Helena Acker, Associate at Ferro, Castro Neves, Daltro & Gomide Advogados
The Brazilian Arbitration Forum is an annual event organized by Sciences Po Law School with the sponsorship of CAM-CCBC Center for Mediation and Arbitration, and the support of the ICC, the Clube dos Arbitralistas Lusófonos and the Sciences Po Arbitration Society. This year’s 6th edition of the conference was held on the 7th and 8th September in Paris.
The first day was hosted at Sciences Po Law School and featured four round tables concerning hot topics in arbitration prevalent in Brazil and Latin America. The second day, held at the International Chamber of Commerce – ICC, focused on the interaction between arbitration and national courts.
This blog post sheds light on the background of the conference and summarizes the main topics discussed.
Hot Topics in Brazilian Arbitration: Predictable Justice, Collective Shareholders Claims, Oil & Gas Disputes, and Duty of Disclosure
The first day of the event, held at Sciences Po, was opened by Professor Diego Fernandez Arroyo, who recalled the background of the Sciences Po Law School – CAM-CCBC cooperation and presented the main topics of the conference.
The Brazilian Arbitration Forum is a result of a successful and lasting collaboration between Sciences Po Law School and the CAM-CCBC, thanks to the invaluable stewardship of the members of its organization committee – Diego P. Fernández Arroyo, José Ricardo Feris, Renato Grion, Rodrigo Garcia da Fonseca and Bruno Sousa Rodrigues.
Throughout the years, the event has encouraged a new generation of practitioners and young scholars in the field of arbitration. On March 29th, 2023, this collaboration was further strengthened by the signature of a partnership agreement between the two entities, under which they reinforced their commitment with ongoing work, such as the Brazilian Arbitration Forum, and announced new initiatives, such as, for instance, a joint scholarship.
Arbitration and Predictable Justice: Friends or Foes?
In the first roundtable, José Ricardo Feris moderated the discussions on the topic “Arbitration and predictable justice: friends or foes? (Should arbitrators be predictable?)”. Speakers Fabiane Verçosa, Sofia Ribeiro Mendes, Cláudio Finkelstein, and José Miguel Judice debated if arbitrators are bound to Brazilian courts’ case law in disputes in which Brazilian substantive law applies.
Panelists concluded negatively, despite recognizing that Brazilian arbitrators usually consider judicial precedents when deciding over the dispute. The speakers also dove into the potential benefits and risks of adopting artificial intelligence in arbitration as a mechanism to strengthen predictability. The panelists concurred that artificial intelligence may be a useful tool – for instance, when parties wish to evaluate their chances of success in an upcoming dispute. However, it cannot replace the role of arbitrators, since, in the panelists’ view, the process of decision-making requires features and activities that only humans can perform, such as assessing evidence, analyzing arguments and facts, and connecting them with previous experience and knowledge.
Realities and Challenges of Collective Shareholders Claims
The second panel, entitled “Realities and challenges of collective shareholders claims”, was moderated by Renato Grion. Speaker Lucila Carvalho dealt with emblematic collective shareholders arbitrations in Brazil, notably the ones initiated by shareholders of Petrobras, Vale and, Americanas after events that led to stock price decreases. The growing importance of shareholders’ collective arbitrations in Brazil gave rise to Bill 2925, which aims to establish a legal framework for these disputes, and was analyzed by speaker Riccardo Torre.
Conversely, panelists Paula Costa e Silva and Filipe Vaz Pinto shared that Portugal’s experience is limited to class actions – based, for example, on consumer and data protection claims. Additionally, the speakers discussed controversial issues which may arise in collective shareholders arbitration, such as how to assess the shareholders’ consent to arbitrate, if the proceedings should be public, the extent of the arbitrator’s duty of disclosure in collective cases, and matters related to third-party funding and security for costs.
Present and Future of Oil & Gas Arbitration à Brasileira
The third panel pertained to Oil & Gas arbitration disputes in Brazil (“Present and Future of Oil & Gas Arbitration à Brasileira”) and was moderated by Rodrigo Garcia da Fonseca. Speaker Ana Carolina Beneti shed light on the evolution of arbitration clauses inserted in concession agreements of the Brazilian National Agency for Petroleum, Natural Gas and Biofuels – ANP, the regulating body for the activities within the oil, natural gas, and biofuels industries in Brazil.
Against this backdrop, panelist Ana Luiza Nery commented on the outcome of the “Jubarte” case (Petrobras v. ANP 2015), arisen in connection with a concession agreement executed between Petrobras and ANP. After Petrobras initiated arbitral proceedings under the ICC Rules, the ANP challenged the arbitral tribunal’s jurisdiction, leading to a decision by the Brazilian Superior Court of Justice, which held that the issue was prima facie arbitrable and, thus, that the arbitral tribunal had jurisdiction to hear the dispute.
