Country Author: Siqueira Castro Advogados

Transcription

1 The Legal 500 & The In-House Lawyer Comparative Legal Guide Brazil: Arbitration This country-specific Q&A provides an overview of the legal framework and key issues surrounding arbitration law in the Brazil including arbitration agreements, tribunals, proceedings as well as costs, awards and the hot topics concerning this country at present. This Q&A is part of the global guide to Arbitration. For a full list of jurisdictional Q&As visit php/practice-areas/arbitration/ Country Author: Siqueira Castro Advogados The Legal 500 Carlos Roberto Siqueira Castro, Partner crsc@siqueiracastro.com.br The Legal 500 Daniela Soares Domingues, Partner ddomingues@siqueiracastro.co m.br The Legal What legislation applies to arbitration in your country? Are there any mandatory laws? The law that regulates arbitration in Brazil is Law nº 9.307/1996, which was recently amended by Law nº /2015 to extend the scope of the arbitration and rule on the choice of the arbitrators when the parties resort to arbitration body, interruption of prescription by the arbitration, the granting of provisional and urgency guardianships in cases of arbitration, the arbitration letter and the award, and revoke some articles of Law nº 9,307/96. In addition, the Code of Civil Procedure is applied secondarily to

2 arbitration, when there is no provision on the subject in the Arbitration Law. All these laws are mandatory. 2. Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention? Brazil is signatory to the New York Convention, which was approved and enacted by our country in There aren t reservations to the general obligations of the New York Convention in Brazil. 3. What other arbitration-related treaties and conventions is your country a party to? Brazil is signatory to Genebra Pact, but with reservation, so that the Convention is in force in our country only in relation to international commercial contracts; to Montevidéu Convention (Inter-American Convention on Extraterritorial Effectiveness of Foreign Arbitral Judgments and Foreign Arbitral Awards); to New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards); to Panamá Convention (Inter-American Convention on International Commercial Arbitration); to Las Lenas Protocol; to Agreement on International Commercial Arbitration of MERCOSUL. 4. Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two? The Law governing international arbitration in Brazil is based on the UNCITRAL Model Law, so although not literally adopted the text of the UNCITRAL Model Law, the Law that regulates arbitration in Brazil (Law nº 9.307/96) has its genesis in the precepts of this Model Law. There aren t significant differences between the two, but we can cite as an example of the differences between Law nº 9.307/96 and the UNCITRAL Model Law the fact that, although the exemption of statement of arbitral award is permitted by the UNCITRAL Model Law, this arrangement is contrary to Law nº 9.307/96, which provides the recital as one of the essential requirements of the award. 5. What arbitral institutions (if any) exist in your country?

3 In Brazil, there are several arbitral institutions, such as Brazilian Center of Mediation and Arbitration, Chamber of Mediation and Arbitration of FGV Getúlio Vargas Foundation, Chamber of Conciliation, Mediation and Arbitration of CIESP/FIESP, Conciliation and Arbitration Court of the Bar Association of Brazil São Paulo Section, Conciliation and Arbitration Court of the Bar Association of Brazil Rio de Janeiro Section, a subsidiary of the Arbitral Court of ICC International Chamber of Commerce in São Paulo. However, three stood out at a time when little was mentioned about arbitration: Arbitration Commission of the Chamber of Commerce Brazil-Canada (now known as the Arbitration Centre of the Chamber of Commerce Brazil-Canada), Arbitration Commission of the International Chamber of Commerce of Brazil (headquartered in Belo Horizonte, in Minas Gerais, given that in that state today work at least two mighty arbitration entities: Business Arbitration Chamber - Brazil and Mining Chamber of Mediation and Arbitration) and the Brazilian Center of Mediation and Arbitration. The Mediation and Arbitration Center of the Chamber of Commerce Brazil-Canada, the Commission of Arbitration of the International Chamber of Commerce of Brazil and the Brazilian Center of Mediation and Arbitration are institutions with general competence (multi-sector) who know of all kinds of commercial arbitrations, given that in this category fall into practically all committees, centers or arbitration courts linked to chambers of commerce, trade associations or industry associations, such as also the Board of Mediation and Arbitration of São Paulo, the Board of Mediation and Arbitration - Commercial Association of Paraná and the Arbitration Centre of American Chamber of Commerce. In addition to the institutional arbitration bodies mentioned above, we can name a few others, as examples: Arbitration Judge of the Commodities and Futures Exchange of São Paulo, Mediation, Conciliation and Arbitration Court of the Bar Association of Brazil - São Paulo Section, Conciliation and Arbitration Court of the Bar Association of Brazil Rio de Janeiro Section, Board of Mediation and Arbitration of the Brazilian Institute of Energy Law Studies - IBDE (these three bodies have essentially corporate nature, which shall ensure the interests of a sector or profession and resolve, through arbitration, matters relating to their particular area of expertise); National Council of Mediation and Arbitration Institutions (CONIMA), Brazilian Arbitration Committee (CBAr), and these two are scientific institutions, dealing with arbitration from the standpoint of investigation and research, promoting its development through publications and cultural activities.

