Originially from: World Arbitration and Mediation Review (WAMR)

The 1996 Brazilian Law on Arbitration
by Ricardo Alvarenga
[M.S. Commercial Law Science, College of Law of the Federal
University of Minas Gerais; Legal Executive Officer, Lider Taxi Aereo,
S.A., Belo Horizonte, Brazil]
Introduction
The 1996 Brazilian arbitration law has drawn much attention and
commentary—both critical and complimentary. For Brazil, the law
represents a definitive effort to embrace arbitration domestically and to
present itself as a favorable forum for the use of arbitration in an
international context. Arbitration has been widely used by business people
for several decades, particularly in Europe and North America, to achieve
swifter, more industry-sensitive, and less bureaucratized resolutions to
business disputes. In Brazil, despite great legislative support for arbitration
in the mid-nineteenth century, the use of arbitration has been limited and
fraught with obstacles. The 1996 law attempts to remedy the disfavored
status and to reintroduce a favorable climate for arbitration in Brazil. This
article provides legal practitioners and business people with a brief
overview of arbitral practice in Brazil. It reviews the major stages of the
history of arbitration legislation in Brazil, the changes wrought by the
1996 law, and the improvements and limitations it introduced.
A Brief History of Arbitration in Brazil
In 1822, when Brazil gained its independence from Portugal, it retained
the Portugese legislative recognition of arbitration as an institution of
adjudication. Horacio Falcao, Recognition and Enforcement of Foreign
Arbitral Awards, 8 Am. Rev. Int'l. Arb. 367 (1997). Arbitration was even
recognized by the Constitution of 1824. Numerous laws enacted thereafter
explicitly supported arbitration; some even required recourse to arbitration
for the resolution of certain types of disputes or when certain parties were
involved. Decree No. 737 of November 25, 1950 recognized the use of
arbitration as a dispute resolution mechanism among merchants. Article
411 and the following provisions of the then-existing Code of Civil
Procedure set forth specific procedural rules governing the recognition and
enforcement of arbitral awards. The Commercial Code introduced by Law
No. 556 of June 25, 1850, although archaic in other aspects, contained a
clear preference for the use of arbitration to resolve commercial disputes.
In Article 24, for example, the Code directed that "all issues arising out of
merchant leasing shall be decided by arbitral award." (Free translation).