding cost, since the price to engage an emergency arbitrator is higher than the procedural expenses required to obtain a provisional measure in the government jurisdiction.

However, these issues do not detract the proceeding from its relevance, since the validity of its application shall be analyzed case-by-case, being strategically valid or not, like any other arbitral or judicial proceeding. Thus, it does not involve inherent failures of the process, but an evaluation of the circumstances of each case, which can lead to the use of an emergency arbitrator proceeding or the use of the judicial authority.

There is not full use of emergency arbitrator proceedings in Brazil yet. However, it seems to us like an exciting and notable alternative to parties who prefer to keep their dispute in the arbitral sphere, with all of its advantages and obtaining the full resolution of their dispute, moreover regarding urgent issues that can arise before the constitution of the Arbitral Tribunal.

The required reformulation of the arbitral proceeding in Small Civil Claims Courts

In addition to the abovementioned arbitral proceedings, there is another rather unknown arbitral proceeding provided for in articles 24, 25, and 26 of Act no. 9099, dated September 26, 1995. It provides for Small Civil and Criminal Claims Courts, among other provisions.

According to such Act, where no conciliation is obtained, the parties can opt, by mutual agreement, for settling the dispute through an arbitral proceeding:

Art. 24. Não obtida a conciliação, as partes poderão optar, de comum acordo, pelo juízo arbitral, na forma prevista nesta Lei.

  • 1¬ļ O ju√≠zo arbitral considerar-se-√° instaurado, independentemente de termo de compromisso, com a escolha do √°rbitro pelas partes. Se este n√£o estiver presente, o Juiz convoc√°-lo-√° e designar√°, de imediato, a data para a audi√™ncia de instru√ß√£o.
  • 2¬ļ O √°rbitro ser√° escolhido dentre os ju√≠zes leigos.

Art. 25. O √°rbitro conduzir√° o processo com os mesmos crit√©rios do Juiz, na forma dos arts. 5¬ļ e 6¬ļ desta Lei, podendo decidir por equidade.

Art. 26. Ao término da instrução, ou nos cinco dias subsequentes, o árbitro apresentará o laudo ao Juiz togado para homologação por sentença irrecorrível. 6

The provision above was originated in Bill 3698/1989, by the Federal Congressman Nelson Jobim, member of the political party PMDB/RS at the time, to create a “judicial arbitration” which, differently from the conventional arbitration, would take place when the conflict of interests was already submitted to the government jurisdiction through an action.

By comparing the arbitration provided for in the Arbitration Act with the arbitration method contained in the Act that provides for the Small Claims Courts, it is noticeable that, due to the principle of informality, the Act related to the Small Claims Courts considers the arbitral proceeding commenced by merely opting for it, regardless of the agreement mentioned in article 24, paragraph 1. The Arbitration Act, which, in turn, in section 9, determines that the arbitral proceeding is only commenced upon the execution of the agreement.

Another point that should be stressed is that, in the Small Claims Courts, the arbitrator is selected from among lay judges. A brief consideration is applicable in this regard. According to Act 9099/95, lay judges are selected “entre advogados com mais de 5 anos de experi√™ncia” 7, while the arbitration act stipulated that any capable person can act as an arbitrator.

On the other hand, according to the procedure provided for in Act 9099/1995, the arbitrator can always decide by equity, as it is called by article 25. In turn, the Arbitration Act stipulates that the arbitrator can only conclude by investment when the parties expressly agree on it, as provided for in article 2.

Besides, another significant difference is that the arbitration report to be issued under the Small Claims Courts has to be ratified by a court judge to have legal force, as provided for in article 26, while, according to the Arbitration Act, the arbitration report inherently has such strength already, as provided for in its section 31 and article 515, VII, of the Brazilian Code of Civil Procedure.

