BRAZIL Law and Practice Contributed by: Arthur Villamil and Yuri Luna Dias, Villamil Advogados
13. Arbitration 13.1 Laws Regarding the Conduct of Arbitration
13.3 Circumstances to Challenge an Arbitral Award Challenging an arbitral award in court is limited and permissible only under specific circumstances, as arbitral awards are considered final and binding. The Brazilian Arbitration Law allows parties to request the annulment of an arbitral award in court if there are procedural or substantive issues that violate the legal framework or public policy. A challenge is allowed if: • the arbitration agreement is found to be invalid or non-binding under Brazilian law; • if one party was not given proper notice of the arbi- tration proceedings or was unable to present their case, thereby violating due process rights; • the arbitrators ruled on matters outside the scope of the arbitration agreement, known as beyond the parties’ requests (ultra petita); • the arbitrators acted with bias, demonstrated a conflict of interest, or engaged in misconduct dur- ing the arbitration; or • the award conflicts with fundamental principles of Brazilian public policy, which can encompass issues of legality, morality, or state sovereignty. The annulment action must be filed within 90 days of the award’s issuance. Brazilian courts emphasise minimal intervention in arbitration, so these grounds are narrowly applied, focusing on upholding the integ- rity and autonomy of the arbitration process. 13.4 Procedure for Enforcing Domestic and Foreign Arbitration The enforcement of domestic and foreign arbitration awards involves distinct procedures under the Bra- zilian Arbitration Law and international conventions like the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Domestic awards are enforceable in Brazilian courts similarly to court judgments, with no special formali- ties. If the losing party does not comply voluntarily, the prevailing party can file an enforcement action in a state court. The court will then enforce the award as it would any judicial decision, treating it as legally binding and final without re-examining the merits.
Arbitration is governed by the Brazilian Arbitration Law, which outlines the procedures for arbitration and the recognition and enforcement of arbitral awards. The Brazilian Arbitration Law legitimises arbitration as a binding method for resolving civil and commercial disputes, provided both parties have agreed to it, usu- ally through an arbitration clause in their contract. The Brazilian Arbitration Law grants parties signifi- cant autonomy in selecting arbitrators, procedural rules, and applicable laws, while ensuring fairness and impartiality in the proceedings. Brazilian courts generally respect the finality of arbitral awards and avoid intervening in the arbitration process. Domes- tic awards are directly enforceable in Brazilian courts without special procedures. For international awards, as Brazil is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, enforcement is facilitated through a confirmation (homologation) process by the STJ, which verifies compliance with Brazilian public policy standards. This approach sup- ports the principle of arbitral autonomy and minimises interference. 13.2 Subject Matters Not Referred to Arbitration According to the Brazilian Arbitration Law, only dis- putes involving freely disposable rights (those rights over which parties have legal control and may freely negotiate) are arbitrable. As a result, matters that involve public policy issues, criminal law, family law (such as divorce, child custody), or labour disputes involving employees (with some exceptions for high- level executives) cannot be settled through arbitration. Additionally, some matters related to consumer rights and certain administrative issues may also be restrict- ed, particularly where there is a significant public inter- est involved.
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