Sunday, July 09, 2006

Brazil, the former "Black Sheep"

On September 23, 1996, the Brazilian Arbitration Act —a piece of legislation heavily inspired in the UNCITRAL Model Law— was passed into law. Five years later, on December 12, 2001, a split 7-4 Brazilian Supreme Court decision upheld the constitutionality of the Brazilian Arbitration Act, which had been challenged ex officio by a Justice of the Brazilian Supreme Court (one Justice of the Supreme Court considered that arbitral clauses forced the parties to surrender their constitutional right to have their case heard in a court of law, and therefore, the sections of the Brazilian Arbitration Act concerning the binding nature of the arbitral clauses were unconstitutional). On June 7, 2002, Brazil finally acceded to the 1958 New York Convention, which became effective in Brazil on September 5, 2002.

The (i) passing of the Brazilian Arbitration Act, the (ii) Brazilian Supreme Court decision upholding the constitutionality of the Brazilian Arbitration Act, and (iii) the entering into effect in Brazil of the New York Convention, all together, have changed the long-established foreign views of Brazil as the “black sheep” of Latin America in its approach to arbitration. Such three changes have made international arbitration practice become possible in Brazil (although much has to be done until Brazil becomes an attractive venue for international arbitration).

To date, there are several law review articles on this subject have been written recently in Brazil and two law reviews exclusively related to arbitration. Presently, the shelves of Brazilian law bookstores carry out several books on the subject of international commercial arbitration. As for arbitration-related court decisions —whether they refer to decisions on exequatur of foreign arbitral awards, enforcement of arbitration clauses in international contracts, joinder of third parties, or other issues—, they have become more usual to find in Brazilian jurisprudence.

As there is little information on Brazilian arbitration available in the English language, this blawg is my contribution to revert this situation (an exception must be made to Arbitration Law of Brazil: Practice and Procedure, recently published in the US).

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