BRAZIL Law and Practice Contributed by: Arthur Villamil, Villamil Advogados
13. Arbitration 13.1 Laws Regarding the Conduct of Arbitration Arbitration is governed by the Brazilian Arbi- tration 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, provid- ed both parties have agreed to it, usually through an arbitration clause in their contract. The Brazilian Arbitration Law grants parties sig- nificant autonomy in selecting arbitrators, pro- cedural rules, and applicable laws, while ensur- ing fairness and impartiality in the proceedings. Brazilian courts generally respect the finality of arbitral awards and avoid intervening in the arbi- tration process. Domestic 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 confirma- tion (homologation) process by the STJ, which verifies compliance with Brazilian public policy standards. This approach supports the principle of arbitral autonomy and minimises interference. 13.2 Subject Matters Not Referred to Arbitration According to the Brazilian Arbitration Law, only disputes 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, crimi- nal law, family law (such as divorce, child cus- tody), 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 restricted, particularly where there is a signifi- cant public interest involved. 13.3 Circumstances to Challenge an Arbitral Award Challenging an arbitral award in court is limited and permissible only under specific circum- stances, 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 substan- tive issues that violate the legal framework or public policy. A challenge is allowed if: • the arbitration agreement is found to be inva- lid or non-binding under Brazilian law; • if one party was not given proper notice of the arbitration 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 miscon- duct during the arbitration; or • the award conflicts with fundamental prin- ciples 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, focus- ing on upholding the integrity and autonomy of the arbitration process.
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