4 With the enactment of Law nº 9.307/96, some of these institutional arbitration bodies took the form of civil associations, as occurred with the National Institute of Mediation and Arbitration (INAMA) and the Brazilian Arbitration Association (ABAR), both headquartered in Sao Paulo; others do not have legal autonomy and depends (organically) on federations, associations or chambers of commerce, such as the Mediation and Arbitration Center of Pernambuco (CEMAPE), linked to the Federation of Trade Associations of the State of Pernambuco, the Mediation and Arbitration Center of the Chamber of Commerce Brazil-Canada, the Centre of Conciliation and Arbitration of the Argentine-Brazilian Chamber of Commerce of São Paulo, the Chamber of Conciliation and Arbitration of Commercial Association of Bahia, the Chamber of Mediation and Arbitration of São Paulo, linked to São Paulo State Industries Centre, the Arbitration Judge of the Commodities and Futures Exchange of São Paulo, the Commercial Arbitration Brazilian Court (CBAC), a member body of the Confederation of Trade Associations of Brazil, the Arbitration Center of American Chamber of Commerce, among others. 6. What are the validity requirements for an arbitration agreement under the laws of your country? According to Article 4 of Law nº 9.307/96, it is possible to conclude that the arbitration clause can t be broad enough to submit the signatories to arbitration to any conflict that they be engaged, since that article provides that the arbitration clause is the convention by which the parties to a contract commit to submit to arbitration disputes which may arise in relation to this contract. In regard to form, determines Brazilian Law that the arbitral clause must be celebrated in writing. In the case of contracts without specific formality unless the use of writing, the clause must be submitted to the general mechanisms provided in the Civil Code for the signing of contracts. The legislator set rigidly only for the compromissum (submission to arbitration), which, according to Article 9 of Law nº 9.307/96, is the agreement whereby the parties submit a dispute to arbitration by one or more persons, and it can be judicial or extrajudicial. Also according to this Article 9, the judicial compromissum shall be signed by term in the records before the Judge or the Court where the lawsuit is proceed, and the extra-judicial

5 compromissum shall be signed in particular writing, signed by two witnesses, or public instrument. In addition, in accordance with Article 10 of Law nº 9.307/96, mandatorily shall appear on the compromissum the name, profession, marital status and domicile of the parties; the name, profession and domicile of arbitrator or arbitrators, or, if it is the case, the identification of the entity to which the parties have delegated the appointment of arbitrators; the matter that will be the object of arbitration; and the place where the award shall be rendered. Finally, Article 11 of Law nº 9.307/96 provides that the arbitration agreement may contain also the place or places where the arbitration will be developed; the authorization for the arbitrator or arbitrators to decide in equity, if so agreed by the parties; the deadline for submission of the arbitral award; the indication of the national law or corporate rules applicable to arbitration, so when the parties have agreed in this way; the statement of responsibility for the payment of the fees and costs of arbitration; and setting the arbitrator's fees. 7. Are arbitration clauses considered separable from the main contract? Yes, since Article 8 of Law nº 9.307/96 determined the autonomy of the arbitration clause, by providing, expressly, that the arbitration clause is autonomous in relation to the contract in which it is inserted, and that the nullity of the contract does not necessarily lead to the nullity of the arbitration clause. 8. Can claims under more than one contract be brought in the one arbitral proceeding? Can an arbitral tribunal with its seat in your country consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances? Yes, because there is no limitation on the Arbitration Law of the number of contracts that can be the object of a particular arbitration procedure, so that the only logic requirement applicable is that the contracts must be related to each other. The Court of Justice of the State of Rio de Janeiro, on the occasion of the judgment of the appeal nº , decided that a single arbitral court may reunite

