As Latin America's biggest market, Brazil is enjoying record foreign investment and business growth. Contracts for these activities often carry arbitration provisions. As Brazil is both a vital market and a relative newcomer to the international arbitration community, developments there merit close observation. In this Expert Commentary, the authors briefly identify and interpret the most important cases and legislation from 2007 through early 2008 impacting Brazilian arbitration law and practice.
The authors write: Much has been said and written about the growing importance of arbitration in Brazil, particularly after the Federal Supreme Court’s 2001 decision upholding the 1996 Arbitration Act, Brazil’s adoption of the New York Convention in 2002, and the booming Brazilian economy that has whetted the unprecedented appetite of foreign companies to invest in the country, as well as the desire of some large Brazilian multinationals to make acquisitions abroad - transactions that almost always involve arbitration provisions.
In addition to that, Brazil has become a pioneer in the region in its use of arbitration to resolve corporate shareholder disputes. Most of these have been domestic, although an increasing number of international joint ventures, mergers and acquisitions in Brazil carry arbitration clauses for shareholder disputes. One of the most well-known is the very large and complex multimillion dollar case of Brazil Telecom where an arbitration clause was invoked to help determine ownership rights of a domestic shareholder, Opportunity, and Italian corporate shareholders.
An objective way to assess the commitment of the Brazilian legal community towards arbitration is to analyze past decisions rendered by the Federal Superior Court of Justice (STJ), the highest authority on issues involving the interpretation of federal law (such as the Arbitration Act). The STJ also has exclusive jurisdiction to confirm foreign arbitration awards, i.e., those awards rendered outside Brazilian territory. [footnote omitted]