Arbitration and the Judiciary
Arbitration can be used in Brazil for the settlement of any disputes related to patrimonial and disposable rights of the contracting parties. Once an arbitration clause is agreed on, parties delegate the resolution of disputes arising out of that legal relationship to an arbitral tribunal (positive effect of the arbitration agreement); at the same time, they deprive the Judiciary of its natural jurisdiction over that conflict (negative effect of the arbitration agreement).
Unlike judicial authorities, however, arbitrators do not have coercive powers. Therefore, when their orders are not complied with spontaneously, it may be necessary to request the aid of the Judiciary to implement concrete measures of enforcement. The National Council of Justice ('CNJ'), the body responsible for the oversight of the Judiciary in Brazil, has been working for some time on different fronts to facilitate the interchange between arbitration and the Judiciary, having this indispensable cooperation in sight. A recent example is the regulation on the so-called arbitral letters
Resolutions of the National Council of Justice ('CNJ')
On October 27th, 2020, the CNJ published Resolution n. 3501, regulating the topic of national judicial cooperation, with the aim of improving the administration of justice, including the speed and effectiveness of national jurisdiction. The Resolution was initially directed to the judicial bodies, including the Public Prosecutor's Office, the Brazilian Bar Association, the Public or Defense Attorneys (see Article 16), as a normative attempt to strengthen inter-institutional cooperation.
More recently, on September 29th, 2021, the CNJ published Resolution n. 4212, regulating the national judicial cooperation specifically on the topic of arbitration. Pursuant to its Article 1, Sole Paragraph, arbitrators, arbitral tribunals, and arbitral institutions were added alongside the aforementioned institutions, being expressly contemplated by the guidelines of the previous CNJ Resolution. In other words, as per CNJ Resolution n. 421, the framework established by previous CNJ Resolution n. 350 became also applicable to arbitral matters (see Article 16, item VI), providing for an additional layer of protection to this ADR method.
The recent CNJ Resolution n. 421 also treats in greater detail the requirements and certain procedural aspects of the arbitral letter. The arbitral letter is provided for in Article 22-C of the Brazilian Arbitration Act ('BAA'), introduced in 2015 (Amendment to BAA n. 13,129/2015), as well as in Article 260, Paragraph 3 of the Brazilian Code of Civil Procedure ('CPC'). It is a formal request for assistance issued by an arbitral tribunal to a judicial court.
CNJ Resolution n. 421 has the practical importance of consolidating in one specific normative instrument the legal regime for the arbitral letter, thus facilitating the enforcement of orders rendered by arbitrators. As this regulation comes from the CNJ, it is applicable to all judicial courts in Brazil.
It is noteworthy that the function of the judge in an arbitral letter is to collaborate with the arbitral tribunal and to use their coercive powers to enforce an order that was rendered by the arbitrators. Apart from a strict analysis of the legality of the letter – limited to (i) the letter's formal requirements, (ii) the jurisdictional assessment and (iii) authenticity related issues (see Article 267 of the CPC) –, the state judges are prohibited from reviewing the merits of the measures they are requested to enforce and they cannot re-examine the content of the decisions of the arbitral tribunal.
According to the new CNJ Resolution, the arbitral letter must indicate (i) the arbitrator/arbitral institution requesting compliance with the order and the judge to whom the arbitral letter is addressed, (ii) the procedural act or order that must be performed or enforced, (iii) the arbitrator's signature, (iv) the identification of the arbitral institution and the number of the procedure, and (v) the qualification of the parties.
Additionally, a copy of the arbitration agreement, the evidence of the constitution of the arbitral tribunal, and the appointment/acceptance of the arbitrator(s) must be attached to the letter. Last but not least, the underlying petition and the arbitral decision that is requested to be complied with, along with other documents ordinarily required for judicial demands (i.e., proof of powers of attorney), must also accompany the arbitral letter. These requirements, laid down in Article 3, Paragraph 1 and 2 of the Resolution, are similar (albeit more detailed) to what is provided for in Article 260, Paragraph 3 of the CPC, and ensure legal certainty to the institute of the arbitral letter.
Furthermore, Article 4 of the CNJ Resolution states that the Judiciary must respect confidentiality when processing the arbitral letter, provided that the parties demonstrate an existing and valid agreement in this regard. Therefore, if the parties have agreed that the arbitration proceedings are confidential, any arbitral letter shall be treated in court under seal. The CNJ Resolution has reaffirmed the provisions of Article 189, item IV of the CPC and Article 22-C, Sole Paragraph of the BAA, in the sense that the files of the arbitral letter issued from a confidential arbitration shall also remain confidential in court. There have been a few recent decisions by the Court of Appeals of São Paulo questioning the constitutionality of such confidentiality, so the CNJ Resolution should help settle this matter and ensure the agreement of the parties regarding confidentiality is respected.
Finally, Article 5 of the CNJ Resolution specifies that the Judiciary in each State may assign arbitral letters to a specific court or chamber, if it is specialized in arbitration matters. This is important to stimulate a technical approach to the management and processing of arbitral letters.
There is no doubt that the arbitral letter is a very useful tool in the context of the cooperation between arbitrators and judges. The recent regulation by the CNJ reinforces this notion and represents an unequivocal sign to national judicial courts about the importance of taking measures to process arbitral letters expeditiously and efficiently. Effective assistance by the Judiciary Branch, allowing arbitral tribunals to count on measures to enforce their orders, is ultimately essential towards further enhancing the efficacy of arbitration as a trustworthy and effective ADR method nationwide.
1. CNJ Resolution n. 350/2020. Access on September 29th, 2021. https://atos.cnj.jus.br/files/compilado13573620211006615dab50a8169.pdf
2. CNJ Resolution n. 421/2021. Access on September 29th, 2021. https://atos.cnj.jus.br/files/original13424620211006615da7d63ee0f.pdf
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.