Thiago Marinho Nunes, FCIArb[1]
Since the enactment of Brazilian Arbitration Act in 1996 (“BAA”) Brazilian arbitration practice increased, having expanded to numerous regions of Brazil. A huge number of theses, academic articles and courses have emerged (and are still emerging) demonstrating that the practice of arbitration in Brazil is constantly growing. This success is due not only to the legislator (who presented a modern bill based on diplomas of significant importance, such as UNCITRAL Model Law[2]), but because it has evolved over time, aligning itself with former court decisions on important issues, such as the regulation of arbitration involving public entities, the permission to use pre-arbitral measures before the Judiciary, inter alia, but also to the entire arbitration community, such as lawyers, in-house counsels and arbitrators acting in this field which, for the most part, understood the “spirit” of arbitration and its peculiarities. A good evidence of this is the minimal rate of annulment of arbitral awards by the Judiciary, as well as the massive pro-arbitration case-law developed in the higher courts, especially of Federal Superior Court of Justice (“STJ”)[3].
As the arbitration practice in Brazil has expanded, and its players have increased, the comparative study of arbitration developed in other legal system is thought to be of great value to Brazil. Alongside the comparison through legal systems[4], a source of comparison that is worth considering are the various guidelines created by respected international institutions such as the International Bar Association (“IBA”) and the Chartered Institute of Arbitrators (“CIArb”). In particular, CIArb has a special importance in the field of international commercial arbitration.
Established in 1915, CIArb is an organization that assembles numerous professionals working in the field of alternative dispute resolution (arbitration, mediation, dispute boards, inter alia) around the world, spreading and facilitating the use of such mechanisms[5]. Based in London, it has approximately 16,000 members distributed in 39 branches in 133 countries. Since 2019, it has been represented in Brazil (CIArb Brazil Branch) and, throughout its existence, has published a series of guidelines on consolidated practices in international arbitration that can serve as a useful guide for lawyers, in-house counsels and arbitrators involved in arbitration proceedings.
The CIArb, to date, has issued 13 (thirteen) guidelines related to arbitration[6], including (a) Interviews for Prospective Arbitrators; (b) Terms of Appointment including Remuneration; (c) Jurisdictional Challenges; (d) Applications for Interim Measures; (e) Security Costs[7]; (f) Managing Arbitrations and Procedural Orders; (g) Party Appointed and Tribunal Appointed Expert Witnesses; (h) Documents-Only Arbitration Proceedings; (i) Party Non-Participation; (j) Drafting Arbitral Awards Part I – General, Part II – Interest, and Part III – Costs; (k) Witness Conferencing[8]; and, more recently, a Guidance Note on Remote Dispute Resolution Proceedings[9].
With a widespread acceptance by both the operators of arbitration and the Judiciary, several of the above-mentioned guidelines have already been applied in Brazilian arbitration practice. Among them, a few of the most important guidelines include the applications for interim measures, security costs, the party non-participation (default), the rules regarding expert evidence (party appointed and tribunal appointed expert witnesses) and interviews for prospective arbitrators.
The latter (Interviews for prospective arbitrators) is of utmost importance, especially in the field of domestic arbitration in Brazil. According to the preamble of Guideline 1 of CIArb, “As the selection of arbitrators is one of the most important strategic decisions in arbitration, the parties may want to interview a prospective arbitrator before making an appointment instead of relying solely on publicly available information and personal recommendations”[10]. Since this subject is not regulated by BAA and cannot be found in the code of ethics of the main Brazilian arbitral institutions, it is strongly recommended the use of CIArb Guideline 1 for domestic use, considering the permitted limits, to preserve arbitrator’s independence and impartiality[11]. Not only in house counsels but outside counsel must be involved in these interviews, and then, the choice of the arbitrator[12].
Additionally, as much as these guidelines have been issued for use in international arbitration (further, for use in both civil and common law systems), there is no doubt that they are useful and transposed to the domestic arbitration field, not only guaranteeing efficiency in arbitration proceedings, but also in a pedagogical way, by establishing practices that are expected to be implemented by arbitration players[13].
