CCMA-CIESP/FIESP hosts its Arbitration Day in NYC to discuss “Brazil as an arbitration-friendly forum
April 17, 2018
On April 17, the Chamber of Conciliation, Mediation and Arbitration Ciesp/Fiesp (the “Chamber”) hosted its Arbitration Day in New York City, a full-day seminar to discuss “Brazil as an Arbitration-Friendly Forum,” held at the New York International Arbitration Center (“NYIAC”).
The event started with welcome remarks from Justice Ellen Gracie Northfleet (Vice-President of the Chamber and member of the governing board of the International Council for Commercial Arbitration – ICCA), Minister Roberto Ardenghy (Consul for Economic and Commercial Affairs in the Consulate General of Brazil in New York) and from Ms. Rekha Rangachari (NYIAC’s Director).
Mr. Maurício Gomm dos Santos, Justice Ellen Gracie Northfleet and Justice Ricardo Villas Bôas Cueva
Justice Northfleet shed light on the evolution of arbitration in Brazil and the importance of the work accomplished by the Chamber for the development of the culture of alternative dispute resolution in Brazil. Minister Ardenghy analyzed the current state of affairs in Brazilian economy and recalled that, having overcome a period of recession, Brazil is back to the business and that the country remains a functioning and stable democracy where the rule of law prevails thanks to an independent judiciary.
Ms. Rangachari praised the evolution of arbitration in Brazil and remembered Justice Judith S. Kaye, founding Chair of NYIAC who was the first woman to sit as justice of the New York Court of Appeals and then became a champion of arbitration, devising and setting up NYIAC. Her admirable accomplishments much remind of Justice Northfleet’s path, as she also became the first woman to sit as justice of the Brazilian Supreme Court—handing down during that time the opinion that swung the Brazilian Supreme Courts’ opinion in favor of the constitutionality of arbitration—and later became one of the most important voices in the Brazilian arbitration community.
In the first panel, Justice Northfleet was joined by Justice Ricardo Villas Bôas Cueva, from the Brazilian Superior Court of Justice (“STJ”) and by Mr. Maurício Gomm dos Santos, Brazilian lawyer established and licensed to practice in Florida, partner at GST LLP. The panel discussed “Arbitration through the Eyes of the STJ.” Justice Cueva discussed the development in case law of the STJ, emphasizing the main areas of interest for international arbitration cases, such as the level of scrutiny applied in the recognition of foreign arbitration awards and the procedure relating to the communication of procedural steps. Justice Cueva posited that, over the years, the number of arbitration cases judged by the STJ has increased significantly. This changed the Judges' feelings towards arbitration, from the skepticism to full confidence and concluded with a quote attributed to Prof. Albert Jan van den Berg, according to whom, “Brazil has become, during the last ten years, the best student of the arbitration class.” Mr. Maurício Gomm encapsulated the evolution of arbitration in Brazil in his formula of the five “e”s. According to him, arbitration in Brazil evolved from a phase of exclusion, during which arbitration was a mere picture on the wall, or a fond memory of the peaceful resolution of nearly all Brazilian border disputes through arbitration, in a movement spurred by the Baron of Rio Branco during the XIXth century. Arbitration then dived into a phase of expectation after 1996 as Brazil enacted legislation and did treaties favoring arbitration. This legal framework led Brazil to a phase of expansion, from 2002 to 2008, as the users became fond and started making actual use of this dispute resolution method, which led to the current phase of explosion, where arbitration has become widespread and a reality in the Brazilian legal system.
Audience
The second panel discussed the “Duty to Disclose and Brazilian Arbitration Culture.” The panel was moderated by Mr. Celso Xavier, from Demarest Advogados, and featured presentations from Prof. Carlos Alberto Carmona, member of the drafting committee that prepared the bill that led to the Brazilian arbitration act, and partner at Marques Rosado, Toledo Cesar & Carmona Advogados as well as Washington-based Mrs. Érica Franzetti, partner at Dechert LLP. Prof. Carmona explained the rules applicable to the analysis of conflicts of interest in arbitration cases and commented that the composition of the task force that drafted the International Bar Association (“IBA”) Guidelines on Conflict of Interest did not reflect the current diversity of the international users of arbitration. Prof. Carmona also highlighted the Chamber’s code of ethics, especially the provision that requires the parties to approach the arbitrator’s disclosures as a two-way road, as the parties are encouraged not only to request but also to provide information that they deem relevant in the arbitrator’s analysis of potential conflicts of interest. Mrs. Franzetti compared the disclosure obligations in Brazil and in the United States, the case law and relevant pieces of legislation and arbitration regulations in both jurisdictions and concluded that the development of international disclosure standards is consistent with the international arbitration community’s desire for increased transparency, which is amenable to foster the legitimacy of arbitration worldwide.
