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The award

Requirements
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

Under the Arbitration Act, arbitral tribunals can issue both partial and final awards. An award must include:

  • the names of the parties;
  • the factual and procedural background of the dispute;
  • the grounds for the decision;
  • the decision;
  • the date and place where the decision was rendered; and
  • the signatures of the arbitrators. 

The need to submit the award to a national court for recognition depends on where the award was rendered. Awards rendered in Brazil have the same status as a court judgment and are automatically enforceable. Foreign awards must undergo a fairly simple recognition procedure, in which the Superior Court of Justice examines formal issues such as whether the award:

  • is final;
  • was rendered by a competent authority after proper notice;
  • has been notarised by a Brazilian consulate; and
  • is accompanied by a sworn translation in Portuguese. 

The grounds for refusal to recognise a foreign award essentially mirror those for refusal to enforce an award set out in the New York Convention. Recognition will not be granted 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 seat of arbitration;
  • the respondent was not given proper notice of the appointment of the arbitrator or of the commencement of proceedings, or was otherwise unable to present its case;
  • the award exceeds the scope of the arbitration agreement and it is impossible to separate the relevant portion from the rest of the award;
  • the tribunal was not constituted in accordance with the arbitration agreement;
  • the arbitration award is not yet binding on the parties or has been set aside or suspended by a court at the seat of arbitration;
  • the subject matter of the dispute cannot be submitted to arbitration under Brazilian law; or
  • the award is contrary to Brazilian public policy.

Timeframe for delivery
Are there any time limits on delivery of the award?

The Arbitration Act provides that the award must be rendered within six months of constitution of the tribunal or the replacement of an arbitrator, unless the parties have agreed otherwise.

Remedies
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

Brazilian law imposes no restrictions on the types of remedy that tribunals can award. 

The Brazilian courts – and thus tribunals – rarely award punitive damages, on the grounds that indemnification should generally offer compensation to the victim and not penalise the offender.  

What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?

Local courts may grant interim measures to protect the parties’ rights and the integrity of the arbitration proceeding prior to constitution of the tribunal, and will also assist in the enforcement of interim measures rendered by the tribunal.  

Interest
Can interest be awarded?

Tribunals can award both simple and compound interest under Brazilian law. Unless the parties have agreed otherwise, the tribunal may consider several factors when determining the applicable interest rate, including:

  • the applicable arbitration rules;
  • the law governing the merits of the arbitration; and
  • the law of the seat of the arbitration.  

At what rate?

Under Brazilian law, pre-award interest is generally awarded at the basic rate defined by the Brazilian government at the time that the award is rendered.

Finality
Is the award final and binding?

An award will be final and binding if it meets the formal requirements (ie, it includes the names of the parties; the factual and procedural background of the dispute; the grounds for the decision; the decision; the date of the award; the seat of the arbitration; and the signatures of the arbitrators).

What if there are any mistakes?

Unless the parties have agreed otherwise, a party may request corrections or clarification to the award within five days of notice of the award, and the tribunal must decide on this request within 10 days.

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

The Arbitration Act does not specify whether the parties can waive their right to set-aside proceedings. Whether such a waiver is valid is controversial, in light of the Brazilian constitutional principle of free access to the judiciary.

Appeal
What is the procedure for challenging awards?

Under Brazilian law, unless the parties have agreed otherwise, an award can be challenged through annulment proceedings or as a means of defence in judicial enforcement proceedings. In the case of annulment proceedings, the party seeking to challenge the award must lodge its application before the competent court within 90 days of notification of the award or the decision on the request for correction and clarification.

On what grounds can parties appeal an award?

The grounds for annulment are as follows:

  • The arbitration agreement is invalid.
  • The award was rendered by someone who could not serve as arbitrator.
  • The award does not meet the formal requirements (ie, does not include the names of the parties, the factual and procedural background of the dispute, the grounds for the decision, the decision, the date of the award, the seat of the arbitration or the signatures of the arbitrators).
  • The award exceeds the scope of the arbitration agreement.
  • The award was rendered as a result of nonfeasance, extortion or passive corruption.
  • The award was not rendered within the agreed timeframe or within six months of the commencement of proceedings.
  • The award does not comply with the procedural principles of full defence, proper response, equal treatment of the parties, and impartiality and independence of the arbitrators. 

Enforcement
What steps can be taken to enforce the award if there is a failure to comply?

If a party fails to comply voluntarily with an arbitral award, the interested party can enforce the award in the national courts, following the procedure for recognition of a foreign award.  

Can awards be enforced in local courts?

Yes.

How enforceable is the award internationally?

Awards rendered in Brazil can be enforced internationally pursuant to the relevant international treaties to which Brazil is a party. 

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

It is unlikely that a state or state entity that entered into an arbitration agreement while carrying out economic activities could successfully raise a defence of sovereign immunity in enforcement proceedings. The arbitrability of patrimonial disputes involving the state and state-owned entities is expressly recognised by the Arbitration Act and several laws, such as the Public-Private Partnership Law, the Concession Law and the Petroleum Law, and has been repeatedly affirmed by Brazilian jurisprudence and doctrine. Thus, unless the state or state-owned entity was acting as the public power – in which case its acts are deemed to concern the public interest – it cannot raise immunity of jurisdiction as a defence against enforcement. 

Likewise, there is no legal provision preventing the enforcement of an award against a foreign state. The assets of a foreign state are generally subject to execution in Brazil, unless they are immune pursuant to law or international treaties.

Are there any other bases on which an award may be challenged, and if so, by what?

An award can only be challenged through annulment proceedings. 

How enforceable are foreign arbitral awards in your jurisdiction?

Foreign awards are enforced in accordance with any applicable treaties, such as the New York Convention. If no treaty is applicable, they are subject to the enforcement grounds established by the Arbitration Act, which are almost identical to those set out in the New York Convention. Enforcement may be refused 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 seat of arbitration;
  • the respondent was not given proper notice of the appointment of the arbitrator or of the commencement of proceedings, or was otherwise unable to present its case;
  • the award exceeds the scope of the arbitration agreement and it is impossible to separate the relevant portion from the rest of the award;
  • the tribunal was not constituted in accordance with the arbitration agreement;
  • the arbitration award is not yet binding on the parties or has been set aside or suspended by a court at the seat of arbitration;
  • the subject matter of the dispute cannot be submitted to arbitration under Brazilian law; or
  • the award is contrary to Brazilian public policy.

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

No.

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