1 LLM International Business Law (Queen Mary and Westfield College – London University), Senior Partner Gomm Santos – Advogados Associados, Member of the Directory Board of Brazilian Arbitration Committee and Director of the Mediation and Arbitration Centre of Parana Chamber of Commerce.

On my first day of LLM course at Queen Mary and Westfield College (University of London), on October 12 19922, Professor Julien D. M. Lew3, after having heard my personal presentation, kindly asked me:

“Are you sure you are in the right classroom”? Surprised by the fact that for the first time the School of International Commercial Arbitration4 was receiving a Brazilian student - and showing a mixture of curiosity and satisfaction with my answer - he wished me good luck for the upcoming academic year and raised a question: “is this a sign that things are changing in Brazil?

Having passed more than a decade since then, one can say that arbitration in Brazil has indeed dramatically changed. In fact, it had to. In an ICC award, for example, rendered in the mid-80s5, where several issues were raised related to the ineffectiveness of the arbitration clause where a Brazilian party was involved, it was ruled that “a country like Brazil, which is more and more involved in the fabric of international trade cannot place itself in a position of splendid isolation, which would imperil the ability of its businessmen to enter into international commercial agreements.”

Therefore, during the ‘90s6, Brazil, following the winds that blew throughout Latin America, enacted a new legislation on arbitration and ratified important international conventions, (New York and Panama). Strong efforts have been made for the spread, study and development of arbitration and various arbitral institutions have emerged. The interest in mediation has also increased in the near past. There are now solid movements throughout the region to increase the use of mediation. Brazil is not a exception and a mediation bill is about to be presented before Parliament.

2 4 years before the enactment of the new Brazilian Arbitration Legislation

3 Head of the School of Internation Commercial Arbitration

4 Established within the Centre for Commercial Law Studies at Queen Mary and Westfield College

5 Case 4695

6 For example: Bolivia – Ley de Arbitraje y Conciliacion nº 1770 de 10 de Marzo de 1997

Contrary to the world trend and following the well-known hostility in the region towards arbitration, Brazil remained for a long time faithful to historic traditions, hindering the use of arbitration as a useful way to settle conflicts. In fact, a hardly explainable anomaly for a country whose birth certificate was due to an Arbitration Act7. Arbitration was also expressly recognized, in a way or another, among all Brazilian Constitutions as from the first Imperial Magna Carta dated back to 1824.8

During the first half of the 19th century, mandatory arbitration was introduced to questions related to insurance and services, while the famous decree n. 737 of 18509 - a truly Code of Commercial Procedure - established arbitration to disputes between traders. One can also mention the Brazilian Commercial Code which prescribed arbitration in several specific instances10 and the large use of arbitration to solve Brazilian boundary limit questions.

7 The Treaty of Tordesilhas between Castilla and Portugal allowing the transmission of the Portuguese culture to our yet unborn futue nation.

8 Art. 160 allowed the parties to appoint arbitrators in matters related to civil cases.

9 It was revoked by Law 1350 of September 14, 1866.

10 Art. 245 CCO 1850 (Commercial Lease Contract)

As highlighted by Pedro Batista Martins11, Brazil settled border disputes with Argentina and British Guyana by arbitration in 1900.The highly contested dispute with Bolivia over the currently Brazilian territory of Acre (at the Amazon region) was solved by arbitration. Arbitration was also used in 1910 to successfully settle the mutual claims with Peru regarding problems emerged in the border. An early example of the success of arbitration in the international scenario was the settlement with the United States to bring to an end the indemnity claims resulting from the shipwreck of the American vessel “Canada” on Brazilian shores. In the same period, Brazil arbitrated disputes with Sweden and Norway that resulted from nautical collisions. Finally, Brazil's experience with arbitration includes participation by prominent Brazilian citizens on international arbitration tribunal, often cases of major import12.

In addition, Brazilian Government had never been receptive to the main international agreement related to arbitration.13

11 Presentation made at the 1st Annual Miami International Arbitration Conference- January 15-17 2003

12 The Earl of Itajubá was appointed member of the Arbitral Tribunal established to solve disputes arising out of the war of Secession (Alabama case).

13 Panama Convention was ratified in 1996 by Decree n. 1902 of May 9 and the ratification of New York Convention was done in 2002, by Decree 431, although Genena Protocols had been ratified.

The arbitration clause was considered in the Brazilian Code of Civil Procedure - which regulated arbitration before law 9307/96 - as a “pactum de contrahendo”; a mere promise to contract. According to the previous legislation, in order to exclude State Courts jurisdiction, the agreement should include a clear indication of all details of the dispute which, needless to say, was impossible to state during the contractual phase.

