Abstract: In 2012, Brazilian and English courts examined the validity of an arbitration agreement executed in Brazil. The decisions rendered demonstrate the different approaches in view of the choice of the law governing arbitration agreements. In Brazil, this law was associated with the law governing the main contract, which was Brazilian law, whereas in England, the decisions were based on the doctrine of the separability of the arbitration agreement from the underlying contract and determined that the closest connected law to the arbitration agreement was that of the arbitration seat, which was English law. Injunctions were filed in both jurisdictions in view of the lawsuits filed in the Brazilian and English courts. Whereas Brazilian courts ordered the interruption of arbitration in London, English courts enjoined the parties to abstain from pursuing court litigation in Brazil, reminding them of the difficulties that such orders impose on the conduct of international arbitration proceedings, both from the standpoint of the arbitrators’ prerogatives and as regards international law.

[This article first appeared in Portuguese in Brazilian Arbitration Review – Revista Brasileira de Arbitragem – Issue 37]

I Introduction

For centuries, navigators have dealt with the problem of longitudes in the absence of an instrument that calculates actual time. In 1714, the British Parliament offered a prize to the inventor who produces a clock able to indicate longitude at sea. Centuries later, the installation of submarine telegraph cables spread London time (Greenwich) to the world.[1]

Concerning the validity of arbitration agreements, one does not have a global reference, in view of the different sensitivities of national legislators.[2] Faced with the diversity of sparse criteria, the validity of arbitration agreements is subject to unexpected obstacles.

In 2012, English and Brazilian courts faced a similar issue and were called upon to rule on the validity of the same agreement. Both jurisdictions had to resolve, expressly or implicitly, the question of the law applicable to arbitration clauses inserted in the contract and react accordingly with that assessment.

Such decisions not only contrasted, on the one hand, the validity criteria and, on the other hand, the formal requirements for arbitration agreements in those jurisdictions, but also highlighted different approaches to the reaction order before an arbitration agreement whose validity is discussed. Some of these decisions are as follows:

• High Court of Justice of England and Wales, Queen’s Bench Division, Commercial Court (“Commercial Court“) decision (judgment) delivered on 19.01.2012, [2012] EWHC 42 (Comm) (“Commercial Court’s Decision“);
• Interlocutory Appeal No. 0304979-49.2011.8.26.0000 brought before the 6^th Chamber of Private Law in the Court of Justice of São Paulo, Reporting Judge Paulo Alcides, judged on 1/13/2013 (“Judgment of the State Court of Appeal of São Paulo“);
•  Court of Appeal of England and Wales (“Court of Appeal“), judgment delivered on 16.05.2012, [2012] EWCA Civ 638 (“Court of Appeal’s Decision“).

A   Background

The decision in comment relate to two insurance policies (“Policies“) by which three Brazilian companies (“Insured“) contracted with six “Insurance Companies” to cover the risks involved in the construction of the hydroelectric plant Jirau, located in Madeira River, 120 km from Porto Velho, in the northern Brazilian State of Rondônia.

The Policies contained three provisions on dispute resolution, treating respectively the choice of law and jurisdiction, the provision of mediation, and finally, that of an arbitration agreement. The relevance of these provisions justifies its transcript below:

7. Law and Venue

It is established that this Policy shall be governed exclusively by the laws of Brazil.

Any dispute under the terms of this Policy shall be subjected to the exclusive jurisdiction of Brazilian Courts .

11. Mediation

In case of any dispute or divergence of any kind arising from or relating to this Policy, including any question regarding its existence, Term or termination, hereinafter the Dispute, the parties are obliged to seek an amicable settlement of the Dispute through mediation before leaving for arbitration.

They will remain in full force all the rights of the parties with respect to the Dispute, and the entire mediation process, including the documents submitted or to be the subject of reference, as well as the deliberations, oral presentations will be strictly confidential between the parties, and will be conducted on the same basis as negotiations without prejudice, privileged, inadmissible not subject to disclosure in any other process whatsoever, and shall not constitute a waiver of that privilege, either between the parties or between any of these and a third.

Mediation may be terminated by either party by written notice to the appointed mediator and the other party.

The notice of termination may be submitted at any time after the first meeting or deliberation concerning mediation.

If the dispute is not resolved to the satisfaction of both parties within 90 days of the submission of the notification to the commencement of the mediation, or if either party fails or refuses to participate in mediation, or if any party presents a written notice to terminate the mediation under this clause, then either party may forward the dispute to arbitration.

Unless the parties agree otherwise, the fees and expenses of the mediator, as well as all other costs of mediation, shall be borne in equal proportions by the parties, and each party shall bear the costs incurred for mediation, regardless of the outcome of the mediation.

2. Arbitration

Should the Insured and the Insurance Company do not reach an agreement regarding the amount to be paid under this Policy through mediation as above foreseen, such Dispute shall be settled through an arbitration proceeding under the Rules of ARIAS. The Arbitration Panel shall be composed by three arbitrators, one to be appointed by the Insured, the other to be nominated by the Insurer, and the third to be appointed by the two arbitrators. The third member must be appointed as soon as practicable within a period not exceeding 28 days after the appointment of representatives of both parties. The Panel shall be constituted by the appointment of the third arbitrator.Alpha

The arbitrators may be retired individuals who have experience of at least 10 years in the industry of insurance or reinsurance, as lawyers or other professional advisers who provide services to the industry.

If a party fails to appoint its arbitrator within 14 days after the request, or if the two arbitrators appointed by the parties fail to appoint the third arbitrator within 28 days from the date of their appointment, then by request, ARIAS (UK) shall appoint an arbitrator to fill the vacancy. At any time prior to the appointment by ARIAS (UK) the party or arbitrators at fault may remit such appointment.

At its discretion, the Panel may promote such orders or directives that it considers necessary for the resolution of claims in dispute. The Panel shall be entitled to broader criteria allowed by law concerning the arbitration proceedings relatively the promotion of such orders or directives.

The seat of arbitration shall be London, England.

With the occurrence of events in March 2011, the Insured notified the Insurance Companies that it requires coverage. Insurers appointed auditors to investigate the causes and to assess the amount of damage resulting from the claim. By September of that year, the Insurance Companies apparently had not expressed a formal position regarding coverage or with respect to the quantum of warranty. A subsequent meeting resulted in a definition regarding coverage of claims.

The Insured indicated the possibility of conducting mediation in accordance with the Policies, and shortly thereafter, one of the Insured sent a formal notice of claim, starting the monthly period provided by Brazilian regulations for a formal response from the Insurance Companies.