6 different arbitration procedures, in cases where there is a plurality of issues within the same object and that there is the risk of conflicting decisions of each of the arbitration courts. According to this judgment, in those cases where the different arbitrations have related objects and where there is the risk of being rendered conflicting decisions, these separate arbitration proceedings should be brought together in a single arbitration, adopting the procedural rules about prevention and connection to define which arbitral court shall assume the processing of the related arbitration proceedings. However, as there is no specific regulation in Law nº 9.307/96 on the connection and reunion of arbitration proceedings, this possibility shall be regulated by the regulations of the existing Arbitration Chambers in Brazil. According to the Regulation of the Market Arbitration Chamber, for example, when an arbitration request was made to have the object or cause of action common to another arbitral procedure already pending and governed by the Regulation in question, the President of the Arbitration Chamber, after hearing the parties, taking into account the circumstances and progress already achieved in the current procedure, may order the reunion of the procedures for joint trial, but this reunion will only be possible in the discovery phase of the arbitration procedure. 9. How is the law applicable to the substance determined? In Brazil, the autonomy granted to parties contracting is large, to the point of the Arbitration Law (Law nº 9.307/96) allow them to choose the law (substantive or procedural) which they want to be applied, and as seen in item 7 above, the indication of the national law or corporate rules applicable to arbitration is one of the optional requirements that may be included in the compromissum. As optional clause of compromissum, the parties have the opportunity to indicate to the arbitrator the law that he should apply, and it is also possible the use of corporate rules (to be understood as the set of rules governing an activity or profession, and that may have character national or international), expression that the legislature did not use in Article 2 of Law nº 9.307/96, when treated exactly about the free will of parties, providing that the arbitration may be in law or in equity, at the discretion of the parties. 10. Are any types of dispute considered non-arbitrable? What is the approach used in determining whether or not a dispute is arbitrable? Yes, can t be submitted to arbitration the litigious that deal with inalienable rights, so it

7 is necessary that the dispute involves property disposable rights, in accordance with Article 1 of Law nº 9.307/96. A right is disposable when it may or may not be freely exercised by the holder without cogent rule imposing compliance with the precept, under penalty of nullity or annulment of the act practiced with his infringement. Thus, are disposable those assets that can be freely sold or traded, because they are uncumbered and because the alienor has full legal capacity to do so. In general, are not under the scope of the disposable right issues relating to Family Law (in particular the status of persons, such as affiliation, parental rights, marriage, alimony), those relating to Succession Law, those whose object things out of the trade, the natural obligations, those relating to Criminal Law, among many others, since these matters are off limits that can act the autonomy of the will of the litigants. However, these conclusions aren t sufficient to exclude absolutely of the scope of the arbitration any demand that involves Family Law or Criminal Law, because the proprietary consequences both in one case as in the other may be subject of extrajudicial solution. That is, if it is true that a demand which concerns the right to provide and receive alimony comes out right, it is no less true that the value of the allowance can be freely agreed upon by the parties (and this makes this an arbitrable issue). Thus, are arbitrable the causes that deal with matters in respect of which the State does not create specific reserve under the guard of the fundamental interests of the community, and since that the parties can freely dispose about the asset on which they litigate. 11. In your country, are there any restrictions in the appointment of arbitrators? According to the caput of Article 13 of Law nº 9.307/96, the arbitrator can be anyone capable and which has the confidence of the parties, so that they can name any individual (there is no possibility of the arbitrator be a legal entity) that has the planned capacity established by the Civil Code, being either excluded relatively incapable (over 16 and under 18 years; the usual drunkards and junkies toxic; those who, for temporary

8 or permanent cause, can t express their will; and lavish), as absolutely incapable to personally exercise the activities of civil life (under 16 years). It is important to highlight that the Organic Law of the Judiciary (Complementary Law nº 35/79) leaves no doubt about the impossibility of the state judges to exercise the duty of arbitrators. Moreover, are prevented from working as arbitrators the persons who have with the parties or with the dispute brought before them some of the relationships that characterize cases of impediment or suspicion of judges, applying, as appropriate, the same duties and responsibilities as provided in the Civil Procedure Code. 12. Are there any default requirements as to the selection of a tribunal? Yes, the requirements (rules) standards for the choice of an Arbitral Court are: 1) the parties may appoint one or more arbitrators, always in odd number, and they may appoint also their substitutes; 2) when the parties appoint arbitrators in even number, they are allowed to appoint immediately another arbitrator; if there isn t agreement, the parties shall request the appointment of the arbitrator to the judicial organ that would be competent, originally, for the judgment of the cause, and applies, as appropriate, the procedure laid down in Article 7 of Law nº 9.307/96, which provides the procedure for transcription of the judicial compromissum in cases where there is an arbitration clause and there is resistance to the arbitration; 3) the parties may, by mutual agreement, establish the process for selection of arbitrators, or adopt the rules of an arbitral institution or specialized entity; 4) being nominated several arbitrators, these, by majority, shall elect the president of the arbitral court, and if there is no consensus, will be designated as president the oldest among the arbitrators; 5) the parties, by agreement, may waive the application of rule of regulation of arbitral institution body or specialized entity that limits the choice of sole arbitrator, co-arbitrator or president of the court to its list of arbitrators, authorizing the control of choice by competent bodies of the institution, and in cases of deadlock and multipart arbitration should be observed the applicable regulation; and 6) the arbitrator or the president of the Court shall appoint, if considered appropriate, a secretary, who may be one of the arbitrators. 13. Can the local courts intervene in the selection of arbitrators? If so, how? As seen in item 13 above, the local courts can only intervene in the selection of arbitrators in cases where there is no agreement between the parties for the appointment of arbitrators. In such cases, according to paragraph 2 of article 13 of Law

