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After 10 Years of Positive Developments, Does Confusion Remain in Brazil's Arbitration Law? - WAMR 2006 Vol. 17, No. 3

Author(s): 
Philip Dunham
Simon Greenberg
Page Count: 
27 pages
Media Description: 
PDF from World Arbitration and Mediation Report (WAMR) 2006 Vol. 17, No. 3
Published: 
March, 2006
Jurisdictions: 
Brazil
Practice Areas: 
Arbitrability,
Agreement to Arbitrate,
Enforceability of Arbitration Agreements,
Dispute Resolution & Litigation
Author Detail: 

 

Philip Dunham, Partner, Dechert, LLC, Paris Office

Simon Greenberg, Associate, Dechert, LLC, Paris Office

PDF221.78 KB

$40.00
Description: 

 

 
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Articles and Commentary
 
 
AFTER 10 YEARS OF POSITIVE DEVELOPMENTS,
DOES CONFUSION REMAIN IN BRAZIL’S ARBITRATION LAW?
By Philip Dunham & Simon Greenberg
 
In the last 10 years, Brazil has progressively taken important
legislative and judicial steps to enhance its “arbitral–appeal.” By enacting
Law N° 9307 of 1996 (“Arbitration Act”) and by ratifying the New York
Arbitration Convention and other conventions, Brazil began to shake off
its former reputation for hostility toward arbitration which was manifested,
notably, in Brazil’s treatment of arbitration clauses and the requirement of
double-recognition (or double homologação) of foreign awards. These
steps have instilled increasing confidence in arbitration by its users and
especially foreign investors and contractors.
 
A functional international commercial dispute resolution system in
Brazil was long awaited. Brazil is a substantial industrial power: it has the
largest population in Latin America and the Caribbean, is the eighth
largest economy in the world and has well-developed agricultural, mining,
manufacturing, and service sectors. The economy continues to expand
and productivity gains have contributed to a surge in exports. In 2004,
Brazil surpassed the previous year’s record export level over a range of
products and services.
 
Despite these economic developments, the justice system is
reputed for being slow and bureaucratic. Brazilian judges have a tendency
to be active in their interpretations of the law, providing opportunities for
multiple appeals. A result of this is that judges have effectively amended
several articles of the former Civil Code by thirty years of judicial lawmaking.
The Government is aware that complicated laws, unclear rights,
and overburdened and inefficient courts have earned Brazil the name
“Risk Brazil” with investors. In order to create a better environment for
foreign investment and to better promote international relations, Brazil has
also been pushing Congress to reform the country’s core legislation
(mainly, the Civil Code).
 
The attitude of the judiciary towards the developments in
international arbitration in Brazil has been mixed. While judges have
generally welcome the increasing use of arbitration as a means of reducing
their overwhelming case loads, some local courts have not been as
progressive as the legislature and the commercial world. Several