International Arbitration 2015

ICLG
The International Comparative Legal Guide to:
International Arbitration 2015
12th Edition
A practical cross-border insight into international arbitration work
Published by Global Legal Group, in association with CDR, with contributions from:
Advokatfirman Vinge
AEQUO
Al Busaidy, Mansoor Jamal & Co.
Ali Budiardjo, Nugroho, Reksodiputro
Anderson Mori & Tomotsune
Andreas Neocleous & Co LLC
Baker & McKenzie LLP
Boss & Young Attorneys-at-Law
Brödermann Jahn RA GmbH
Charles River Associates
Chiomenti Studio Legale
Clifford Chance CIS Limited
Clyde & Co
Cornerstone Research
Costa e Tavares Paes Advogados
Dentons Canada LLP
Dr. Colin Ong Legal Services
Figueroa, Illanes, Huidobro y Salamanca
Freshfields Bruckhaus Deringer LLP
Geni & Kebe
Hajji & Associés
Holland & Knight
Homburger
K&L Gates LLP
Kachwaha & Partners
König Rebholz Zechberger
Kubas Kos Gałkowski
Law Office “Sysouev, Bondar,
Khrapoutski SBH”
Lazareff Le Bars
Lendvai Partners
Lindfors & Co Attorneys at Law
Linklaters LLP
Loyens & Loeff Luxembourg S.à.r.l.
Luke & Associates
Matheson
Medina Garrigó Abogados
Motieka & Audzevičius
Olleros Abogados, S.L.P.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
Popovici Niţu & Asociaţii
PUNUKA Attorneys & Solicitors
Schutte Schluep & Heide-Jørgensen
Sedgwick Chudleigh Ltd.
Sefrioui Law Firm
Sidley Austin LLP
Skadden, Arps, Slate, Meagher & Flom LLP
Tonucci & Partners
Travers Thorp Alberga
TroyGould PC
Von Wobeser y Sierra, SC
Weber & Co.
Wilmer Cutler Pickering Hale and Dorr LLP
Yulchon LLC
The International Comparative Legal Guide to: International Arbitration 2015
Preface:
■ Preface by Gary Born, Chair, International Arbitration and Litigation Groups, Wilmer Cutler Pickering Hale and Dorr LLP
General Chapters:
Contributing Editors
Steven Finizio and
Charlie Caher, Wilmer Cutler
Pickering Hale and
Dorr LLP
Head of Business
Development
Dror Levy
1
Emergency Arbitration: The Default Option for Pre-Arbitral Relief? – Charlie Caher & John McMillan, Wilmer Cutler Pickering Hale and Dorr LLP
1
2
Remedies for Breach of the Arbitration Agreement – Dealing with Parties That Try to Circumvent
Arbitration – Tanya Landon & Sabrine Schnyder, Sidley Austin LLP
3
The Evolving Landscape for Enforcement of International Arbitral Awards in the United States – Lea Haber Kuck & Timothy G. Nelson, Skadden, Arps, Slate, Meagher & Flom LLP
15
7
Sales Director
Florjan Osmani
4
Advantages of International Commercial Arbitration – Maurice Kenton & Peter Hirst, Clyde & Co 5
Commercial Director
Antony Dine
The Enforcement of International Arbitration Agreements in U.S. Courts – Peter S. Selvin, TroyGould PC
25
6
The Use of Economic and Business Expertise in International Arbitration – Andrew Tepperman, Charles River Associates
30
7
Controversial Topics in Damage Valuation: Complex Issues Require Sophisticated Analytical Methods – José Alberro & Sharon B. Johnson, Cornerstone Research
35
8
The Toolbox of International Arbitration Institutions: How to Make the Best of It? – Professor Dr. Eckart Brödermann & Tina Denso, Brödermann Jahn RA GmbH
41
Account Directors
Oliver Smith, Rory Smith
Senior Account Managers
Maria Lopez
Sales Support Manager
Toni Hayward
Editor
Rachel Williams
Asia Pacific:
Senior Editor
Suzie Levy
9
Group Consulting Editor
Alan Falach
Group Publisher
Richard Firth
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20
Overview
Dr. Colin Ong Legal Services: Dr. Colin Ong
46
10 Brunei
Dr. Colin Ong Legal Services: Dr. Colin Ong
59
11 China
Boss & Young Attorneys-at-Law: Dr. Xu Guojian
68
12 India
Kachwaha & Partners: Sumeet Kachwaha & Dharmendra Rautray
80
13 Indonesia
Ali Budiardjo, Nugroho, Reksodiputro: Sahat A.M. Siahaan & Ulyarta Naibaho
90
14 Japan
Anderson Mori & Tomotsune: Yoshimasa Furuta & Aoi Inoue
101
15 Korea
Yulchon LLC: Young Seok Lee & Sae Youn Kim
109
Central and Eastern Europe and CIS:
16 Overview
Wilmer Cutler Pickering Hale and Dorr LLP: Franz T. Schwarz
118
17 Albania
Tonucci & Partners: Neritan Kallfa & Sajmir Dautaj
128
18 Austria
Weber & Co.: Stefan Weber & Katharina Kitzberger
136
19 Belarus
Law Office “Sysouev, Bondar, Khrapoutski SBH”: Timour Sysouev & Alexandre Khrapoutski
144
20 Hungary
Lendvai Partners: András Lendvai & Gergely Horváth
155
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Global Legal Group Ltd.
