Legislation

BRAZILIAN ARBITRATION ACT

Law no 9.307 of setember 23, 1996,
as amended by law no 13.129 of may 26, 20151.

THE PRESIDENT OF THE REPUBLIC
Let it be known that the National Congress enacts and I ratify the following Law:

Chapter I

General Provisions

Article 1. Those who are capable of entering into contracts may make use of arbitration to resolve conflicts regarding freely transferable property rights.

Paragraph 1. Direct and indirect public administration may use arbitration to resolve conflicts regarding transferable public property rights. (Added by Law no. 13,129 of 2015)

Paragraph 2. The competent authority or direct public administration entity that enters into arbitration agreements is the same entity that enters into agreements or transactions. (Added by Law no. 13,129 of 2015)

Article 2. At the parties' discretion, arbitration may be at law or in equity.

Paragraph 1. The parties may freely choose the rules of law that will be used in the arbitration, as long as their choice does not violate good morals and public policy.

Paragraph 2. The parties may also agree that the arbitration shall be conducted under general principles of law, customs, usages and the rules of international trade.

Paragraph 3. Arbitration that involves public administration will always be at law, and will be subject to the principle of publicity. (Added by Law no. 13,129 of 2015)

Chapter II

The Arbitration Agreement and its Effects

Article 3. The interested parties may submit their disputes to arbitration by means of an arbitration agreement, which may be in the form of either an arbitration clause or an arbitration agreement.

Article 4. An arbitration clause is an agreement by which the parties to a contract undertake to submit to arbitration any disputes that might arise with respect to that contract.

Paragraph 1. An arbitration clause will be in writing, and it may be inserted into the contract itself or into a separate document to which it refers.

Paragraph 2. In adhesion contracts, an arbitration clause will only be valid if the adhering party takes the initiative to file an arbitration proceeding or if it expressly agrees with its initiation, as long as it is in an attached written document or in boldface type, with a signature or special approval for that clause.

Paragraph 3. (Vetoed by message 162 of May 26, 2015).

Paragraph 4. (Vetoed by message 162 of May 26, 2015).

Article 5. If the arbitration clause makes reference to the rules of a particular arbitral institution or specialized entity, the arbitration shall commence and be conducted in accordance with such rules. The parties may also agree in the arbitration clause or in a separate document, the procedure for the commencement of arbitral proceedings.

Article 6. In the event of absence of provision as to the method of commencing the arbitration, the interested party shall notify the other party, either by mail or by any other means of communication, with confirmation of receipt, of its intention to commence arbitral proceedings, and to set up a date, time and place for the execution of the submission agreement.

Sole Paragraph. If the notified party fails to appear, or if it appears but refuses to sign the submission agreement, the other party may file a lawsuit as provided in Article 7 of this Law, before the judicial authority originally competent to hear the case.

Article 7. If there is an arbitration clause and there is objection for the commencement of arbitration, the interested party may request that the other party be served with process to appear in court so that the submission agreement is drawn up. The court judge will designate a special hearing for this purpose.

Paragraph 1. The plaintiff will accurately define the subject matter of arbitration, including in its request the document that contains the arbitration clause.

Paragraph 2. If the parties show up at the hearing, the judge shall first try to bring the parties into a settlement. If this is not successful, the judge will lead the parties for a consensual submission agreement.

Paragraph 3. If the parties fail to agree on the terms of submission agreement, after hearing the party against whom the request is filed, the judge shall determine on the contents of the submission agreement, either at the hearing or within ten days there from, in accordance with the wording of the arbitration clause, taking into account the provisions of Articles 10 and 21 Paragraph 2 of this Law.

Paragraph 4. If the arbitration clause has no provision as to the appointment of arbitrators, the judge, after hearing the parties, shall make a determination, and is allowed to appoint a sole arbitrator to resolve the dispute.

Paragraph 5. If the plaintiff fails to appear at the hearing designated for drafting the submission agreement without showing good cause, the case will be dismissed without judgment on the merits.

Paragraph 6. If the defendant fails to attend the hearing, the judge, after hearing the plaintiff, shall be competent to draw up the contents of the submission agreement, and to appoint a sole arbitrator.

Paragraph 7. The court ruling that grants the plaintiff's request will be considered the submission agreement.

Article 8. An arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

Sole paragraph. The arbitrator has jurisdiction to decide ex officio or at the parties' request, the issues concerning the existence, validity and effectiveness of the arbitration agreement, as well as the contract containing the arbitration clause.

Article 9. The submission agreement is the judicial or extrajudicial agreement by which the parties submit an existing dispute to arbitration by one or more persons.

Paragraph 1. The judicial submission agreement shall be entered into by a written instrument registered within the dockets of the case before the court where the suit was filed.

Paragraph 2. An extrajudicial arbitration agreement shall be entered into by a private written instrument signed by two witnesses, or by a public notary.

Article 10. The arbitration agreement must contain:

I – The name, profession, marital status and domicile of the parties;

II – The name, profession and domicile of the arbitrator or arbitrators, or, if applicable, the identification of the institution to which the parties have entrusted the appointment of the arbitrators;

III – The subject matter of the arbitration; and

IV – The place where the award shall be rendered.

Article 11. The arbitration agreement may also contain:

I – The place or places where the arbitration will be held;

II – If the parties so agree, the provision authorizing the arbitrators or arbitrators to decide in equity;

III – The time limit for making of the arbitral award;

IV – An indication of national law or institutional rules applicable to the arbitration, if agreed upon by the parties;

V – A statement regarding the responsibility for the fees and costs of the arbitral proceedings; and

VI – The fees of the arbitrator or arbitrators.

Sole paragraph. By setting up the arbitrator or arbitrators' fees in the submission agreement, such document will be considered an enforceable extrajudicial instrument. In the absence of such provision, the arbitrator will request the court with original jurisdiction to hear the case to rule upon the issue.