After a few more attempts at mediation, Insurance Companies forwarded a notification of the commencement of the arbitration proceedings, on 29 November 2011.

B Procedure, dispute and decisions

On 12 December 2011, the Insured filed suit against the Insurance Companies, seeking a declaration that the arbitration agreements were invalid, combined with a request for ex parte injunctive relief, or a decision determining to refrain from the commencement of arbitration in London, since the Insured were not bound by the arbitration agreement.[3]

On the same date, the trial court rejected the Insured request for injunctive relief, justifying its decision on the principle of the binding force of contracts, as follows:

[The] full preservation of the legal effect of contractual provisions (with force of law between the contracting parties, according to the pacta sunt servanda principle) should only allow modifications in extremely exceptional situations, when external factual situations come to greatly influence the effective economic balance of the agreement.

It is not the case in these proceedings, in the midst of which, still in the pleading stage of the lawsuit, and based on the elements presented with the complaint of claimants, it appears that the Policies established between the disputing parties provide that in the absence of agreement over the amount to be paid as insurance compensation, such dispute shall be object of an arbitration proceeding (p. 226).

The Insurance Companies requested on the same date, before the London Commercial Court, a court order with opposite effects to what was intended by the Insured in São Paulo. The insurance companies sought an anti-suit injunction, preventing the Insured from pursuing the lawsuit filed in Brazil. The next day, a court order was issued to that effect, but on a preliminary basis. English justice has thus ordered that the Insurers either refrain from starting or comply with legal actions in Brazil, with matters related to the Policies.

In view of the interlocutory decision of the judge from São Paulo that rejected the request for an injunction in order to prevent the Insurance Companies from continuing the arbitration in London, the Insured brought an interlocutory appeal on 13 December 2013[4] before the Court of Appeals of São Paulo. On the same day, the reporting judge’s decision granted the injunction as claimed by the Insured and ordered the Insured Companies to refrain from commencing arbitration in London pending a decision in the lawsuit as regards the Insured’s right to refuse this mode of dispute resolution.[5] Among the arguments presented by the Insured to allege the invalidity of the arbitration agreement there were the requirements imposed by paragraph 2, Article 4 of the Brazilian Arbitration Act,[6] governing arbitration clauses inserted in adhesion contracts and formal requirements imposed by Ruling 256 of the Superintendence of Private Insurance or Superintendência de Seguros Privados (SUSEP), which is the body overseeing the insurance sector in Brazil.[7]

Then, the Insurers are required to confirm the anti-suit injunction preliminarily rendered by the London Commercial Court. On 19 January 2012,[8] after the production of written memorials from both parties, after which a decision was rendered. Such decision analyzed, among other arguments, four relevant points for the validity of the arbitration agreement inserted in the Policies: (i) the determination of the applicable law to the arbitration agreement included in the Policies; (ii) the validity of the arbitration agreement included in the Policies in accordance with such law (¶ 16); (iii) the effect of the arbitration agreement in view of its permissive wording, which is not expressly binding; and (iv) the scope of a clause providing for conflict mediation prior to the commencement of the arbitration. Alpha

The Commercial Court, which understood that the validity of the arbitration agreement was determined by English law, therefore upheld the anti-suit injunction that prohibited the application for judicial proceedings in Brazil in favor of the continuation of arbitration in England.

In their reasons, the Commercial Court outlined a distinction between the law governing the contract (proper law) and the law governing the conduction of arbitration proceedings (curial law) (¶ 12). In its reasoning, the Judge took into account the doctrine of separation of the arbitration agreement in the contract that is entered, as well as revisited precedents according to which “it would be rare for the law of the separable arbitration agreement to be different from the law of the seat of the arbitration.”

The court decision also registers that “the law with which the agreement to arbitrate has its closest and most real connection is the law of the seat of arbitration, namely the law of England” (¶ 15). By understanding that the arbitration agreement was subject to English law, the court concluded in favor of the validity of arbitration agreements, in spite of the alleged causes of invalidity highlighted by the Insured on the basis of Brazilian law (¶ 16).

The English court has faced the argument by the Insured (¶ 20) in the sense that the mechanism of dispute resolution depending on mediation as a prerequisite for the commencement of arbitration. Revisiting precedents and considering the facts of the case, the Commercial Court ruled that mediation, as provided in the Policy, was undefined and cannot be enforced (¶ 27), and concluded that Clause 11 of the Policies “does not give rise to a binding obligation to mediate and the court would not be able to determine whether or not a party had complied with the ‘obligations’ allegedly imposed” (¶ 28).

On 19 April 2012, the 6^th Chamber of Private Law of the State Court of Appeals of São Paulo granted the interlocutory appeal. In general, the majority opinion acknowledged that the parties have accepted the jurisdiction of the Brazilian courts without limitations (p. 8), concluding that the arbitration agreement could prevail only with the consent of the Insured under paragraphs 2 of Article 4 of the Arbitration Act and Article 44 of Ruling SUSEP 256/2004 (p. 6). It also recognized that the anti-suit injunction given by the English justice would amount to a violation of national sovereignty (p. 9), since it is a contract between Brazilian parties and will be performed in Brazil. Accordingly, the Chamber confirms the monocratic decision , imposing on Insurance Companies, in the event of noncompliance, a daily fine of BRL400,000).

When ruling that the parties expressly agreed to the jurisdiction of the Brazilian courts, the majority opinion does not consider the notion of separation of the arbitration clause from the underlying contract, nor recognizes the law applicable to the contract (lex contractus) of the law governing the arbitration procedure (lex arbitri) or the law applicable to the contract and the law applicable to the arbitration agreement. The vote does not extend to the classification of Policies as adhesion contracts, directly applying the provisions of para. 2 of Article 4 of the Arbitration Act combined with Article 44 of Ruling 256/2004 of the Superintendent of Private Insurance. The vote also restricts the applicability of the arbitration to the definition of “amount payable under this Policy,” to wit:

However, it appears that Clause 12, against everything that has been said by Appellees, cannot and should not prevail due to important reasons: it does not demonstrate the parties’ express consent to arbitrate, as required in para. 2 of Article 4 of Law No. 9.307/96 [Brazilian Arbitration Act]. Similarly, Article 44 of Ruling 256/2004 of the Superintendent of Private Insurance, which expressly provides that the clause should ‘be written in bold and contain the signature of the insured, in the clause itself or in a specific document expressly agreeing to its application “(section I) and contain the information “It is optionally adhered by the insured” (section II, point ‘a’). And also, because its rationale (mediation and arbitration) is restricted to the provision contained in it, i.e., it would be justified in the event of disagreement over the “amount to be paid under this Policy.”[9]

On 16 May 2012, the Court of Appeal in London dismissed the appeal filed against the decision that confirmed the anti-suit injunction that was preliminarily issued.[10] The decision addressed the same four topics discussed in the decision of the Commercial Court. such decision elaborates on the discussion of what the applicable law to the arbitration agreement was and further considers the close connection of Policies with Brazilian law. The conclusion, however, followed the same reasoning of the Commercial Court.