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21 Lithuania
Motieka & Audzevičius: Ramūnas Audzevičius
163
22 Poland
Kubas Kos Gałkowski: Rafał Kos & Maciej Durbas
172
23 Romania
Popovici Niţu & Asociaţii: Florian Nițu & Raluca Petrescu
181
ISBN 978-1-910083-56-7
ISSN 1741-4970
24 Russia
Clifford Chance CIS Limited: Timur Aitkulov & Julia Popelysheva
191
25 Ukraine
AEQUO: Pavlo Byelousov
203
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Strategic Partners
Western Europe:
26 Overview
Skadden, Arps, Slate, Meagher & Flom LLP: Dr. Anke Sessler & Dr. Markus Perkams
213
27 Belgium
Linklaters LLP: Joost Verlinden & Olivier van der Haegen
28 Cyprus
Andreas Neocleous & Co LLC: Christiana Pyrkotou &
Athina Chatziadamou
228
218
Continued Overleaf
Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720
Disclaimer
This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.
Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.
This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified
professional when dealing with specific situations.
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The International Comparative Legal Guide to: International Arbitration 2015
Western Europe, cont.:
29 England & Wales
Wilmer Cutler Pickering Hale and Dorr LLP: Charlie Caher & Michael Howe
237
30 Finland
Lindfors & Co Attorneys at Law: Leena Kujansuu & Petra Kiurunen
257
31 France
Lazareff Le Bars: Benoit Le Bars & Raphaël Kaminsky
265
32 Germany
Skadden, Arps, Slate, Meagher & Flom LLP: Dr. Anke Sessler & Dr. Markus Perkams
275
33 Ireland
Matheson: Nicola Dunleavy & Gearóid Carey
284
34 Italy
Chiomenti Studio Legale: Andrea Bernava & Silvio Martuccelli 293
35 Liechtenstein
König Rebholz Zechberger: MMag. Benedikt König & Dr. Helene Rebholz 303
36 Luxembourg
Loyens & Loeff Luxembourg S.à.r.l.: Véronique Hoffeld
312
37 Netherlands
Schutte Schluep & Heide-Jørgensen: Alexandra Schluep & Irina Bordei
321
38 Spain
Olleros Abogados, S.L.P.: Iñigo Rodríguez-Sastre & Elena Sevila Sánchez
330
39 Sweden
Advokatfirman Vinge: Krister Azelius & Lina Bergqvist
338
40 Switzerland
Homburger: Felix Dasser & Balz Gross
346
41 Overview
Baker & McKenzie LLP: Luis M. O’Naghten
356
42 Brazil
Costa e Tavares Paes Advogados: Vamilson Costa & Antonio Tavares Paes, Jr.
368
43 Chile
Figueroa, Illanes, Huidobro y Salamanca: Juan Eduardo Figueroa Valdes & Luciana Rosa Rodrigues
376
44 Colombia
Holland & Knight: Enrique Gómez-Pinzón & Sergio García-Bonilla
45 Dominican Republic
Medina Garrigó Abogados: Fabiola Medina Garnes & Jesús Francos Rodriguez
390
46 Mexico
Von Wobeser y Sierra, SC: Victor M. Ruiz
398
408
Latin America:
384
Middle East / Africa:
47 Overview – MENA
Freshfields Bruckhaus Deringer LLP: Sami Tannous & Seema Bono
48 Overview – Sub-Saharan Africa
Baker & McKenzie LLP: Gerhard Rudolph 413
49 OHADA
Geni & Kebe: Mouhamed Kebe & Hassane Kone
415
50 Botswana
Luke & Associates: Edward W. F. Luke II & Queen Letshabo
423
51 Libya
Sefrioui Law Firm: Kamal Sefrioui
432
52 Morocco
Hajji & Associés: Amin Hajji
440
53 Nigeria
PUNUKA Attorneys & Solicitors: Anthony Idigbe & Emuobonuvie Majemite
447
54 Oman
Al Busaidy, Mansoor Jamal & Co.: Mansoor J Malik & Aleem O Shahid
463
55 Qatar
Sefrioui Law Firm: Kamal Sefrioui
470
56 South Africa
Baker & McKenzie LLP: Gerhard Rudolph & Darryl Bernstein 482
57 UAE
Freshfields Bruckhaus Deringer LLP: Sami Tannous & Seema Bono
492
North America:
58 Overview
Paul, Weiss, Rifkind, Wharton & Garrison LLP: H. Christopher Boehning & Melissa C. Monteleone
504
59 Bermuda Sedgwick Chudleigh Ltd.: Mark Chudleigh & Chen Foley
511
521
60 Canada
Dentons Canada LLP: Gordon L. Tarnowsky, Q.C. & Rachel A. Howie
61 Cayman Islands
Travers Thorp Alberga: Anna Peccarino & Ian Huskisson
531
62 USA
K&L Gates LLP: Peter J. Kalis & Roberta D. Anderson
545
Chapter 42
Brazil
Vamilson Costa
Costa e Tavares Paes Advogados
1 Arbitration Agreements
1.1 What, if any, are the legal requirements of an
arbitration agreement under the laws of Brazil?