Ms. Erika Levin from Lewis Baach PLLC moderated the third panel and joined the discussion in which her partner Mr. Adam Kaufmann, Mr. Alex Wilbraham, partner at Freshfields Bruckhaus Deringer and Mr. Maurício de Almeida Prado, partner at L.O. Baptista Advogados, discussed “The Limits to the Freedom of Contract in Arbitration.” Mr. Almeida Prado highlighted the duties incumbent on the arbitrators when corruption issues at stake. An important issue is the level of evidence necessary to evince that corruption issues are involved in the dispute at hand. Arbitrators should balance the probabilities and take appropriate action in accordance with their perception of the case. Two different situations can arise when arbitration and corruption are at stake. First, arbitrators may deal with contracts that are tainted by corruption, in which case the separability principle may allow them to adjudicate the case and enforce the appropriate laws. Second, there can be contracts which are not only tainted by corruption, but that are specifically entered into for corrupt purposes, in which case even the arbitration agreement might be considered null and void. Mr. Alex Wilbraham dealt with the scope of arbitrability in commercial and investment arbitration, emphasizing that national statutes and public policy concerns may provide absolute or partial limits to the parties’ freedom to arbitrate their disputes, also analyzing the specific issue of IP disputes. Mr. Adam Kaufmann dwell from his experience as a public prosecutor to discuss how corruption issues may influence the litigation of commercial disputes.
Mr. Leonardo de Campos Melo moderated the fourth panel, in which participated Mr. Grant Hanessian, partner at Baker McKenzie, Prof. Horacio Grigera Naón, arbitrator and professor at the Center on International Commercial Arbitration of the Washington College of Law (American University) and Prof. Luiz Olavo Baptista arbitrator and founding partner at Atelier Jurídico. Prof. Baptista analyzed the perceived idiosyncrasies of Brazilian arbitration practitioners and discussed the issue of multiculturalism in international arbitration. He then explained that the Brazilian mixed ethnicity and heritage provides a great example of tolerance and understanding. Prof. Grigera Naon addressed the difference between the inquisitorial system adopted in Brazil, in which adjudicators are actively involved in investigating the facts of the case, as opposed to the so called adversarial system, in which the adjudicators act as impartial referees between the parties, such as in common law countries. He also analyzed the perceived growing belligerence between parties and opposing counsel in international arbitration. Mr. Grant Hanessian also addressed the difference between civil and common law lawyers, emphasizing the growing trend towards globalization of the legal profession, with lawyers spending time in and receiving training from multiple jurisdictions. Mr. Hanessian also commented on the IBA Guidelines, positing that it can be deemed as the middle ground between the perspectives of multiple jurisdictions, therefore correctly depicting the global trends in arbitration.
Ms. Emily Mathews (NYIAC), Mrs. Rekha Rangachari (NYAC), Prof. Carlos Alberto Carmona, Justice Ellen Gracie Northfleet and Mr. Luis Peretti
The fifth panel discussed “Recent Developments for Arbitration in Brazil and the CCMA Ciesp/Fiesp Rules”. Mrs. Adriana Pucci, arbitrator and partner at Adriana Noemi Pucci – Sociedade de Advogados, described the evolution of the arbitration of disputes relating to the public administration in Brazil. Mr. Antônio Corrêa Meyer, partner at Machado Meyer Advogados, discussed arbitrations in the context of Brazilian corporations and corporate law. Mr. Luís Peretti, Secretary-General of the Chamber described the solid caseload handled by the Chamber since its establishment in 1995 and the features of its rules that make it adapted to international cases. He also mentioned the current state of evolution the Brazilian Arbitration Act, both circumstances that justify the praise received by the Chamber’s services in domestic and international cases from relevant international publications.
Mr. José Ricardo Feris, partner at Squire Patton Boggs delivered the final notes on “Why Should One Chose to Arbitrate in Brazil?” With his ample experience with Brazil-related cases, Mr. Feris pointed out that Brazil has not only the legal and physical infrastructure required for organizing arbitration proceedings, but also a competent pool of professionals and a well-rooted culture of support to arbitration built by the Brazilian Judiciary and the legal community in general.
The event received the institutional support of the Brazilian Arbitration Committee, the Brazilian Legal Society of the New York University, the Brazilian-American Chamber of Commerce, the Center on International Commercial Arbitration of the Washington College of Law of the American University, the Consulate General of Brazil in New York, the CPR Institute for Conflict Prevention & Resolution, and the European-American Business Association, whose support is greatly appreciated.
Currently, about 20% of the cases managed by the Chamber involve at least one party domiciled abroad, but a much larger share of its cases involve at least one party that is incorporated in Brazil but controlled (as a Brazilian subsidiary) of a foreign company. Arbitrating in Brazil may yield benefits to foreign parties. By making the award resulting from the arbitration proceeding a “domestic award”, arbitrating in Brazil exempts the award from the requirement of recognition and enforcement proceedings at the STJ, expediting its enforcement. Hence, the Chamber will continue to raise awareness from international parties and to welcome cases relating to international trade and investment.
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