BRAZIL Law and Practice Contributed by: Cláudio Finkelstein, Maria Isabel Gori Montes and Laura Martini Brevilieri, Finkelstein Advogados
respect the negative effect of kompetenz - kompetenz , leaving it to the arbitral tribunal to rule first on such matters. However, a recent and much-debated deci - sion has modulated this boundary. In a multiparty arbi - tration before the CAM-B3, the chamber’s president, applying an internal rule inspired by the Dutco case, appointed all three members of the tribunal and set aside a co-arbitrator previously nominated by one of the parties. The São Paulo Court of Appeals (Apelação Cível No 1129029-43.2024.8.26.0100, 2nd Reserved Chamber of Business Law, judgment of 18 Novem - ber 2025) allowed judicial review by characterising the president’s decision as administrative – rather than jurisdictional – in nature: because the appointment was treated as an act of procedural administration by the institution, and not as an exercise of the tribunal’s jurisdiction, it was held to be subject to ordinary judi - cial review of its legality without offending kompetenz - kompetenz . On the merits, the court found that the party’s right to appoint its own arbitrator under Article 13 of the BAA prevailed over the institution’s internal rule, reinstated that party’s nominee and annulled the constitution of the tribunal. The decision is not yet final. 4.4 Challenge and Removal of Arbitrators Under Articles 13, 14 and 20 of the BAA, arbitrators must meet the requirements of legal capacity, impar - tiality and independence. They are subject to the same grounds for impediment and suspicion applica - ble to judges under Articles 144 and 145 of the Code of Civil Procedure (CCP), and must therefore remain independent of the interests of those involved in the proceedings. Arbitrators are also under a duty to dis - close any fact that may raise justified doubt as to their independence or impartiality (Article 14, paragraph 1). In institutional arbitration, the institution will normally decide the challenge unless its rules provide other - wise. If an arbitrator who could not serve improperly remains in office, this may later support an annul - ment action against the award – either because the award was rendered by someone who could not act as arbitrator (Article 32, II) or because the principles of impartiality and equal treatment set out in Article 21, paragraph 2 were violated (Article 32, VIII). Brazil - ian courts, however, generally require a concrete and
relevant impact on independence, impartiality or due process. 4.5 Arbitrator Requirements As discussed in 4.4 Challenge and Removal of Arbi- trators , the BAA requires arbitrators to be impartial, independent and legally capable. They must also act with diligence and discretion, and are subject to the rules on impediment and suspicion applicable to judges under the CCP, where compatible with arbitra - tion. In practice, this assessment is also – and almost always – guided by soft-law instruments, such as the IBA Guidelines on Conflicts of Interest in International Arbitration and the CBAr guidelines on the arbitrator’s duty of disclosure. Arbitrators also have a continuing duty of disclosure, from the time of appointment and throughout the proceedings, regarding any circumstance that may give rise to justifiable doubts as to their impartiality or independence. This duty is assessed objectively and has also been addressed by the Federal Justice Council’s Jornadas de Prevenção e Solução Extraju- dicial de Litígios . Failure to disclose relevant facts may lead to the arbi - trator’s removal and, in more serious cases, to the annulment of the award. The SCJ generally adopts a case-by-case approach: a breach of the duty of dis - closure does not automatically invalidate the award unless the omitted facts are sufficiently relevant to cast objective doubt on the arbitrator’s impartiality or independence.
5. Jurisdiction 5.1 Challenges to Jurisdiction
The sole paragraph of Article 8 of the BAA empowers the arbitral tribunal to decide on its own jurisdiction, giving effect to the kompetenz - kompetenz princi - ple. The tribunal has primary authority to rule on the existence, validity and effectiveness of the arbitration agreement and of the contract containing it. This prin - ciple also has a negative effect: as a rule, state courts must defer to the arbitral tribunal, which has priority to rule first on its own jurisdiction, with judicial review
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