The Chamber of Conciliation, Mediation and Arbitration Ciesp/Fiesp welcomes the China International Economic and Trade Arbitration Commission to discuss the resolution of disputes between Chinese and Brazilian Parties
May 14, 2018
In an event jointly hosted by the Chamber of Conciliation, Mediation and Arbitration Ciesp/Fiesp (“CCMA”) and the China International Economic and Trade Arbitration Commission (“CIETAC”), Brazilian and Chinese experts in international trade and dispute resolution discussed the current state of affairs between the two economies and the most effective ways of resolving disputes between the two countries.
Prof. José Carlos de Magalhães, Vice-President of CCMA’s advisory board and one of the most prominent Brazilian arbitrators, offered welcome remarks together with Mr. Li Hu, Deputy Secretary-General from CIETAC. Both speakers emphasized the importance of arbitration as a dispute resolution mechanism allowing businesspersons from distant places to overcome disputes and to protect their commercial relationship in case of disagreements. The first panel ensued and analysed the “Outlook for Trade and Investment between Brazil and China.” Mr. Harry Chiang, Director of the International Affairs and Foreign Trade Department of the Federation of the Industries of the State of São Paulo, then discussed the importance of the commercial relationship between China and Brazil. He also pointed out that China is currently the most relevant trade partner of Brazil and delivered auspicious news regarding the China International Import Export fair to be held in Shanghai in November this year. For the first time, the Chinese central government will foster a trade fair aiming specifically at allowing foreign exporters to sell goods to China. Fiesp is training and providing consultancy for Brazilian entrepreneurs interested in attending and displaying their goods or services – see this link. Mrs. Fernanda Chang, partner at Ernst Young, delivered a presentation on the current state of Chinese investment in Brazil describing a broad panoply of Chinese investment in many sectors in Brazil.
Mr. Thomas Law, professor at the Arbitration Study Group of the Pontifical Catholic University of São Paulo and president of the Brazil-China Sociocultural Institute (“Ibrachina”) moderated the second panel, which discussed “Alternative Dispute Resolution (Negotiation and Mediation) between Brazil and China.” From the Chinese delegation, Mr. Cui Xinmin, Deputy Director of CIETAC’s alternative dispute resolution division addressed CIETAC’s work with mediation and domain name dispute resolution. CCMA was represented by two members of its mediation committee, Mr. Adolfo Braga Neto, lawyer, mediator and president of the Brazilian Institute of Mediation and Arbitration (“IMAB”), and by Prof. Daniela Gabbay, founding partner at Mange & Gabbay, Professor of Graduate and Post-Graduate Studies at the Fundação Getúlio Vargas Law School. Mr. Cui indicated that in China parties can mix different dispute resolution mechanisms. Parties may request, for example, that the arbitrator appointed to resolve a case through arbitration holds in abeyance the arbitration proceedings in order to attempt resolving the dispute through conciliation or mediation, in an initiative that would not prevent him or her from resuming the functions as arbitrator if the settlement discussions fails. Profs. Braga and Gabbay shared the stage to explain how mediation has evolved in Brazil and exploring avenues in which it could be effective for international trade disputes.
Mr. Daniel Lau, partner at KPMG, moderated the third panel, relating to “The Resolution of Disputes between Brazil and China.” This panel started with a speech from Mr. Li Hu, CIETAC’s representative, who described CIETAC’s inception in 1956 and the current state of the arbitration practice in China. In particular, Mr. Li mentioned that the Chinese arbitration law in principle only allows for institutional arbitration, that is to say, arbitration proceedings that are administered by a permanent institution. However, competent lawyers can make arrangements that allow the parties to carry out ad hoc arbitrations in China, that is to say, arbitration proceedings that are not administered by an institution. In such cases, following the advice of competent legal counsel, it may suffice to select a foreign law to govern the arbitration agreement in order to carry out ad hoc arbitrations in China. Prof. Hermes Marcelo Huck, partner at Lilla Huck Otranto Camargo, former professor of international law at the University of São Paulo and member of the CCMA advisory board delivered a compelling speech explaining how the choice of arbitration can be beneficial for the parties who enter into international contracts. He also emphasized the need for mutual study and cultural understanding between Brazilian and Chinese parties. The panel was concluded with a presentation by Mr. Reinaldo Ma, partner at TozziniFreire. As a transactional lawyer, Mr. Ma jested with the idea that he preferred to avoid arbitration, as a dispute would generally mean that something went wrong in the deal negotiated and drafted by transactional lawyers. Still, he acknowledged that, if a dispute is unavoidable, arbitration would be an effective means allowing the parties to seek an expedited and quality resolution. Mr. Ma also mentioned that China is ever changing: it is not a photo, but instead a motion picture. Hence, preconceived ideas as the traditional Confucian preference to avoid conflict are changing fast: comparing dispute resolution clauses from contracts executed in the latest decades, he explained that the wording is becoming increasingly affirmative in the sense that disputes can also be adjudicated and not always resolved by talks and good offices from the disputing parties.
Alternative Dispute Resolution (Negotiation and Mediation) between Brazil and China
The fourth panel discussed the experience of CIETAC and of CCMA in the management of international disputes. Mr. Li showed the important amount of international cases managed by his institution and indicated that CIETAC is one of the institutions worldwide that manages the greatest number of international cases. Mr. Peretti emphasized the autonomy of CCMA’s structure not only from the institutions that created it but also from Brazilian companies, as its presidency is held by two prominent former Chief Justices of the Brazilian Supreme Court. Hence, CCMA Ciesp/Fiesp is immune from influence from companies or the Brazilian government. Mr. Peretti also indicated that approximately 20% of the cases managed by CCMA involve at least one foreign party, but that there is an even greater number of cases where the parties involved are controlled by foreign companies, bringing a foreign context to its proceedings. After having accepted over 530 arbitrations, CCMA obtained the praise from international arbitration publications that acknowledge the quality and dependability of its services.
Arbitrating in Brazil may yield benefits to foreign parties, especially by making the award resulting from the arbitration proceeding a “domestic award” under Brazilian law. This does away with the requirement of previous recognition and enforcement before the Brazilian Superior Court of Justice. Hence, CCMA will continue to raise awareness from international parties and to welcome cases relating to international trade and investment.
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