Article 12. The arbitration agreement is terminated:

I – If either arbitrator excuses himself prior to accepting his appointment, as long as the parties have expressly declared that they will not accept substitution;

II – If either arbitrator dies or becomes unable to act as such, as long as the parties have expressly declared that they will not accept substitution; and

III – Upon expiration of the time limit referred to in Article 11, item III, as long as the interested party has notified the arbitrator, or the president of the arbitral tribunal, granting a further period of ten days to render and present the arbitral award.

Chapter III

The Arbitrators

Article 13. Any individual with legal capacity, who is trusted by the parties, may serve as arbitrator.

Paragraph 1. The parties will appoint one or more arbitrators, always an uneven number, and they may also appoint their respective alternates.

Paragraph 2. When the parties appoint an even number of arbitrators, the arbitrators are authorized to appoint an additional arbitrator. Failing such agreement, the parties shall request the State Court which originally would have had jurisdiction to hear the case to appoint such arbitrator, following to the extent possible, the procedure established in Article 7 of this Law.

Failing such agreement, the parties shall request the State Court which originally would have had jurisdiction to hear the case to appoint such arbitrator, following to the extent possible, the procedure established in Article 7 of this Law.

Paragraph 3. The parties may mutually agree to set up the procedure for the appointment of arbitrators, or they may choose the rules of an arbitral institutional or specialized entity.

Paragraph 4. By mutual agreement, the parties may choose not to be bound by the provision of the rules of arbitral institution or specialized entity that requires the appointment of sole arbitrator, co-arbitrator, or president of the tribunal from the respective roaster of arbitrators. It is however preserved the arbitral institution's control over the appointment of arbitrators. In the event of impasse and with multiparty arbitration, the respective applicable institutional rules shall be observed. If several arbitrators have been appointed they shall elect, by majority, the president of the arbitral tribunal. In the absence of an agreement, the eldest will be the president. (Amended by Law no. 13,129 of 2015)

Paragraph 5. An arbitrator or the president of the arbitral tribunal will, if appropriate, appoint a secretary who may be one of the arbitrators.

Paragraph 6. In performing his duty, the arbitrator shall proceed with impartiality, independence, competence, diligence and discretion.

Paragraph 7. An arbitrator or the arbitral tribunal may order the parties to advance the funds to cover expenses and services it may deem necessary.

Article 14. Individuals somehow linked to the parties or to the submitted dispute, by any of the relationships that characterize the impediment or suspicion of judges, are prevented from serving as arbitrators and become subject, as the case may be and to the applicable extent, to the same duties and responsibilities incurred by court judges, as set up in the Code of Civil Procedure.

Paragraph 1. Prior to accepting the service, an individual appointed to serve as arbitrator shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence.

Paragraph 2. A party may challenge the appointed-arbitrator only for reasons of which it becomes aware after the appointment has been made, unless:
a) The arbitrator was not appointed directly by the party; or
b) The reason for the challenge of the arbitrator becomes known subsequent to the appointment.

Article 15. The party who intends to challenge the arbitrator shall, pursuant to Article 20, present the respective motion either directly to the arbitrator or to the president of the arbitral tribunal, setting forth their reasons with the pertinent evidence.

Sole paragraph. If the motion is granted, the arbitrator will be removed and replaced in accordance with Article 16 of this Law.

Article 16. If an arbitrator withdraws prior to accepting the appointment, or if the arbitrator dies after acceptance, becomes unable to carry out his duties or is successfully challenged, the alternate indicated in the arbitration agreement, if any, will assume their position.

Paragraph 1. If no substitute has been appointed, the rules of the arbitral institution or specialized entity shall apply, if the parties have invoked them in the arbitration agreement.

Paragraph 2. In the absence of any arbitration agreement and if the parties fail to reach an agreement as to the appointment of the substitute arbitrator, the interested party shall proceed in the manner set forth in Article 7 of this Law, unless the parties have expressly stated in the arbitration agreement that they will not accept a substitute arbitrator.

Article 17. By performing their service, or as a result thereof, the arbitrators shall be considered comparable to public officials for the purpose of criminal law.

Article 18. An arbitrator is the judge in fact and in law, and his award is not subject to appeal or recognition by judicial court.

Chapter IV

Arbitration Proceedings

Article 19. The arbitration shall be deemed to be commenced when the appointment is accepted by the sole arbitrator or by all of the arbitrators, if there is more than one.

Paragraph 1. Once the arbitration has been commenced, and if the arbitrator or arbitration tribunal concludes there is a need to clarify a matter set forth in the arbitration agreement, an addendum will be drafted together with the parties, executed by all, and will become an integral part of the arbitration agreement. (Added by Law no. 13,129 of 2015)

Paragraph 2. The commencement of arbitration tolls the statute of limitations, retroactive to the date of the filing of the request for arbitration, even if the arbitration is terminated due to absence of jurisdiction. (Added by Law no. 13,129 of 2015)

Article 20. The party wishing to raise issues related to the jurisdiction, suspicion or impediment of an arbitrator or arbitrators, or as to the nullity, invalidity or ineffectiveness of the arbitration agreement, must do so at the first opportunity, after the commencement of the arbitration.

Paragraph 1. When the challenge of suspicion or impediment is accepted, the arbitrator shall be replaced in accordance with Article 16 of this Law; and if the lack of jurisdiction of the arbitrator or of the arbitral tribunal, as well as the nullity, invalidity or ineffectiveness of the arbitration agreement is confirmed, the parties shall revert to the Judicial Authority competent to rule on the matter.

Paragraph 2. When the challenge is not accepted, the arbitration shall proceed normally, subject however to review of that decision by the competent Judicial Authority if a lawsuit referred to in Article 33 of this Law is filed.