9 nº 9.307/96, the parties shall require the appointment of the arbitrator to the judicial organ that would be competent, originally, for the judgment of the cause, and applies, where applicable, the procedure laid down in Article 7 of Law nº 9.307/96, which provides the procedure for transcription of the judicial compromissum in cases where there is an arbitration clause and there is resistance to the arbitration. 14. Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for such challenge? As seen in item 12 above, according to the caput of Article 14 of Law nº 9.703/96, are prevented from working as arbitrators the persons who have with the parties or with the dispute brought before them some of the relationships that characterize cases of impediment or suspicion of judges, applying, where applicable, the same duties and responsibilities as provided in the Civil Procedure Code. Regarding this aspect, there is impediment of the judge, being forbidden to perform his functions in the lawsuit: (i) where intervened as agent of the party, officiated as expert, worked as member of the Public Attorney s Office or testified as a witness; (ii) that appreciate in another degree of jurisdiction, rendering a decision; (iii) when it is postulating, as a public defender, attorney or member of Public Attorney s Office, his spouse or partner, or any relative, consanguineous or by affinity, in straight or collateral line until the third degree, inclusive; (iv) when it is party to the proceedings himself, his spouse or partner, or relative, consanguineous or by affinity, in straight or collateral line until the third degree, inclusive; (v) when partner or member if direction or administration of legal entity that is party in the lawsuit; (vi) when presumptive heir, donee or employer of either party; (vii) in which figures as party an educational institution with which has an employment relationship or arising from a contract of service; (viii) in which figures as party a client of law firm of his spouse, partner or relative, consanguineous or by affinity, in straight or collateral line until the third degree, inclusive, even if sponsored by another attorney office; and (ix) when promoting lawsuit against the party or his attorney. There is suspicion of the judge (i) close friend or enemy of any of the parties or their lawyers; (ii) which receive gifts from people who are interested in the lawsuit before or after the beginning of the process, which advise either party about the lawsuit object or that provide means to meet the expenses of the lawsuit; (iii) when either party is a

10 creditor or debtor of his spouse or partner or their relatives, in straight line until the third degree, inclusive; and (iv) interested in the trial of the lawsuit in favor of either party. According to paragraph 1 of article 14 of Law nº 9.307/96, the persons appointed to act as an arbitrator has the duty to disclose, before the acceptance of the function, any fact that denotes justified doubts about his impartiality and independence. The paragraph 2 of Article 14 of Law nº 9.307/96 provides that, in principle, the arbitrator may only be refused by reasons occurred after his appointment. However, the arbitrator may be refused by reason prior to his appointment when (i) is not appointed directly by the party; or (ii) the reason for their refusal is only known after his appointment. According to Article 15 of Law nº 9.307/96, the interested party in argue the arbitrator's refusal must present the adequate exception (in the first opportunity to present a manifestation), directly to the arbitrator or to the president of Arbitral Court, deducing their reasons and presenting relevant evidence. Accepted the exception, the suspect or impeded arbitrator will be removed and replaced by the substitute arbitrator indicated in the compromissum, if existent. If there is no substitute indicated for the arbitrator, the rules of the arbitral institution or specialized entity shall be applied, if the parties have invoked in the arbitration convention. Nothing providing the arbitration convention and not getting the parties to agree on the appointment of the arbitrator being replaced, shall the interested party proceed in the form provide in Article 7 of Law nº 9.307/96 (mentioned above), unless the parties have stated expressly in the arbitration convention does not accept a substitute arbitrator. 15. Are arbitrators immune from liability? No, according to Article 17 of Law nº 9.307/96, the arbitrators, when in the exercise of their duties or because of them, are treated as public officers for the purposes of criminal law. By equating the arbitrator to public officers, the legislature aimed to strengthen the reliability offered by arbitration, ensuring users of this alternative means of resolving disputes a decision free from distortions and deviations. By reporting (indirectly) to the title of the Criminal Code dealing with crimes against public administration, the Article 17 of Law nº 9.307/96 aimed to protect the parties against misconduct in office, corruption and malfeasance.