According to Article 10 of the Brazilian Arbitration Law (Federal
Law No. 9.307/1996 – “BAL”), the arbitration agreement must
indicate: (i) the name, profession, marital status and domicile of the
parties; (ii) the name, profession and domicile of the arbitrators, or,
if applicable, the name of the institution to which the parties have
delegated the appointment of arbitrators; (iii) the subject matter of
the arbitral proceeding; and (iv) the place where the arbitral award
shall be made.
The Brazilian Arbitration Law also provides that the arbitration
agreement shall be in writing, contained in the contract or in a
separate document referring thereto (Article 4, first paragraph).
Nevertheless, the BAL does not specify whether the arbitration
agreement must be signed by the parties in order to be effective.
For this reason, some scholars have admitted the tacit acceptance of
the arbitration agreement – a risky proposition based on applicable
case law.
1.2 What other elements ought to be incorporated in an
arbitration agreement?
Article 11 of the BAL provides that an arbitration agreement may
also indicate: (i) the place or places where the arbitral proceeding
shall take place; (ii) the authorisation for the arbitrator(s) to decide
in equity; (iii) the deadline for the issuance of the arbitral award;
(iv) the choice of national law or institutional rules applicable to the
proceedings; (v) provision as to the responsibility for the payment of
the fees and procedural costs of the arbitrator(s); and (vi) stipulation
as to the fees of the arbitrator(s).
1.3
What has been the approach of the national courts to
the enforcement of arbitration agreements?
After the enactment of the BAL in 1996, the confirmation of its
constitutionality by the Federal Court of Appeals in 2011 and the
ratification of the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (“New York Convention”)
in 2002, Brazilian courts have become more willing to enforce
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Antonio Tavares Paes, Jr.
arbitration agreements and awards. Currently, Brazil is evolving to
become more confident with a pro-arbitration scenario supported by
case law from the higher courts.
2 Governing Legislation
2.1 What legislation governs the enforcement of
arbitration proceedings in Brazil?
The laws that govern the enforcement of arbitration proceedings in
Brazil are: (i) the Brazilian Arbitration Law, enacted under number
No. 9.307, dated of 23 September 1996; (ii) the Brazilian Code of
Civil Procedure, enacted under No. 5.8696, dated of 11 January 1973;
(iii) the New York Convention on Recognition and Enforcement of
Foreign Arbitral Awards, internalised through Decree No. 4.311,
dated of 23 July 2002; (iv) the Internal Rules of the Federal Court of
Appeals (Superior Court of Justice – “STJ”); and (v) Resolution No.
9, issued by the Federal Court of Appeals, dated May 2005.
2.2 Does the same arbitration law govern both domestic
and international arbitration proceedings? If not, how
do they differ?
Brazilian law does not distinguish domestic arbitration from
international arbitration. Nevertheless, for the purpose of enforcement
of arbitral awards, Brazilian law makes a distinction between domestic
and foreign awards. A foreign award is an award issued outside of
the Brazilian territory (Article 34 of the BAL) and is subject to
homologation/ratification by the Federal Court of Appeals (Article
35 of the BAL). On the other hand, a domestic award is an award
issued within the Brazilian territory and that can be enforced in a
straightforward manner by Brazilian Courts without the need to go
through a homologation/ratification process (Article 31 of the BAL).
2.3 Is the law governing international arbitration based
on the UNCITRAL Model Law? Are there significant
differences between the two?
The BAL was inspired by the UNCITRAL Model Law, the Spanish
Arbitration Act of 1988 and also by the New York Convention
and the Inter-American Convention on International Commercial
Arbitration (“Panama Convention”) (internalised through Decree
No. 1.902 of 09 May 1996).
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Costa e Tavares Paes Advogados
This provision does not apply, since Brazilian law does not make
a distinction between national and international arbitration (see
the answer to question 2.2) except for purposes of homologation/
ratification of the latter before the Federal Court of Appeals.
3Jurisdiction
3.1 Are there any subject matters that may not be referred
to arbitration under the governing law of Brazil? What
is the general approach used in determining whether
or not a dispute is “arbitrable”?
A dispute can be referred to arbitration when it is related to patrimonial
rights over which the parties may dispose. Administrative and
judicial claims arising from the activities carried out by private
parties under the rules of public departments and/or public agencies
(that are of public interest) cannot be referred to arbitration, such as
environmental matters, anti-trust and competition matters, consumer
and some employment relationship matters. Although there are
exceptions within the matters aforementioned, and each case should
be analysed in particular, the law is broad and therefore any dispute
that is related to patrimonial rights, which are disposable by the
parties, may be arbitrated.
A bill to amend the BAL was recently signed into law by Brazilian
Vice President and enacted under No. 13.129, dated of 26 May
2015; within its most relevant topics is the clarification of certain
matters that have always been controversial under the local legal
landscape. In this sense, the bill provides for: (i) the possibility
for government-controlled entities to refer to arbitration disputes
that are related to disposable rights; (ii) the possibility to establish
arbitration clauses in employment agreements when the employees
are directors or statutory managers (therefore, sophisticated, senior
level employees); and (iii) rules for arbitration involving consumer
relationships. The new law also includes amendments to Brazilian
Corporation Law (Law No. 6.404/1976) in order to make it clear
whether shareholders are bound or not to arbitration clauses
included in a company’s by-laws, proving also for the possibility of
the dissenting shareholder to exit the company.