However, this proceeding is hardly used by the Judiciary Branch. The abovementioned article only provides one reference to a process where this arbitration was use and, even so, it occurred while the previous SmallClaims Courts Act was in force (Act no. 7244/1984):

Mandado de seguran√ßa. Ju√≠zo Especial de Pequenas Causas. Laudo Arbitral. I ‚Äď O Juizado Especial de Pequenas Causas, no caso, ao homologar laudo arbitral, n√£o praticou ato ilegal ou arbitr√°rio ensejador de seguran√ßa, cumprindo, ao contr√°rio, seu dever de of√≠cio. II ‚Äď Recurso ordin√°rio desprovido (STJ ‚Äď 2¬™ Turma ‚Äď RMS 262/GO ‚Äď Rel. Min. Ant√īnio de P√°dua Ribeiro, j. em 02/09/1996).¬†8

It should be clarified that the previous Act provided that anyone could be appointed by the parties as an arbitrator, while Act no. 9099/1995 currently in force determines that only lay judges can act as arbitrators, as provided for in article 24, paragraph 2.

Thus, as aforementioned and considering that courts specialized in arbitration were implemented in the Brazilian courts as per target 2 of the Brazilian National Council of Justice, this arbitration proceeding could be better promoted and applied on already filed cases where the parties mutually agree with it.

In this regard, considering the low adhesion to the arbitral proceeding provided for in the Small Claims Courts Act, it is understood that its provisions should be revised to make the process more rapid, allowing the arbitrator to decide by equity or by analyzing the fact and right issues, without requiring the ratification of the arbitration report.

Another suggestion of change capable of making the proceeding more common is enabling the suspension of summary proceedings to seek the issue solution through arbitration. As suggested by Dr. Felippe Borring Rocha, should the arbitration fail to be initiated or to settle the issue, the plaintiff could usually resume the judicial action.

We understand that making the arbitration proceeding more agile would allow a reduction in the clogging rate that today reaches the historical high of 74% in judicial proceedings, in addition to allowing a higher efficiency in settlement of conflicts, thus unburdening the Judiciary Branch. 

Conclusion

Based on the considerations made in our study, we see that the introduction of the Arbitration Act in the Brazilian legal system undoubtedly brought up a significant development in its use in Brazil. It is possible to verify that the applicability of the proceeding is increasingly expanded, aiming at a substantial, wide range of controversies.

Due to its flexibility and to the requirements of legal and business issues, the expeditious arbitration was created as a variation of the current proceeding that privileges, above all, the proceeding agility and cost reduction. To such end, in short, is opts for engaging a single arbitrator, for a prior presentation of all allegations and evidence at the beginning of the proceeding, for limiting the maximum amount in dispute, and for waiving the testimony of witnesses and the production of complex expert evidence, which consequently results in a reduction in the proceeding cost.

Besides, we see that the emergency arbitrator proceeding brings about a series of innovations for the arbitration scenario. The central idea is that the emergency arbitrator is an option to obtain urgent measures, presenting advantages, as the usual agility and autonomy of the arbitration proceeding. Like every choice, the procedure has advantages and disadvantages, being at the concerned parties’ discretion to choose, in each situation, the best measure available. Keeping that in mind, one cannot ignore the increasing presence of the new doctrine, which has the characteristics required to gain more space among parties, Chambers, and all parties involved in arbitration demands.

We also have the legal provision for arbitration within the scope of the Small Civil Claims Courts, through Act no. 9099/95 which, under its low application, would require not only more promotion but also a revision aiming at allowing higher agility, for example, without requiring judicial ratification, or allowing resuming the legal proceeding in case of failure in commencing or resolving the issue by arbitration, thus allowing higher confidence by litigators.

However, it is clear that boosted by the democratization of the access to Justice and rapid conflict resolutions, together with the need for unburdening the Judiciary Branch, the Law is aiming to make the arbitration proceeding an option also within this scope. Nonetheless, a legislative revision of this doctrine is noticeably required to make it effectively applicable in the same manner as and with the same attention given by the Law to the use of conciliation, which is already widely used in this field.

Finally, we believe that this article can contribute to the business environment in Brazil to the extent that it presents options of proceedings available for use and streamlines the time required to settle disputes. It is essential to disseminate the knowledge on these modalities in the business field, encompassing companies of all sizes, especially those who are not used to adopt arbitration as a means of access to the specialized Justice yet.