Article 21. The sole arbitrator or the arbitral tribunal shall comply with the procedure agreed upon by the parties in the arbitration agreement, which may refer to the rules of an arbitral institution or specialized entity, it being possible for the parties to empower the sole arbitrator or the arbitral tribunal to regulate the procedure.

Paragraph 1. In the absence of any provisions on the procedure, the sole arbitrator or the arbitral tribunal shall conduct the arbitration in such a manner it considers appropriate.

Paragraph 2. The principles of due process of law, equal treatment of the parties, impartiality of the arbitrator and freedom of decision shall always be respected.

Paragraph 3. The parties may be represented by legal counsel, and the right to appoint someone to represent them or to assist them in the arbitration proceeding will always be respected.

Paragraph 4. The sole arbitrator or the arbitral tribunal shall, at the commencement of the procedure, attempt to reconcile the parties, applying, to the extent possible, Article 28 of this Law.

Article 22. The sole arbitrator or the arbitral tribunal, either ex officio or at the parties' request, may hear parties' and witnesses' testimony and may rule on the production of expert evidence, and other evidence deemed necessary.

Paragraph 1. Testimony of the parties and witnesses shall be taken at places, dates and hours previously communicated in writing to the parties, and a written record of such testimony shall be signed by the party or witness, or at his request, also by the arbitrators.

Paragraph 2. If a party fails, without good cause, to comply with a request to render personal testimony, the arbitrator or the arbitral tribunal shall give due consideration to such behavior when issuing the award; and if a witness, under the same conditions, is absent, the arbitrator or the president of the arbitral tribunal may request the State Court to compel the appearance of the defaulting witness, upon evidence of the existence of an arbitration agreement.

Paragraph 3. Default by a party shall not prevent the arbitral award from being made.

Paragraph 4. (Revoked by Law no. 13,129 of 2015)

Paragraph 5. If an arbitrator is replaced during the arbitral procedure, the alternate, at his discretion, may determine what evidence will be repeated.

Chapter IV-A

(Added by Law no. 13,129 of 2015)

Provisional Measures of Protection and Urgent Relief

Article 22-A. Prior to commencing the arbitration, the parties may seek provisional measures of protection and urgent relief from a judicial court (Added by Law no. 13,129 of 2015).

Sole paragraph. The efficacy of the provisional measure granted by the judicial court shall cease if the interested party does not file the request for arbitration within 30 (thirty) days from the date the respective decision takes effect. (Added by Law no. 13,129 of 2015)

Article 22-B. Once arbitration has been commenced, the arbitrators will have competence for maintaining, modifying or revoking the provisional or urgent measures granted by the Judicial Authority. (Added by Law no. 13,129 of 2015)

Sole paragraph. If arbitration proceedings have already been commenced, the request for the injunctive and urgent relief will be directly addressed to the arbitrators. (Added by Law no. 13,129 of 2015)

Chapter IV-B

(Added by Law no. 13,129 of 2015)

Arbitration Letter

Article 22-C. An arbitrator or the arbitral tribunal may issue an arbitration letter so that the judicial court offers assistance or imposes compliance, in the area of their territorial jurisdiction, of an act requested by the arbitrator. (Added by Law no. 13,129 of 2015)

Sole paragraph. In compliance with the arbitration letter, the respective court proceedings will be under seal, as long as the confidentiality set forth in the arbitration is verified. (Added by Law no. 13,129 of 2015)

Chapter V

The Arbitration Award

Article 23. The arbitration award shall be made within the time frame set up by the parties. If no timing has been determined, the arbitral award shall be made within six months from the date of the commencement of the arbitration or from the date of the substitution of an arbitrator.

Paragraph 1. The arbitrators may render partial awards. (Added by Law no. 13,129 of 2015)

Paragraph 2. The parties and the arbitrators, by mutual agreement, may extend the timing for the delivery of the final award. (Added by Law no. 13,129 of 2015)

Article 24. The arbitral award shall be in writing.

Paragraph 1. If there are several arbitrators, the decision shall be made by majority vote. Failing majority determination, the opinion of the president of the arbitral tribunal shall prevail.

Paragraph 2. A dissenting arbitrator may, if he so wishes, render a separate decision.

Article 25. (Revoked by Law no. 13,129 of 2015)

Sole paragraph. (Revoked by Law no. 13,129 of 2015)

Article 26. The arbitral award must contain:

I – A report including the names of the parties and a summary of the dispute;

II – The grounds of the decision with due analysis of factual and legal issues, including, a the case may be, a statement that the award is made in equity;

III – The dispositive by which the arbitrators shall resolve questions presented before them, and establish a time limit for the compliance with the decision, as the case may be; and

IV – The date and place where the award is rendered.

Sole paragraph. The arbitral award shall be signed by the arbitrator or by all the arbitrators. If one or more arbitrators is unable to or refuses to sign the award, the president of the arbitral tribunal shall certify such fact.

Article 27. The arbitral award shall decide on the parties' duties regarding costs and expenses for the arbitration, as well as on any amount resulting from bad faith conduct, if applicable, complying with the provisions of the arbitration agreement, if any.

Article 28. If the parties reach a settlement during the course of the arbitral proceedings, the arbitrator or arbitral tribunal may, at the parties' request, render an arbitral award declaring such fact, containing the requirements provided for in Article 26 of this Law.

Article 29. The rendering of the arbitral award marks the end of the arbitration; the sole arbitrator or the president of the arbitral tribunal must send a copy of the decision to the parties by mail or by other means of communication, with confirmation receipt, or through direct delivery to the parties, with return receipt.

Article 30. Within five days immediately following receipt of the award or the personal delivery of that award, and having informed the other party, the interested party may request the sole arbitrator or the arbitral tribunal to: (Amended by Law no. 13,129 of 2015)

ICorrect any clerical errors in the award; (Amended by Law no. 13,129 of 2015)

II – Clarify any obscurity, doubt or contradiction in the arbitral award, or decide on an omitted issue that should have been resolved.