3.2 Is an arbitrator permitted to rule on the question of his
or her own jurisdiction?
The BAL provides, in the sole paragraph of Article 8, that the
arbitrator has jurisdiction to decide, ex officio or at the parties’
request, the issues concerning the existence, validity and
effectiveness of the arbitration agreement, as well as of the contract
containing the arbitration clause, embracing, thus, the competencecompetence principle.
3.3 What is the approach of the national courts in Brazil
towards a party who commences court proceedings
in apparent breach of an arbitration agreement?
Brazilian courts have been very positive towards arbitration and,
in general, have dismissed, without ruling on the merits, court
proceedings initiated in breach of arbitration agreements based on
Article 267, VII of the Brazilian Code of Civil Procedure.
3.4 Under what circumstances can a court address
the issue of the jurisdiction and competence of the
national arbitral tribunal? What is the standard of
review in respect of a tribunal’s decision as to its own
jurisdiction?
National courts are not allowed to review an arbitrator’s decision
as to their own jurisdiction based on the competence-competence
principle.
Brazil
2.4 To what extent are there mandatory rules governing
international arbitration proceedings sited in Brazil?
Brazil
3.5 Under what, if any, circumstances does the national
law of Brazil allow an arbitral tribunal to assume
jurisdiction over individuals or entities which are not
themselves party to an agreement to arbitrate?
Brazilian law does not address the issue as to the extension of
the arbitration agreement to non-signatory parties. Nevertheless,
Brazilian courts have already recognised the possibility of extending
the arbitration agreement when there is evidence that a party has
participated in the negotiations or enforcement of the agreement
in which the arbitration clause is contained, or was represented in
the legal business or in arbitration by the non-signatory party (i.e.
Trelleborg v. Aneel [State Appellate Court of São Paulo, Appeal
No. 267.450-4/6, 7th Chamber, Reporting Judge Constança
Gonzaga, judged 24 May 2006]; Comverse Inc. v. American
Telecommunication [Federal Court of Appeal, SEC No. 3.709/US,
Special Panel, Reporting Judge Teori Albino Zavascki, judged 14
June 2012]; L’aiglon S/A v. Têxtil União S/A [Federal Court of
Appeal, SEC No. 856/EX, Special Panel, Reporting Judge Carlos
Alberto Menezes Direito, judged 18 May 2005]).
3.6 What laws or rules prescribe limitation periods for the
commencement of arbitrations in Brazil and what is
the typical length of such periods? Do the national
courts of Brazil consider such rules procedural or
substantive, i.e., what choice of law rules govern the
application of limitation periods?
The Brazilian Civil Code provides for Statute of Limitation
periods (Art. 206) that vary from one to 10 years depending on
the substantive issue under discussion. This rule is considered a
substantive rule and is mandatory.
3.7 What is the effect in Brazil of pending insolvency
proceedings affecting one or more of the parties to
ongoing arbitration proceedings?
Brazilian courts have already recognised the possibility of the
continuance of ongoing arbitral proceedings seeking the declaration
of a debt when bankruptcy of a party to such arbitration is declared
(i.e. Saúde ABC v. Interclínicas [Federal Court of Appeals,
Provisional Measure No. 14.295/SP, Reporting Justice Nancy
Andrighi, judged 13 June 2008]). In this case, the arbitral award
will be enforced by the Bankruptcy Court due to the principle of
its exclusive jurisdiction (Article 76 of Law No. 11.101/2005), and
the corresponding debt will be included in the schedule of creditors
in the bankruptcy proceeding and is to be paid according to the
development of such proceeding.
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4 Choice of Law Rules
Brazil
4.1 How is the law applicable to the substance of a
dispute determined?
The parties to an arbitration proceeding are entitled to choose the
law applicable to the dispute and also agree that the arbitration be
conducted under the general principles of law, customs, usages
and international rules of trade (Article 2 of the BAL). In case the
parties are silent, Law No. 4.657/1942, which provides for conflict
of law rules, will apply.
4.2 In what circumstances will mandatory laws (of the
seat or of another jurisdiction) prevail over the law
chosen by the parties?
Mandatory rules will apply when the chosen law violates good
morals and/or public policy/order (Article 2 of the BAL).
4.3 What choice of law rules govern the formation,
validity, and legality of arbitration agreements?
The Brazilian Arbitration Law applies.
5 Selection of Arbitral Tribunal
5.1 Are there any limits to the parties’ autonomy to select
arbitrators?
There are no limits in terms of the selection of the arbitrators
imposed by Brazilian Law, but they must meet the requirements
of independence and impartiality (Article 14 of the BAL and
134 et seq. of the Brazilian Code of Civil Procedure). The Rules
of Arbitration Centre in which a particular arbitration is under
development, however, may impose limits to the parties’ autonomy
to select arbitrator, such as mandating that arbitrators be selected
from a pool of professionals maintained by such entity.