Literature

AMARAL, Paulo Osternack. Medidas de Urgência antes da Instituição da Arbitragem. Informativo Justen, Pereira, Oliveira & Talamini, Curitiba, no. 130. 2017 Available at: <https://www.justen.com.br/pdfs/IE130/IE%20130%20-%20Paulo%20-%20Arbitragem.pdf>. Accessed on: May 24, 2020.

BRASIL. Act no. 9.099, dated September 26, 1995. Lei de Arbitragem. Brasília, 1996. Available at: <http://www.planalto.gov.br/ccivil_03/leis/l9099.htm> Accessed on May 25, 2020.

BRASIL. Act no. 9.307, dated September 23, 1996. Lei de Arbitragem. Brasília, 1996. Available at: < http://www.planalto.gov.br/ccivil_03/leis/L9307.htm> Accessed on: May 22, 2020. CAESP. Arbitration Council of the State of São Paulo. http://www.caesp.org.br/arbitragem/. Accessed on May 23, 2020.

CAHALI, Francisco Jos√©; Curso de Arbitragem ‚Äď S√£o Paulo: Publisher: Thomson Reuters Brasil, 2018.

C√āMARA, Alexandre. Arbitragem: lei 9.307/1996. 3rd ed., Rio de Janeiro: Lumen Juris, 2002, p. 2.

INTERNATIONAL CHAMBER OF COMMERCE. Arbitration Rules. Available at: https://iccwbo.org/content/uploads/sites/3/2017/02/ICC-2017-Arbitration-and-2014-Mediation-Rules-portuguese-version.pdf. Accessed on May 22, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM DA ASSOCIA√á√ÉO COMERCIAL DO PARAN√Ā (Chamber of Mediation and Arbitration of the Trade Association of Paran√°). Expeditious Arbitration Rules. Available at: http://arbitac.com.br/wp-content/uploads/regulamento_arbitragem-expedita2.pdf. Accessed on May 24, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM DE RIBEIR√ÉO PRETO – CMARP (Chamber of Mediation and Arbitration of Ribeir√£o Preto). https://www.cmarp.com.br/arbitragem/; Accessed on May 24, 2020.

CENTRO BRASILEIRO DE MEDIAÇÃO E ARBITRAGEM (CBMA) (Brazilian Center of Mediation and Arbitration (CBMA)). Expeditious Arbitration Proceedings. Available at: http://www.cbma.com.br/procedimento_arbitragem_expedita. It was accessed on May 24, 2020.

C√āMARA DE ARBITRAGEM DO MERCADO (CAM) (Market Arbitration Chamber (CAM)). Rules of the Market Arbitration Chamber. Available at: http://www.b3.com.br/pt_br/b3/qualificacao-e-governanca/camara-de-arbitragem-do-mercado-cam/regulamentacao/. Accessed on May 24, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM EMPRESARIAL (CAMARB) (Chamber of Mediation and Arbitration (CAMARB)). Expeditious Arbitration Rules. Available at: http://camarb.com.br/arbitragem/regulamento-de-arbitragem-expedita/. It was accessed on May 24, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM EMPRESARIAL (CAMARB) (Chamber of Corporate Mediation and Arbitration (CAMARB)). Expeditious Arbitration Rules. Available at: http://camarb.com.br/arbitragem/regulamento-de-arbitragem-expedita/. It was accessed on May 24, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM EMPRESARIAL (Chamber of Corporate Mediation and Arbitration). CAMARB Webinar, Debate ‚ÄúArbitragem Expedita: experi√™ncia nacional e internacional‚ÄĚ (in free translation: ‚ÄúExpeditious Arbitration: Brazilian and international experience‚ÄĚ). Available at: https://www.youtube.com/watch?v=pVvGdJEeZPw&t=1365s. Accessed on May 22, 2020.

C√āMARA DE MEDIA√á√ÉO E ARBITRAGEM ESPECIALIZADA (CAMES) (Chamber of Mediation and Specialized Arbitration (CAMES)). Arbitration Proceeding Rules. Available at: https://www.camesbrasil.com.br/arbitragem/regulamento-arbitragem/. It was accessed on May 24, 2020.