However, the reasoning of the Commercial Court was further elaborated upon by the Court of Appeals. While the former applied more resolutely the law of the seat of arbitration procedure to verify the validity of the arbitration agreement, the latter considered, with more caution, the link between the Policies and Brazilian law. In both cases, the English courts proceeded to choose the applicable law to the arbitration agreement by adopting a three-step reasoning that verifies: (i) if the parties had expressly chosen the law applicable to the arbitration agreement; (ii) if there was an implicit choice of this law; and (iii) absent a choice whether express or implied, that the legal system is more closely connected with the arbitration agreement.

In the analysis of what law would be in closer bond with the arbitration agreement of the Policies, the Court of Appeal held that, under the New York Convention, there may be a rebuttable presumption that the law of the seat of arbitration shall be applied to determine the validity of the arbitration agreement:

The starting point is to determine the proper law of the contract in which the arbitration is embedded. As a general rule, the arbitration agreement will be governed by the same law, since it is part of the substance of the underlying contract. But this is not an absolute rule, since other factors may point clearly to some other system of law. Thus, if the arbitration is to be held in the territory of a state that is party to the New York Convention on the Recognition and Enforcement of Awards, section 5(2)(b) of the Arbitration Act 1975 [now section 103(2)(b) of the Arbitration Act 1996] appears to give rise to a rebuttable presumption that the law governing the validity of the arbitration agreement is the law where the award is to be made. The presumption would we submit readily be rebutted in favor of the proper law of the underlying contract.[11]

Thus, the controlling opinion started from the hypothesis that, by choosing the applicable law to the contract, the parties could have implicitly chosen Brazilian law to govern the arbitration agreement as well. However, the Court held that two factors pointed to another solution. First, the choice of the seat of arbitration in London suggests that “the parties intended English law to govern all aspects of the arbitration agreement, including matters touching on the formal validity of the agreement and the jurisdiction of the arbitrators” (¶ 29). Second, the Court of Appeal held that the eventual choice of Brazilian law by the parties would reduce the effectiveness of the arbitration clause, since that would allow the institution of arbitration only at the discretion of the Insured. That would be an indication that the parties did not intend to submit this clause to Brazilian law, or, in other words: “the possible existence of a rule of Brazilian law that would undermine that position tends to suggest that the parties did not intend the arbitration agreement to be governed by that system of law” (¶ 30).

Finally, at this point, the court held that the arbitration agreement “has its closest and most real connection with the law of the place where the arbitration is to be held and which will exercise the supporting and supervisory jurisdiction necessary to ensure that the procedure is effective. Its closest and most real connection is with English law” (¶ 32). Subject to English law, the arbitration agreement remained valid (¶ 40).

With respect to the obligation of prior mediation, the court held that there was not enough detail in the mediation clause (¶ 35), concluding therefore that since “mediation is not defined with sufficient certainty, the conditions cannot constitute a legally effective precondition to arbitration” (¶ 37).

II  Commentary: The contours and the dynamics of the invalidity of the arbitration agreements before the State courts

In reviewing the criteria for determining the applicable law to the arbitration agreement, the decisions outlined the contours of the rule, defining the terms of the law (A).

In addition, the process for reaching such conclusions also emphasizes the procedure, or the dynamics, for the application of the law by State courts in support of arbitration (B).

A   The contours of the validity of arbitration agreements before the State courts: the examination of the applicable law to determine its validity

In a series of decisions commented upon, Brazilian courts and English courts have adopted contrasting views. While the reasoning in the judgment of State Court of Appeals of São Paulo emphasizes the choice of the substantive law governing the arbitration agreement, the English courts, in their turn, choose the notion of separation of the arbitration of the underlying contract, linking the validity of the arbitration agreement to the law of the seat of arbitration (1).

Moreover, by adopting the criterion of the closest connection with the arbitration agreement, the English courts have applied the unilateral method choice of law, which has advantages over the traditional choice of law methods of private international law (2).

1  The separation between the applicable law to the object matter of the agreement and the applicable law to the agreement to arbitrate

The decision rendered by the Court of Appeals of the State of Sao Paulo based its understanding as regards the applicable law to the arbitration agreement on the provision that sets Brazilian law as the governing law for the Policies, whereas the English courts drew a threefold distinction between: (i) the proper law (lex contractus) method, the curial law (lex arbitri); and, still, (iii) the law that governs the validity of the agreement to arbitrate.

Such distinction reflects the fundamental doctrine of the separation of the agreement to arbitrate from the contract it is inserted into.[12] The agreement to arbitrate is a “procedural agreement (the agreement to arbitrate) that removes the jurisdiction from the judge,” [13] thereby transferring such jurisdiction to the arbitrators. That is, the parties to an agreement are not only obliged to comply with the agreement’s contractual terms, but should also agree that the disputes deriving from such agreement shall be subject to arbitration, as an exception to the regular jurisdiction of the state courts.

Hence, the English courts held that, although Brazilian law was applicable to the subject matter of the Policies, such law was not necessarily applicable to determining the validity of the arbitration agreement provided in such Policies.

This separation has two consequences. First, the separation of the arbitration agreement from the substantive contract implies that the underlying arbitration agreement may be governed by a law other than the law governing the substantive contract. [14] Second, the transfer of powers to the arbitrators to resolve the disputes arising from the contract also empowers the arbitrators to rule on challenges to their jurisdiction based on the invalidity or unenforceability of the arbitration agreement, [15] in accordance with the principle of competence-competence. Both principles are provided in the heading and in the sole paragraph of Article 8 of the Brazilian Arbitration Law. [16]

In this context, how can one determine the law applicable to the agreement to arbitrate? Three understandings prevail for this purpose.

