Globalized Americas

P U B L I C A T I O N S

Origins of Brazil Arbitration

Jonathan C. Hamilton, “Developments in Latin America” (2002)

Brazil was the last major Latin American jurisdiction to ratify the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.  It did so in 2002, six years after the 1996 Brazilian arbitration act and many years after most other countries in the region ratified the leading multilateral convention relating to the enforcement of international arbitration awards in the courts of signatory countries. When Brazil ratified the New York Convention, the most obvious lingering gap in the Latin American framework supporting international commercial arbitration was filled.

Brazil recently became the last major Latin American nation to ratify the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, some thirty years after many of its neighbors adhered to this leading multilateral convention relating to the enforcement of international arbitration awards in the courts of signatory countries. Brazil ratified the convention by means of Legislative Decree No. 52 dated April 25, 2002 and Presidential Decree No. 4.311 dated July 23, 2002, following more than three years of debate in the Brazilian legislature.

Brazil now joins the host of other Latin American nations that have ratified both the New York Convention and the 1975 Inter-American Convention on International Commercial Arbitration, commonly known as the Panama Convention. The most obvious lingering gap in the Latin American framework supporting international arbitration has thus been filled.

The ratification of the New York Convention is the latest in a series of legal developments in Brazil that should facilitate the evolution of international arbitration in that country.  The Federal Supreme Court of Brazil recently upheld the constitutionality of a 1996 Brazilian law setting forth a contemporary legal framework  for arbitration. These legal developments reflect a perceived need for greater predictability and certainty for foreign parties involved in commercial transactions with Brazilian entities. They also reflect a legal system adapting to the interests of an increasing number of Brazilian companies competing in the global marketplace.

As is the case throughout Latin America and the world, the practical effects of the ratification of the New York Convention depend greatly on its consistent and faithful enforcement by Brazilian courts. The approach that the Brazilian courts will take towards the New York Convention  merits close attention.