Thursday, December 07, 2006

Restrictions on Parties' Representation in Brazilian Arbitration Proceedings

Today I just came across an article in the November 2006 issue of Baker & McKenzie's International Litigation & Arbitration NewsletterInternational Arbitration – Pitfalls For Participants— which talks about a recent Rio de Janeiro chapter of the Brazilian Bar opinion "stating that only attorneys licensed to practice in Brazil may represent clients in local arbitrations governed by Brazilian law".

The article's authors state that "[a]lthough there is no statutory restriction on non-Brazilian arbitrators’ serving in Brazil, parties to arbitrations might fear, in the light of the Bar pronouncement, that such participation could lay the groundwork for subsequent challenges, in Brazil, to arbitration awards against Brazilian parties".

I have not seen this opinion of the Rio de Janeiro chapter of the Brazilian Bar, but I am very interested to get a copy of it. In any case, I can't see any legal basis for a Brazilian Court to prohibit a foreign lawyer from representing a party in arbitration proceedings in Brazil, even if —in a given case— the law applicable to the substance of the parties' dispute was Brazilian law. Section 21(3) of the Brazilian Arbitration Act is very clear when it lays down that "[t]he parties may be represented by an advogado, and may always be free to choose their representative or assistant at the arbitral procedure".

The above means that a party to arbitral proceedings in Brazil may choose an advogado as counsel, but it also means that the party may choose anybody to act as its representative in the proceedings, regardless of whether or not such advocate has a law degree or is registered with a local chapter of the Brazilian Bar as an advogado.

Considering the provisions of Section 21(3) of the Brazilian Arbitration Act, if Brazilian or foreign parties can be represented by non-lawyers (não-advogados) in arbitral proceedings under Brazilian law, what would be the legal basis for a Brazilian Court to prohibit a foreign lawyer act as counsel to a party arbitrating in Brazil? Sincerely, I can't see any reasonable arguments for such prohibition.

What the Rio de Janeiro chapter of the Brazilian —which I am a member— is attempting to do, without any merit, is to reserve the "arbitration market" to its own members (or Brazilian "advogados" in general). I strongly believe, however, that such attempt will not go any further than an "opinion" (which —by the way— is non-binding). At the most, it will be subject to a few articles and blawg postings!

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