Brief note about Brazilian judiciary system: Brazilian System has three superior courts. The Supreme Federal Court is
the top of judicial pyramid, but it has jurisdiction on limited subjects. In
short, Supreme Federal Court decides constitutional issues. The other superior
courts are the Superior Labor Court and the Superior Court of Justice. The
Superior Court of Justice has jurisdiction to decide issues of interpretation
of federal law. In the case of arbitration, a federal statute regulates the
topic, so the Superior Court of Justice provides the definitive solutions about
the subject (provided that it does not violate the constitution).
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| Superior Court of Justice (STJ) in the City of Brasilia. |
Brazil received the title of “most improved
jurisdiction” in arbitration in the year of 2014 of the publication Global
Arbitration Review. The Superior Court of Justice certainly had a very
important role in this “prize”,
building a strong jurisprudence in favor of arbitration. In the last week, the
Court reinforced the jurisprudence pro-arbitration in a big corporate dispute.
The Superior Court decided the Graal case in
December 17 of 2015 sending the parts to arbitration to solve a big corporate
dispute between two families over an option provided in the shareholder
agreement signed by the parties. The issue was whether there was an express and
firm agreement to arbitrate.
The arbitration clause provided that the
disputes arising from the shareholder agreement would be solved by mediation or
arbitration except the issues related to clause number 8. The clause number 8 stated
that any breach of the shareholder agreement allowed the non-breaching party to
sue in judicial court in order to suspend or cancel the register of transfer of
shares or to fulfill the act of a refusing party to comply with obligations created
by the agreement. The plaintiff sued in court alleging that clause number 8
encompassed the disputed about the option agreement. Furthermore, the court
also analyzed if the arbitration clause was an obligation or a mere option of
the parties. Therefore, the issue could be divided in two topics, existence of
the agreement to arbitrate and scope of the clause.
The court got into the debate about the
parties’ intention when they signed the arbitration agreement. One of the
Judges said that there was not an agreement to arbitrate, because the clause
provided a mere option to the parties between mediation, arbitration and the
court system, so the court could not force them to arbitrate. This is a clear
issue of interpretation of a dubious agreement. The majority found that the
parties agreed to solve their disputes in arbitration and one side was trying
to avoid compliance with that agreement.
The decision of the Superior Court of Justice
is one-step further in the direction to the most prominent jurisdictions in
arbitration. It is a very important precedent, because it signals to the
international arbitration community that parties can trust in Brazilian legal system
in aid of arbitration procedures. The confirmation of a pro-arbitration
jurisprudence will help Brazilian arbitral institutions to compete for a
position as an arbitration hub for international disputes.
The underlying dispute
The case is a big dispute related to the giant
in construction business Odebrecht. When Odebrecht made its IPO, the company’s
shareholder created a holding company, Odbinv.
With the arrangement, the original shareholders of Odebrecht became
shareholders of Odbinv. The Odebrecht family was ultimately the controllers of
the company, using another holding company (Kieppe Participações) that owned
62% of the holding Odbinv. The Gradin family also had a holding company, Graal
Participaçõess who owned 20,6% of the holding Odbinv.
The parties signed a shareholders agreement
creating option rights. By the time the company decided to close the capital
(go private), the Odechrechts tried to force the Gradins to sell their shares
based on the shareholder agreement. The underlying dispute is about the option
agreement, because the Gradins are resisting selling the shares to the
Odebrechts.
Sources (in Portuguese):
- https://ww2.stj.jus.br/processo/pesquisa/?tipoPesquisa=tipoPesquisaNumeroRegistro&termo=201201003014&totalRegistrosPorPagina=40&aplicacao=processos.ea
- http://www.stj.jus.br/sites/STJ/default/pt_BR/noticias/noticias/Contrato:-disputa-bilion%C3%A1ria-de-a%C3%A7%C3%B5es-da-Odebrecht-ser%C3%A1-resolvida-por-arbitragem
- http://www.conjur.com.br/2015-dez-17/gradin-ganha-acao-stj-disputa-bilionaria-odebrecht
- http://oab-rj.jusbrasil.com.br/noticias/2949238/disputas-judiciais-suscitam-questinamentos-sobre-arbitragem
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