Early this week Brazilian newspaper Valor Econômico published an article about disclosure of arbitration to investors by publicly traded companies.
According to the article, just a few companies traded at Bovespa have been disclosing information about arbitrations they are parties to. The article mentions three of such companies: Grupo Pão de Açúcar; Embratel; and Brasil Telecom.
Two things to keep in mind:
- The Brazilian Arbitration Act does not have any provision regarding the confidentiality of arbitration (arbitration in Brazil is private, but not necessarily confidential);
- The Brazilian Securities and Exchange Commission - CVM does not have any specific rule regarding disclosure of arbitrations, therefore, parties should look for general disclosure rules when in doubt whether or not to disclose any arbitrations t their investors.
To date, neither a Brazilian court has ruled on this subject nor any fines have been imposed by CVM for lack of disclosure of participation in arbitration proceedings.