BRAZIL Trends and Developments Contributed by: Karina Goldberg and Bruno Monteiro, Ferro, Castro Neves, Daltro & Gomide Advogados
• there is a violation of rules considered to be mat - ters of public order (however vaguely defined); or • there is a specific law or statute containing a restriction. In this sense, unless there is a violation of public order or there is a specific legal prohibition, it is even valid for Brazilian parties in a domestic legal transaction to opt for the choice of international law and the adop - tion of arbitration as a means of dispute resolution. To illustrate the matter, it is worth taking as an exam - ple a type of contract that very often involves parties of different nationalities, such as commercial repre - sentation contracts. In Brazil, this type of contract is regulated by Law 4,886/1965, whose Article 39 establishes that, “For the judgment of disputes aris - ing between the representative and the represented party, the common courts and the forum of the rep - resentative’s domicile shall have jurisdiction”. Even in this case, where a specific rule of jurisdiction is estab - lished, case law has already recognised the validity of any arbitration clause and the choice of foreign law to apply to such transactions. The first reason for the validity of these clauses consists in the fact that commercial representation contracts are of a business nature, making it even more relevant to observe the autonomy of will and contractual freedom of the parties. Similarly, scholars recognise that the choice of foreign law in this type of contract is even clearer when it is combined with the inclusion of an arbitration clause, considering that the arbitration regime is also governed by the primacy of the autonomy of the parties’ will. The validity of these provisions is only questionable if one of the parties can be considered as economi - cally vulnerable and, therefore, that the choice of for - eign law and arbitration clauses were imposed on the weaker party. This limitation stems precisely from the need to observe public order and the supremacy of the public interest, which has among its functions the protection of the vulnerable parties in legal relation - ships. Following this line of reasoning, state courts have ruled out arbitration and foreign jurisdiction clauses
only when they can find strong evidence about the vulnerable position of the party to a commercial rep - resentation contract. Therefore, Brazilian courts may conclude differently from the general rule of enforceability when one party (typically the representative) has not freely and know - ingly consented to the contractual dispute resolution provisions, reinforcing the need to assess the factual matrix of the contract, the relative positions of the par - ties, and the manner in which consent was obtained. However, these characteristics – such as vulnerability, lack of negotiation, and the adhesive nature of the contract – must be demonstrated with concrete evi - dence and are not presumed. Moreover, this assess - ment must be first analysed in the arbitral jurisdiction, in accordance with the principle of kompetenz-kom- petenz , as established in Article 8, sole paragraph, of the Brazilian Arbitration Law and long recognised by national courts, even in cases where it was alleged that a party to a commercial representation contract was vulnerable. Therefore, even if a party attempt to challenge a for - eign arbitration award that recognises the validity of the choice of law and of the arbitration clause, the Superior Court of Justice ( Superior Tribunal de Justiça ) has consistently ruled that it is not within its jurisdic - tion to review the merits of a foreign arbitral decision with respect to the nature of the contract or the rela - tionship of the parties, and that its analysis is limited to verifying formal and procedural requirements. Conclusion This article has sought to analyse the general approach of Brazilian law to the validity of the choice of jurisdic - tion and the choice of applicable law in international contracts with arbitration clauses, given the growing importance of the topic due to the globalisation and digitisation of the economy. Brazilian legislation, in line with the LINDB and the Brazilian Arbitration Law, grants autonomy to the parties in choosing the applicable rules, the jurisdic - tion and the form of dispute resolution. However, this autonomy is not unrestricted: Brazilian law imposes limits, such as compliance with public order, as estab -
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