Originally from Arbitration Law of Brazil: Practice and Procedure - Second Edition

Preview Page

ARBITRABILITY

3.1 EXPOSITION OF THE ISSUE

Arbitrability is a term of art adopted by arbitration doctrine to
address the issue of whether a given dispute may be resolved through
arbitration.1

The question of arbitrability is twofold. On one hand, it is important
to identify whether the parties are able to resolve the controversy by
arbitration, in view of their personal status. This aspect, in general,
concerns the possibility of public entities and state-controlled companies
participating in arbitration, which is also known as “subjective
arbitrability” or “arbitrability ratione personae.”

Another aspect addresses the issue of whether the subject matter of
the controversy can be resolved through arbitration. This is known as
“objective arbitrability” or “arbitrability ratione materiae.”
These two aspects of arbitrability will be addressed in this chapter,
which will also deal with arbitration involving state entities, a very
relevant issue that involves both of those concepts.

3.2 SUBJECTIVE LIMITS TO ARBITRATION – WHO CAN
BE A PARTY TO ARBITRATION

In view of the contractual nature of the arbitration agreement, in
general, any individual with full legal capacity or any legal entity
represented by individuals with due powers may enter into arbitration
agreements and will be bound to participate in the arbitration proceeding.

The majority of Brazilian scholars understand that only individuals
with full legal capacity can enter into arbitration agreements.2

Another relevant issue concerns the execution of arbitration
agreements by attorneys-in-fact. Brazilian law requires the granting of
special powers to attorney-in-facts so they would be able to enter this
kind of arrangement.3

3.3 OBJECTIVE LIMITS TO ARBITRATION - MATTERS
THAT CANNOT BE ARBITRATED

The Arbitration Law states that only issues connected with
disposable pecuniary rights may be arbitrated.4 Thus, the objective limits
to arbitrability are non-pecuniary rights and non-disposable rights.

Non-pecuniary rights are those not directly linked to economic
utility, such as the right to life, liberty, physical integrity, name, honor
and intimacy. Accordingly, the term non-pecuniary right is frequently
used to represent personal and family rights.5

Even the most arbitration-friendly legal systems recognize that
disputes that do not involve an economic interest cannot be submitted to
arbitration.6 It is inconceivable, for instance, that arbitrators could grant
divorces, rule on the validity of marriages or establish paternity. In this
sense, the Civil Code of 2002 expressly states that arbitral agreements
cannot deal with questions of personal status, family rights and other
non-pecuniary matters.7

Disposable rights, in turn, are usually classified as any right that may
be assigned, transmitted, waived or settled.8

The list of non-disposable rights is not a unanimous issue, but
several authors mention9 − besides personality rights and family rights −
hereditary rights,10 taxation, antitrust matters, insolvency and bankruptcy