5.2 If the parties’ chosen method for selecting arbitrators
fails, is there a default procedure?
The BAL also entitles a national court to intervene in the selection
of arbitrators if there is disagreement between the arbitrators as to
the appointment of the president of the arbitral tribunal (Article 13,
Paragraph 2).
5.4 What are the requirements (if any) as to arbitrator
independence, neutrality and/or impartiality and
for disclosure of potential conflicts of interest for
arbitrators imposed by law or issued by arbitration
institutions within Brazil?
Articles 13 and 14 of the BAL provide that arbitrators must be
independent and impartial (following the requirement set forth in
Article 134 et seq. of the Brazilian Code of Civil Procedure) and
must disclose, before the acceptance of the appointment to act as
arbitrators, any facts likely to give rise to justified doubts as to their
independence and impartiality.
6 Procedural Rules
6.1 Are there laws or rules governing the procedure of
arbitration in Brazil? If so, do those laws or rules
apply to all arbitral proceedings sited in Brazil?
Yes, the BAL and the Brazilian Code of Civil Procedure apply to all
arbitral proceedings sited in Brazil (unless the parties have agreed
otherwise).
6.2 In arbitration proceedings conducted in Brazil, are
there any particular procedural steps that are required
by law?
Chapter IV of the BAL provides for the procedural steps for the
conducting of arbitrations in Brazil, which will apply only if the
parties have not agreed otherwise.
6.3 Are there any particular rules that govern the conduct
of counsel from Brazil in arbitral proceedings sited in
Brazil? If so: (i) do those same rules also govern the
conduct of counsel from Brazil in arbitral proceedings
sited elsewhere; and (ii) do those same rules also
govern the conduct of counsel from countries other
than Brazil in arbitral proceedings sited in Brazil?
The default procedure is provided in Article 7, Paragraph 4 of
the BAL, which establishes that a court judge will appoint a sole
arbitrator to settle the dispute in case the arbitration agreement does
not indicate the method for selection of arbitrators and/or the parties
disagree as to such selection. This article does not apply if the
parties have chosen the rules of an arbitral institution which already
provides for a default procedure.
The Code of Ethics of the Brazilian Bar Association applies to all
Brazilian counsel, irrespective of the place they are conducting
proceedings. The rules do not apply to foreign counsel, unless they
are licensed to practise in Brazil. Often, arbitrators will hold foreign
lawyers to the same standards of Brazilian counsel in connection
with arbitrations that are taking place in Brazil.
5.3
6.4
Can a court intervene in the selection of arbitrators? If
so, how?
Yes, a judge is allowed to appoint a sole arbitrator to settle the dispute
after hearing the parties in cases where there is resistance from one
of the parties as to the commencement of the arbitral proceedings,
or the arbitration agreement fails to provide for the appointment of
arbitrators (Article 7, paragraph 4 of the BAL).
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What powers and duties does the national law of
Brazil impose upon arbitrators?
In performing his duty, the arbitrator shall behave in an independent,
impartial, diligent, discreet and competent manner (Article 13,
Paragraph 6 of the BAL).
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Are there rules restricting the appearance of lawyers
from other jurisdictions in legal matters in Brazil and,
if so, is it clear that such restrictions do not apply to
arbitration proceedings sited in Brazil?
The Code of Ethics of the Brazilian Bar Association does not allow
foreign lawyers to act in legal matters in Brazil. Such restriction,
however, does not apply to arbitral proceedings. The BAL does
not require that counsel in arbitration proceedings (Article 21,
paragraph 3) represent a party. As indicated under question 6.3
above, however, often arbitrators will hold foreign lawyers to the
same standards of Brazilian counsel in connection with arbitrations
that are taking place in Brazil.
6.6
To what extent are there laws or rules in Brazil
providing for arbitrator immunity?
Although there are no specific provisions as to an arbitrator’s
immunity, arbitrators are liable for their acts when they have acted
with intent or gross negligence.
6.7 Do the national courts have jurisdiction to deal with
procedural issues arising during an arbitration?
No. The arbitral tribunal will settle procedural issues.
7 Preliminary Relief and Interim Measures
7.1 Is an arbitrator in Brazil permitted to award
preliminary or interim relief? If so, what types of
relief? Must an arbitrator seek the assistance of a
court to do so?
An arbitrator is entitled to award any kind of preliminary or interim
relief. However, arbitrators might seek the assistance of national
courts to enforce reliefs if necessary.
7.2 Is a court entitled to grant preliminary or interim
relief in proceedings subject to arbitration? In what
circumstances? Can a party’s request to a court
for relief have any effect on the jurisdiction of the
arbitration tribunal?
The parties are only entitled to request relief from a national court
before the arbitral tribunal is constituted. In this case, the arbitral
tribunal, after its constitution, will take on the matter that was being
handled by national courts and will be entitled to uphold or overturn
the court decision regarding such relief.
During the arbitral proceedings, the parties must request relief
directly from the arbitral tribunal, which is the only court with
jurisdiction to grant such relief. Any measure requested to national
courts during the course of arbitral proceedings will be ineffective.
7.3 In practice, what is the approach of the national
courts to requests for interim relief by parties to
arbitration agreements?
