To be effective in Brazil, arbitral awards rendered abroad - deemed by our legal system as foreign awards - must be recognized by the Superior Court of Justice (STJ) according to the procedure set forth in Resolution No. 9/2005. On December 2, the STJ Special Court denied an application for recognition of a foreign arbitral award that had been declared null at the seat of the arbitration (SEC 5,782). The decision was unanimous and followed the vote of the case Rapporteur, Justice Jorge Mussi. This was the first time that the STJ Special Court addressed this subject. The application for recognition was made by the French company EDF International S/A and challenged by the Argentinean company Endesa Latinoamérica S/A and by the Spanish company YPF S/A.
The arbitration, seated in Argentina, was based on a dispute regarding the acquisition by the claimant EDF International S/A of shares held by the defendants in two other companies. The claimant initiated the arbitration seeking the review of the price of the shares based on a statement of the Central Bank of Argentina that extinguished the foreign exchange regime in force in that country (exchange rate parity between the US dollar and the Argentine peso).
The arbitral award, rendered in October 2007, was declared null by the courts of Argentina in December 2010 because it was based on equity, although there was no authorization from the parties for the arbitrators to decide that way. In Argentina, like in Brazil, arbitrators can only decide based on equity when this is expressly authorized by the parties and, in this particular case, the parties chose the application of the laws of Argentina. The decision to annul, rendered by the National Chamber of Commercial Appeals of the City of Buenos Aires and confirmed by Argentina's Supreme Court, has already become final and unappealable.
In his vote, the Rapporteur, Justice Jorge Mussi, mentioned the international treaties ratified by Brazil - such as the New York Convention of 1958 and the Las Leñas...