It is common sense that when the parties are drafting the contract, they hardly know the possible nature and the specific characteristics of the conflict; in fact, they even do not know if a conflict will come out. But if it came out, the parties – before law 9307/96 – were forced to sign a second agreement; the socalled submission agreement (compromisso) where, among other requirements, it should contain the subject matter of the dispute and the name of the arbitrators14.

According to the previous law, the court was required to dismiss judicial proceedings and to refer the case to arbitration only when the interested party could demonstrate that the parties had agreed to resolve the dispute in the form of a compromisso15.

Second consequence: The non-compliance with the arbitration clause, pushed the bona fide party to Court where – in theory - it could pursue losses and damages16 against the other party for breach of a bilateral promise to submit future disputes to arbitration. Not surprisingly, there is no report in the Brazilian Case-law of a claim of this kind.

In practical terms, it was then more convenient to the parties to forget the existence of the arbitration clause and to have the case directly presented before the State-judge. Or, in other words, it was easier and less timeconsuming for the parties not to discuss the use of arbitration and go directly to litigation provisions.

14 Art. 1074 of the Brazilian Code of Civil Procedure which was revoked by law 9307/96 - art. 44

15 Art. 267, section VII of the Brazilian Code of Civil Procedure which was modified by law 9307/96 - art. 41

16 with all the difficulties to ascertain the amount due

The second barrier to the development of an arbitral culture relates to the award. An arbitral award to be enforceable had to be previously ratified in Court. Paradoxically, one of the main purposes of the parties when choosing arbitration consists of avoiding any and - if possible - all intervention of the State Courts in the matter. The necessity to submit the award to Court recognition eliminated several advantages of the institute. The confidentiality disappeared, costs increased and finally the speed would be seriously damaged since judicial steps towards recognition17 allowed the demand to remain pending for several years18. In the case of a foreign award19, the requirement was a double approval (double exequatur or recognition) since the award had to be approved by the Court in the jurisdiction were the award was rendered as a prior condition for the Brazilian Supreme Court’s homologation.

As noted by Paul Mason20, the fast pace of technological change, privatizations, foreign investment and globalization affecting Latin America starting in the mid-1990s has generated greater demand for arbitration of international commercial disputes. The boom period of the mid-1990s was a time when large deals and contracts were signed and the seeds of modern international commercial arbitration were sown once again on Latin American soil. International investors and businesses setting up operations in Latin America want to be assured that any disputes that arise will be decided on their merits, expeditiously, impartially, in confidence, and by knowledgeable experts.

17 the recognition decision could be submitted to various different appeals, from State Courts of Appeals to the Supreme Court.

18 Carlos Alberto Carmona “Arbitration in Brazil” - A speech delivered in Miami on April 7, 1997.

19 Brazilian Law defines what is considered to be a foreign award (art. 34, sole paragraph)

20 Seven Keys to Arbitration in Latin America published by Lexis Nexis. A commentary reprinted from the February 2004 issue of Mealey´s International Arbitration Report, pp. 1 and 2

Brazilian Federal Government finally noticed that our national legislation, in comparison with that of other countries was completely outdated. For such reason, three bills were drafted21 by the government itself and submitted to analysis and suggestions from lawyers and traders. Aside for technical problems - added to the lack of political will - they were simply dismissed.

Time had come to listen to society, claiming for an efficient method to solve disputes which only happened in 1991 upon initiative of Liberal Institute of Pernambuco State.22 A project known as Arbiter Operation - under the tireless command of Mr. Petronio R. G. Muniz23 - was launched in order to restore the discussion of the apparently forgotten institute. The intention was to have a new bill duly prepared and presented by the Brazilian society based on practical experience so that it could meet the wishes of those – Brazilians and foreigners alike - who are in search for an efficient and speedy method of settling controversies24.

Therefore, a reporting commission25 formed by experienced law professors was constituted and few months later a new draft was presented to society to receive suggestions from traders, lawyers, significant public sectors, including members of the Judiciary Power. The final draft was approved in a National Conference held in Curitiba in April 1992. The National Congress approved the bill - as it was presented26 - in September 1996 and the President of Brazil sanctioned the law during a public ceremony held on September 23, 1996. The new law was then published in the Official Gazette on the following day and has been in force since November 24, 199627.