Since there is a pro-arbitration scenario in Brazil, it is most likely
that Brazilian courts will deny any request of interim relief based on
the existence of ongoing arbitral proceedings.
7.4
Under what circumstances will a national court
of Brazil issue an anti-suit injunction in aid of an
arbitration?
When there is an arbitration agreement between the parties and one
is seeking to circumvent such agreement by filing its grievances in
court.
7.5
Does the national law allow for the national court and/
or arbitral tribunal to order security for costs?
Brazil
6.5
Brazil
Yes, the Brazilian Code of Civil Procedure provides for the
possibility for a court to order security for costs (Articles 804 and
805).
8 Evidentiary Matters
8.1 What rules of evidence (if any) apply to arbitral
proceedings in Brazil?
The parties are entitled to choose the rules of evidence that will
apply to the arbitral proceedings. If Brazilian law is chosen, the
rules of evidence contained in the Brazilian Code of Civil Procedure
will apply to the dispute.
8.2 Are there limits on the scope of an arbitrator’s
authority to order the disclosure of documents and
other disclosure (including third party disclosure)?
Discovery – as the term is used in Common Law countries – is
not contemplated by Brazilian law. In Brazil, the parties are not
obligated to present documents/evidence that might harm their
defence – they have a constitutional right against self-incrimination.
Nevertheless, if the parties have agreed otherwise, the arbitral
tribunal may order such disclosure, including third party disclosure,
such as access to privileged banking information.
8.3 Under what circumstances, if any, is a court able to
intervene in matters of disclosure/discovery?
As mentioned above, discovery is not contemplated by Brazilian
law. Nevertheless, the arbitrator may request the parties to present
any document they deem necessary for the understanding of the
dispute, as well as request an expert examination (Article 22 of the
BAL). If a party ordered to present a document (or e-file) fails to do
so, an arbitral tribunal may seek assistance from a national court in
enforcing the decision it rendered in favour of the delivery of such
document (or e-file).
8.4 What, if any, laws, regulations or professional rules
apply to the production of written and/or oral witness
testimony? For example, must witnesses be sworn in
before the tribunal or is cross-examination allowed?
The rules that apply to the hearing of witnesses in civil procedures
also apply to oral testimonies in local arbitrations. The Brazilian
Code of Civil Procedure stipulates that individuals providing oral
witness testimonies must swear to speak the truth under the penalty
of criminal sanctions (Article 415).
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Brazil
8.5 What is the scope of the privilege rules under the
law of Brazil? For example, do all communications
with outside counsel and/or in-house counsel attract
privilege? In what circumstances is privilege deemed
to have been waived?
Yes, all communications with outside counsel and/or in-house
counsel attract privilege. However, the concept of “privilege” is
not as developed, and case law protected, as in certain Anglo-Saxon
countries.
9 Making an Award
9.1 What, if any, are the legal requirements of an arbitral
award? For example, is there any requirement under
the law of Brazil that the Award contain reasons or
that the arbitrators sign every page?
Article 24 of the BAL provides that the award is to be prepared
in writing and signed by the arbitrators. Article 26 provides that
the award shall mandatorily contain: (i) a report, including the
qualification of the parties and a summary of the dispute; (ii) the
grounds for the decision, with due analysis of factual and legal
issues; (iii) the actual decision; and (iv) the date of the award and
the place where it was rendered.
10 Challenge of an Award
10.1 On what bases, if any, are parties entitled to challenge
an arbitral award made in Brazil?
Article 32 of the BAL provides the grounds for declaration of
nullity of an award: (i) the arbitration agreement is null and void;
(ii) the person(s) who rendered the award could not have acted as
an arbitrator; (iii) the award does not comply with the requirements
set forth in Article 26 (see the answer to question 9.1 above);
(iv) the award has exceeded the limits imposed by the arbitration
agreement; (v) the award does not address all of the issues submitted
in the arbitration; (vi) it is proven the award was made through
unfaithfulness, extortion or corruption; (vii) the making of the
award exceeded the time limit stipulated by the parties; or (viii) the
award violates the principles of due process, equal treatment of the
parties, impartiality of the arbitrator and autonomy of the decision.
10.2 Can parties agree to exclude any basis of challenge
against an arbitral award that would otherwise apply
as a matter of law?
of the BAL or if it violates public policy. The parties are not allowed
to expand the scope of appeal nor agree on new methods for judicial
revision of the award.
10.4 What is the procedure for appealing an arbitral award
in Brazil?
Article 30 of the BAL provides that the parties may submit a request
for clarification of the award within five days of the receipt of the
award in order to correct any material error or clarify any obscurity,
doubt or contradiction of the award, or request the tribunal to decide
on an issue that was not decided. Aside from this procedure, and
a possible challenge against aspects of the award, it may not be
appealed to an appeals court or tribunal as the arbitral tribunal’s
decision will be final and binding upon the parties.
11 Enforcement of an Award
11.1 Has Brazil signed and/or ratified the New York
Convention on the Recognition and Enforcement
of Foreign Arbitral Awards? Has it entered any
reservations? What is the relevant national
legislation?
Yes. The New York Convention was internalised through Decree
No. 4.311 of 23 July 2002 and ratified with no reservations.
