The conclusions drawn in the research “Arbitration and the Courts” (“Arbitragem nos Tribunais”) conducted by attorneys Antônio Carlos Rodrigues do Amaral and Letícia Mary Fernandes do Amaral Viggiano were recently published in the newspapers "O Estado de São Paulo” and “Valor Econômico” and disclosed in an event held at the São Paulo State Trade Federation (Federação do Comércio de São Paulo) on June 21, 2007.

Based on such conclusions, people began to question the effectiveness of the arbitration procedure in Brazil and whether it is an adequate form of private dispute resolution for cases involving freely negotiable rights.

According to the authors, “the risks involved in arbitration are high." The research supposedly shows that Brazilian courts would annul almost half (44%) of all arbitration awards and would refuse to dismiss more than half (51%) of the cases involving an arbitration clause despite the existence of such arbitration clause.

The Brazilian Arbitration Committee (CBAr), made up of a number of Brazilian professionals and academics with broad experience in domestic and international arbitration, has a different view concerning the reality of arbitration in Brazil.

CBAr members’ practical experience shows that civil and commercial arbitration – particularly since the Brazilian Supreme Court's 2001 decision upholding the constitutionality of the Brazilian Arbitration Act – has been under consistent development as a useful and effective means of solving disputes involving freely negotiable rights. Moreover, arbitration has been widely accepted and supported by the Brazilian Courts.

Notwithstanding CBAr's respect for the authors, CBAr believes the methodological criteria and premises used in the abovementioned research are not sufficient to support the conclusions it draws, as one can see below:

1) the authors analyzed those cases brought to Court only, without taking into consideration such arbitration proceedings actually conducted and arbitration awards actually given in Brazil during the relevant period that were not even submitted to the Courts in view of voluntary compliance; international statistics show a high level (more than 90%) of voluntary compliance with arbitration awards;

2) the research refers to the period between 1997 and 2001, when the constitutionality of substantial provisions of the Arbitration Act was being challenged before the Brazilian Supreme Court (STF), and ignores the developments occurred throughout the past six (6) years, during which there was a substantial increase in the number of arbitration proceedings in Brazil .

3) Of the 416 decisions examined:

a) 181 cases were dismissed in view of the parties’ agreement to arbitrate. The reason for dismissal is not specified. Could it be the existence of the so-called “pathological” clauses?

b) 9 cases involve specific performance of the arbitration clause. No decision is revealed. What were the results?

c) 55 cases involve an annulment action, 31 of which were denied and 24 granted.  The subject is not informed.

d) 75 cases involve incidental and procedural matters, such as the enforcement of an arbitration award, preliminary arguments regarding the merits (article 301 of the Brazilian Code of Civil Procedure), preliminary injunctions, etc. What were the results? Were they favorable to or against arbitration?

e) 25 cases involve coercive and provisional measures in general (which seem to us to have taken place before the commencement of the arbitration proceedings). Were they favorable to or against arbitration?

f) 46 cases involve the Brazilian unemployment guarantee fund (FGTS) (Federal Courts and Federal Court of Appeals), 43 of which were granted.

g) 15 cases involve the homologation of foreign arbitration awards, 10 of which were granted and 5 dismissed.

Given the above, the Brazilian Arbitration Committee does not share the views of the research authors, and will conduct scientific research to demonstrate and provide a real portrait of how arbitration is actually applied and used in Brazil.