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

Preview Page

RECOGNITION AND ENFORCEMENT
OF FOREIGN AWARDS

9.1 NATIONALITY OF THE ARBITRAL AWARD

9.1.1 Nationality Depends on the Place of Issuance

Contrary to various legal systems, such as the French one,1 the
Brazilian Arbitration Act of 1996 does not distinguish between
international and domestic arbitrations in order to impose different rules
to each. It chooses to differentiate, on the other hand, the nationality of
the arbitral award, which may be domestic or international, depending on
the place of issuance.2 Roughly, a domestic award is issued in Brazil,
while a foreign award is issued abroad.3

This territorial criterion, also known as the “geographic criterion”
was inspired by the Spanish Arbitration Law of 19884 and is aligned with
the New York Convention.5

9.1.2 Effects of Nationality

The nationality of the arbitral award has relevant practical
consequences. The enforcement of foreign awards, for instance, is subject
to prior recognition by the Brazilian STJ. Domestic awards, on the other
hand, may be directly enforced before the Judiciary’s lower courts.

Moreover, foreign arbitral awards may be denied enforcement in the
events envisaged in the New York Convention. In contrast, domestic
arbitral awards are enforceable as of the moment of their issuance and
can be annulled, in the situations established in Art. 32 of the Brazilian
Arbitration Act, or can be the object of the challenge of a decision.

Furthermore, we can cite other relevant effects, such as the
identification of the law that regulates arbitral procedures (lex arbitri)
and the identification of the national Judiciary branch that has the
competence to analyze and decide on matters related to the arbitration
and to the possibility of annulment of the arbitral award.6

9.1.3 International and Domestic Arbitration

Even though the Arbitration Act does not distinguish between
domestic and international arbitrations, various Brazilian authors choose to
do so,7 based on an international tendency. Following such tendency, there
are two standards for said distinction, depending on the characteristics of
the legal transaction to which the dispute refers. According to the
economic criterion, influenced by the precedent of the French Court of
Cassation Procurateur Matter,8 the arbitration is to be deemed
international when the transaction to which it relates involves a flow and
reflow of goods or services across borders. According to the legal
criterion, however, an arbitration proceeding is to be deemed international
when it has significant consequences for more than one country