Conduct of Arbitral Proceedings - Chapter 07 - Arbitration Law of Brazil: Practice and Procedure - Second Edition
7.1 PROCEDURAL RULES
Arbitration is much more flexible than a judicial process, and there
are no compulsory procedural rules to be followed by the parties,1
provided that the procedure complies with certain mandatory principles2
(i.e., full defense and proper response, equal treatment of the parties,
arbitrators’ impartiality and free convincement).3
Therefore, parties have certain freedom to set forth in the arbitration
agreement the procedure that will apply. The parties may either:
(i) choose the arbitration rules of an institution or entity such as
UNCITRAL; or (ii) spell out in the arbitration agreement the applicable
arbitration rules; or even (iii) assign to the arbitrators the power to define
the procedure. The first alternative is usually the best choice, since the
arbitration rules of renowned institutions have been continuously tested
in practice and are less likely to give rise to disputes or doubts.
It is usual to choose a set of arbitration rules, as well as to foresee in
the arbitration agreement certain changes thereto to better suit the
intentions of the parties. This is a possible alternative, but the parties
should carefully verify in advance whether the arbitration rules allow the
intended amendment, so as not to create a pathologic clause. To quote an
example, it may not be possible to conduct an ICC arbitration if the
institution does not have a body similar to the International Court of
Arbitration to perform acts such as the scrutiny of the draft award.
A similar problem may arise when the parties select the rules of a
given arbitral institution, but choose another institution to manage the
arbitration. It is also strongly advisable that such a thorough compatibility
review should precede such a choice, therefore preventing the
development of a situation in which the competent arbitral institution is
unable to perform all the procedural acts contemplated in the applicable
In the case both the arbitration agreement and the arbitration rules
are silent on a given procedural issue, the arbitrators have powers to
regulate it.4 In arbitrations with the seat in Brazil, arbitration agreements
sometimes stipulate the subsidiary application of the Brazilian Civil
Procedure Code as a parameter for conducting the proceeding. This
raises the issue of the law applicable to the procedure, which will be
analyzed in the following section.
7.1.1 Subsidiary Application of Foreign Procedural Rules
It is questionable whether the arbitration agreement may provide for
the subsidiary application of foreign procedural rules, or if the Brazilian
Civil Procedure Code always applies − on a subsidiary basis as to the
rules chosen by the parties − to arbitral proceedings conducted in Brazil.
The traditional rule under civil procedure is that the judge shall apply
the procedural law of the place where the process is conducted (lex fori).
Nonetheless, with respect to arbitrations, considering that the parties may
choose not only the rules applicable to the merit (provided that there is no
breach of public policy),5 but also the rules of procedure,6 certain scholars
argue that it is possible to provide for the subsidiary application of foreign
procedural rules, even if the arbitral process is conducted in Brazil.7
Other authors, however, feel that the possibility of choosing foreign
law does not cover procedural rules,8 which are subject to the lex fori.
This interpretation is consistent with the New York Convention9 and the
Panama Convention,10 which acknowledge the subsidiary application of
the lex fori, by stating that the recognition and enforcement of a foreign
award may be refused if the arbitral procedure was not in accordance
with the arbitral agreement, or in its silence, the law of the country where
the arbitration took place.