The direct application of the substantive rules of international law prevails in France, where the doctrine of “délocalisation“[17] of arbitration has consistently produced innovative decisions. This approach eliminates the difficulties involved in choosing a conflict rule; that is, to say, a rule that will determine the applicable national law in accordance to certain connection criteria, and the judge may directly apply the substantive rules of international law. Example of this application is the celebrated Galakis case, [18]in which the Cour de Cassation refused to consider arguments of domestic law put forth by a public entity in order to plead its inability to enter into an arbitration agreement. Likewise, in the Dalico case, [19] the Cour of Cassation ruled that the validity of an arbitration agreement is not analyzed by reference to a rule of law, but rather from an international law standpoint, since “save for mandatory rules or public policy reasons, the existence and efficacy of such agreements must be evaluated in accordance with the common intent of the parties without any reference to national laws.”

Differing from the delocalized approach, the civil law system often follows the traditional conflicts method, in which a rule of private international law indicates the applicable law through the analysis of certain connecting factors or foreign elements, [20]in which case the conflict rule will determine that, in the presence of a given foreign element, a certain national law shall apply.

An intermediate approach is the unilateral system, according to which the determination of the applicable law in situations of conflict of laws is made through the assessment of which law is most “closely connected” with the legal relationship in question. [21] When using a unilateral method for the choice of the applicable law, the judge considers the opportunity of this choice and weighs the importance of the application of this law in conflict with the law from other legal systems that could be applied in the case, and may adopt a pragmatic solution in view of issues of the case. It is in this context that Article 9 (3) of the Rome I Regulation on applicable law to contracts invites judges to “give effect” to overriding mandatory provisions, as follows:

“Effect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of the contract have to be or have been performed, in so far as those overriding mandatory provisions render the performance of the contract unlawful. In considering whether to give effect to those provisions, regard shall be had to their nature and purpose and to the consequences of their application or non-application” (European Regulation (EC) No. 593/2008 of 17 June 2008 on the law applicable to contractual obligations – Rome I).

It should be noted, however, that judges and arbitrators are in different situations as regards the decision on the applicable law to an arbitration agreement in the absence of choice by the parties. Judges are bound to the rules of private international law or conflict of laws of their respective jurisdictions. Arbitrators are not bound to the rules of conflict of laws in any particular jurisdiction, since “l’arbitre n’a pas de for,” or “the arbitrator is not bound by a forum,” and they are therefore not obliged to follow the rules of conflict of laws of a particular jurisdiction, even those of the seat of the arbitration. [22]

The cases provided below illustrate the application of the adversarial method and the conflicts method, as described.

2  The determination of the applicable law to the agreement to arbitrate per Brazilian and English courts

In the lawsuit filed in Brazil, the Insured resorted to two Brazilian pieces of legislation so as to allege that they were not bound to the agreement to arbitrate. Such rules are paragraph 2, Article 4 of the Brazilian Arbitration Law and the Ruling 256 of the regulation of the insurance sector regulator – SUSEP and its Ruling SUSEP n 256/2004. Indeed, clause 7 of the Policies provide that the “Policy shall be governed exclusively by Brazilian law.” The objections to the validity of the agreement to arbitrate alleged before the São Paulo court and the São Paulo Court of Appeals derived exactly from the application of such provisions of Brazilian law.

Resorting to paragraph 2 of Article 4 of the Brazilian Arbitration Act aims to characterize the insurance policies as adhesion contracts. Although adhesion contracts are more often related to consumer relations, any agreement may be defined as an adhesion contract under Brazilian law when its terms are previously and unilaterally prepared by a party, and the other party “only has the choice to accept or repel the contract.” [23] Hence, this definition can also be applied to sophisticated business agreements. In an adhesion contract, the effectiveness of the arbitration agreement depends on: (i) the initiative of the contractor, rather than the proponent, to file for arbitration; or (ii) the special configuration of this provision in highlighted bold format, and the execution of a specific and separate signature for it. Absent these conditions, the contractor is not bound to the arbitration agreement and is free to prefer “the courts over the arbitration.” [24]

On the other hand, Article 44 of Ruling SUSEP 256/2004[25] sets forth validity conditions for the agreements to arbitrate inserted into insurance policies. Thus, SUSEP carries out its function of regulator of the insurance sector, setting forth the “conditions of the policies, operation plans and fees to be, in a mandatory stance, adopted by the national insurance market.” [26]

If we consider the insurance policies as adhesion contracts, such would be, theoretically, two valid arguments, the violation of which would lead to the invalidity of the arbitration clause.

Since the insurance policies were likely to be enforced in Brazil, given that they were entered into by Brazilian parties and whose obligations were governed by Brazilian law, the intention of examining the validity of the arbitration agreement entered into such a contract through the prism of Brazilian law does not seem to be a severe departure from the remaining contractual provisions. In fact, the judgment of the Court of Appeals of the State of Sao Paulo gives little attention to the foreign element (possibly the only) that distinguishes the Policies from purely Brazilian contracts: the provision of arbitration with seat in London.

In its turn, in the first decision of the series, the Commercial Court resorted to conflict of laws rules in order to ascertain the applicable law to the Policies. According to English law, the connection factors for the applicable law were the choice of law either: (i) expressly; or (ii) implicitly; or, in the absence of those: (iii) the assessment of the law with which the arbitration agreement had “its closest and most real connection.” [27]

This approach differs from the existing rule in Brazilian law that ignores party autonomy as a connecting factor for determining the applicable law to contracts. [28] However, in the context of arbitration, paragraph 1 of Article 2 of the Brazilian Arbitration Act provides that the parties “may freely choose the rules of law that will be applied to the arbitration.” This is also confirmed by the New York Convention, [29] since Article V (1) (a) provides that the parties may stipulate the applicable law to the arbitration agreement.

The rationale of the English courts does not automatically proceed to the identification of a connection factor, which establishes the applicable law to such legal relationship. In the absence of a choice of law by the parties, either explicit or tacit, the court proceeds to investigate which law is more closely connected with the agreement to arbitrate.

