Judicial procedure is governed by the Civil Procedure Code (Federal Law 5.869/1973) and must be followed by all states.
Congress recently approved a new Civil Procedure Code (Federal Law 13.105/2015), which revokes the 1973 code. The new code will come into force on March 17 2016.
The new Civil Procedure Code regulates some aspects of domestic arbitration, although Federal Law 9.307/1996 regulates arbitral proceedings.
Article 3 of the new code incorporates the constitutional principle of universal access to justice whenever an individual's rights are at risk. Under Paragraph 1 of Article 3, arbitration can serve as an alternative method for resolving disputes.
Under Article 42, the parties to a suit can file an arbitration petition at any time, even after the suit has been filed. In addition, Article 359 obliges the courts to attempt mediation before the start of trial.
The new code also imposes a duty of national cooperation on the courts and arbitral and mediation tribunals (Articles 67 and 237(IV) of the new code). The courts and arbitral tribunals will cooperate where an arbitral letter has been issued. While arbitral letters have no specific requirements, certain minimum information must be attached (Paragraph 3 of Article 260 of the new code), including the names of the arbitrators or mediators and their acceptance of the role. If this minimum information is not attached, the court may refuse the arbitration request (Article 267 of the new code).
If the arbitration/mediation is confidential, the court may determine that the cooperation proceeding must also be confidential (Article 189(IV) of the new code).
Under Paragraph 5 of Article 337(X) of the new code, if the parties do not adhere to an arbitration agreement and instead file suit with the state court, the defendant – in its primary defence – must state that there is an arbitration clause between the parties. Since the court may not recognise the arbitration clause ex officio, if the defendant does not communicate the existence of the clause immediately during the judicial proceedings, it will be assumed that the defendant has accepted the state court's jurisdiction and waived its right to arbitration or mediation (Paragraph 6 of Article 337 of the new code).
On the other hand, if the defendant communicates the existence of an arbitration/mediation clause, the court must terminate the court proceedings without issuing a decision (Article 485(VII) of the new code).
The new Civil Procedure Code has integrated the specific rules on arbitration (Federal Law 9.307/1996) and the civil rules.
Brazil is seeking to encourage alternative dispute resolution – in particular, arbitration and mediation – in order to reduce the number of suits filed before the courts and offer a definitive and quick means of dispute resolution.
For further information on this topic please contact André Gondinho or Emerson Soares Mendes at Doria, Jacobina e Gondinho Advogados by telephone (+55 21 3523 9090) or email (firstname.lastname@example.org or email@example.com). The Doria, Jacobina e Gondinho Advogados website can be accessed at www.djga.com.br.
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