Diego Gosis and Quinn Smith to Speak at Events in Lisbon and Rio
On March 21, SILC professionals Diego Gosis and Quinn Smith will be speaking at a unique event for young practitioners in Lisbon. Portugal just approved a new arbitration law, and the event will bring together young practitioners and the judiciary for the first time to discuss the changes. The following day, Quinn Smith will moderate a roundtable in Rio as part of an ICC YAF event on controlling costs in international arbitration. The YAF event follows the ICC conference the day before to launch the latest edition of the ICC Rules. A flyer for the YAF event is available here.
Updates from the Brazilian Legislative Scene: International Disputes Focused
The Brazilian Congress has been busy considering a couple of important legislative changes to key features of international dispute resolution: applicable law and the validity of arbitration awards. Both of the bills under consideration merit attention from international observers, especially those who do business in and with Brazil.
Projeto de Lei 2.937 (the number of the legislative proposal, called Proposal 2937 for this article) seeks to dramatically alter the Brazilian Arbitration Law. Currently, arbitration has flourished in Brazil, attracting many large disputes on both the domestic and international scenes. Arbitration clauses are a common feature of many commercial relationships, from shareholder agreements to public-private partnerships. But Proposal 2937 would likely provoke serious changes in the current system. Proposal 2937 would allow the losing party to seek the review of the judiciary of the merits of the arbitration award, allowing a losing party to reopen the case on the very issues the arbitral tribunal decided. Although greater review may sound appealing, it would undermine the arbitration process, giving the losing party the option to drag the case on for years, repeatedly challenging the decision of the tribunal. The Brazilian Committe on Arbitration has mobilized against the issue and is actively working in the Brazilian Congress to stall it. An article from the Brazilian business journal Brasil Econômico highlights the opposition, quoting some of the most renowned practitioners in the area. Right now, the bill is in committee and is not scheduled for a hearing or vote, but the Brazilian arbitration community is taking a strong stance, actively working with the Brazilian Congress on the issue.
The other piece of legislation at issue is far closer to becoming law and goes the opposition direction of Proposal 2937. Projeto de Decreto Legislativo 222 de 2011 (another method for identifying bills in the Brazilian Congress, called Legislative Proposal 222 for this article) seeks to adopt the Convention on the International Sale of Goods as the law of Brazil. Otherwise known as the CISG, this international treaty has wide acceptance in many countries, including the U.S., China, and Germany. The CISG provides a set of laws that govern international contracts for the sale of goods, normally providing a leveler, more trusted playing field for companies in different countries. The Brazilian “House of Representatives” (using a U.S. method to describe part of the bicameral legislature) has approved Legislative Proposal 222, and it now heads to the Brazilian Senate, where it has a strong chance of passage. Legislative Proposal 222 has been in the legislative process for quite sometime, including this article describing the legislation and its path as of May 2011.
While Proposal 2937 would seriously hinder the use of arbitration, Legislative Proposal 222 would substantially even the playing field in many of the international arbitration cases that involve Brazilian companies. International practitioners and scholars should closely follow both pieces of legislation because both can influence present and future international transactions.
