Let's continue to talk about arbitration! - International Law Office

International Law Office

Arbitration - Brazil

Let's continue to talk about arbitration!

June 09 2011


Not so long ago, the general perception within the Brazilian legal community was that the number of seminars, symposia and congresses about arbitration far outnumbered the actual cases submitted to this alternative means of dispute resolution. Although the subject remains a hot topic at these events (as is appropriate), the recent explosion in the number of proceedings serves to put to rest, once and for all, the initial scepticism of some practitioners towards arbitration.

The number of cases administered by Brazilian arbitral institutions has soared in the past few years and the country holds a prominent spot in the annual statistics published by the International Chamber of Commerce. The arbitration bar has grown more diverse and specialised, with many practitioners engaging in academic studies abroad, followed by internships at respected law firms and international arbitral institutions.

The Arbitration Committee continues to fulfil its mission to serve as a conduit between arbitration and the business community. Quality scholarly works are being published by respected authors and rising stars, and law schools are finally offering courses specifically designed to train students in alternative dispute resolution.

However, all the hype around arbitration in Brazil would not be possible without the pivotal role played by the judiciary. The early resistance to the Arbitration Act has been replaced by reasoned decisions enforcing arbitration clauses, granting injunctions in aid of arbitration and refusing to set aside arbitral awards based on groundless arguments. The track record of the Superior Court of Justice in confirming the vast majority of foreign arbitral awards is a testament to the judiciary's commitment to arbitration.

Despite evidence of genuine enthusiasm, there will always be room for improvement of arbitration in Brazil. The success of arbitration is also arguably the main threat to its development. As the number of disputes increases, so too does the need to continue to educate lawyers and judges about the particularities of arbitration. Lawyers must understand that arbitration is not litigation, and that the tactics once used to impress judges and clients in a court of law are simply not effective in defending their clients' interests before an arbitral tribunal.

The large inventory of cases currently administered by the main local arbitral institutions requires an investment in qualified personnel to ensure the proper and efficient development of the proceedings. Some modification to the respective rules may be needed to foster a more engaging environment for these administrators, who should be able to share some of the responsibilities with the arbitral tribunal. This is particularly relevant in the early stages of the proceedings, in the interplay with local courts and during the appointment and challenge of arbitrators.

The pool of arbitrators must be enlarged - many arbitrators are already feeling the pains of a large docket of cases. Removing mandatory lists of potential arbitrators appears to be one way to address this problem, as does the need to improve arbitrators' compensation to keep up with international standards.

Finally, the arbitration community must continue its fruitful collaboration with the judiciary. This recently resulted in an unprecedented seminar held at the Supreme Court with the participation of leading arbitration practitioners and judges of both the Supreme Court and the Superior Court of Justice, who embraced the principle of judicial restraint in matters submitted to arbitration.

The challenges of arbitration in Brazil will continue to grow as the country is likely to experience its fastest economic development in the next decade. Improvements in the quality of arbitral awards, as well as in the process itself, will require a great deal of discussion within the Brazilian arbitration bar. Apparently, the early stigma mentioned above is also the solution to these booming times: let there be many more seminars, symposia and congresses about arbitration!

For further information on this topic please contact Antonio M Barbuto Neto or Fernando Eduardo Serec at Tozzini Freire Advogados by telephone (+55 11 50 86 50 00), fax (+55 11 50 86 55 55) or email (abarbuto@tozzinifreire.com.br or fserec@tozzinifreire.com.br).


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