BRAZIL Law and Practice Contributed by: Ivo Waisberg, Ricardo Pomeranc Matsumoto and Ana Rennó, Thomaz Bastos, Waisberg, Kurzweil Advogados
matters of public policy and cannot be waived or altered by the parties to an agreement. While parties have broad autonomy to shape the arbitral procedure, including the choice of rules and applicable law, they cannot waive the right to seek annulment on statutory grounds, nor can they create additional avenues for appeal not contemplated by the legislation. 11.3 Standard of Judicial Review Judicial review of the merits of an arbitral award is not permitted. The Brazilian Arbitration Act adopts a deferential standard, under which courts may not re- examine the facts or legal reasoning underlying the arbitral decision. This approach reflects the principle of finality and autonomy of arbitration in Brazilian law. As a result, arbitral awards are generally respected and enforced as final decisions. Brazil has signed, ratified, and fully incorporated the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards into its domestic legal system. The Convention was ratified in 2002 and was incorporated through Decree No 4,311/2002. Brazil adopted the Convention with the two standard reservations permitted under Article I (3): • the reciprocity reservation, meaning it will apply the Convention only to awards made in the territory of another contracting state; and 12. Enforcement of an Award 12.1 New York Convention • the commercial reservation, limiting its application to disputes considered commercial under Brazilian law. Since ratification, Brazilian courts have consistently applied the Convention to recognise and enforce foreign arbitral awards, subject to the limited refusal grounds set forth in Article V of the Convention and in accordance with the Brazilian Arbitration Act. 12.2 Enforcement Procedure To be enforced, a foreign award must first be recog - nised by the Superior Court of Justice (STJ) through a proceeding called homologação . Recognition may only be refused on the exhaustive grounds listed in
Articles 38 and 39 of the Brazilian Arbitration Act and Article V of the New York Convention, including: inca - pacity of the parties, invalidity of the arbitration agree - ment, lack of proper notice or due process, award rendered beyond the scope of the arbitration agree - ment, procedural irregularities, or if the award is not yet binding, has been annulled or suspended at the seat. Additionally, recognition may also be denied if the subject matter is not arbitrable under Brazilian law or if the award violates national public policy. Although Brazilian law provides that recognition may be denied if the award has been annulled at the seat, the STJ has not adopted a consistent position on the matter. In some cases, the STJ has refused recogni - tion where annulment was final in the seat (eg, SEC 5.782/EX), while in others it has granted recognition despite pending or concluded annulment proceedings (eg, SEC 611/EX). The court does not reassess the foreign court’s reasoning but may weigh whether the annulment is compatible with Brazilian public policy. When annulment proceedings are still pending abroad, the STJ may choose to suspend the recogni - tion proceeding or continue it, depending on the cir - cumstances and arguments presented. In respect of sovereign immunity, Brazilian courts recognise that state entities may waive immunity by agreeing to arbitration. Once waived, immunity from jurisdiction is lost, and enforcement against state assets may be allowed, subject to restrictions on Brazilian courts adopt a pro-enforcement and arbi - tration-friendly approach toward the recognition and enforcement of arbitral awards, both domestic and foreign. When it comes to public policy, Brazilian courts interpret this concept narrowly and consist - ently emphasise that only clear and serious violations of Brazilian domestic public policy can justify denial of recognition or enforcement. Public policy is under - stood primarily in the domestic sense, not in its broad - er or international version, and does not include mere divergence from Brazilian legal standards or public interest considerations. assets used for public purposes. 12.3 Approach of the Courts
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