Sole paragraph. The arbitrator or the arbitral tribunal will decide within 10 (ten) days, or within the timeframe agreed to by the parties, the amendment of the arbitral award, which shall be communicated to the parties in accordance with Article 29. (Amended by Law no. 13,129 of 2015)

Article 31. The arbitral award shall have the same effect on the parties and their successors as a judgment rendered by the Judicial Authority and, if it includes an obligation for payment, it shall constitute an enforceable instrument thereof.

Article 32. An arbitral award is null and void if:

I – The arbitration agreement is null; (Amended by Law no. 13,129 of 2015)

II – It is made by an individual who could not serve as an arbitrator;

III – It does not comply with the requirements of Article 26 of this Law;

IV – It has exceeded the limits of the arbitration agreement;

V(Revoked by Law no. 13,129 of 2015)

VI – It has been duly proved that it was made through unfaithfulness, extortion or corruption;

VII – It is rendered after the time limit has expired, in compliance with Article 12, item III of this Law; and VIII.

VIII – It violates the principles set forth by Article 21, Paragraph 2 of this Law.

Article 33. The interested party may request to the competent Judicial Authority to declare the arbitral award null in the cases set forth in this law. (Amended by Law no. 13,129 of 2015)

§ 1o A demanda para a declaração de nulidade da sentença arbitral, parcial ou final, seguirá as regras do procedimento comum, previstas na Lei n

Paragraph 1. A request for the declaratory nullity of the arbitral award, whether partial or final, will comply with the rules of cognizance procedure set up in the Law No 5869 of January 11, 1973 (Code of Civil Procedure), and it must be filed within 90 (ninety) days after receipt of notification of the respective award, whether partial or final, or of the decision on a motion for clarification. (Amended by Law no. 13,129 of 2015)

Paragraph 2. It the request is granted, it will set the arbitral award aside, and in the cases of Article 32, it will rule, if applicable, that the arbitrator or the arbitral tribunal issues a new ruling. (Amended by Law no. 13,129 of 2015)

Paragraph 3. A declaration of nullity of the arbitral award may also be raised by means of a debtor's defense, according to Article 475-L et seq. of Law No. 5869 of January 11, 1973 (Code of Civil Procedure), in case court enforcement proceedings are filed. (Amended by Law no. 13,129 of 2015)

Paragraph 4. The interested party may file a request for the rendering of a supplemental arbitral award if the arbitrator fails to rule on all matters submitted to arbitration. (Added by Law no. 13,129 of 2015)

Chapter VI

Recognition and Enforcement of Foreign Arbitral Awards

Article 34. A foreign arbitral award shall be recognized or enforced in Brazil in accordance with international treaties effective in the internal legal system, or, in its absence, in strict accordance with the terms of this Law.

Sole paragraph. A foreign award is considered to be an award rendered outside the national territory.

Article 35. In order to be recognized or enforced in Brazil, a foreign arbitral award is only subject to homologation by the Superior Court of Justice. (Amended by Law no. 13,129 of 2015)

Article 36. The provisions of Articles 483 and 484 of the Code Civil Procedure shall apply, where applicable, to the request for recognition or enforcement of a foreign arbitral award.

Article 37. The interested party's request seeking recognition of a foreign arbitration award shall meet the requirements of the procedural law in accordance with Article 282 of the Code of Civil Procedure, and it must necessarily contain:

I – The original of the arbitral award or duly certified copy authenticated by the Brazilian consulate, accompanied by a certified translation;

II – The original arbitration agreement or a duly certified copy, accompanied by a certified translation.

Article 38. Recognition or enforcement of the foreign arbitral award may be refused if the party against which it is invoked, furnishes proof that:

I – The parties to the arbitration agreement were under some incapacity;

II – The arbitration agreement was not valid under the law to which the parties have subject it, or failing any indication thereon, under the law of the country where the award was made;

III – It was not given proper notice of the appointment of an arbitrator or the arbitral proceedings, or was otherwise unable to present his case;

IV – The arbitral award was issued beyond the scope of the arbitration agreement and it was not possible to separate the exceeding portion from what was submitted to arbitration;

V – The commencement of the arbitration proceedings was not in accordance with the submission agreement or the arbitration clause;

VI – The arbitral award has not yet become binding on the parties or has been set aside or suspended by a court in the country where the arbitral award was made.

Article 39. Recognition or enforcement of a foreign arbitral award will also be refused if the Superior Court of Justice finds that: (Amended by Law no. 13,129 of 2015)

I – According to Brazilian law, the object of the dispute cannot be settled by arbitration;

II – The decision violates national public policy.

Sole paragraph. The service with arbitral process of a party that resides or is domiciled in Brazil, pursuant to the arbitration agreement or to the procedural law of the country in which the arbitration took place, including mail with confirmation of receipt, shall not be considered as in violation of Brazilian public policy, provided the Brazilian party is granted proper time to present its defense.

Article 40. The denial of the request for recognition or enforcement of a foreign arbitral award based on formal defects does not prevent the interested party from renewing the request once such defects are properly cured.

Chapter VII

Final Provisions

Article 41. Articles 267, item VII; 301, item IX; and 584, item III of the Code of Civil Procedure shall be drafted as follows:

"Art. 267.........................................................................

VII – by the arbitration agreement."

"Art. 301.........................................................................

IX – arbitration agreement"

"Art. 584...........................................................................

III. – the arbitral award and a court ruling affirming settlement or conciliation;"

Article 42. Article 520 of the Civil Procedure Code shall have a new item, drafted as follows:

"Art. 520...........................................................................

VI – rules admissible the request for arbitration."