21 In 1981, 1986 and 1988.

22 Carlos Alberto Carmona “Arbitration in Brazil”. A speech delivered in Miami on April 7, 1997.

23 Arbiter Operation´s National Coordinator.

24 Adapted from Carlos Alberto Carmona “Arbitration in Brazil” - op. cit.

25 The Reporting Commission was composed by Selma M. F. Lemes, Pedro Batista Martins and Carlos

26 In fact, from all the amendments that had been presented before Parliament only one, related to the

27 Art. 43 - “This law shall take effect sixty days after the date of its publication”

Soon after the enactment of the Brazilian Arbitration Act 1996 (“The Act”), one of the Supreme Court’s justice, taking advantage of a request for recognition of an arbitral award issued in Spain28 - rendered partially in favor of a Swiss company against a Brazilian party - recommended a previous judgment by all members of the Supreme Court regarding the possible unconstitutionality of The Act.

- Article 7 still refers to empty arbitral clause and deals with a claim before State Court for specific performance when a party shows reluctance to initiate arbitral proceedings. It provides in such a situation for a judicial hearing where the parties shall agree to the terms of a compromisso, or in the absence of such agreement the judge is to appoint the arbitrator, with the judge's decision constituting the compromisso itself.

28 M.B.V. Commercial and Export Management Establishment vs. Resil Indústria e Comércio Ltda, Agravo Regimental

direction as to the Attorney General to the effect that the parties are free to agree to arbitrate a dispute without violating Article 5, paragraph XXXV of the Brazilian Constitution (which guarantees the right of access to the State-Courts), and to the effect that the law may provide for no appeal from the arbitral award.

However, Brazilians and the International community were taken by surprise when Justice Pertence concluded that the parties were not free to agree to arbitrate any future disputes without violating Art. 5, paragraph XXXV of the Constitution. The essence of his argument is that, while the parties are free to settle a dispute or to refer it to arbitration, exercising their freedom to dispose of "available rights", they are not free to dispose of rights which are not certain due to the fact that the dispute and its characteristics have not yet arisen.

This interpretation has received strong criticism by traders, lawyers, professors, scholars as well as members of Judiciary Power. Apart from its technical misunderstandings, Justice Sepulveda Pretence’s opinion did not mention the Inter-American Convention on Commercial Arbitration - Panama Convention29 - which had already been ratified. Nor, for that matter, Sepulveda Pertence considered the Geneva Protocol30 of 1923 on arbitration.

In fact, the debate regarding the constitutionality issue brought to bail the ideological content and the extreme conservativeness of the minority of the members of the Supreme Court that feared the unknown consequences of the so-called potential “privatization of justice” and the consequent lack of prestige of the Judiciary Power.31 Fortunately, for the benefit of the country and of the

29 Brazil has ratified the Interamerican Convention on International Commercial Arbitration done at City of Panama of 1975 (Decree No. 1902 of 05.09.96). This convention is effective in all countries of MERCOSUR and 16 American countries adopt it. In general lines, this Convention sets forth: a) the recognition of the arbitration clause with obligatory nature and binding effect, whether through clause inserted in agreement or through exchange of letters or communications by telex; b) the non-necessity of dual ratification of the arbitration award; c) the inversion of the burden of proof; d) the application of the Rules of the Interamerican Commercial Arbitration Commission – IACAC.

3032 Protocol of Geneva of 1923 was in force in Brazil, for the recognition of arbitration clauses (Decree No. 21187/32), setting forth that in international agreements the arbitration clause had binding effect. This understanding was ratified by the Higher Courts case law (Special Appeal 616 – RJ – 890009853-5, j.09.24.90 – Lex Case law of STF/TRF, Feb., 1991, 18:108-30).

31 Adapted from Pedro Batista Martins´ presentation made at the mentioned conference

9

It is interesting to mention a brief transcript32 of some of the highest judicial Court’s opinion in such historic decision33:

32 personal translation

33 AGRSE 5206-7 – Reino da Espanha

Bar Association was also requested to issue an opinion whether article 21, paragraph 3 of The Act would be unconstitutional since it allows the parties to postulate before the arbitral tribunal in person or by way of an attorney. Unanimously, the highest body of Brazilian Bar ruled that it would be inconvenient and out-dated filing a petition to the Legislative Power to try to modify a fully constitutional law in order to impose the mandatory presence of a lawyer during arbitral proceedings before acknowledging how this method of settlement of disputes works in practice.34

Apart from removing the two main obstacles - as mentioned above, the Act repositioned Brazil into its path to modernity. According to the Reporting Commission, the Spanish legislation on Arbitration35 and de Uncitral Model Law36 were the basis for the proposed law which also received relevant contributions from New York and Panama Conventions.