Moreover, speakers Lauro Gama and João Vicente Pereira Assis discussed the Dommo case (Dommo Energia v. Enauta Energia and Barra Energia), a landmark case of the industry, in which the arbitrators assessed the validity of a forfeiture clause provided in a Joint Operating Agreement, pursuant to Brazilian law. In a partial award, the arbitral tribunal concluded that the forfeiture clause was valid in that case, since it did not constitute an abusive penal clause, nor a breach of good faith – as argued by Dommo –, but rather a provision freely agreed by the parties, which are bound by the principle “pay first, argue later”. Lastly, the speakers debated future hot topics in Oil & Gas arbitration in Brazil, notably environmental issues and ESG clauses.
Arbitration in Turmoil in Brazil and Latin-America: Much Ado About Nothing?
In the fourth and last panel of day 1, entitled “Arbitration in Turmoil in Brazil and Latin-America – Much Ado About Nothing?”, moderator Diego P. Fernández Arroyo conducted the debate on the Brazilian state of the art regarding challenges of arbitrators and the duty of disclosure. Speakers Debora Visconte, Bruno Sousa Rodrigues, Ana Gerdau de Borja, and Isabela Lacreta emphasized that cultural background plays an important role in the duty of disclosure, since the standard for disclosure is subjective. Nevertheless, panelists agreed that adopting a different (i.e., “Latinized”) standard for the duty of disclosure in Brazil may have adverse consequences, especially by distancing arbitration in Brazil from international best practices.
Moreover, speakers commented on local initiatives, notably the newly issued guidelines of the Brazilian Arbitration Committee (CBAr), which aim to help arbitrators, lawyers, parties, and institutions handle questions related to the duty of disclosure of arbitrators, in accordance with Brazilian law and international standards. These Guidelines also include recommendations directed to the parties, such as the duty to cooperate with the arbitrators and to be informed about facts of the public domain regarding the arbitrators. Panelists further reflected on possible mechanisms to protect arbitrators in Brazil and Latin America, given the recent attacks and criminal prosecutions some of them face.
Arbitration and National Courts
The second day of the conference was hosted by the ICC and featured one round table, entitled “Arbitration and National Courts – Convergence or Divergence?” and moderated by Luiza Saldanha. Speakers Esperanza Barron Baratech, Daniel Levy, Samantha Nataf, and Jose Manuel Garcia Represa dealt with the intervention of national courts in arbitration, focusing on three stages: (i) the beginning of the arbitration, (ii) during arbitral proceedings and (iii) after the award was rendered.
On the first issue, panelists discussed the role of national courts in the constitution of the arbitral tribunal, based on their experience acting as counsel. This role of the courts can be exercised both (i) to enable the constitution of the panel (i.e., constructively) – for instance, by appointing an arbitrator in an ad hoc case when one of the parties fails to do so – as well as (ii) to review the constitution of the arbitral tribunal (i.e., destructively) – e.g., to annul the selection of an arbitrator deemed to not have been rightly appointed. Speakers also mentioned strategic elements to be considered by counsel when deciding to submit an interim measure before state courts or to an emergency arbitrator, such as the nature of the measure, the urgency of the situation, the importance of confidentiality and whether the decision-maker should analyze the merits of the dispute.
As to the second matter, speakers dealt with practical cases in which state courts intervened during the course of arbitral proceedings. For instance, panelists commented on the 2020 ruling of the French Supreme Court, which refused to refer the parties to arbitration on the grounds that a consumer was not bound by the arbitration agreement (PwC 2020). Further, the panelists discussed cases of unwanted intervention of State courts in arbitration, including the criminal measures adopted against arbitrators in some Latin American countries as a mechanism to exercise pressure and intimidate arbitrators – e.g., cases in Peru and Brazil.
The third and last part of the panel analyzed the role of national courts after the final arbitral award was rendered. As such, the speakers debated if courts should delve into questions of admission of evidence when deciding over requests of enforcement or setting aside of awards. Panelists reached a negative conclusion, except if the issue pertains to international public policy. Finally, given that national courts often take different (if not antagonistic) positions on issues related to arbitration, the speakers highlighted that sophisticated parties have been progressively adjusting their arbitration clauses to mitigate risks of diverging interpretations of their content by State courts.
The 6th Brazilian Arbitration Forum was another successful edition of the conference, providing the participants with insightful discussions about the current arbitration trends in the region. As shown by the speakers, arbitration has consolidated itself as an efficient mechanism to solve commercial disputes in Brazil and Latin America, notably those involving shareholders’ claims and Oil & Gas matters.
However, the prominent role acquired by arbitration has also led to turmoil. The panels revealed that arbitrators have been suffering attacks, including with the involvement of criminal courts, on the grounds of lack of independence and violation of the duty of disclosure. Thus, arbitration in the region seems to be undergoing a self-regulating process, which requires the participation and interaction between users of arbitration, practitioners, State courts, and legislators. The outcome of this process is expected to further strengthen the legitimacy of arbitration in the region and solidify an arbitration-friendly environment in the near future.
ABOUT THE AUTHOR
Helena Acker is a Brazilian qualified lawyer with five years of arbitration and litigation experience gained at Ferro, Castro Neves, Daltro & Gomide Advogados. Helena has advised clients on energy, construction, Oil & Gas and post-M&A disputes. She is currently an LL.M. Candidate in Transnational Arbitration and Dispute Settlement at Sciences Po Law School, having been awarded the CAM-CCBC International Arbitration Excellence Grant.