Peter Sester, Luis André AzevedoFrom: International Arbitration: Law and Practice in Brazil
Edited By: Peter Sester
This chapter assesses stock corporate arbitration. Corporate arbitration has distinct features compared to other segments of Commercial Arbitration. This is particularly true if listed corporations provide mandatory shareholder arbitration in their bylaws. In order to serve as an effective dispute resolution mechanism, one capable of providing consistent decisions and legal certainty, corporate arbitration needs to fulfil two conditions: first, to produce, at least in some cases, an award with erga omnes or extra partes effect; and second, to exclude conflicting awards on identical disputes referring to the same company and identical facts. Developing an effective framework for stock corporation arbitration is one of the biggest challenges for Commercial Arbitration in Brazil today. According to the listing rules of Brazil's sole equity exchange (B3), corporations listed in the market segments Novo Mercado or Level II must adopt arbitration clauses in their corporate bylaws. Hence, over 150 Brazilian stock corporations impose mandatory shareholder arbitration on their shareholders. The Brazilian Corporation Law (BCL) explicitly permits these arbitration clauses. The chapter then explains why the core principles of Commercial Arbitration do not straightforwardly justify the erga omnes effect of arbitral awards, and discusses several proposals aiming to create collective shareholder arbitration in Brazil.