Through reference to previous cases,[30] the English court cites the choice of the seat of the arbitration as a relevant point to determine the closest connection of the English law with the agreement to arbitrate. Such choice clashed with the choice of Brazilian law to govern the main provisions of the contract, although the Court of Appeal understands that such are separate situations:

Although [it was] submitted that the agreement has a close and real connection with the law of Brazil, being the law governing the substantive contract in which the arbitration agreement itself is embedded, I think his argument fails adequately to distinguish between the substantive contract and the system of law by which it is governed. No doubt the arbitration agreement has a close and real connection with the contract of which it forms part, but its nature and purpose are very different. In my view, an agreement to resolve disputes by arbitration in London, and therefore in accordance with English arbitration law, does not have a close connection with the system of law governing the policy of insurance, whose purpose is unrelated to that of dispute resolution; rather, it has its closest and most real connection with the law of the place where the arbitration is to be held and which will exercise the supporting and supervisory jurisdiction necessary to ensure that the procedure is effective. Its closest and most real connection is with English law. [31]

Such understanding is consistent with positions presented in the best works on the issue. For instance, Fouchard, Gaillard and Goldman understand that “the seat of the arbitration is undoubtedly considered to be the most significant factor in the determination of the applicable law. That, after all, is the place where the arbitration agreement is to be performed.” [32] Also, Born agrees with this understanding: “Particularly in more recent decades, a number of jurisdictions, both common and civil law, have applied the substantive law of the arbitration seat to the validity of international arbitration agreements (again, absent agreement by the parties on the law applicable to the arbitration agreement).” [33]

However, the approach of the English courts does not only relate to the application of the rules of conflict of laws: the application of the unilateral method allows one to examine a wider range of situations. For instance, this approach allows the court to consider the consequences of choosing a certain applicable law. By doing so, the Court of Appeal considered that the choice of Brazilian law would make the arbitration agreement ineffective without the consent of the Insured. Accordingly, the court noted that as the arbitration agreement contained no adaptation in order to facilitate the consent of the Insured, it could not have been agreed based on Brazilian law, as follows: “the possible existence of a rule of Brazilian law that would undermine that position tends to suggest that the parties did not intend the arbitration agreement to be governed by that system of law.” [34]

Hence, the unilateral method, in which the judge considers the closest ties with the legal relationship at stake, allows the evaluation of the results of the application of a particular law, applying mandatory rules when necessary and thus avoiding obstacles that could result in nullity, thereby obtaining an efficient result.

The wide range of conflict of law rules that may be used for ascertaining the applicable law to the arbitration agreements, which bear unknown formal requirements, may create uncertainties and compromise the outcome of the arbitration. The unilateral approach, accordingly, has as an advantage the choice of the law that holds a closer connection with the situation at stake.

That being said, the analyzed decisions also deal with the possible reactions for the cases in which the courts are urged to analyze an arbitration agreement that is allegedly null and void.

B The dynamics of the arbitration agreement before the judge: the principle of competence-competence and the control of the validity of the arbitration agreement

Once the Court of Appeals of the State of São Paulo judged that the arbitration agreement included in the Policies was tainted with nullity, it reasoned in its decision that there is sometimes the need to “adapt the competence-competence principle.”

In fact, instead of relaxing its application, the decision of the São Paulo Court of Appeals adopts a mitigated interpretation of the negative effect of the competence-competence principle (1).

Yet, the imposition of injunctive orders preventing a party from pursuing legal action or arbitration imposes difficulties from the point of view of the international jurisdiction of the courts involved, and it may be preferable under the circumstances that the judicial review of the validity of the arbitration agreement is conducted ex post (2).

1  The judgment of the Sao Paulo Court of Appeals and the judicial control of the validity of the agreement to arbitrate

For this journal, the competence-competence principle and its positive and negative effects do not need extensive presentations. The prior relates to the powers of the arbitrator to rule on its own competence, while the further relates to the courts, imposing to it the duty “to refrain from ruling on the competence before the arbitrator himself or herself decides about it.” [35] Thus, such principle offers to the arbitrators a priority in time to rule on its competence, rendering a first decision that is subject to “further jurisdictional control.” [36]

Even though the sole paragraph of the Article 8 of the Brazilian Arbitration Act provides that “the arbitrator is to decide, ex officio, or upon request by the parties, on issues relating to the existence, validity and effectiveness of the agreement to arbitrate, or of the contract that contains arbitration clause,” such a provision does not correspond to the “exclusive competence of the arbitrator to solve any and all challenges to the agreement to arbitrate.” [37]

The exceptions brought by the New York Convention are well known, since its Article II (3) provides that “the court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.” A similar provision can be found in Article 8 (1) of the Uncitral Model Law, according to which the state courts shall refer the parties to arbitration “unless it finds that the agreement is null and void, inoperative or incapable of being performed.” [38]

Once the Article 2 (3) of the New York Convention does not limit this screening to the nullities acknowledgeable through summary cognition of the case, [39] it is assumed, in many jurisdictions, the screening of the clauses whose nullity is recognizable at first sight,[40] or even through more intense research. Surely there are jurisdictions more protective toward arbitration, such as France, whose arbitration law only relaxes the application of the principle of competence-competence if the arbitration agreement is (“patently void or patently non inapplicable,” “manifestement nulle ou manifestement inapplicable“) [41]butthis ruleis not widespread, as evidenced bystandards referred toabove.

That being said, it is important that judicial intervention stay exceptional, under penalty of becoming a hindrance to the progress of the arbitration proceedings, allowing for preliminary discussions on the arbitration agreement that would be best resolved by the arbitrator. Moreover, such judicial intervention can be performed preventively (ex ante), but also correctively (ex post).

2 The anti-arbitration injunction rendered in Brazil and the anti-suit injunction rendered in England

According to Gaillard, an anti-suit injunction is “an order, granted to one of the parties by the jurisdiction of a State, precluding a party from filing an action before the jurisdiction of another State or before an arbitration tribunal and, if already filed, to withdraw such action.” [42]

In common law countries, where the institute was first established, anti-suit injunctions are granted, among other cases, when there is a breach of a contractual obligation to choose a certain forum (court or arbitration) for the continuation of an action. [43] The greatest interest to justify such orders is to avoid the famous “torpedo action,” through which one party initiates legal proceedings in another jurisdiction in order to disrupt the processing of proceedings that should be conducted in the forum selected by the parties.

