Part 2 Specific Issues of Arbitration in Brazil, 15 Post M&A Arbitration

Subject(s):

Arbitral agreements

This chapter addresses post-mergers and acquisitions (M&A) arbitration. M&A transactions provide fertile ground for litigation. These complex transactions usually give rise to a significant level of information asymmetry between the parties regarding the target company. Buyer and seller harbour opposing interests concerning the sale value. Representations and warranties, as well as the allocation of risk among parties, although aimed at facilitating the closing of the transaction, also frequently create tension and give rise to dissonant expectations during the post-closing phase. Cross-border M&A transactions add even more layers of complexity given the different business cultures and legal regimes involved. Even though M&A deals have established standard global commercial practices, which follow the common law framework, they still raise a series of challenges for parties, stakeholders, and legal advisors, generating all types of post-closing disputes. Although there are several means of dispute resolution, M&A parties have reliably chosen arbitration as a method for resolving their disputes in Brazil. The chapter then looks at the issues that most frequently feature in the arbitration of international M&A disputes in Brazil.