11 The jurists opinion criticizes the wording given to that article 17 of Law nº 9.307/96, because it leaves aside the question of the arbitrator's civil liability, which is thinly mentioned in the caput of Article 14 of Law nº 9.307/96, which provides that are prevented from working as arbitrators the persons who have with the parties or with the dispute brought before them some of the relationships that characterize cases of impediment or suspicion of judges, applying, as appropriate, the same duties and responsibilities as provided in the Civil Procedure Code. In the absence of an article that regulates the civil liability of the arbitrator, the jurists opinion has held that the arbitrators can t be held responsible for any error in judicando, and that in case of error in procedendo the arbitrator's civil liability should always be restricted to the hypotheses of malicious fraud or grievous fault. 16. Is the principle of competence-competence recognised in your country? What is the approach of local courts towards a party commencing arbitration in apparent breach of an arbitration agreement? Yes, because the sole paragraph of Article 8 of Law nº 9.307/96 provides that the arbitrator must decide ex officio or at the instigation of the parties, the issues concerning the existence, validity and effectiveness of the arbitration convention and the contract containing the arbitration clause, so this legal provision, in fact, provides the principle of competence-competence, given that according to this principle, the arbitrator has the jurisdiction power to decide on its own jurisdiction, solving the challenges that arise about their ability to judge, the extent of his powers, the arbitrability of the dispute, that is, evaluating the effectiveness and the extent of the powers that the parties have given him through the arbitration clause and the compromissum. Thus, it is possible to realize that what gives power to arbitrators is not the arbitration convention, but it is the law, by Article 8, sole paragraph, of Law nº 9.307/96, which recognizes the principle of competence-competence, because it is this legal provision that gives to a particular person the power to be arbitrator for the specific purpose of determining its own jurisdiction. According to Law nº 9.307/96, the local arbitral courts understand that if a party initiates the arbitration in apparent violation of the arbitration agreement, the arbitration procedure cannot be continued in the form in which it was started.

12 In addition, according to caput and 3º of Article 485 of the Brazilian Code of Civil Procedure, it is up to the defendant to raise a motion to dismiss the lawsuit on grounds of the existence of an arbitration agreement, and request the judicial court to dismiss the case and remand the parties to arbitration. However, if the defendant fails to do so, it will be deemed to have waived the arbitration agreement, and the court proceedings will continue. 17. How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods of which the parties should be aware? Article 19 of Law nº 9.307/96 provides that arbitration be considered established when it is accepted the appointment by the arbitrator, if single, or by all the arbitrators, if several. The paragraph 1 of that Article 19 provides that established arbitration and understanding the arbitrator or the arbitral court that there is need for explicit question exposed in the arbitration convention, shall be drawn up together with the parties an addendum signed by all, which will become part member of the arbitration convention. Paragraph 2 provides that the arbitration interrupt the limitation period, retroactive to the date of application of arbitration s establishment, although extinct arbitration for lack of jurisdiction. There are not in Law nº 9.307/96 provisions about limitation periods, so will be observed the limitation periods provided by Civil Code. 18. What is the applicable law (and prevailing practice) where a respondent fails to participate in the arbitration? Can the local courts compel parties to arbitrate? Can they order third parties to participate in arbitration proceedings? Article 7 of Law nº 9.307/96 provides that existing arbitration clause and existing resistance about the arbitration institution, the interested party can request the service of the other party to attend in court in order to celebrate the compromissum by designating the judge hearing especially for that purpose. About this procedure, we highlight its main rules: 1) the plaintiff must indicate precisely the object of the arbitration, instructing the application with the document that contains the arbitration clause; 2) attending the parties to the hearing, the judge will try previously conciliation on the dispute; not succeeding, the judge will try to bring the parties to the celebration, by mutual agreement, of the compromissum; 3) not agreeing the parties on the terms of the compromissum, after hearing the defendant, the judge will decide on its content, at

13 the same hearing or within ten days, respecting the provisions of the arbitration clause and including the mandatory requirements that should be included in the compromissum; 4) if the arbitration clause has not provides on the appointment of arbitrators, it will be up to the judge, after hearing the parties, to set out at respect, may appoint a sole arbitrator for the dispute; 5) the absence of the plaintiff, without good cause, in the hearing designated for the drafting of compromissum, will result in the dismissal of the case without trial of merit; 6) not attending the defendant at the hearing, it will be up to the judge, after hearing the plaintiff, to set out at about the content of the compromissum, appointing a sole arbitrator; and 7) the award which grant the application shall be regarded as the compromissum. Based on the foregoing, we conclude that, existing arbitration clause and the refusal of a party to institute arbitration, local courts can compel the parties to commence arbitration. However, if there is no arbitration clause, local courts cannot compel the parties to conduct arbitration. Can they order third parties to participate in arbitration proceedings?: Yes, but only in cases of compulsory joinder of parties in which the third party signed the contract with the arbitration clause, as will be explained in item 20 below. 19. In what instances can third parties or non-signatories be bound by an arbitration agreement or award (e.g. by joinder)? Regarding the intervention of third parties in the arbitration, we will cover, according to the understanding of the jurists opinion, the hypotheses of need of the contradictory integration (compulsory joinder of parties), third-party intervention caused by any of the parties, and voluntary third party intervention. Regarding the compulsory joinder of parties, being indispensable the presence in the arbitration of a third party who has not entered into the compromissum or not signed the contract in which it operates the arbitration clause, the arbitration can t proceed, and should be provided the involvement of the third under penalty the arbitrator having to terminate the arbitration process without judging the merits. However, if the third party whose presence is necessary in arbitration is not a party to the compromissum, nothing and no one can force him to participate in the arbitration process. If the parties are connected to the same arbitration clause, the solution will be different because the contract may involve several parties and the arbitration may not involve all parties contracting. In this case, it is possible that the arbitrator check the need to involve everyone in the process, causing the intervention of third parties (clause signatories but unrelated to the initiated arbitration