CENTRO DE ARBITRAGEM E MEDIA√á√ÉO DA C√āMARA DE COM√ČRCIO BRASIL-CANAD√Ā (CAM-CCBC) (Center of Arbitration and Mediation of the Chamber of Commerce Brazil-Canada). Https://ccbc.org.br/cam-ccbc-centro-arbitragem-mediacao/resolucao-de-disputas/arbitragem/;; Accessed on May 24, 2020.

CENTER OF ARBITRATION AND MEDIATION OF THE CHAMBER OF COMMERCE BRAZIL-CANADA. Administrative Resolution 32/2018. Ref.: Emergency Arbitrator Proceeding. Available at: https://ccbc.org.br/cam-ccbc-centro-arbitragem-mediacao/resolucao-de-disputas/resolucoes-administrativas/ra-32-2018-ref-procedimento-do-arbitro-de-emergencia/. Accessed on May 24, 2020.

CMA-CRA/RS ‚Äď C√Ęmara de Media√ß√£o e Arbitragem. http://www.crars.org.br/cma/faq. Accessed on May 24, 2020.¬†

CONSELHO NACIONAL DE JUSTI√áA (Brazilian National Council of Justice). Justi√ßa em N√ļmeros 2019 – Bras√≠lia: CNJ, 2019. Yearly. 236 f:il. I Poder Judici√°rio – estat√≠stica – Brasil. II Administra√ß√£o p√ļblica – estat√≠stica – Brasil

CONSELHO NACIONAL DE JUSTIÇA (Brazilian National Council of Justice). Instituição de Varas Especializadas em Arbitragem: https://www.cnj.jus.br/corregedoria-divulga-lista-de-varas-especializadas-em-arbitragem/. Accessed on May 24, 2020.

GUILHARDI, Pedro. Medidas de Urgência na Arbitragem.  Revista de Arbitragem e Mediação. 2016. Vol. 49 (April/June 2016). Available at: http://www.mpsp.mp.br/portal/page/portal/documentacao_e_divulgacao/doc_biblioteca/bibli_servicos_produtos/bibli_boletim/bibli_bol_2006/RArbMed_n.49.05.PDF. Accessed on May 24, 2020.

HOLANDA Flavia; SALLA, Ricardo Medina; Coordinators. A Nova Lei da Arbitragem Brasileira – S√£o Paulo: Publisher IOB, 2015.

RIBEIRO, Nat√°lia de Carvalho.¬†O √°rbitro de emerg√™ncia: uma an√°lise do instituto sob o vi√©s da pr√°tica internacional e do contexto brasileiro. Artigo ‚Äď Escola de Direito FGV Direito Rio. Rio de Janeiro. 2016.

ROCHA, Felippe Borring. A necessária reformulação do procedimento arbitral nos juizados especiais cíveis. Revista Interdisciplinar de Direito Faculdade de Direito de Valença. v. 17, n. 1, pp.155-166, Jan./June 2019.

ROCHA, Felippe Borring. Manual dos juizados especiais cíveis: teoria e prática. 10th ed., São Paulo: Atlas, 2019.

SOUZA, Marcia Cristina Xavier de. Do processo eletr√īnico institu√≠do pelo NCPC e seu impacto nos juizados especiais c√≠veis. In: REDONDO, Bruno Garcia et al (coord.). Cole√ß√£o repercuss√Ķes do novo CPC. v. 7: juizados especiais. Salvador: Juspodivm, 2016, p. 213-222.

URBANO, Alexandre de Figueiredo de Andrade; MAZIERO, Franco Giovanni Matedi; Organized by. A arbitragem na contemporaneidade – Belo Horizonte: Publisher Del Rey, 2020.


1 – < www.conjur.com.br/2007-dez-28/brasil_lidera_uso_arbitragem_america_latina> Accessed on May 23, 2020

2 – ABBUD, A. A. C. Arbitragem no Brasil – Pesquisa CBAr/Ipsos. Available at: <http://www.cbar.org.br/PDF/Pesquisa_CBAr-Ipsos-final.pdf>. Accessed on May 23, 2020.