Article 43. This law shall enter into force sixty days after the date of its publication.

Article 44. Articles 1037 to 1048 of Law No. 3071 of January 1, 1916, Brazilian Civil Code; Articles 101 and 1072 to 1102 of Law No. 5869 of January 11, 1973, Code of Civil Procedure; and all other provisions to the contrary are hereby revoked.

 

Brasilia, September 23, 1996: 175th year of Independence, and 108th year of the Republic.

 

FERNANDO HENRIQUE CARDOSO

Nelson A. Jobim

 

1 This translation was prepared by Maurício Gomm Santos, arbirator, mediator and lawyer licensed to practice law in Brazil, New York and Florida Foreign Legal Consultant. Partner with GST LLP.

Brazilian Arbitration Act

BRAZILIAN MEDIATION ACT

Law No 13140, OF JUNE 26, 20152

Provides for mediation between private parties as a means to settle disputes and the self-resolution of disputes in the scope of public administration; amends Law No. 9469, of July 10, 1997, and Decree No. 70235, of March 6, 1972; and revokes Paragraph 2 of art. 6 of Law No. 469, of July 10, 1997.

THE PRESIDENT OF BRAZIL
I hereby make it known that the National Congress enacts and I approve the following Law:

Article 1. This Law provides for mediation as a means to settle disputes between private parties and the self-resolution of disputes in the scope of public administration.

Sole Paragraph. Mediation shall mean the technical activity exercised by an independent third party without decision making power, who, upon being chosen or accepted by the parties, assists and encourages them to identify or develop mutually agreed solutions to a dispute.

CHAPTER I

MEDIATION
Section I
Miscellaneous

Article 2. Mediation shall be governed by the following principles:

I – independence of the mediator;

II – equality between the parties;

III – orality;

IV – informality;

V – free will of the parties;

VI – search for consensus;

VII – confidentiality;

VIII – good faith.

Paragraph 1. If there is a mediation section provided for in a contract, the parties shall attend the first mediation meeting.

Paragraph 2. Nobody shall be required to remain at a mediation proceeding.

Article 3. The object of mediation may be a dispute over "disposable" (transferable or waivable) rights or non-disposable, non-waivable rights which are able to be negotiated.

Paragraph 1. The mediation may deal with the whole conflict or part thereof

Paragraph 2. The parties' agreement involving non-waivable but negotiable rights shall be confirmed by a court, and the testimony of the Public Prosecutor's Office shall be required.

Section II

The Mediators
Subsection I
Common Provisions

Article 4. The mediator shall be appointed by the court or chosen by the parties.

Paragraph 1. The mediator shall conduct the communication process between the parties, seeking the parties' understanding and agreement, as well as facilitating the settlement of conflicts.

Paragraph 2. Mediation shall be free of charge for those in need.

Article 5. The same legal provisions concerning a judge's impediment and disqualification shall apply to the mediator.

Sole Paragraph. The person appointed to act as mediator shall have the duty to disclose to the parties, prior to accepting such assignment, any fact or circumstance that may cause justified doubt with respect to his/her independence to mediate the conflict, and at such time he/she may be rejected by any of the parties.

Article 6. The mediator shall be prevented, for a period of one year as from the end of the last hearing attended, from assisting, representing or defending any of the parties.

Article 7. The mediator may neither act as an arbitrator nor as a witness in legal or arbitration proceedings concerning a dispute in which he/she has acted as a mediator.

Article 8. The mediator and all those assisting him/her in the mediation proceeding, when exercising their duties or in furtherance thereof, shall have the same treatment as a public employee, for the purposes of the criminal law.

Subsection II
Out-of-Court Mediators

Article 9. Any competent person who is trusted by the parties and is able to carry out mediation may act as an extrajudicial mediator, irrespective of being a member of or registered with any kind of council, group entity or association.

Article 10. The parties may be assisted by lawyers or public defenders.

Sole Paragraph. If one of the parties appears with his/her lawyer or public defender, the mediator shall suspend the procedure, until all of them are duly assisted.

Subsection
Judicial Mediators

Article 11. A competent person having a college degree for at least two years from a university acknowledged by the Ministry of Education and being qualified by a mediators' graduate school or institution recognized by the National School for Graduation and Improvement of Magistrates - ENFAM or by the courts, in compliance with the minimum requirements established by the National Council of Justice together with the Ministry of Justice, may act as a judicial mediator.

Article 12. The courts shall establish and keep updated registers for qualified mediators who are authorized to act in judicial mediations.

Paragraph 1. The registration on the list of judicial mediators shall be requested by the interested party at the court of jurisdiction in the area he/she intends to exercise said mediation.

Paragraph 2. The courts shall regulate the procedures for registration and de- registration of its mediators.

Article 13. The remuneration due to judicial mediators shall be fixed by courts and paid by the parties, in compliance with the provision set forth Paragraph 2 of Article 4 of this Law.

Section III
The Mediation Proceeding

Subsection I
Common Provisions

Article 14. In the beginning of the first mediation meeting, and whenever he/she deems necessary, the mediator shall warn the parties about the confidentiality rules applicable to the proceeding.

Article 15. Upon request by the parties or the mediator, and with their consent, other mediators may be admitted to act in the same proceeding, whenever it is recommendable in view of the nature and complexity of the conflict.

Article 16. Even if there is an arbitration or legal action in course, the parties may submit to mediation, and in such case they shall request the judge or arbitrator to stay the proceeding for a term sufficient to settle the litigation amicably.

Paragraph 1. The decision staying the proceeding under the terms mutually agreed upon by the parties shall be final.

Paragraph 2. The stay proceeding shall not hinder the granting of provisional injunctions by the judge or arbitrator.

Article 17. A mediation shall be deemed as initiated on the date scheduled for the first mediation meeting.

Sole Paragraph. The limitation period shall be suspended for the time the mediation proceeding takes place.

