São Paulo – Although it presents no immediate solution, arbitration is usually a faster way for enterprises to settle issues amongst themselves. Such was the gist of the lecture given this Tuesday (17th) by the attorney Flávio Pereira Lima at the offices of the Arab Brazilian Chamber of Commerce, attended by approximately 50 people. Lima specializes in the subject, and is a partner at law firm Mattos Filho Advogados. He discussed the pros and cons of arbitration. According to him, cases that usually drag on for ten years in Court take one to one-and-a-half year to be solved through arbitration.
Arbitration is a sort of private justice. Instead of submitting their cases to regular Justice, the companies opt to settle them in an arbitration chamber, in which arbiters selected based on expertise on the subject matter, or due to their being attorneys, work to find a solution for the case. The process resembles that of regular Justice, with attorneys representing both parties, replies, sur-replies, court investigations and witnesses, but takes place at higher speed. Once a case has been closed, however, no appeals can be filed.
According to Lima, most arbitration cases involve acquisitions and sales of companies. upon signing a contract, companies may opt to solve conflicts through arbitration, or it can be resorted to later, once a problem arises. A law suit can also be moved from a regular court to an arbitration court. Whenever arbitration it is provided for in a contract, said contract can also set forth how many arbiters will be involved, where the arbitration will take place, either in the country or abroad, the language to be spoken and the laws to be applied, etc.
At this time, there are several arbitration chambers working in Brazil, the best known of which are the International Chamber of Commerce (ICC), the Arbitration and Mediation Centre of the Brazil-Canada Chamber of Commerce, the Chamber for Reconciliation and Arbitration at Fundação Getúlio Vargas (FGV) and the Ciesp/Fiesp Chamber for Reconciliation, Mediation and Arbitration. Enterprises usually select the chamber based on each case, because some of them have specialized over time, like the FGV’s, which is fairly active in the energy industry.
According to Lima, one of the reasons for the increase in arbitration cases seen in the past few years in Brazil is the slowness of the legal system. Another advantage of arbitration, said the specialist, is its flexibility, which allows for all of the arbitration team to move to a certain place if need be, and its confidentiality, which is better suited to cases in which a lawyer exits a partnership, in which discussions revolve around how much is charged from one’s clients, among other sensitive information.
The attorney warned about issues that must be thoroughly examined and set forth in the contracts in order to prevent later conflicts, like price readjustments, omission of information by a company’s salesperson, compensation for breach of representations and warranties, obligation of non-competition on the part of the salesperson, and surveying of amounts deposited for the case of contingencies.
The lecture was opened by the Arab Brazilian Chamber president, Marcelo Nabih Sallum, and by the former director Mário Rizkallah, who is in charge of organizing events of this type. The event was also hosted by the Chamber’s legal director William Adib Dib Júnior, and attended by other top-level delegates like the CEO Michel Alaby, the treasury director Nahid Chicani and the guidance council member Antonio Sarkis Jr, who is also a former president of the Chamber.
*Translated by Gabriel Pomerancblum