Brazil: The Brazilian Exchange Changed The Rules Of The Market Panel

Changes to the Rules of the Market Arbitration Panel (Câmara de Arbitragem do Mercado - CAM), also known as Market Panel (Câmara do Mercado), were approved in a restricted hearing, and subsequently approved by the Board of Directors of the Brazilian Exchange (BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros - BVMF) on September 10, 2011. The Market Panel is deemed to be an appropriate forum to settle both corporate and stock market disputes and aims to provide an independent, confidential, agile and cost effective environment for dispute settlements in line with the directives of the Brazilian Arbitration Law (Law No. 9307, of September 23, 1996).

The Market Panel was initially designed for the settlement of disputes arising out of environment where the companies from the special segments of BVMF operate, known as New Market (Mercado Novo) and Corporate Governance Level 2 (Nivel 2 de Governança Corporativa). In Brazil, the company's bylaws may establish that any dispute between shareholders and the company, or between majority and minority shareholders should be resolved by arbitrations under the terms specified by it.

The new Regulation is the result of a long and meticulous process review and updates the procedures to those adopted by the other global arbitration chambers. It allows that anyone willing to settle conflicts whose core is related to corporate issues or the stock market can use the Market Panel, comprising any company (listed or not at BVMF) as well as any kind of investor (institutional investor or not). It was concluded that the Market Panel should have a wider scope to be more ordered and have more experience and prestige.

From now on, the Market Panel will have a larger team of arbitrators, not so focused on people linked to the capital market, but mainly made up of lawyers. Fifteen new names will compose the team of arbitrators, which will total 40 members.

As a result of the changes introduced by the new Regulation, the procedures of the Market Panel have become simpler and more flexible. The major changes are outlined below.

Before the adoption of the new Regulation, the preliminary arbitration demanded that the parties exhausted the dispute about the allegations and that the defenses of both would be presented in a maximum term of five days. This period was considered too short, especially considering the number of documents that normally this type of dispute involves. Now, after the reform, the parties can first make their opening statements and then, in a second stage, after conversations with the arbitrator(s), the parties and the arbitrators will set forth a schedule for submission of the defenses.

Furthermore, the new Regulation contains the possibility of appointment of an urgency arbitrator. If before the arbitration tribunal has been constituted, any party deems necessary urgent interim or conservatory measures to prevent imminent harm or irreparable injury, such party shall submit a motion to this effect to the President of the Market Panel, who shall appoint a permanent member of the Market Panel to act as an emergency arbitrator. The role of the emergency arbitrator is to take a decision regarding the motion for urgent interim or conservatory measures, which if granted shall remain in force until the arbitration tribunal decides upon the merits. The emergency arbitrator shall decide on the motion after hearing the opposing party, who shall be summoned to contest the motion within 48 hours. Urgent interim or conservatory measures may be granted without hearing the opposing party if this is indispensable on ground of efficacy, in which case the emergency arbitrator shall have the party concerned notified of this decision immediately. Any decision taken by an emergency arbitrator or court of law may be upheld or modified by the arbitration tribunal when constituted.

The evaluation of the preliminary procedures for the establishment of arbitration, which can often lead to the extinction of the process, was also modified. Before the adoption of the new Regulation, this decision was taken only by the chair of the arbitration tribunal. From now on, the matter must be decided by majority vote and requires the participation of the other arbitrators.

The purpose of this reform is to permit the Arbitration Panel to act more quickly in order to be in fact an option to the discussion of issues in court. The new Regulation was approved by two-third of the companies listed in the New Market. All the companies that expressed their vote were favorable to these changes.


The new Market Panel Regulation was published in the Daily Information Bulletin (Boletim Diário de Informações - BDI) issued by BVMF of September 26, 2011 and shall come into effect 30 days after this publication and is available in the BVMF webpage at

2 This provision is contained in paragraph 3 of article 109 of the Brazilian Corporation Law (Law No. 6404, of December 15, 1976, as amended by Law No. 10303, of October 31, 2001).

3 These rules govern the use of arbitration to settle disputes among Participants in the markets managed by BVMF in connection with shareholder and partnership issues or contractual matters disciplined by the Brazilian Corporate Law, the company´s bylaws, or the rules and regulations applicable to the capital markets in general. The term "Participants" refers to the companies whose securities are admitted for trading on BVMF´s special listing segments, their controlling shareholders and other shareholders, their directors, managers and supervisory board members, and investor and intermediaries in transactions involving securities issued by such companies or instruments linked to such securities. In addition to Participants, any other individuals or legal entities, funds or estates may adopt these rules to settle disputes provided such disputes relate to business law. In the absence of a specific agreement or covenant, should the parties wish to submit a dispute to the Market Panel, they shall enter into an undertaking to do so in accordance with the Brazilian Arbitration Law.

4 Any material change to the rules of the Arbitration Panel shall come into force only if (a) no objections are raised by more than a third of the participants in a restricted hearing attended by the companies listed in the Bovespa Plus (Bovespa Mais), the New Market segment and the Corporate Governance Level 2 segment within a period of not less than fifteen days, to be established by the President of the Arbitration Panel; and (b) said change is approved by BVMF´s Board of Directors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Walter Stuber
Adriana Maria Gödel Stuber
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