Art. 2º § 1: The parties may freely choose the rules of law to be applied in arbitration, as long as there is no violation of good customs and public order.

34 Decision rendered in November 17 1997 (File nº 4234/97/COP – Decision º 028/97/COP – Rapporteur

35 1988 version.

36 To know more about Uncitral Model law: see Aron Broches “Commentary on the Uncitral Model Law on International Commercial Arbitration” - Kluwer (1990). Alan Redfern and Martin Hunter “Law and Practice of International Commercial Arbitration - Sweet & Maxwell - 2nd edition (1991) pp.508-524.

In a recent Brazilian case38, following the dominant caselaw, prevailed the principle of party autonomy39 but it still remained uncertain what would be the outcome had the parties not expressly agreed in the law applicable to the merits of the dispute.

37 It is the effective acknowledgment of the rules established by the international community that make easier and know all commercial mechanisms, such as Incoterms and the Uniform Customs and Practice for Documentary Credits. In addition, it protects Lex Mercatoria which has in arbitration practice its the most authentic application.

38 Agravo de Instrumento n. 1.111.650-0 – 1º Tribunal de Alçada Civil de São Paulo, between Total Energie SNC versus Thorey Invest Negócios Ltda.

39 The principle of party autonomy is well respected. According to the new law, the parties are free to indicate either the law applicable to the merits or allow the application of general principles of law, customs and usages and the rules of international trade. The arbitration also act as amiable compositeur if the parties so agree.

But, one must bear in mind that while national courts owe allegiance to their national law an international arbitral tribunal does not owe allegiance to a particular national system of law. Its appointment is not due to the state, but to agreement of the parties; and in applying the law chosen by the parties, an arbitral tribunal is simply carrying out their agreement.40 The seat of the arbitration is usually chosen for reasons other than the conflict rules of the forum: neutrality, geographical convenience, a pro-arbitration approach by local courts, etc.

Following the international trend, the autonomy of the arbitration clause is expressly recognized in the law41. A full recognition of the separability principle is vital to ensure that the wishes of the parties will be respected.

It is widely understood that if the arbitration clause is not held to survive the invalidity of the contract, a party could well be encouraged to evade his obligations to arbitrate42.

The law also contemplates expressly the principle of competence/competence through which the arbitrator shall decide at his own discretion or on request of the parties, the issues concerning his independence or impartiality as well as the existence, validity and efficacy of the arbitration agreement as well as the main contract43.

40 Alan Redfern and Martin Hunter – Law and Practice of Internatinal Commercial Arbitration, Sweet and Maxwell, 1991 ed. p. 98

41 Art. 8º.

42 “If the arbitral agreement were not independent from the underlying transaction is would be suffice to question the latter´s validity to prevent the immediate effectiveness of the arbitral clause until such preliminary issue is decided by adjudicators (most likely a state court) not chosen or designated under the arbitral clause.

43 Art. 8 - sole paragraph.

If there is an arbitration clause containing a provision concerning the procedures for appointing the arbitrator44 and one of the parties decide, irrespective of such agreement, to start proceedings in court, the other party who wishes to abide by the agreement may45 apply for a dismissal of such proceedings.

If there is an arbitration clause but with no provision concerning the appointment of the arbitrator46 and should one of the parties show resistance as to the initiation of the arbitration, the interested party may summon the other one to appear in court in order to prepare and to sign the compromisso47 with the judge designating a special hearing for such a purpose. In the case Compushopping v. Americel48, the latter showed reluctance to start arbitral proceedings, irrespective of an agreement to arbitrate (empty clause). It was signed the compromisso before the judge.

(i) repels the State Court jurisdiction (negative effect) and (ii) has the power itself49 to establish the arbitration50 (positive effect)

It must be stressed that both legal effects, negative and positive, have already been subject to several State-Court decisions, which have ensured them normal treatment.

44 The so-called “full clause”; as it is the case with a clause that refers to the rules of a particular arbitral institution.

45 This article modified some of the provisions of the Brazilian Code of Civil Procedure which stated that only the submission agreement (compromisso) could be able to dismiss court proceedings.

46 The so-called “empty clause”. Art 6 and 7 of Brazilian Arbitration Act gives the possibility of a suit before the State-Court: action of specific performance..

47 Art. 7.

48 Special Appeal nº 450.881 – Superior Tribunal of Justice. Published in Revista de Direito Bancario do Mercado de Capitais e Arbitragem (RDBA) nº 20/393.

