In a recently released report on dispute resolution statistics, the International Chamber of Commerce (ICC) ranked Brazil as number one in Latin America and number two in the world for the number of parties involved in International Court of Arbitration cases during 2020.
The ICC data is just the latest indication of the significant growth of arbitrations originating in Brazil in recent years. As Fernando Merino, managing director, investigations and white-collar defense at Steptoe & Johnson LLP, notes in the latest episode of Omni Bridgeway’s Beyond Hourly podcast, Brazil “has become a truly sophisticated market” with a “large cross-section of industries and businesses” now regularly using arbitration.
Merino, a lawyer qualified in the United States and Brazil and based in Steptoe’s Washington, D.C., office, is a veteran practitioner and legal executive with deep ties to the Brazilian legal community. He has worked as chief legal officer and independent board member for large Latin America-based conglomerates and as an in-house compliance and legal officer for leading investment banks in the region.
For the Beyond Hourly podcast, he sat down with Annie Lespérance, Head of Omni Bridgeway’s Latin America Group, to discuss the rise of arbitrations in Brazil, trends affecting dispute resolution in the country, and the current and future role of dispute funding in the Brazilian arbitration market.
Among the issues they discussed were:
• Brazil’s status as a large and highly active legal market, one with millions of claims per year, and the impact of this activity on the development of arbitration laws in the country during the last two decades.
• Several of the critical factors driving the substantial growth in the number of Brazilian arbitrations in recent years, including the sheer size of the Brazilian economy; the prominence of certain arbitration-heavy industrial sectors, such as oil and gas, mining, and retail; and the growing internationalization of Brazil-based companies.
• The growth in the number of institutions providing arbitration services in the country, such as the ICC; the Centre of Arbitration and Mediation of the Brazil-Canada Chamber of Commerce (CAM-CCBC); and the Market Arbitration Chamber (CAM B3) established by B3, the Brazilian stock and futures exchange.
• The expanding universe of law firms and lawyers serving the arbitration market, and the growing number of industries and types of companies now embracing arbitration.
• Dispute funding’s current role in the market, and its growth potential as more claimants and law firms familiarize themselves with the opportunities for financing major disputes.
• Brazil’s status as a civil law country and how this fact affects the way practitioners should approach cross-border disputes in the country.
• What the next five to 10 years may bring for arbitration in Brazil. Merino and Lespérance discussed a potential increase in the number of securities claims and how they may drive arbitration growth; how companies and banks are increasingly likely to partner with financial and strategic investors such as dispute funders to finance cases; and how the recent wave of M&A, initial public offerings and infrastructure investments will likely trigger an increase in disputes between companies; private parties and the government; and shareholders and co-investors.