Nevertheless, the issuance of these orders may result in a restriction of the jurisdiction of other states and result in the violation of international agreements, such as the New York Convention. Such was the understanding of the Court of Justice of the European Union (CJEU) in the trial of the famous West Tankers case, [44] in which the court examined an anti-suit injunction rendered by the Commercial Court, requiring the withdrawal of lawsuits initiated in Italy in favor of the arbitration agreement. In its reasoning, the CJEU not only understood that such an anti-suit injunction was contrary to Regulation (CE) No 44/2001[45] on jurisdiction and on the recognition and enforcement of judgments in civil and commercial matters, but also stated that such prohibition is in line with the New York Convention, which allows for the examination by the state courts on the validity of the arbitration agreement. [46]

In view of the CJEU’s ruling, the British courts were unauthorized to render anti-suit injunctions as regards lawsuits before State members of the European Union. However, the applicability of such ruling does not go beyond the limits of the European Union, thereby resulting in casuistry difficult to reconcile. The difference of understanding resulting from the West Tankers case, according to which anti-suit injunctions are not admissible in Europe, but acceptable elsewhere, was considered “odd and illogical,” according to Veeder. [47] In fact, the difficulties resulting from this kind of judicial order can be illustrated by the use, at the São Paulo’s Court of Appeals judgment, of the notion of national sovereignty, so as to repel the order rendered in England. [48]

In Brazil, the imposition of an order preventing the parties from continuing an arbitration proceeding (anti‑arbitration injunction) recalls the so-criticized AES vs. CEEE[49] and COPEL vs. UEG[50] cases, examples of the intervention of the Judiciary in arbitration. In fact, aside from exceptional circumstances, [51] such judicial intervention reveals itself as of no avail, especially once it can be postponed to the analysis of the arbitration award.

In the event the agreement to arbitrate suffers from any flaw ignored at the arbitration’s award, its validity can be analyzed in a corrective manner through a lawsuit to set aside the award or during a proceeding for the recognition and enforcement of a foreign award. The possibility of the Judiciary taking a second look in the validity of the agreement to arbitrate is set forth at the New York Convention and is backed by the second look doctrine, developed by the American courts. [52] In accordance with such a construction, the courts do not necessarily need to anticipate and intervene in the arbitration proceedings to the extent that they can proceed to make such control afterward.

In fact, the interest in the postponement of such analysis reveals itself to the extent that the agreement to arbitrate and the award resulting therefrom are to produce effects in several jurisdictions.

III  Conclusion

The complexity of the web of jurisdictions involved in the context of an international relationship allows the arbitration agreement to make contact with several legal systems. As Professor Mayer once wrote: “The ultimate source of legality of an international relationship is simultaneously located in all the States whose courts may be amenable to render a decision regarding such relationship, either directly or as such courts examine the enforcement or exequatur of an arbitration award.” [53]

In this context, the arbitrator finds himself or herself in a privileged position to carry out his or her work of analyzing the existence, validity and effectiveness of the arbitration agreement, being such function trusted to it by the competence-competence principle.

This is because, in the absence of the parties’ choice of the law applicable to the arbitration agreement, the arbitrators are not limited to the application of a determined rule of conflict, as provided by a number of arbitration rules. Similarly, free from the limitations imposed by the conflict of laws method, the arbitrators can consider a wide range of laws, aside from the law chosen by the parties or the law applicable in the seat of the arbitration, in a manner that the arbitrator himself or herself may take into account the immediate application norms of the other jurisdictions that are closely connected with the arbitration agreement.

[1] GALISSON, Peter. L’Empire du Temps : Les horloges d’Einstein et les cartes de Poincaré. Paris, Gallimard, 2006.

[2] KENNEDY, Duncan, The Political Stakes in “Merely Technical” Issues of Contract Law. European Review of Private Law, 1: 7 – 28, 2001. Available on: http://duncankennedy.net/documents/The%20Political%20Stakes%20in%20Merely%20Technical%20Issues%20of%20Contract%20Law.pdf. Accessed on 13 May 2013.

[3] The lawsuit is at the 9th Civil Court of the Central District of the Capital in São Paulo (Procedure 0223943-73.2011.8.26.0100), pp. 14 e 15.

[4] It is an interlocutory appeal No. 0304979-49.2011.8.26.0000 brought before the 6^th Chamber of Private Law of the State Court of Appeal of São Paulo, reporting Judge Paulo Alcides.

[5] Monocratic decision rendered on 15.12.2011 by Judge Paulo Alcides on the Interlocutory Appeal no. º 0304979-49.2011.8.26.0000:

Reported. Given the complexity of the case and considering that there is express mention in the contract (item 7, p. 118) that ‘the Policy shall be governed exclusively by the laws of Brazil’ and that ‘any dispute under this Policy shall be subject to exclusive jurisdiction of the courts of Brazil ‘, and also before the apparent absence of express agreement with the arbitration institution by Appellants solution in London, required by Art. 4, para. 2 of the Federal Law No. 9.307/96 [Brazilian Arbitration Act], to avoid prejudice to Appellants, I grant the requested injunction, determining “the Insured Companies to refrain the institution of the arbitration in London as the Insured’s right to refuse this mode of dispute resolution is appreciated (p. 15).

[6]Brazilian Arbitration Act, Article 4:

“Article 4. The arbitration clause is the agreement by which the parties in a contract agree to submit to arbitration any dispute which may arise with respect to such contract. (…) § 2 In adhesion contracts, the arbitration clause will have effect only if the adherent take the initiative to institute the arbitration or expressly agree with its institution through an attached document or in bold, with signature or rubric especially for this clause”

[7] Ruling 256 of the Superintendence of Private Insurance (SUSEP), on 16 July 2004:

Article 44. The Arbitration Clause, when inserted in the contract of insurance shall be as follows: I – being written in bold contain the signature of the insured, in the clause itself or specific document expressly agreeing to its application II – contain the following information: a) that is optionally adhered to by the insured, b) that by agreeing to this clause, the insured will be pledging to resolve all their disputes with the insurance company through Arbitration, whose sentences have the same effect that the judgments of the judiciary, c) which is governed by Law No. 9,307, of September 23, 1996.

[8] United Kingdom, High Court of Justice, Queen’s Bench Division, Commercial Court, judgement on 19.01.2012, [2012] EWHC 42 (Comm).

[9] State Court of Appeal of São Paulo decision, p. 6.

[10] Court of Appeal of England and Wales, judgment rendered on 16.05.2012 on the Appeal filed by Sulamérica Nacional de Seguros S.A. et al. v. Enesa Engenharia S.A. et al.

[11] Court of Appeal decision, ¶ 17.

[12] BORN, Gary. International Commercial Arbitration. Hague: Kluwer Law International, 2009, p. 311:

The characteristics of an arbitration agreement … are in one sense independent of the underlying or substantive contract [and] have often led to the characterization of an arbitration agreement as a ‘separate contract.’ [An arbitration agreement] is ancillary to the underlying contract for its only function is to provide machinery to resolve disputes as to the primary and secondary obligations arising under that contract.

[13] CARMONA, Carlos Alberto. Flexibilização do Procedimento Arbitral. Revista Brasileira de Arbitragem, Ano VI – Nº 24 – Out-Nov-Dez 2009, p. 7.