Article 18. As soon as the mediation starts, the subsequent meetings attended by the parties may only be scheduled with their consent.

Article 19. When performing his/her duty, the mediator may meet with the parties, whether collectively or separately, as well as ask the parties to provide information he/she deems necessary to enable the understanding between them.

Article 20. The mediation proceeding shall be closed upon drawing up of its final instrument, when an agreement is reached or whenever new efforts to reach an agreement are not justified, whether by means of a statement by the mediator in that regard or by statement by any of the parties.

Sole Paragraph. If an agreement is entered into by the parties, the final mediation instrument shall become an instrument enforceable out of court and, if such agreement is ratified by a court, it shall be a judicially enforceable instrument.

Subsection II
Out-of-Court Mediation

Article 21. The invitation to start an out-of-court mediation proceeding may be made by any communication means and it shall mention the scope proposed for the negotiation, the date and place of the first meeting.

Sole Paragraph. The invitation made by one party to another shall be deemed as refused if it is not replied to within thirty days as from the date of its receipt.

Article 22. The contractual provision on mediation shall mention at least:

I – a minimum and maximum term for holding of the first mediation meeting, as from the invitation receipt date;

II – a place of the first mediation meeting;

III – criteria to choose the mediator or mediation team;

IV – a penalty in case of non attendance by the party invited to the first mediation meeting.

Paragraph 1. The contractual provision may replace the specification of the items listed above with indication of a regulation, published by a reliable institution providing mediation services, which includes clear criteria to choose the mediator and the holding of the first mediation meeting.

Paragraph 2. In the event there is no complete contractual provision, the following criteria shall be complied with for the holding of the first mediation meeting:

I – a minimum term of ten business days and maximum term of three months, as from receipt of the invitation;

II – a place suitable for a meeting involving confidential information;

III – a list of five names, contact information and professional references of qualified mediators; the invited party may expressly choose any of the five mediators and, if the invited party does not make an objection, the first name in the list shall be deemed as accepted;

IV – the non-attendance by the invited party to the first mediation meeting shall cause the latter to bear fifty per cent of the loss of suit costs and fees if the same wins the subsequent arbitration or legal proceeding involving the scope of the mediation to which he/she has been invited.

Paragraph 3. In the litigations arising from commercial or corporate agreements without a mediation provision, the out-of-court mediator shall only charge for his services if the parties decide to sign a mediation initiation instrument and willfully remain in the mediation proceeding.

Article 23. If, as provided for in a mediation contractual provision, the parties undertake not to start an arbitration proceeding or a legal proceeding during a fixed term or until the implementation of a certain condition, the arbitrator or judge shall suspend the course of arbitration or the action for the previously agreed term or until the implementation of such condition.

Sole Paragraph. The provisions in the head Paragraph hereof shall not apply to preliminary injunctions where the access to the Judiciary is necessary to avoid loss of a right.

Subsection III
Judicial Mediation

Article 24. The courts shall create judiciary centers to amicably settle disputes, and such centers shall be responsible for holding pre-procedural and procedural conciliation and mediation sessions and hearings, and for the developing programs intended to assist, guide and encourage the self-resolution of disputes.

Sole Paragraph. The composition and organization of the center shall be defined by the respective court, in compliance with the rules issued by the National Council of Justice.

Article 25. In a judicial mediation, the mediators shall not be subject to the previous acceptance by the parties, in compliance with the provision set forth in Article 5 of this Law.

Article 26. The parties shall be assisted by lawyers or public defenders, except for the events set forth in Laws numbers 9099, of September 26, 1995, and 10259, of July 12, 2001.

Sole Paragraph. Assistance by the Public Defender's Office shall be ensured to those evidencing insufficiency of resources.

Article 27. If the complaint fulfills the essential requirements and the pleading is not provisionally dismissed, the judge shall designate a mediation hearing.

Article 28. The judicial mediation proceeding shall be concluded within sixty days, counted from the first session, except when the parties, as per mutual agreement, request the extension thereof.

Sole Paragraph. If an agreement is reached, the records shall be submitted to the judge, who shall determine the filing of the proceeding and, provided that it is requested by the parties, he shall ratify the agreement, by means of a court decision and final mediation instrument, and the same shall determine the filing of the proceeding.

Article 29. Upon settlement of the dispute by mediation prior to defendant's summoning, final court's costs shall not be due.

Section IV
Confidentiality and its Exceptions

Article 30. Any and all information concerning the mediation proceeding shall be confidential with respect to third parties, and said information may not be disclosed even in arbitration or legal proceeding, except if the parties expressly decide otherwise or whenever the disclosure thereof is required by the law or is necessary to comply with the agreement achieved by mediation.

Paragraph 1. -The duty of confidentially shall be applicable to the mediator, the parties, their agents, lawyers, technical advisors and other persons of his/her trust who directly or indirectly have participated in the mediation proceeding, thus, obtaining:

I – a statement, opinion, suggestion, promise or proposal made by one party to the other in search of an understanding for the dispute;

II – acknowledgment of a fact by any of the parties in the course of the mediation proceeding;

III – a statement of acceptance of the agreement proposal presented by the mediator;

IV – a document solely prepared for the purpose of the mediation proceeding.

Paragraph 2. The evidence submitted in disagreement with the provision set forth in this article shall not be admitted at an arbitration or legal proceeding.

Paragraph 3. The information concerning the occurrence of a public crime shall not be bound by the confidentiality rule.

Paragraph 4. The confidentially rule does not exclude the duty of the parties mentioned in the head provision hereof to provide information to tax authorities after the final mediation instrument is completed, and the agents of said parties shall also be bound to the obligation of keeping the confidentiality of the information shared under the terms of Article 198 of Law No. 5172, of October 25, 1966 – National Tax Code.

