THE AUTHOR:
Giovanna Martins de Santana, Lawyer at Eliana Baraldi Advogados
The following article refers to the latest international arbitration conference in Latin America, hosted by the ICC on March 7th, 2024 at the Hotel Unique in São Paulo, the 12th Brazilian Arbitration Day.
The aim of this series of two articles is to recount the discussions held in São Paulo to promote the growth of international arbitration and alternative dispute resolution (ADR) in Brazil, alongside shedding light on the ICC‘s objectives and perspectives regarding the evolution of international arbitration in emerging economies.
Every year, the ICC organizes one of Latin America’s premier conferences, known as the Brazilian Arbitration Day. In its 12th edition, the event attracted a very selective audience of 489 attendees, 24 sponsors, and 19 esteemed speakers. Attendees seized the opportunity to engage with influential speakers and discuss compelling topics amidst the distinguished professionals of the international arbitration community in Brazil and Latin America.
In the early hours of the morning, Ana Serra e Moura, Deputy Secretary General of the ICC, delivered her opening speech, accentuating the notable expansion of arbitration in Brazil and its crucial role in international arbitration. With conviction, she asserted, “Arbitration in Brazil is here to stay. And the ICC holds a significant place in the development of international arbitration in the country.”
As recounted by Serra e Moura, the ICC’s International Court of Arbitration (“ICC Court”) traces its origins back to 1923, when forward-thinking entrepreneurs recognized the necessity of furnishing an efficient and equitable dispute resolution mechanism to facilitate trade. The inaugural case presented before the ICC Court occurred in the same year, with the entrepreneurs themselves adjudicating the dispute. Over a century later, the ICC Court reached a worldwide presence, engaging with stakeholders globally to offer a robust framework for the prevention and resolution of disputes, underscored by a commitment to diversity and innovation.
Serra e Moura highlighted that the ICC Court transcends geographical and linguistic confines, with a presence in 120 cities, attending 150 countries worldwide. In a strategic move towards global outreach, the ICC Court inaugurated its Hong Kong office in 1958. Subsequent expansions included openings in New York in 2014, Brazil in 2017, and later establishments in Singapore and Abu Dhabi. This concerted effort involves the collaboration of over 800 parties and 300 arbitrators from more than 12 different nationalities.
Regarding its operations in Brazil, significant growth has been observed over the years. In 2001, following the Brazilian Supreme Court’s affirmation of the constitutionality of the Brazilian Arbitration Act, the ICC Court had 28 Brazilian parties under dispute. By 2015, this number had risen to 91, and in 2022, marking five years since the establishment of the ICC’s Brazilian Office, it reached 161 Brazilian parties. Notably, in 2023, there were 540 arbitral awards rendered in Brazil following a meticulous review process. Of these cases, 45% involved states and public entities, underscoring the diverse nature of disputes handled by the ICC Court.
In 2024, there is a clear upward trend in cases administered by the ICC Court, with Brazil currently witnessing a record surge. This trend highlights Brazil’s status as one of the leading countries in ICC arbitration, affirming its growing significance in the international dispute resolution field.
Serra and Moura’s opening speech was followed by the President of the ICC Court of Arbitration, Claudia Salomon, at a panel called “Fireaside Chat with the President of the ICC International Court of Arbitration”, conducted by Eduardo Damião (Lawyer at Mattos Filho).
According to Salomon, the President of the ICC Court of Arbitration wears three significant hats:
- Firstly, supervising the quality of the Court.
- Secondly, engaging with stakeholders to grasp the intricacies of their business environment where they operate.
- Thirdly, formulating the institution’s strategic direction. This involves analyzing transactional patterns and strategizing for the institution’s future, considering disputes stemming from contracts signed within the last two years and predicting trends for the next two years.
The ICC handles cases ranging from large multiparty disputes to smaller ones, with 40% of them involving amounts below USD 5 million, and even cases as small as USD 10,000. A unique aspect of the ICC Court’s function lies in the meticulous review of awards through a process called scrutiny, ensuring that parties receive the outcomes they seek. The scrutiny process is carried out by voluntary Court members, appointed on the proposal of ICC national committees and groups, to serve for a three-year term, renewable once.
In advocating for diversity, the ICC Court addresses concerns raised by Claudia Salomon, echoing Nelson Mandela’s sentiment about fair representation in courtrooms when he stated that “I fear that I will not be given a fair and proper trial” and “I consider myself neither legally nor morally bound to obey laws made by a parliament in which I have no representation”. Therefore, the promotion of diversity is integral to upholding the rule of law, ensuring that decision-makers accurately mirror the global business community. Efforts have been focused on advancing gender equality among arbitrators, although there remains a discrepancy between the number of women appointed by the institution and those appointed by parties or co-arbitrators.
Geographically, the ICC’s engagement extends beyond its institutional operations, actively enriching the Brazilian community through training and education, and providing a platform for individuals regardless of nationality or location. Claudia Salomon acknowledges the instrumental role of the ICC’s team and commission leadership in driving growth in Brazil, where regional disputes involving parties from Latin America and Asia are on the rise. Moving forward, Claudia Salomon also affirmed that expedited procedures aim to deliver awards within six months, enhancing efficiency and reducing costs for parties involved.
In the next three years, the ICC’s focus will pivot towards Latin America, where it is considered the preferred institution for arbitration. Collaborative efforts with China and India are also underway, recognizing the significant investments from these regions in Brazil’s economy. In Brazil, there has been a notable increase in regional disputes involving parties from Latin America or Asia, highlighting the importance of addressing local and regional dynamics. This growth is anticipated to extend beyond traditional boundaries, with São Paulo emerging as a hub for arbitration procedures not directly related to Brazilian parties, according to Claudia Salomon’s observations.
Despite challenges related to language barriers and non-existence of investment arbitration in Brazil, the ICC remains determined in promoting Brazilian arbitration on a global scale. Additionally, the promotion of Dispute Boards (DBs) as essential tools for long-term contracts underscores the ICC’s commitment to preventing disputes and streamlining the arbitration process into a more efficient and effective mechanism for resolving conflicts.
Claudia Salomon emphasized the significance of addressing corruption, noting the ICC Commission’s task force dedicated to this issue. While there hasn’t been a notable increase in corruption within arbitration, recent decisions such as the UK Court’s ruling on Nigeria highlight the importance of scrutinizing awards. Additionally, Claudia Salomon highlighted the competitive landscape as a primary challenge for arbitration, especially with the proliferation of arbitration institutions in China and Africa. According to Claudia Salomon, there are 277 arbitral institutions in China, and around 100 in Africa.
ABOUT THE AUTHOR:
Giovanna Martins de Santana is a Brazilian qualified lawyer with more than 10 years of experience in litigation and arbitration. She had been appointed as Secretary of Arbitral Tribunals for the past 5 years. She is also the General Secretary of the Center for Conciliation and Mediation of the Argentinian-Brazilian Chamber of Commerce in São Paulo. She will earn her master’s degree at the University of São Paulo by the end of 2024.
