After some discussion regarding the arbitrator’s duties of impartiality, independence and disclosure resulting from a clear intention to harm an institute that has contributed a lot to the resolution of conflicts, I thought it would be good to write a few words to recall important concepts behind this subject.

There is nothing better to address the issue than going straight to the law, starting with article 14 of the Brazilian Arbitration Law (Law No. 9,307,1996), which provides that:

“Art. 14. Arbitrators who have a relationship with the parties or to the dispute submitted for arbitration which would constitute grounds for recusal of a judge may not act as arbitrators, and the duties and responsibilities provided for in the Code of Civil Procedure apply to such arbitrators, mutatis mutandis”.

The Code of Civil Procedure provides for hypotheses that constitute grounds for recusal of judges, but in practice reveals that this issue is viewed even more rigorously in arbitration, since art. 14, §1 of Law No. 9,307,1996 provides that “Before accepting their appointment, those appointed to serve as arbitrators have a duty to disclose any circumstances likely to give rise to justifiable doubt as to their impartiality and independence.”. In other words, any fact that causes the parties discomfort and insecurity in having a certain professional as an arbitrator in that dispute must be revealed.

It is obvious that, if the arbitrator is the spouse or partner of a lawyer or of the own party, he or she should not accept the assignment. But why state the obvious? Simply because highly renowned professionals, seen by thousands of Brazilians in lectures and important events, name absurd examples such as this to hurt the arbitration institute and the arbitration community, which has been struggling for years to contribute to the adequate resolution of conflicts.

What is important to know is that the number of challenges to arbitrators is insignificant, and the number of challenges accepted is even smaller – according to recent research carried out by the distinguished Professor Selma Ferreira Lemes, entitled “Arbitration in Numbers: 2021-2022 survey carried out in 2023 ”, contrary to what has been tried to make us believe.

Well then. When the professional is appointed to act as an arbitrator, he or she must obtain relevant information in the dispute regarding the parties and their attorneys, in order to verify whether he or she has already been a lawyer for one of the parties, whether he or she has performed any paid work for one of them, whether he or she has personal or economic interest in the dispute, etc. should he or she have had any connection, he or she must disclose or refuse the appointment, depending on the specific case. It is important to emphasize that this duty of impartiality and independence must remain throughout the arbitration procedure until its end.

As for the hypotheses that may give rise to a lack of independence and impartiality, I expressly refer to the IBA Guidelines on Conflicts of Interest in International Arbitration, which function as international guidelines for the subject. And although they are guidelines, they have always worked very well and have universal application. Why in Brazil are there people who want it to be different? Could it be because of bad losers dissatisfied with the result they had in recent arbitrations? Or was it because of the Brazilian way? Or both? I was reading a very interesting article by Mario Sergio Cortella about the “Brazilian way”, in which he says that this expression has two aspects: the positive, which consists of the famous game of not letting one be tied down in a given situation, and the negative …Ah, this is dangerous, or in his words, “it’s a risky shortcut, because this way of circumventing the norm is rarely an indicator of flexibility”[1].

Could this be the case with the constant bombardment that arbitration has been suffering?

But we cannot lose the thread in reflections like this… that’s why I return to the topic: in addition to the predictions indicated above, it is necessary to mention the recent guidelines of the Brazilian Arbitration Committee (CBAr) on the arbitrator’s duty of disclosure, which brought important contributions for arbitration scholars, and one that I particularly understand to be quite valid is this[2]:

“6. Until acceptance or confirmation by the arbitrator, the parties have the burden of informing themselves about public and easily accessible facts, and may carry out research on their own to ensure the correct exercise of the duty of disclosure by the arbitrator, as long as they do so by lawful and suitable means, during the course of the arbitration, and must raise any questions relating to the independence or impartiality of the arbitrator at the first opportunity they have to express themselves”.

What does this mean? Why was this prevision created? In my humble opinion, to prevent the party that obtains an arbitration decision that is unfavorable to them from alleging the existence of bias on the part of the arbitrator based on public and notorious facts, in a frustrated attempt to invalidate or annul the decision. As an example of an unreasonable allegation, I cite the fact that an arbitrator is at the same arbitration event as the counterparty’s lawyer or is on the same panel to debate a certain issue – which, in itself, is not capable of leading to “justified doubt.”

So, to prevent absurd cases like this from happening – further cluttering the Judiciary with “no brainer” annulment actions, the recommendation was for the parties to also carry out their due investigation.

After so much reflection on this subject, I see that criticisms of arbitration – disguised as allegations of improvement to the institute – are not based on applicable legislation, norms, principles and international guidelines, which permeate this appropriate method of conflict resolution.

In fact, they completely disregard the fact that arbitration is an institute that emerged centuries ago. There is historical evidence that it was used to resolve disputes between states and state entities in Ancient Greece, Rome, Persia and Mesopotamia. And it has worked very well in our country. By the way, arbitration reached historic numbers in Brazil, with billions of reais involved in disputes, revealing the growing trust in the institute[3].

This is especially relevant in a country that is facing what minister Luís Roberto Barroso calls an “epidemic of judicialization”[4], with legal disputes that exceeded 31 million new cases in 2022 alone[5], and which loves bureaucracy.

Well, I want to believe that, given all of this, appropriate conflict resolution methods, such as arbitration, should be embraced and applied, especially by large companies of relevance in the market, and not confronted with unfounded allegations.

Does this mean that arbitration is immune to defects? Certainly not, but we have to be careful that the Brazilian way or bad losers, combined with exacerbated officialdom, do not ruin years of a successful record of conflict resolution for many.

And with that, I close with some words from Minister Luís Roberto Barroso, at the 1st International Arbitration Forum in Brasília, on October 25, 2023[6]:

“There are bad losers in politics, there are bad losers in the Judiciary and bad losers in arbitration” (…) “I view judicial interference in arbitration processes with great reservation” (…), “It is always important to be careful that contrary interests do not change the rules of well-functioning institutions” and my favorites: “The law of the future lies in alternative means of resolving conflicts and the lawyer’s ability to negotiate”.

[1] Available at: https://www.linkedin.com/pulse/jeitinho-brasileiro-mario-sergio-cortella%3FtrackingId=vvA9kLLtQdCxbngoc8C9Fw%253D%253D/?trackingId=%2Fx8c%2BdFYShG7ZV%2FwO2wLJg%3D%3D . Accessed on October 25, 2023.

[2] Available at: https://cbar.org.br/site/diretrizes-do-comite-brasileiro-de-arbitragem-cbar-sobre-o-dever-de-revelacao-doa-arbitroa/. Accessed on October 25, 2023.

[3] Available at: https://valor.globo.com/legislacao/noticia/2023/09/08/arbitragem-bate-recorde-com-bilhoes-de-reais-em-disputa.ghtml. Accessed on October 25, 2023.

[4] Available at: https://www.youtube.com/watch?v=_Eld5nSYfPI. Accessed on October 25, 2023.

[5] Available at: https://www.cnj.jus.br/com-315-milhoes-de-casos-novos-poder-judiciario-registra-recorde-em-2022/#:~:text=Ao% 20if%20consider%20only%20as,more%20than%20the%20year%20previous. Accessed on October 25, 2023.

[6] Available at: https://www.youtube.com/watch?v=_Eld5nSYfPI . Accessed on October 25, 2023.

Article published in the JOTA newspaper: https://www.jota.info/opiniao-e-analise/artigos/as-infundadas-criticas-a-arbitragem-no-brasil-02112023. Accessed on February 27, 2024.