Recently, the 3rd Panel of the STJ decided, by 3 votes to 2, that a breach of the arbitrator’s duty to disclose only annuls an arbitration award if this breach affects the arbitrator’s impartiality.
In the case on trial, a medical services company and a doctor, convicted in arbitration proceedings, filed an action to annul an arbitration award on the grounds that one of the arbitrators failed to disclose a fact that could cast doubt on his impartiality. However, the claim was dismissed and the appeal to the lower court was rejected.
For the local court, there was no timely refusal or challenge of the chosen arbitrator, under the terms of the Arbitration Law, since the appellants, although they had access to the questionnaire and the arbitrator’s CV since his appointment, only discussed the duty of disclosure after the unfavorable award. Furthermore, the facts not disclosed by the arbitrator did not constitute a breach of impartiality.
The appellants filed a Special Appeal, arguing that, in order to annul the arbitration award, it would only be up to the Judiciary to ascertain whether or not there had been a breach of the arbitrator’s duty to disclose, without verifying whether the omission in fact harmed impartiality.
On the one hand, the votes of Justices Moura Ribeiro and Humberto Martins were to the effect that it is not up to the Judiciary to examine whether or not the undisclosed fact compromises the arbitrator’s impartiality, so that a breach of the duty of disclosure is sufficient to annul the arbitral award.
However, Reporting Justice Nancy Andrighi, who cast the winning vote, joined by Justices Ricardo Villas Bôas Cueva and Marco Aurélio Bellizze, held that the Judiciary must assess whether the undisclosed fact is capable of annulling the arbitration award. She pointed out that the validity of the award cannot depend solely on the parties’ subjective perception of the impact of the arbitrator’s non-disclosure of a fact.
This is because, according to the rapporteur, “in view of the exceptional nature of the action for annulment of the arbitral award and the wide possibility of situations that would be considered a breach of the duty of disclosure, it is imperative that the Judiciary carry out a case-by-case analysis of the elements brought to the record in order to verify the existence not only of a breach of the duty of disclosure, but also of the duty of impartiality and independence of the arbitrator.”
As you can see, this is a position that certainly contributes to maintaining the robustness of the national arbitration system, since it honors legal certainty and the credibility of the institution.