Article 31. The information provided by one party at a private session shall be deemed as confidential, and the mediator may not disclose it to the other parties, except if expressly so authorized.

CHAPTER II

SELF-RESOLUTION OF THE DISPUTE WHEN ONE PARTY IS A LEGAL ENTITY GOVERNED BY PUBLIC LAW

Section I
Common Provisions

Article 32. The Government, the States, the Federal District and the Municipalities may create chambers to prevent and administratively settle disputes, within the scope of the respective Public Advocate General Office entities, if any, with authority to:

I – settle disputes among public administration bodies and entities;

II – evaluate the admissibility of the requests to settle disputes, by means of an agreement by the parties, in case of a dispute between an individual and a legal entity governed by public law;

III – promote, when applicable, the execution of a conduct adjustment instrument.

Paragraph 1. The manner of formation and operation of the chambers mentioned in the head provision hereof shall be established by a regulation issued by each State.

Paragraph 2. The submission of the dispute to the chambers mentioned in the head provision hereof is optional and shall be applicable only to the cases provided for in a regulation of the respective State.

Paragraph 3. If an agreement is reached by the parties, it shall be written in the form of an instrument and the same shall be deemed as an instrument enforceable out of court.

Paragraph 4. The authority of the entities mentioned in the head provision hereof shall not include disputes that may only be settled by acts or granting of rights subject to the authorization of the Legislative Branch.

Paragraph 5. The authority of the chambers mentioned in the head provision hereof shall include the prevention and settlement of disputes involving economic-financial balance of agreements executed by the administration with individuals.

Article 33. While said mediation chambers are not created, the disputes may be settled according to the mediation proceeding provided for in Subsection I of Section III of Chapter I of this Law.

Sole Paragraph. The Government's, the States', the Federal District's and the Municipalities' Public Advocate General Office, wherever they exist, may start, by their own motion or pursuant to a call, a collective mediation proceeding for disputes related to the provision of public services.

Article 34. The initiation of an administrative proceeding for the amicable settlement of a dispute in the scope of public administration stays the statute of limitations.

Paragraph 1. A proceeding shall be deemed as initiated when the body or public entity issues an admissibility judgment, making retroactive the stay of statute of limitations to the date of formalization of the request for amicable settlement of the dispute.

Paragraph 2. In case of a tax matter, the stay of statute of limitations shall comply with the provisions set forth in Law No. 5172, of October 25, 1966 – National Tax Code.

Section II
Disputes Involving the Direct Federal Public Administration, Their Agencies and Foundations

Article 35. Legal disputes involving the direct federal public administration, their agencies and foundations may be subject to compromise by adhesion, based on:

I – authorization of the Federal Advocate General, based on the consolidated court precedents of the Federal Supreme Court or higher courts; or

II – opinion issued by the Federal Advocate General, approved by the President of Brazil.

Paragraph 1. The requirements and conditions of operation by adhesion shall be defined by a specific administrative resolution.

Paragraph 2. When applying for adhesion, the interested party shall attach evidence of compliance with the requirements and conditions stipulated in the administrative resolution.

Paragraph 3. The administrative resolution shall have general effects and it shall be applied to identical cases, timely qualified pursuant to an adhesion request, even if it resolves only part of the dispute.

Paragraph 4. Said adhesion shall imply waiver by the interested party to the right upon which the action or appeal is grounded, which may be pending a decision, of administrative or legal nature, with respect to the points included in the purpose of the administrative resolution.

Paragraph 5. If the interested party is a party to a legal proceeding filed by means of a collective action, the waiver to the right upon which the action is grounded shall be expressed by a petition addressed to the presiding judge.

Paragraph 6. The formalization of an administrative resolution intended to the operation by adhesion shall neither imply an implicit waiver to the statute of limitations nor the interruption or stay.

Article 36. In case of disputes involving litigation between bodies or entities governed by the public law comprising the federal public administration, the Federal Advocate General Office shall carry out an out-of-court settlement of the dispute, in compliance with the procedures set forth in an act by the Federal Advocate General.

Paragraph 1. In the event mentioned in the head provision hereof, if an agreement concerning the legal dispute is not achieved, the Federal Advocate General shall be responsible to settle the same, with grounds on the applicable law.

Paragraph 2. In the cases where the resolution of a dispute implies the acknowledgement of existence of Government's, its agencies' and foundations' credits enforceable against legal entities governed by federal public law, the Federal Advocate General Office may request to the Ministry of Planning, Budget and Management the budgetary adjustment for settlement of debts acknowledged as lawful.

Paragraph 3. The out-of-court settlement of disputes shall not exclude the determination of liability of the public agent giving rise to the debt, whenever it is found out that his/her action or omission is, in theory, a disciplinarian infraction.

Paragraph 4. In the events where the litigation matter is discussed under an action against a corrupt public employee or if a decision has been issued in this regard by the Federal Accounting Court, the conciliation mentioned in the head provision hereof shall depend upon the express agreement of the presiding judge or the Reporting Judge.

Article 37. The States, the Federal District and the Municipalities, their agencies and public foundations, as well as public companies and federal public and private companies may submit their litigations with public administration entities or bodies to the Federal Advocate General Office, for the purposes of an out-of-court settlement of the dispute.

Article 38. In cases where the legal dispute is related to taxes managed by the Federal Revenue Service of Brazil or to credits registered as federal debts:

I – the provisions set forth in items II and III of the head provision of Article 32 shall not apply;

II – public companies, public and private companies and their subsidiaries conducting the economic activity of production or marketing of goods or the rendering of services under the competition system may not exercise the option set forth in Article 37;

III – when the parties are those mentioned in the head provision of Article 36:

a) the submission of the dispute to the out-of-court resolution of dispute by the Federal Advocate General Office implies the waiver of the right to resort to the Administrative Council of Tax Appeals;

b) the reduction or cancelation of credit shall depend upon the joint statement by the Federal Advocate General and the State Minister of Finance.

