BRAZIL AMERICAN CHAMBER OF COMMERCE Brazil: Investment Opportunities and International Arbitration

transcript

BRAZIL AMERICAN CHAMBER OF COMMERCE

Brazil: Investment Opportunities and International Arbitration

New York, April 15th, 2010

Fernando Eduardo SerecTozziniFreire AdvogadosR. Borges Lagoa ,1328

04038-904 - São Paulo, SP - BrazilTel: (55 11) 5086-5230 Fax: (55 11) 5086-5555

E-mail: fserec@tozzinifreire.com.br

Informações Confidenciais de Propriedade de TozziniFreire Advogados

What an IPAD and Brazil have in common?

Both of them have new and great features - IPAD

lLED-Backlit dDisplay

Thin and Light

Multi-Touch, Wireless, Connectivity

Both of them have new and great features - Brazil

But both still have their bugs and problemsIPAD

Do not have a USB port;

Weak Wi-Fi;

Charging Issues;

Typing headaches;

But both still have their bugs and problems - Brazil

Poor Education system;

Deficiencies in the Healthy system

Corruption;

Archaic Labor Legal System;

Crazy and Burdensome Tax System

But things are improving in Brazil…

“And, in some ways, Brazil outclasses the other BRICs. Unlike China, it is a democracy. Unlike India, it has no insurgents, no ethnic and religious conflicts nor hostile neighbors. Unlike Russia, it exports more than oil and arms, and treats foreign investors with respect.”

Things are really improving in Brazil…

and treats foreign investors with respect”.

Arbitration In Brazil

Approximately R$ 2,4 billion (US$ 1,200,000) were

disputed in local arbitrations in Brazil last year. In 2008

the amount involved was R$ 867 million. Since 2005

when CBAR started to collect such information, the local

arbitration centers and chambers have solved disputes

involving almost R$ 5 billion. (Source: CBAR – “Comitê

Brasileiro de Arbitragem”(Brazilian Arbitration

Committee)

Good Legal Framework

The Arbitration Act 1996 (Federal Law Number has been in

effect for almost 14 years, while the New York Convention on

the Recognition and Enforcement of Foreign Awards was ratified

in 2002.

Rules to be Adopted in an Arbitration

The Brazilian Arbitration Act grants the parties autonomy to

select the legal rules to govern the arbitration proceeding, which

may be conducted ad hoc or under the administration of any

domestic or international arbitration institution.

Practice shows that in Brazil the vast majority of the arbitrations

are institutional arbitrations.

Arbitration Institutions - Local

Throughout the last decade a significant number of arbitration

institutions and centers have been created or gained reputable

prestige in Brazil.

Arbitration and Mediation Centre of the Chamber of Commerce

Brazil-Canada (CCBC);

the Sao Paulo Chamber for Mediation and Arbitration;

American Chamber of Commerce in Sao Paulo

FGV Chamber of Arbitration in Rio

Arbitration Institutions - International

Recognized importance of the well-known international entities

such as:

International Court of Arbitration of the International Chamber of

Commerce (ICC)

International Centre for Dispute Resolution (ICDR);

London Court of International Arbitration (LCIA).

Language

With the exception of the 2004 Public-Private Partnership Law

and the 2005 Amendment to the Concessions Law, which

authorize arbitration in disputes between public entities and

private parties, but requires that the language of the arbitration

should be the Portuguese language, arbitral proceedings may be

conducted in any language.

Foreign and domestic awards

All awards issued within the Brazilian territory are considered to

be domestic awards irrespective of whether the underlying

dispute has an international flavor. According to the Brazilian

Arbitration Act, the domestic arbitration award is enforced

irrespective of its judicial recognition by the Brazilian courts

Enforceability of Foreign Awards in Brazil

The Brazilian Arbitration Act establishes that for an arbitration award to

be recognized and enforced in Brazil, it shall only be subject to the

confirmation proceeding before the STJ.

The application for confirmation should contain the original foreign

arbitration award or a certified copy thereof, duly notarized by the

Brazilian consulate and translated into Portuguese by a sworn translator

in Brazil, and the original agreement to arbitrate or a certified copy

thereof duly translated into Portuguese by a sworn translator.

The standards regarding the enforcement of a foreign arbitration award

in Brazil are consistent with article V of the New York Convention.

According to the Brazilian Arbitration Act, the enforcement of a foreign

arbitration award can be denied only if:

the parties to the arbitration agreement lack capacity;

the arbitration agreement is invalid under the law to which the parties

agreed or the law of the place where the award was rendered;

the award exceeds the limits of the arbitration agreement;

the commencement of the arbitration proceeding was not in accordance

with the arbitration agreement;

the respondent was not given proper notice of the appointment of the

arbitrator or of the arbitration proceeding or was otherwise unable to

present his or her case and was unable to exercise his or her right of

defense;

the arbitration award is not yet binding on the parties or has been

annulled or suspended by a court of the place of arbitration;

the object of the dispute is not susceptible to arbitration as a matter of

Brazilian law;

or the award violates Brazilian public policy.

Commitment of Brazil towards Arbitration

One of the most objective ways to assess the commitment of

the Brazilian legal community towards arbitration is to analyze

how the courts are supporting arbitration clauses and also how

they are enforcing arbitration awards.

Commitment of Brazil towards ArbitrationEnforcement of Arbitration Clauses

• Several decisions from the Courts in São Paulo Rio de Janeiro,

Paraná, Rio Grande do Sul and other States dismissing lawsuits

due to the existence of an arbitration clause in a written

agreement.

Commitment of Brazil towards ArbitrationHomologation of Foreign Awards,

• From 2005 to 2009 – 21 cases were reviewed by the Superior Court

of Justice:

• 17 foreign awards were recognized;

• In 4 cases homologation was denied due to following reasons:

2 cases - lack of a written arbitral agreement (2 cases)

1 case - Brazilian company involved in the case had not been

properly summoned;

1 case – Party who requested homologation was not involved in the

arbitration.

BRAZIL AMERICAN CHAMBER OF COMMERCE Brazil: Investment Opportunities and International Arbitration

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