11.2 Has Brazil signed and/or ratified any regional
Conventions concerning the recognition and
enforcement of arbitral awards?
Yes, Brazil is party to the Inter-American Convention on
International Commercial Arbitration (internalised through Decree
No. 1.902 of 09 May 1996).
11.3 What is the approach of the national courts in
Brazil towards the recognition and enforcement of
arbitration awards in practice? What steps are parties
required to take?
In order to be recognised and enforced in Brazil, a foreign arbitral
award, must be homologated/ratified by the Federal Court of
Appeals (STJ), following the rules provided in: Articles 483 and 484
of the Code of Civil Procedure; Resolution No. 09 of the Federal
Court of Appeals; and the New York Convention. The rules include,
for example, the need for the party requesting the recognition of
the award to present certified and notarised copies of the arbitration
agreement and the final award, both translated into Portuguese by a
local official public translator.
No. The list provided by law is mandatory, but whether an actual
challenge will be successful will depend on a variety of factors
that may have influenced at least a few of the items so listed (for
example, issues of force majeure that may have delayed the actual
rendering of the award).
The Federal Court of Appeal has demonstrated a positive and
proactive position towards the recognition of foreign arbitral
awards, and in the past few years has correctly applied the New
York Convention, especially concerning grounds for denial of the
recognition and enforcement of foreign awards.
10.3 Can parties agree to expand the scope of appeal of
an arbitral award beyond the grounds available in
relevant national laws?
11.4 What is the effect of an arbitration award in terms
of res judicata in Brazil? Does the fact that certain
issues have been finally determined by an arbitral
tribunal preclude those issues from being re-heard in
a national court and, if so, in what circumstances?
In Brazil, there is no appeal against an arbitral award, except if we
consider that a challenge to it is so considered. In any case, an
award can only be challenged on the grounds provided in Article 32
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Issues decided in arbitration cannot be re-heard by national courts.
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Costa e Tavares Paes Advogados
Enforcement can be refused on the grounds of public policy; for
example, if there was a violation of due process (including failure to
properly notify a party), absence of an arbitration agreement, lack of
proper acceptance of arbitration by a party, and questions as to the
nature of the dispute, such as the kind of right that is being subject to
arbitration (certain rights cannot be arbitrated in Brazil).
12 Confidentiality
12.1 Are arbitral proceedings sited in Brazil confidential?
In what circumstances, if any, are proceedings
not protected by confidentiality? What, if any, law
governs confidentiality?
The BAL does not provide for confidentiality. However, the parties
or the rules of the particular institution to which the parties have
referred their dispute can expressly provide for confidentiality and,
therefore, will be binding upon the participants of the procedure. It
is common to have arbitrations in Brazil treated with confidentiality.
12.2 Can information disclosed in arbitral proceedings
be referred to and/or relied on in subsequent
proceedings?
It will depend on the agreement of confidentiality established by the
parties. However, it is not a common practice, unless the subsequent
arbitration involves the very same parties as the preceding one.
13 Remedies / Interests / Costs
13.1 Are there limits on the types of remedies (including
damages) that are available in arbitration (e.g.,
punitive damages)?
Punitive and consequential damages are not allowed under Brazilian
Law, which provides only for compensatory direct damages. The
actual definition of consequential damages needs to be made clear
in the arbitration agreement, as there may be an overlap with
acceptable damages.
13.2 What, if any, interest is available, and how is the rate
of interest determined?
guidelines in the arbitration clause. Arbitration awards rendered in
Brazil often follow the “loser-pays” concept that is adopted in most
judicial proceedings, therefore imposing on the defeated party the
payment of the fees and costs incurred in the proceeding.
13.4 Is an award subject to tax? If so, in what
circumstances and on what basis?
The award itself is not subject to taxation, but the benefits of such
award may result in taxation to the party that benefited from such
decision, depending, for example, on whether amounts received
have an indemnification nature or are of a compensatory nature.
Gains by the victorious party will be taxed just as much as they
would in the case of a court decision in its favour.
13.5 Are there any restrictions on third parties, including
lawyers, funding claims under the law of Brazil? Are
contingency fees legal under the law of Brazil? Are
there any “professional” funders active in the market,
either for litigation or arbitration?
Brazilian law does not address the issue of funding claims; the
concept is new in Brazil. There are individuals and entities (funds,
investment houses, etc.) that offer these services on and off, but this
is not a widespread market yet. Nevertheless, there has been a surge
in interest by local parties in this “product” and the interest has been
met by supply, mostly from abroad.
Contingency fees are legal and provided in Article 20 of the
Brazilian Code of Civil Procedure.
14
Investor State Arbitrations
14.1 Has Brazil signed and ratified the Washington
Convention on the Settlement of Investment Disputes
Between States and Nationals of Other States (1965)
(otherwise known as “ICSID”)?
Brazil has not signed the Washington Convention.
14.2 How many Bilateral Investment Treaties (BITs) or
other multi-party investment treaties (such as the
Energy Charter Treaty) is Brazil party to?
Out of 14 bilateral investment treaties signed by Brazil, none have
been ratified or entered into force.
The interest available is the default interest, and the rate determined
is 1% per month.
14.3 Does Brazil have any noteworthy language that it
uses in its investment treaties (for example in relation
to “most favoured nation” or exhaustion of local
remedies provisions)? If so, what is the intended
significance of that language?