Sole Paragraph. The provisions set forth in item II and letter "a" of item III shall not exclude the authority of the Federal Advocate General Office provided for in items X and XI of Article 4 of Supplementary Law No. 73, of February 10, 1993.

Article 39. The filing of a legal action where bodies or entities governed by public law comprising the federal public administration concomitantly appear as plaintiff and defendant shall be previously authorized by the Federal Advocate General.

Article 40. Public employees and agents participating in the process of out-of-court resolution of disputes may only be made civilly, administratively and criminally liable when, by willful misconduct or fraud, they receive any undue equity advantage, allow or facilitate the reception thereof by a third party, or contribute therefor.

CHAPTER III

FINAL PROVISIONS

Article 41. The National School of Mediation and Conciliation, within the scope of the Ministry of Justice, may create a database on the good practices of mediation, as well as keep a list of mediators and mediation institutions.

Article 42. This Law shall apply, where applicable, to other amicable forms of resolution of disputes, such as community and school mediations, as well as those carried out at out-of-court offices, provided that they are in the scope of their authority.

Sole Paragraph. Mediation in labor relations shall be governed by specific law.

Article 43. Public administration bodies and entities may create chambers to settle disputes among private parties regarding activities governed or supervised by the same.

Article 44. Articles 1 and 2 of Law No. 9469, of July 10, 1997 shall be in force with the following wording:

"Article 1 The Federal Advocate General, directly or by delegation, and the highest officers of federal public companies, together with the statutory officer of the area relating to the matter, may authorize the execution of agreements or operations to prevent or terminate litigations, including court litigations.

Paragraph 1. Specialized chambers may be created, and such chambers shall be formed by public employees or registered public agents, for the purpose of analyzing and preparing proposals for settlement or compromise.

(..)

Paragraph 3. A regulation shall provide for the kind of composition of the chambers mentioned in Paragraph 1, which shall be formed by at least an effective member of the Federal Advocate General Office or, in case of public companies, a legal assistant or someone holding an equivalent position.

Paragraph 4. Whenever the litigation involves amounts above those fixed in a regulation, the settlement or compromise shall, under penalty of being null and void, depend on the prior and express authorization of the Federal Advocate General Office and the Minister of State to which area of authority the matter is related, or also the President of the House of Representatives, the Federal Senate, the Federal Accounting Court, the Court or Council, or the Federal Attorney General, in case of interest of the bodies belonging to the Legislative and Judiciary Branches or the Public Prosecutor's Office, excluding the independent federal public companies, which will need only the prior and express authorization of the officers mentioned in the head provision hereof.

Paragraph 5. In the compromise or agreement entered into directly by the party or by means of an attorney in fact to terminate or close a legal action, including the cases of administrative extension of payments demanded in court, the parties may define the liability of each one for the payment of fees due to their respective lawyers."

Article 2. The Federal Attorney General , the General Attorney of the Central Bank of Brazil and the officers of federal public companies mentioned in the head provision of Article 1 hereof may authorize, directly or by delegation, the execution of agreements to prevent or terminate, in court or out-of-court, a ligation involving amounts lower than those fixed in a regulation.

Paragraph 1. In case of federal public companies, said delegation shall be restricted to a collegiate body formally constituted and formed by at least one statutory officer.

Paragraph 2. The agreement mentioned in the head provision hereof may consist in the payment of the debt in monthly and consecutive installments up to the maximum limit of sixty.

Paragraph 3. The amount of each monthly installment, at the time of the payment, shall be increased by interest equivalent to the reference rate issued by the Special System of Settlement and Custody – SELIC for federal notes, which shall be monthly accrued and ascertained from the month subsequent to that of consolidation up to the month before the payment plus one per cent concerning the month when the payment is made.

Paragraph 4. Whenever any installment is in default, after thirty days, an execution proceeding shall be filed or followed, for the balance."

Article 45. Decree No. 70,235 of March 6, 1972 shall become effective with the inclusion of the following Article 14-A:

"Article 14-A – In case of determination and requirement of Government tax credits, the taxpayer of which is a body or entity governed by public law belonging to the federal public administration, the submission of the litigation to an out-of-court resolution of dispute by the Federal Advocate General Office shall be deemed as a claim, for the purposes of the provisions set forth in item III of Article 151 of Law No. 5172, of October 25, 1966 – National Tax Code."

Article 46. The mediation may be made via Internet or by another communication means allowing remote transaction, provided that the parties are in agreement.

Sole Paragraph. A party residing abroad is permitted to have mediation according to the rules established in this Law.

Article 47. This Law becomes effective after one hundred and eighty days as from its official publication.

Article 48. Paragraph 2 of Article 6 of Law No. 9469, dated July 10, 1997 is hereby revoked.

 

Brasília, June 26, 2015; 194th anniversary of the Independence of Brazil and 127th anniversary of the proclamation of the Republic.

 

DILMA ROUSSEFF (President of the Federative Republic of Brazil)
José Eduardo Cardozo (Ministry of Justice)
Joaquim Vieira Ferreira Levy (Finance Minister)
Nelson Barbosa (Ministry of Planning)
Luís Inácio Lucena Adams (Chief Minister of the Attorney General's Office)

 

2 This text is an unofficial translation, made on August 07, 2015 by mediator, professor and attorney Alexandre P. Simões of the law firm Ragazzo, Simões, Spinelli, Lazzareschi e Montoro Advogados, from São Paulo, Brazil with assistance of Paul E. Mason, attorney, mediator and arbitrator, from Rio de Janeiro, Brazil and Miami, USA and published at the website of the International Mediation Institute (http://www.imimediation.org). Reproduction authorized by the authors.

Brazilian Mediation Act