14 proceedings). It will suffice that the party mend its application for arbitrate to engage in arbitration the other signatories of the instrument containing the arbitration clause. In this case, third parties may not choose to accept or not the arbitration and shall integrate the process. The hypotheses of provoked third-party intervention correspond in the Civil Procedure Code of 2015 to the cases of impleader (causes the introduction in the process of a new demand with increased process object, so that the arbitrator must judge the demand between the original parties and the regressive demand between the original defendant and the impleaded party; if there is no arbitration clause in the contract with the third party, or if the clause point to a different arbitration body that administering the current procedure, the intervention will depend on dual agreement, of the opponent of original defendant and of the impleaded party) and to the cases of third party complaint (the situations are of solidarity, so that the third person called remains legal relationship with the opponent of the person calling; if the arbitration is established by compromissum, signed only between the parties to the contract, the third can only intervene if everyone, including him, agree; if arbitration is established by means of the arbitration clause (inserted in the contract signed between the parties), the consensus for intervention would be guaranteed beforehand, but the situation would not be resolved in the composition of the arbitral court (the third will not have influenced the court's composition)). The hypotheses of voluntary third-party intervention correspond in the Civil Procedure Code of 2015 to cases of simple intervention or joinder of parties. Transporting the two situations to arbitration, simple assistance can be better controlled than joinder of parties, as in the first case the assistant will not be, as a rule, linked to the arbitration convention, what will submit their entry in the arbitration to the consent of the parties. In the second situation, the third party who pleads entering the arbitration process may be connected to the arbitration convention binding the parties: if the arbitration was established by arbitration clause included in the main contract, the intervenor will be part of the contract and signed the same clause (this will not occur if the arbitration is established by compromissum), what will put the third party in direct contact with the parties; moreover, the third party will occupy in the legal relationship a legal position equal or equivalent to the parties involved in arbitration, so that would not be possible, in such circumstances, to deny the access of the third party to the arbitration processes.

15 20. What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal? According to the caput of Article 22-A of Law nº 9.307/96, before established the arbitration, the parties may resort to the Judicial Courts to grant prevention or emergency measures. As the sole paragraph of Article 22-A, the effectiveness of the provisional or emergency remedies stops if the interested party does not require the arbitration within thirty (30) days from the effective date of its decision by the Judiciary. According to the caput of Article 22-B of Law nº 9.307/96, instituted the arbitration, it will be up to the arbitrators to maintain, modify or revoke the prevention or emergency remedy issued by the Judiciary. According to the sole paragraph of Article 22-B, if it is already established arbitration, prevention or emergency remedy must be requested directly to the arbitrators. 21. Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence? Yes, Article 22 of Law nº 9.307/96 broach the question of evidence in arbitration. The caput of Article 22 provides that the arbitrator or the arbitral court may take the testimony of the parties, hear witnesses and determine the expert examination or other evidence deemed necessary, upon request of the parties or ex officio. The Paragraph 1 provides that the hearing of the parties and witnesses will be taken at local, date and time previously reported, in writing, and reduced by term, signed by the deponent or at his request and by the arbitrators. The Paragraph 2 provides that in case of party fails, without justified cause, of the summons to give personal testimony, the arbitrator or the arbitral court shall take into account the conduct of the defaulting party when pronouncing his award; if the absence is of a witness, in the same circumstances, the arbitrator or the president of the arbitral court can request the judicial authority to lead the reluctant witness, proving the existence of the arbitration convention. The Paragraph 3 provides that the default of the party shall not prevent the rendering of arbitral award. The Paragraph 4 was recently repealed and Paragraph 5 provides that if during the arbitration occur the replacement of an arbitrator, will be a criterion of the substitute to repeat evidence already produced. Will the local courts in your jurisdiction play any role in the obtaining of evidence?: Yes, as seen above, in the case of non-attendance of a witness for testimony, the arbitrator or