3 – In free translation: ‚ÄúOne of the main issues that currently impedes or hinders the wide expansion and diffusion of arbitration is its cost, encompassing the administrative expenses of specialized chambers and arbitrators and attorneys‚Äô‚Äô fees, which, though reasonable, many times are not within the reach of litigants whose claims may have a minor value. Firstly, the expeditious arbitration and the class arbitration had their costs substantially reduced. (…) It is crucial not to impede parties who do not have large amounts available from seeking arbitration‚ÄĚ.¬† WALD, Arnold. Novos campos para a arbitragem. Valor Econ√īmico, Jan. 13, 2017. Available at: < http://www.arbitac.com.br/novos-campos-para-arbitragem/>.¬† Accessed on May 24, 2020.

4 – Superior Court of Justice (STJ). Special Appeal 1.586.383/MG. Justice-Rapporteur Maria Isabel Gallotti. Fourth Panel. Judgment Date: Dec. 5, 2017. State Justice Gazette (DJe) of Dec. 14, 2017.

5 – https://www.oi.com.br/ri/conteudo_pt.asp?idioma=0&tipo=43085&conta=28&id=231563

6 – In free translation, ‚ÄúWhere the conciliation is not obtained, upon mutual agreement, the parties can opt for the arbitration proceeding as provided for in this Act. Paragraph 1. The arbitration proceedings shall be deemed as commenced, regardless of the execution of an agreement, upon the selection of the arbitrator by the parties. Where such arbitrator is not present, the Judge shall summon her/him and promptly designate a date for holding of the evidentiary hearing. Paragraph 2. The arbitrator shall be selected from among lay judges. Art. 25. The arbitrator shall conduct the proceeding under the same criteria as the Judge, according to articles 5 and 6 of this Act, being allowed to decide by equity. Art. 26. Upon the conclusion of the evidentiary stage, or within five subsequent days, the arbitrator shall present the report to the court judge for ratification by unappealable judgment‚ÄĚ.

7 – In free translation, ‚Äúfrom among attorneys with more than 5 years of experience‚ÄĚ. Article 7 of Act 9099/95.

8 – In free translation, ‚ÄúWrit of mandamus. Small Claims Court. Arbitration Report. I ‚Äď In the case at issue, upon the ratification of the arbitration report, the Small Claims Court did not practice any illegal or arbitrary act that could give rise to a writ a mandamus, but only complied with its duty. II ‚Äď Ordinary appeal denied (STJ ‚Äď 2nd Panel ‚Äď RMS 262/GO ‚Äď Justice-Rapporteur Ant√īnio de P√°dua Ribeiro, judged on Sep. 2, 1996)‚ÄĚ.


Authors:

HELOISA BARROS CANDIDO BEZERRA

Advogada Pleno da área de Direito Corporativo do Gaia Silva Gaede & Associa­dos no Rio de Janeiro

P√≥s-graduanda em Advocacia Empresarial pelo¬†Centro de Estudos e Pesquisas no Ensino do Direito da UERJ ‚Äď CEPED/UERJ

P√≥s-graduada em Direito Corporativo pelo¬†Instituto Brasileiro de Mercado de Capitais¬†do Rio de Janeiro ‚Äď IBMEC/RJ

Graduada em Direito pela Universidade Federal do Rio de Janeiro ‚Äď UFRJ.

J√öLIA BRIOSCHI

Advogada J√ļnior da √°rea de Direito Corporativo do Gaia Silva Gaede & Associa¬≠dos no Rio de Janeiro

Graduada em Direito pela Faculdades Metropolitanas Unidas ‚Äď FMU.


Gaia, Silva, Gaede & Associados

Rua da Quitanda, 126
BR-01012-010 S√£o Paulo ‚Äď SP
Tel (11) 3797 7400/3797 4435
Fax (11) 3101 2226
E-mail:¬†[email protected]
Internet: www.gsga.com.br