[14] BORN, Gary. Gary B. Born. International Commercial Arbitration. Haia: Kluwer Law International, 2009, p. 410.

[15] FOUCHARD, Philippe; GAILLARD, Emmanuel; GOLDMAN, Bertrand. Fouchard Gaillard Goldman on International Commercial Arbitration. Haia: Kluwer Law International, 1999, p. 213.

[16] Brazilian Arbitration Act, Art. 8º:

The arbitration agreement is autonomous in relation to the contracts it is inserted to, to the extent that the nullity of such contract does not necessarily imply in the nullity of the arbitration agreement. Sole paragraph. The arbitrator is to rule ex officio, or upon request by the parties, on issues regarding the existence, validity and effectiveness of the arbitration agreement and the contract which contains the arbitration agreement.

[17] BORN, Gary. Gary B. Born. International Commercial Arbitration. Haia: Kluwer Law International, 2009, p. 504: “French courts have for nearly two decades held that international arbitration agreements are ‘autonomous’ from any national legal system, and are instead directly subject to general principles of international law.”

[18] Cass., Civ. 1, 2.05.1966. ANCEL, Bertrand; LEQUETTE, Yves. Les grands arrêts de la jurisprudence française de droit international privé. Paris : Dalloz, p. 391 :

L’arrêt Galakis introduit em effet le principe d’une répartition em deux classes des relations internationales; il invite à distinguer, d’une part, celles qui, participant à la vie sociale de plusieurs ordres internes, ne sont pas indépendantes des milieux nationaux que s’efforcent d’organiser les lois étatiques et, d’autre part, celles qui, pour ainsi dire matériellement délocalisées, se développent en dehors de ces ordres et sociétés étatiques.

[19] Cass. Civ. 1, 20.12.1993, 91-16.828, disponível em www.legifrance.gouv.fr.

[20] BUREAU, Dominique; MUIR WATT, Horatia. Droit International Privé : Tome I Partie Générale. Paris : PUF, 2007, p. 334 :

La méthode repose d’abord sur la classification, ou la recherche de la nature du rapport de droit (ex. : dans la catégorie délits), pour procéder ensuite, en considération des besoins spécifiques induits de cette nature, à sa localisation selon son élément le plus caractéristique (ex. : lieu de survenance du délit) dans le ressort d’un législateur donné.

SYMEONIDES, Symeon C. The American Revolution and the European Evolution : Reciprocal Lessons. Tulane Law Review. Maio de 2008, p. 1741 (82 Tul. L. Rev. 1741).

[21] ARAUJO, Nádia de. Direito Internacional Privado: teoria e prática brasileira. Rio de Janeiro: Renovar, 2006, p. 47:

“A unilateral method, whereby it was determined on the one hand, the reach of the rules and on the other, an analysis oriented by the substantive outcome. Such suggested as a modus operandi a detailed analysis of the situation at stake: comparison of the results obtained by the application of the laws in contact with the situation, and finally, evaluating the results, in view of social justice, and then decide which laws apply to the situation. This is largely used in American doctrine and case law.”

[22] LEE, João Bosco. Le nouveau régime de l’arbitrage au Brésil. Revue de l’Arbitrage, 1997, v. 2, p. 216. FOUCHARD, Philippe; GAILLARD, Emmanuel; GOLDMAN, Bertrand. Fouchard Gaillard Goldman on International Commercial Arbitration. Haia: Kluwer Law International, 1999, p. 877.

[23] VENOSA, Sílvio de Salvo. Direito Civil, vol. 2. São Paulo: Atlas, 2012, p. 380.

[24] CARMONA, Carlos Alberto. Arbitragem e Processo: um comentário à Lei nº 9.307/96. São Paulo, Atlas, 2009, p. 106.

[25] Notice of the Superintendence of Private Insurance (Superintendência de Seguros Privados) (SUSEP) nº 256, of June 16, 2004, Article 44:

The Arbitration Clause, when inserted into insurance agreement, shall be bound to the following rules: I – written in bold and have the signature of the insured at the very clause or in an specific document, in which it expressly agrees with the arbitration; II – have the following information: a) it is adopted by the insured in an optional basis; b) that by agreeing with the application of such clause, the insured commits itself to resolve any and all of its disputes with the insurance company through arbitration, whose awards hold the same effects as the judgments of the Judiciary; c) it is governed by the Law 9.307, dated 23 September 1996 [Brazilian Arbitration Act].

[26] Law nº 73, dated November 21, 1966, Article 36 “c.”

[27] Commercial Court’s ruling, ¶ 5.

[28] Lei de Introdução às normas do Direito Brasileiro, art. 9.

[29] Convention on the recognition and enforcement of foreign arbitral awards, known as New York Convention, ratified in Brazil through Decree 4.311 dated 23 July 2002:

Article V 1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: a) the parties to the agreement referred to in Article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made.

[30] Commercial Court’s ruling, ¶ 13: “the law with which that agreement had its closest and most real connection was more likely to be the law of the seat of arbitration than the law of the underlying contract.”

[31] Court of Appeal’s ruling, ¶ 32.

[32] FOUCHARD, Philippe; GAILLARD, Emmanuel; GOLDMAN, Bertrand. Fouchard Gaillard Goldman on International Commercial Arbitration, Kluwer Law International, 1999, p. 224, ¶ 429.

[33] BORN, Gary. International Commercial Arbitration. Hague: Kluwer Law International, 2009, p. 422:

The existence of multiple choices of law rules has the potential to create unfortunate uncertainties about the substantive law applicable to arbitration agreements, and particularly the risk of inconsistent results in different forums. In turn, this leads to uncertainty about the extent to which International arbitration agreements can actually be relied upon to provide an effective means of resolving international disputes. The multiplicity of choice-of-law rules also leads to delays and expense, resulting from the need to engage in choice-of-law debates, before both arbitral tribunals and national courts, when disputes arise concerning the formation or validity of arbitration agreements. This is inconsistent with parties’ expectations of an efficient, centralized dispute resolution mechanism in entering into International arbitration agreements.

[34] Court of Appeal’s ruling, ¶ 30.

[35] ANCEL, Bertrand. O Controle de Validade da Convenção de Arbitragem: O Efeito Negativo da Competência Competência, Revista Brasileira de Arbitragem, n. 6, p. 55.