49 without the requirement that all parties to a dispute sign a second agreement; i.e. the compromissoso

50 Art. 5. The parties may refer in the arbitration clause to the rules of an institution or entity specializing in arbitration,  and the arbitration may be initiated and conducted in accordance with these rules, or at the same time, the parties may establish in their own arbitration clause or in another document, the agreed-upon form for instituting arbitration.

was held that the Act – being of a procedural nature – also applies to contracts that were concluded before 199651

More recently, a Brazilian court was involved in an action for suspending arbitral proceedings (partial award) rendered in New York in a case between the French company Renault and CAOA, its former dealer in Brazil.52 Making reference to another case decided before it, involving the same parties which the principle of party autonomy and the jurisdiction of the arbitral tribunal in accordance with ICC Rules had been upheld53, it ruled that the competent authority had to be a US court and ismissed the case.

Only disputes related to property rights may be subject to arbitration54. This includes matters that arise in the context of labor relations, consumer transactions and administrative law. The arbitrability of disputes in Brazil has a broad scope and also includes disputes between companies and their shareholders55.

51 Case published in Revista de Direito Bancário do Mercado de Capitais e da Arbitragem (RDBA nº 18/385)

52 Agravo de Instrumento nº 285.411-4/0 – 5º Câmara de Direito Privado do Tribunal de Justiça do Estado de

53 Agravo de Instrumento nº 132.793.4/0. Case published in Revista de Direito Bancario do Mercado de

54 Article 1 – Persons capable of entering into contracts will be able to avail themselves of arbitration in order

55 Brazilian Corporate Act, art. 109, par 3, amended by Law 10.303 of October 31,2001.

In the Companhia Paranaense de Energia (Copel) vs. UEG Araucária Ltda. case, Copel filed against UEG before the 3rd Lower State Treasury Court of the City of Curitiba, a preliminary injunction seeking that ICC arbitration clause should be declared null and void, inoperative and incapable of being performed based on the fact that arbitration is not the competent jurisdiction for claims (publicrelated matters) involving it as a government-controlled company.56 The preliminary order was granted by the local judge. This decision is likely to be object of appeal before the Superior Tribunal of Justice in the near future.

AES case the arguments were similar to those raised at Copel´s. In this case it was also argued that the wording in the arbitration clause did not have a binding effect since it stated that the disputes maybe solved by arbitration57.

After the Supreme Court jurisprudence indicated that sovereign immunity only applies to acts of state (imperium)58, the arbitration oppositionists have been raising another issue attempting to avoid the arbitration procedure on disputes involving administrative law, that is, the need of a prior and mandatory rule authorizing arbitration.59

Such understanding was based on the fact that the disposition of public assets and rights is always subject to prior legislative

56 Case Copel vs. UEG Araucária Ltda. (Published in Revista de Direito Bancário e de Mercado de Capitais e de Arbitragem (RDBA 21/421)

57 Case CEEE vs. AES. Published in Revista de Direito Bancário e de Mercado de Capitais e de Arbitragem(RDBA 18/389)

58 Civil Appeal n. 9696 – São Paulo, Rel. Min. Sydney Sanches. Published in Revista Trimestral de Jurisprudencia133/167).

59 See Copel case (RDBA 21/421)

The Federal District Justice Court60 and the National Audit Court (Tribunal de Contas da União)61 have already positioned themselves favorably to arbitration for solution of disputes arising from administrative agreements. Similarly, the Public Services Permission and Concession Law62, the Telecommunications Law63, the Petroleum Law64 and the Water and Land TransportS Law65 expressly allow the adoption of arbitration as a means to settle their conflicts.

Article 21, § 2º states that during the arbitration proceedings there shall always be respect for the principles of the due process of law, equality of the parties and the impartiality of the arbitrator. It is the basic rule that every party to a dispute must be given a fair opportunity to present his case and to answer the case of his opponent.66 In addition, the arbitrator must be - and must be seen to be - unbiased. The act embodies a true code of ethics when prescribing at article 13, § 6º that in the performance of his duty, the arbitrator shall proceed diligently, efficiently, independently and shall be free and remain free from bias.