16 the president of the arbitral court can request the judicial authority to lead the reluctant witness, proving the existence of the arbitration convention. In addition, the parties may also file preparatory provisional remedies for the production of certain evidence even before the institution of arbitration. 22. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country? As there is no national or international general code of ethics that can impose on practitioners of arbitration rigorous and objective conducts in mutual dealings of the parties, lawyers and arbitrators, situations arise that leave doubts about the behavior to be adopted, especially by the arbitrator, who must maintain throughout the arbitration proceedings irrepressible impartiality. Thus, in Brazil, various associations, organizations and arbitration centers try to systematize some rules that can serve as a guide to the performance of the arbitrator before accepting the charge and throughout the arbitral proceedings. Furthermore, whenever a counsel acts it is applied to him the rules contained in the Statute of the Bar Association of Brazil, in the Code of Ethics of the Statute of the Bar Association of Brazil and in the Articles of the Civil Procedure Code (which is applied secondarily to arbitration, when there is no provision on the subject in the Arbitration Law) that establish the duties of the parties, their attorneys and all those who participate in the lawsuit. 23. How are the costs of arbitration proceedings estimated and allocated? According to Article 27 of Law nº 9.307/96, the award shall decide on the responsibility of the parties concerning the costs and expenses of arbitration, as well as expenses resulting from malicious prosecution, if any, respecting the provisions of the arbitration convention on the subject, if any. 24. Can interest be included on the principal claim and costs incurred? Yes, because there is no restriction in Law nº 9.307/96 regarding the inclusion of interest on the principal amount and on the amount of costs incurred by the parties in arbitration.

17 25. Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts? The Law nº 9.307/96 does not impose limits on measures that may be granted by the arbitral award. However, obviously, arbitration awards cannot determine compliance of measures legally impossible to be fulfilled or of illegal measures, and neither can they be rendered outside the limits set by the arbitration convention, so that the local courts cannot enforceable these arbitral awards. 26. What legal requirements are there in your country for the recognition of an award? According to Article 26 of Law nº 9.307/96, the mandatory requirements of the award are (i) the report must contain the names of the parties and a summary of the dispute; (ii) the grounds for the decision, in which will be examined questions of fact and law, mentioning expressly whether the arbitrators ruled on equity; (iii) the judicial opinion, where the arbitrators decide the questions submitted to them and establish a time limit for compliance the decision, if applicable; and (iv) the date and place where it was rendered. In addition to these requirements, the award shall be signed by the arbitrator or all the arbitrators, and it is up to the president of the arbitral court to certify if one or some of the arbitrators can t or do not want to sign the award. 27. Can arbitration proceedings and awards be appealed or challenged in local courts? What are the grounds and procedure? The interested party may plead to the competent organ of the Judiciary the declaration of nullity of the arbitral award, in the hypotheses provided in Article 32 of Law nº 9.307/96: (i) if it is null the arbitration convention; (ii) if the sentence is rendered by those who could not be arbitrator; (iii) if the award does not contain the requirements set out in Article 26 of the Law, mentioned in item 25 above; (iv) if the award is rendered outside the limits of the arbitration convention; (v) if it is proven that the award was rendered by official misconduct, misconduct in office or corruption; (vi) if the award is rendered after the deadline, since the interested party has notified the arbitrator or the president of the arbitral court, granting it a period of ten days to the delivery and presentation of the award; and (vii) if was not respected the principles of contradictory, equality of the parties, the arbitrator's impartiality and its free conviction.

18 The demand for the declaration of nullity of the award, partial or final, follow the rules of the common procedure provided in the Code of Civil Procedure and shall be filed within ninety (90) days after receipt of the respective sentence notification, partial or final, or of the decision about the request for clarification. The sentence that grant the request will declare the nullity of the arbitral award, in the cases of Article 32 of Law nº 9.307/96, and shall determinate, if appropriate, that the arbitrator or the arbitral court renders new arbitral award. The declaration of nullity of the arbitral award may also be required in the challenge to the execution of the arbitral award, if there is any judicial execution. In addition to the foregoing, in accordance with paragraph 4 of Article 26 of Law nº 9.307/96, the interested party may also file suit in court to require the delivery of a complementary award if the arbitrator does not decide all requests submitted to arbitration. 28. Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)? No, the right to judicially challenge the arbitral award may not be subject to prior waiver by either party. Although Brazilian Law does not expressly established the non-waiver of the right to propose the annulment action, it can be deduced from the constitutional text itself, especially from the Article 5º, XXXV, of Federal Constitution, because preventing the analysis of grounds for nullity would mean preventing the submission to the Judiciary of injury of rights, removing any control on the activity of the arbitrators. 29. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage? If the state authority decide to refer the examination of a particular dispute to an arbitral court, either through the inclusion of an arbitration clause in a public contract or through the signature of a compromissum, the state authority have chosen to be submitted to arbitration and to the jurisdiction of the arbitrators, and so may not subsequently claim any state of defense or sovereign immunity during the phase of enforcement of the award.

