Arbitration: conflict resolution mechanism in cases of judicial reorganization or bankruptcy

Alessandra R. Noronha Gomes
Lawyer at Marcos Martins Advogados

The granting of judicial reorganization does not have the power to alter the jurisdiction for judging and the nature of the claim that seeks recognition and quantification in arbitration proceedings.

The Superior Court of Justice, by ruling on Special Appeal 1.953.212/RJ, determined that lawsuits filed against companies undergoing judicial reorganization, which discuss illiquid amounts, must continue to be heard by the court in which they were originally filed, including those submitted to arbitration, until the amount due is effectively determined.

The basis of the decision is that it is up to the arbitrators themselves to decide on their competence to assess the existence, validity or effectiveness of the contract containing the arbitration clause, and it is certain that the mere granting of judicial reorganization or bankruptcy is not cause for a change in competence.

As a result, it will be up to the arbitral tribunal to determine the defaulted claims under the contract entered into between the parties, even if bankruptcy has been decreed or judicial reorganization granted. Only the universal court of judicial reorganization or bankruptcy will have exclusive jurisdiction to perform or control the enforcement of individual claims brought against companies in bankruptcy or judicial reorganization.

Therefore, with the judgment of the Special Appeal, the Superior Court of Justice recognized the competence of the arbitral tribunal to process and judge claims involving companies in judicial reorganization or bankruptcy, and it is certain that, within the scope of arbitration, the discussion will be limited to ascertaining the existence of the right, the amounts owed and the effectiveness of the contract entered into between the parties.

Marcos Martins Advogados is attentive to new legislation and case law, in order to provide adequate and effective advice to our clients.

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