ISSUES AN IN-HOUSE LAWYER SHOULD CONSIDER FOR INTERNATIONAL ARBITRATION RELATED TO BRAZIL
You are an in-house counsel negotiating an international agreement. The transaction either involves a Brazilian entity (as a party or guarantor) or is to be performed in Brazil. International arbitration may be an adequate dispute resolution method, but you are not that experienced with Brazilian arbitration law. The purpose of this article is to present the main issues that one must consider before deciding on international arbitration from a Brazilian law perspective.
Brazil is considered a pro-arbitration country. In 1996, Brazil enacted the Brazilian Arbitration Act (BAA), which mirrored many of the provisions of the UNCITRAL Model Law. In 2002, Brazil ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Choosing the seat of arbitration
Under Brazilian law, an award will be classified as national or foreign depending on the seat of the arbitration. Arbitrations seated in Brazil will produce national arbitral awards, whereas arbitrations seated outside the country will produce foreign arbitral awards. This classification is critical because, under Brazilian law, national awards are equivalent to Brazilian court judgments and may be subject to immediate enforcement in Brazilian courts.
In other words, national awards will not be subject to any recognition proceeding. National awards may be subject to setting aside proceedings in Brazilian courts. Additionally, the grounds for setting arbitral awards aside are limited and set under Section 34 of the BAA. In principle, annulment proceedings should not stay or suspend the enforcement of arbitral awards.
Apr-Jun 2022 issue
Veirano Advogados