[36] FOUCHARD, Philippe; GAILLARD, Emmanuel; GOLDMAN, Bertrand. Fouchard Gaillard Goldman on International Commercial Arbitration, Kluwer Law International, 1999, p. 400, ¶ 660: “Le principe de compétence-compétence peut être défini comme la règle en conséquence de laquelle les arbitres doivent avoir la priorité pour entendre les oppositions à sa compétence, sous réserve d’un contrôle juridictionnel postérieur”.

[37] CARMONA, Carlos Alberto. Arbitragem e Processo: um comentário à Lei nº 9.307/96. São Paulo, Atlas, 2009, p. 176.

[38] UNCITRAL’s Model Law on International Commercial Arbitration, 1985, with the changes adopted in 2006. Available at http://cbar.org.br/site/wp-content/uploads/2012/05/Lei_Modelo_Uncitral_traduzida_e_revisada_versao_final.pdf.

[39] BORN, Gary. International Commercial Arbitration. Hague: Kluwer Law International, 2009, p. 858:

The Convention does not contain or suggest either a prima facie or a full review standard. As discussed below, interpreting the Convention as requiring prima facie review would be contrary to the general approach to competence-competence in the majority of jurisdictions (including many Model Law states, the United States, England and Switzerland).

SCHRAMM, Dorothée; GEISINGER. Elliott, et al., “Article II” in KRONKE, Herbert; NACIMIENTO, Patricia, et al. (eds). Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention. Haia: Kluwer Law International, 2010, p. 108:

Article II (3) does not state whether a court can examine the validity of the arbitration agreement with full powers of review or whether it is restricted to a prima facie examination. The scope of review of the national court depends on the extent to which the negative effect of ‘compétence–compétence’ is recognized in the forum state.

[40] CARMONA, Carlos Alberto. Arbitragem e Processo: um comentário à Lei nº 9.307/96. São Paulo, Atlas, 2009, p. 106.

[41] New French Civil Procedure Code, art. 1448 “Lorsqu’un litige relevant d’une convention d’arbitrage est porté devant une juridiction de l’Etat, celle-ci se déclare incompétente sauf si le tribunal arbitral n’est pas encore saisi et si la convention d’arbitrage est manifestement nulle ou manifestement inapplicable.”

[42] GAILLARD, Emmanuel. ”Anti-suit injunctions em reconnaissance des sentences annulées au siège: une évolution remarquable de la jurisprudence américaine”. Joumal du Droit Intemational, 2003, n. 4, p. 1.106, apud WALD, Arnoldo. As Anti-Suit Injunctions no Direito Brasileiro. Revista de Arbitragem e Mediação, n. 9, 2006, p. 30.

[43] BERMAN, Georges. Transnational Litigation. Saint Paul: Thomson West, p. 110 e segs.

[44] Court of Justice of the European Union. Case C‑185/07, Allianz SpA, previously Riunione Adriatica di Sicurtà SpA, Generali Assicurazioni Generali SpA c. West Tankers Inc., judged on 10 February 2009.

[45] Rules (CE) n.° 44/2001 of the 22 December 2000 Council, regarding the competence of the courts to the recognition and enforcement of decisions on civil and commercial matters.

[46] Court of Justice of the European Union. Case C‑185/07, Allianz SpA, previously Riunione Adriatica di Sicurtà SpA, Generali Assicurazioni Generali SpA c. West Tankers Inc., judged on 10 February 2009:

33.          Such conclusion is supported by Article II, n.° 3, of the New York Convention, according to which the court of a Contracting State is requested to resolve a dispute about an issue the parties entered into an agreement to arbitrate, which shall refer the parties to the arbitration upon request by one of them, except in the case the agreement has expired or the agreement is not enforceable or applicable.

[47] VEEDER, V. V. Strategic Management in Commencing Arbitration. VAN DEN BERG, Albert Jan (ed.), Arbitration Advocacy in Changing Times. ICCA Congress Series, 2010 Rio Volume 15. Haia: Kluwer Law International, 2011, p. 33:

[A]fter West Tankers, the English Court cannot impede, directly or indirectly, court proceedings in EU Member States brought and maintained in deliberate violation of an arbitration agreement — not even by declaration where London is the expressly chosen arbitral seat or lex loci arbitri. Yet the English Courts can still issue anti-suit injunctions impeding anti-arbitration litigation outside the European Union, in support of transnational arbitration. To many, this split jurisdiction seems odd and illogical.

[48] Sao Paulo’s Court of Appeals judgment, page. 9: “Matter of sovereignty, of independence, which in any moment can be mitigated in favour of other interests under penalty of compromising NATIONAL SOVEREIGNTY.”

[49] Segunda Vara da Fazenda Pública de Porto Alegre, Ação cautelar n° 001/1.05.0271266-3 and Ação ordinária n° 001/1.05.0271565-4. TJRS, Segunda Câmara Civil, Agravo de Instrumento n° 70003866258 e nº 70004506424, Companhia Estadual de Energia Elétrica c. AES Sul Distribuidora Gaúcha de Energia, judged on 13 November 2002. STJ, Segunda Turma, Recurso Especial nº 612.439 – RS (2003/0212460-3), Companhia Estadual de Energia Elétrica c. AES Sul Distribuidora Gaúcha de Energia,judged on 25 October 2005.

[50] Parana’s Court of Appeals, Medida Cautelar Inominada nº 160213-7, injunction granted by the reporting Justice, Dr. Ruy Fernando de Oliveira on 1 June 2004.

[51] “Among such exceptional circumstances, one can consider the cases in which there is “clear lack of jurisdiction, suspicion or impediment of the arbitrator, or clear nullity, or ineffectiveness of the arbitration agreement, so as to raise the possibility of partiality or disqualification of the arbitral institution to rule on the claim” (MUNIZ, Joaquim de Paiva. Curso de Direito Arbitral: aspectos práticos do procedimento. Curitiba: CRV, 2012, p. 110).

[52] Scherck c. Alberto-Culver Co (417 US 506, 1974) e Mitsubishi Motors Corp. c. Soler-Chrysler-Plymouth, Inc. (473 US 614, 1985). Through the precedents Bonny v. Society of Lloyd’s (3 F.3d 156, 1993), e.g., or Society of Lloyd’s v. Ashenden (233 F.3d 473, 2000), such doctrine was resumed in European case law, as the CJEU’s ruling shows Eco Swiss China Time Ltd. c. Benetton (C-126/97, 1999).

[53] MAYER, Pierre. Le droit des relations économiques internationales. Études offertes à Berthold Goldman. Paris: Litec, 1982, p. 199.