Considering that in the majority of the cases, the parties agree on arbitration under the rules of an arbitral institution or specialized entity, the Act confers strong prestige to institutional arbitration67. The parties who agree to submit any dispute to arbitration in accordance with the rules of a named institution

60 Case CAESB vs. Seveng Civilsan e Construtora Andrade Gutierrez. Mandado de Segurança n. 1998/002003066-9

61 Decision 188/95, Rio-Niterói bridge’s concession, DNER and Consortium Andrade Gutierrez / Camargo Correa.

62 Law n. 8987/95.

63 Law n. 9472/97.

64 Law n. 9478/97.

65 Law n. 10233/2001.

66 See Ronald Bernstein, John Tackberry, Arthur Marriott and Derek Wood “Handbook of Arbitration Practice” - 3rd edition (1998) pp. 81-89.

67 Art. 5, art. 13§3, art. 16§1 and art. 21 of The Act.

effectively incorporate that institution’s book of rules into their arbitration agreement68.

And automatic incorporation of a set of rules is one of the principal advantages of institutional arbitration since they have generally passed the essential test of working well in practice and undergoes periodic revision69.

Although there is only one place of arbitration (art. 26, IV) which establishes the nationality of the award (art. 34, sole paragraph) this does not mean that the arbitral tribunal must hold all its meetings or hearings at that particular place.70 Since international commercial arbitration often involves people of many different nationalities, it is by no means forbidden for an arbitral tribunal to hold meetings and/or hearings in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties and witnesses.

Article 5 of the Act states that “when an arbitration clause makes reference to the rules of a particular arbitral institution or specialized entity, the arbitration shall be instituted and conducted in accordance with such rules, unless otherwise agreed by the parties.”

According to article 13 of the Act, “any person of legal capacity who enjoys the confidence of the parties may be appointed as arbitrator” which means that foreign arbitrators can well be appointed. This is quite justifiable since it is widely known that one of the features of international commercial arbitration

68 So, as pointed out by Mr. Julian Lew in the booklet issued by Herbert Smith (February 1998) before chosing an arbitral institution, the parties must be aware of: a) are the rules clear, easily understood and userfriendly?,

69 See more on Alan Redfern and Martin Hunter (op cit) pp. 53-55.

70 In the CEEE vs. AES case there was a technical misunderstanding as to interpretation of the place of arbitration .

State courts can intervene in arbitration at one of the three stages. In the beginning of the arbitral process in order to enforce the arbitration clause71, during the course of arbitral proceedings in order to compel e.g. the attendance of a reluctant witness72 or after the award has been rendered. Although the new law has lifted the need of judicial homologation, it created a mechanism of control by granting to the interested party the right to apply to the State Court for setting aside the award73. It is important to stress that only formal aspects related to the validity of the award, the proceeding, or the arbitration agreement may be subject to a claim for nullity74; the court has no power to review the award on its merits.

It was also essential to submit to a change the rules related to the recognition and enforcement of foreign awards through the mechanism of the double exequatur: The Brazilian Supreme Court used to refuse recognition to awards rendered abroad which were not previously submitted to recognition before local foreign Courts. The Act abolished the outdated system so that the arbitral award will be solely subject to Federal Supreme Court homologation75. One shall bear in mind that the Supreme Court will only homologate foreign arbitral awards whose object can be resolved by arbitration under Brazilian law or the recognition or enforcement of the award would not be contrary to the Brazilian public policy76.

71 Art. 7. Only if it refers to empty clause as seen previously.

72 Art. 22 (2).

73 Art. 32.

74 Art. 33.

75 Art. 35.

76 Art. 39. See also Uncitral Model Law art. 36 (b).

Being a foreign award77 the arbitrator should draw attention to article 26 of the Act which states mandatory requirements related to his/her decision which means that, failing to comply with this rule, Brazilian Supreme Court – on its own motion – can deny the exequatur on the grounds that it would be contrary to National public policy. For instance, a no-reasoning foreign award would be against Brazilian public policy, even if the parties had expressly so agreed.

But the main argument which was used to refuse recognition and enforcement of foreign awards during the old regime,78 was the citation of the Brazilian Party. To avoid any possibility of discussions in the matter of summons presentation this should be done through rogatory letters.

The Act states that notification that falls within the framework of the arbitration agreement79 or of the procedural law of the country where the arbitration is held will be sufficient and binding, provided that a fair time for presenting the answer is duly granted to the Brazilian party80.

77 As well as domestic one.

78 Apart from the double exequatur

79 This being so the arbitration clause and the submission agreement (compromisso) according to articles 3, 4

80 Art. 39, sole paragraph.

And finally, if there is still a need for education by local judges, lawyers and arbitrators, the future of international arbitration in Brazil seems promising. Now it is also a question of marketing!!!