The President of the Republic in office, Michel Temer, approved the Law 13.129/2015 on 26.05.2015, amending the Brazilian Arbitration Act (Law N. 9307/1996). The final text is available here.

The amendments brought reinforce the cultivated pro-arbitration environment in the Brazilian legal system with specific changes, seeking only to clarify controversial issues and dealing with matters not previously regulated, namely:

Arbitration and Governmental entities: it confirms that Governmental entities may submit patrimonial issues to arbitration, regarding matters that may be subject to settlement.

Arbitration in Corporations: the Bill clarifies that an arbitration clause included in the bylaws of a corporation is binding upon all shareholders, including the ones that did not expressly approve it.

The main change is that the shareholder will be entitled to withdraw from the corporation in the case of insertion of the arbitration clause in its bylaws, unless the company has shares that have liquidity and dispersion in the stock market, or if the inclusion of the arbitration clause is required for listing in a stock exchange or OTC market requiring at least 25% of free float (e.g., the “New Market” from the São Paulo Stock Exchange – BOVESPA).Appointment of Arbitrators: the bill allows the parties to avoid the application of the arbitration rules if they limits the choice of the arbitrators to names on a previous list.

Limitation period: the bill clarifies that the limitation period shall be interrupted by the filing of the request for arbitration, as it occurs with judicial lawsuits.

Partial award: the bill authorizes the arbitrators to render partial awards.

Request for nullity on challenge: the bill authorizes the respondent to request the setting aside of an arbitral award as defense in a lawsuit to judicially enforce such arbitral award.

Interim measures: insertion or provisions regulating interim and urgent measures in arbitration.

Arbitration letter: creation of the “arbitration letter”, whereby an arbitration can request the judicial power to enforce an arbitral decision.

Three provisions were vetoed. They were those related to arbitration in consumer relations and labor relations.

On the first two issues, which concerned the possibility of arbitration in consumers relations, even if expressed in adhesion contracts (ie, contracts whose terms and conditions the consumer cannot modify), as long as the consumer brings the arbitration, the veto message informs that they “could mean a setback and offense to the guiding principle of consumer protection”, that is to say, the possibility to raise claims in judicial courts.

As to the arbitration in labor relations, in the text approved by Congress, the arbitration had been authorized in cases where the employee is administrator or statutory director, and once arbitration has been established at the initiative of the employee or with his express consent. However, the President realized that this provision “could eventually carry an unwanted distinction between employees, in addition to resort to term technically not defined in labor law.”

Once the Law was published in the Federal Official Gazette on 27.05.2015, it shall come into force on 26.07.2015.

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