Brazil's Tortuous But Ultimately Encouraging Path Towards The Implementation Of The NY Convention

Author:Ms Irene Gee
Profession:Clyde & Co

Arbitration in Brazil has come a long way since the passing of the Brazilian Arbitration Act in 1996 (the "BAA"). The BAA has its origins in the UNCITRAL Model Law and even though it preceded Brazil's ratification of the New York Convention by six years, the BAA is consistent with the New York Convention, at least partly because of its UNCITRAL origins. In these almost twenty years since the passing of the BAA and the ratification of the New York Convention, Brazil is slowly garnering a perception to be an arbitration-friendly jurisdiction. Despite or may be because of the success of arbitration in Brazil, the Brazilian Congress recently enacted an amendment to the BAA (Law No. 13129/2015) with a view to make punctual modifications to domestic aspects of the law. For example, the amendment confirms the ability of governmental entities to participate in arbitrations, the ability of companies and their shareholders to opt for arbitration in their bylaws, and expressly grants powers to arbitrators to issue interim relief. The amendment does not materially modify any aspect of proceedings to confirm foreign arbitral awards.

With the renewed interest in Brazilian arbitration that the new amendment has brought, it is timely to review the Brazilian jurisprudence on confirmation of foreign arbitral awards in these past 10 years.

Foreign arbitral awards 1 are subject only to a summary confirmation proceeding in the Brazilian Superior Tribunal of Justice ("STJ"). Merit inquiries (with the exception of sovereignty, public order and human dignity) are not permitted. See, e.g., Paladin PM Holmes Brazil Investors LLC v. Molnar Construtora e Incorporadora Ltda., SEC 8847 (2012/0244916-3).

STJ's role is limited to the determination whether STJ's requirements are met (STJ'S Internal Regulations), and whether any grounds for refusal to enforce exist (BAA, Articles 38 and 39). Articles 216-C and 216-D of STJ's Amendment to its Internal Rules No.18/2014 lay out the procedural requirements for confirmation proceedings. The confirmation petition must establish (1) tribunal's competence to hear the dispute; (2) valid service or validly obtained default award/ judgment; (3) res judicata; (4) sworn translation or consularization of the foreign arbitral award and of other necessary documents. In the event the petition lacks these requirements or is otherwise defective, the petitioner has an opportunity to cure the defect within a time period. If it fails to do so...

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