Ana Júlia Moraes
Lawyer at Marcos Martins Advogados
Although not widely used in Brazil, the Arbitration Law has always proved to be an effective alternative for resolving conflicts, eliminating the need for the parties to go to the Judiciary and face a long bureaucratic process. In a new bill, Bill 3.293, discussed in the Chamber of Deputies, however, this solution could be put at risk – eliminating its attractiveness and ease of arbitration proceedings.
Enacted in 1996, the Arbitration Law allowed disagreements to be resolved in a more agile and uncomplicated way, without intermediation and the need for legal support. In these processes, the parties are free to come to an agreement and establish all the points to be discussed, with the support of a trained professional to resolve the issue.
Apart from the beneficial empowerment for disagreements, this flexibility allows processes to be resolved in a shorter time and without the bureaucracy usually seen in cases that go through the courts. All this, without limiting geographical barriers, since the court selected to analyze the case does not need to be located in national territory. All these benefits, however, may cease to exist if the bill is approved.
Under an urgent request for analysis sent by members of parliament, the proposals highlighted could radically interfere with the procedure adopted in the country. Among the possible changes, the confidentiality of cases is one of the points of greatest concern, in an attempt to interfere in private relations.
In a nutshell, the protection of privacy, which today guarantees that those involved can discuss any issues related to corporate strategies that do not concern third parties, will become an exception, which can only be requested in exceptional cases, upon presentation of justifications for such secrecy. In addition, the simultaneity of a large volume of cases judged by each arbitrator will tend to be limited to just ten at the same time.
Not enough, a new decision by the US Supreme Court has become another aggravating factor for the prosperity of arbitration in Brazil – it has ruled that the anticipated production of evidence usually required for the continuation of each case can only proceed if it is issued by an international court. Practically speaking, the measure will bring greater obstacles to arbitration proceedings around the world – making it difficult to access documents, testimonies or any other evidence on American soil.
In addition to reducing agility and further limiting judicial procedures, the American decision will require Brazilian conflicts to be judicialized and, only after validation by this body, be allowed to proceed in an international territory. Depending on how this Supreme Court decision is applied in practice, the peace of mind previously enjoyed in resolving conflicts will be seriously jeopardized, generating higher costs and increasing the time it takes to process cases, discouraging the opening of cases in the country for attempts to resolve them in other regions.
Brazil’s business environment is at serious risk with the start of the rulings. Accustomed to the ease of resolution, the increased bureaucracy and costs generated by the changes could significantly reduce the financial attractiveness of this type of procedure, in view of a discouraging and lengthy validation process.
If approved, the opening of new processes will require extra attention from the parties involved, especially in drawing up more detailed and complete clauses as a way of bringing as much reliability as possible to the contractual relationship. The rules of the game will need to be very well discussed, avoiding further wear and tear that could compromise or hinder the resolution of any legal conflict.
Ana Júlia Moraes is head of the civil area at Marcos Martins Advogados.
About Marcos Martins Advogados: founded in 1983, the firm is highly regarded in the areas of Corporate, Tax, Labor and Business Law. Based on values such as commitment, ethics, integrity, transparency, responsibility and the constant specialization and improvement of its professionals, the firm positions itself as a true partner for its clients.