19 30. Are there rules or restrictions on third-party funders in your country? There is no specific provision on third-party funding in national laws on arbitration, but are being created guidelines and also new provisions in institutional rules (rules of arbitration chambers) on the subject. The main point of attention of arbitral institutions regards to the need for disclosure of funding to the arbitral court and the other parties to the arbitration proceedings. By assuming the costs of the arbitration, the financier shall be interested in the procedure, which may affect the impartiality and independence of arbitrators. For this reason, organizations such as the ICC (International Chamber of Commerce) and the International Bar Association (IBA) currently require the identification of funding in order to avoid any conflict of interests between him and the members of the arbitral court, ensuring transparency in the procedure. Following the international trend, the Arbitration and Mediation Center of the Chamber of Commerce Brazil-Canada (CAM-CCBC) recently issued Administrative Resolution nº 18/2016, which in addition to conceptualize the mechanism of "third party funding ", also recommends that the parties inform about their existence "at the earliest opportunity". The guidelines and rules created by Brazilian arbitral bodies have proven sufficient to prevent bad practice on using such third-party funding mechanism, not requiring any legislative amendment in this regard. 31. Is there a concept in your country providing for class-action or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated? There is not yet in Brazil the possibility of using arbitration for group litigation. However, experts point out that this possibility is a viable trend for the coming years, so that the use of arbitration to resolve disputes groups can be inspired by the class action of the US law. 32. Is diversity in the choice of arbitrators (e.g. gender, age, origin) actively promoted in your country? If so, how? No, the parties may choose freely the person that they want to indicate as arbitrator, so, as seen in item 12 above, the arbitrator can be any individual (there is no possibility of the arbitrator be a legal entity) that has the planned capacity established by the Civil Code, being either excluded relatively incapable as absolutely incapable to personally

20 exercise the activities of civil life. If so, how? 33. Is emergency arbitrator relief available in your country? Is this actively used? In Brazil, there is emergency arbitrator relief available, but this resource is not actively used yet. Indeed, some national arbitration chambers establish, in its regulations, the possibility of appointing "emergency arbitrator" (or "support arbitrator") to appreciate any urgent measures. In Brazil, one example of an institution that deal with the appreciation of urgent measures in the private jurisdiction before the formation of the Arbitral Court is the Market Arbitration Chamber (CAM), which provides to the parties the possibility of requesting the naming of an emergency arbitrator for decide on " measures conservatories or reparatory coated with urgent character in order to prevent imminent harm or irreparable damage" However, the CAM Regulation authorizes the appointment of support arbitrator only if the arbitration convention contains express provision in this regard. 34. Have measures been taken by arbitral institutions in your country to promote transparency in arbitration? Yes, in Brazil the arbitration institutions always seek to adopt measures to promote transparency in its arbitration proceedings. 35. Are efforts being made by arbitration institutions or local courts to impose strict deadlines for the rendering of awards? Yes, in Brazil arbitration institutions and arbitration courts always seek to adopt every possible effort so that arbitration awards are rendered within the period stipulated by the parties, and if the parties didn t stipulate time, within the legal deadline provided in Article 23 of Law nº 9.307/96, of six (6) months from the institution of arbitration or the arbitrator replacement. 36. Have steps been taken in your country to publish reasoned decisions on arbitrator challenges and provide more insight into the drivers behind arbitrator selection by institutions?

21 Yes, arbitration institutions and arbitration courts of Brazil always seek to deliver reasonable and grounded decisions in cases of challenge and refusal of the arbitrators and disclose more information about the internal procedures for the selection of arbitrators that compose the boards of arbitral institutions. 37. Are there arbitral laws or arbitration institutional rules in your country providing for simplified procedures for claims under a certain value? No, but according to Article 21 of Law nº 9.307/96, the parties may establish in the arbitral convention the procedure to be followed in the arbitration, so that if the dispute involves a low value, the parties may freely agree that the arbitrator should adopt a more simplified and expeditious procedure in arbitration. According to Law nº 9.307/96, the parties may adopt the arbitration procedure they wish, since they respect the principles of contradictory, equality of the parties, the arbitrator's impartiality and its rational persuasion. If the parties do not indicate the procedure to be adopted and do not relate to rules of any institutional body, the arbitrator or the arbitral court shall dictate the rules to be followed while respecting the principles mentioned above.