13.3 Are parties entitled to recover fees and/or costs and, if
so, on what basis? What is the general practice with
regard to shifting fees and costs between the parties?
This does not apply.
According to Article 27 of the BAL, the arbitral award will embody
a decision as to the parties’ responsibility regarding the costs
and expenses of the arbitration, as well as on any costs resulting
from any possible bad faith/frivolous litigation. The rules of the
chosen institution usually provide for recovery of fees and costs
and the parties are entitled to determine how they want to regulate
their affairs in this particular instance by inserting the appropriate
Brazil
11.5 What is the standard for refusing enforcement of an
arbitral award on the grounds of public policy?
Brazil
14.4 What is the approach of the national courts in Brazil
towards the defence of state immunity regarding
jurisdiction and execution?
The Federal Court of Appeals (“STJ”) is the competent court in
Brazil to decide upon requests of homologation of foreign decisions.
The Federal Court’s approach on the recognition of foreign awards
has been very positive and in conformity with the law. In general,
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Costa e Tavares Paes Advogados
the Federal Court of Appeals has only refused to recognise foreign
arbitral awards on the grounds set forth in Articles 38 and 39 of the
BAL and V of the New York Convention.
Brazil
15
General
15.1 Are there noteworthy trends in or current issues
affecting the use of arbitration in Brazil (such as
pending or proposed legislation)? Are there any
trends regarding the type of disputes commonly being
referred to arbitration?
Recently the BAL was amended by Law No. 13.129, dated 26
May 2015. The amendments concern the scope of application of
arbitration, the choice of arbitrators, statute of limitations, relief
measures and arbitral awards.
The Law encompasses, for example, the “arbitrability” of disputes
involving State entities, consumer, employment and corporate
matters.
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Brazil
The disputes commonly being referred to arbitration are related to
civil construction, corporate and contract law.
15.2 What, if any, recent steps have institutions in Brazil
taken to address current issues in arbitration (such as
time and costs)?
Arbitral institutions in Brazil, alongside the Brazilian Arbitration
Committee (CBAR), have sponsored lectures and conferences/
seminars in order to disseminate the use of arbitration in Brazil and
encourage discussions with specialists on current issues in arbitration.
An issue of concern has been the overall cost of arbitration, which,
nevertheless, is still lower in Brazilian arbitrations since neither
discovery nor e-discovery is an issue to be considered.
Acknowledgment
The authors would like to thank Bianca Longo Campos, an associate
at our firm, for her assistance in the preparation of this chapter.
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Brazil
Vamilson José Costa
Antonio Tavares Paes Jr.
Costa e Tavares Paes Advogados
Avenida Paulista, 1079, 12th floor
São Paulo/SP
Brazil
Costa e Tavares Paes Advogados
Avenida Paulista, 1079, 12th floor
São Paulo/SP
Brazil
Tel: +55 11 3372 1188
Fax: +55 11 3372 1179
Email:[email protected]
URL:www.cwtp.com.br
Tel: +55 11 3372 1188
Fax: +55 11 3372 1179
Email:[email protected]
URL:www.cwtp.com.br
Bachelor of Law (LL.B.) from the Alta Paulista School of Law – São
Paulo (1984), with post-graduation/specialisation in Consumer Affairs
at the Catholic University of Sao Paulo – PUC-SP. Mr. Costa is well
known for advising local and foreign conglomerates in a variety of
disputes and transactions, as well as family-owned companies and
their shareholders in mergers and acquisitions and dispute resolutions
involving such companies and individuals. He is former partner
of Brazilian law firms and is recommended by several respected
industry publications in his areas of practice. His experience includes
representing key parties in arbitration, shareholders’ disputes,
corporate law, mergers and acquisitions, insolvency matters, contract
law and pharmaceutical/joint venture transactions, among others.
Brazil
Costa e Tavares Paes Advogados
Bachelor of Laws (LL.B.) from the University of Rio de Janeiro – UERJ;
1985. LL.M. in Corporate and Trade Law from Columbia University
School of Law, New York, 1987. The Chase Manhattan Bank Corporate
Finance/MBA Finance course, New York, 1992. He practised law as inhouse counsel in the US and as outside counsel in the US, France and
Brazil and worked on the financial industry in the US (SVP at a Private
Equity house and Vice-President – Project Finance/LatAm Corporate
Finance – of a very large bank). He is a lawyer recommended by
Latin American Corporate Counsel Association (LACCA) in the area
of Litigation and Corporate and recommended by various respected
industry publications. His experience includes representing parties in
arbitration/litigation, corporate/M&A matters, banking law, insolvency
and aviation matters and transactions in general.
Costa e Tavares Paes Advogados is a Brazilian law firm with the head office in São Paulo and branch offices in Rio de Janeiro and Brasília. The
Firm represents clients from various parts of the world in their global investment activities and disputes. Over time, the Firm has developed and
continuously broadened its areas of practice by bringing together professionals of high caliber and experience, and has expanded its presence
in sophisticated business arbitration and litigation (administrative and judicial, domestic and cross-border). The Firm also provides services in
connection with its preventive and advisory practice in several areas of activity.
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