While the practice of arbitration increases every year in Brazil, this growth should go alongside with the implementation of the necessary precautions by arbitration players (i.e. parties, lawyers and arbitrators), based on the ethics and professional conduct expected of the mentioned actors, with the purpose of preserving the integrity of arbitration and its greater purpose: to render an enforceable award through an efficient, fair, but, above all, ethical[14] procedure, the latter, the characterizing element of arbitration[15].
The purpose of CIArb guidelines, in addition to emphasizing the ethical behavior that must be observed by its players – parties, counsel, experts, and arbitrators[16] - is to promote uniformity in the practice of arbitration proceedings[17], excelling in predictability, effectiveness and celerity and that, despite having been elaborated based on international arbitration, not only can they be used, but they are also recommended for domestic arbitration[18], which will certainly improve the Brazilian arbitration system[19].
[1] PhD in International and Comparative Law from the University of São Paulo Law School; Master in Litigation, Arbitration and Alternative Dispute Resolution from the University of Paris II - Panthéon-Assas; Vice-President of CAMARB; Fellow of the Chartered Institute of Arbitrators; Professor at the Arbitration Research Center of IBMEC-SP; Independent arbitrator. [2] The UNCITRAL Model Law on International Commercial Arbitration is a model law prepared by UNCITRAL and implemented by the United Nations Commission on International Commercial Law on 21 June 1985 and revisited in 2006. Available at: <https://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf>. Accessed on March 26, 2021. [3] Data that can be checked in research conducted by the Brazilian Arbitration Committee (CBAr) in cooperation with the Brazilian Association of Arbitration Students (ABEArb). Available at: <http://cbar.org.br/site/pesquisa-cbar-abearb-2016/>. Accessed on March 26, 2021. [4] On the importance of comparative law in arbitration, see FAUVARQUE-COSSON, Bénédicte. Development of Comparative Law in France. In: REIMANN, Mathias; ZIMMERMANN, Reinhard (Ed.). The Oxford Handbook of Comparative Law. Oxford: Oxford University Press, p. 59-60, 2008. [5] According to Tim Hardy, FCIArb and Elina Zlatansla, FCIArb: “As the first ever learned society in the world to be devoted to the education and training of what is considered to be ‘modern arbitration, CIArb plays a unique role in furthering the profession and in encouraging and facilitating the use of arbitration. It has a longstanding history in promoting best practices in the field and offering guidance through research and scholarly publications”. CIArb Arbitration Practice Guidelines: An Overview, p.3. Available at: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3019022>. Accessed on March 26, 2021. [6] Available at: <https://www.ciarb.org/resources/guidelines-ethics/international-arbitration?page=1>. Accessed on March 26, 2021. [7] This specific guideline (Security Costs), was commented on by José Victor Palazzi Zakia, available at: <http://www.cbar.org.br/blog/artigos/security-for-costs-na-arbitragem-da-utilidade-e-da-necessidade-da-medida>. Accessed on March 26, 2021. [8] This guideline was recently awarded by Global Arbitration Review (GAR) as the “best innovation by an individual or organization”. Source: <https://www.ciarb.org/news/ciarbs-notable-wins-at-this-years-gar-awards/>. Accessed on March 26, 2021. [9] Available at: <https://ciarb.org/resources/remote-proceedings/>. Accessed on March 26, 2021. [10] CIArb - International Arbitration. Accessed on March 26, 2021. [11] According to the preamble of Guideline 1 of CIArb: “Accordingly, prospective arbitrators should take great care when participating in such an interview to ensure that it does not compromise the integrity of the arbitral process or their impartiality and Independence”. CIArb - International Arbitration. Accessed on March 26, 2021. [12] Ins this sense, according to Ugo Draetta: “The choice of a co-arbitrator should not be left exclusively to outside counsel, as ofter happens, but the in-house lawyer should be fully involved. In particular, if the candidates for co-arbitrator are interviewed, the in-house lawyer should take part in the interviews (within the permitted limits)”. (DRAETTA, Ugo. Behind the Scenes in International Arbitration. New York: JurisNet, 2011, p. 42). [13] In this sense, see BÉDARD, Julie and MARQUES, Ricardo Dalmaso. The Conduct of Attorneys and Representatives of Parties in General in International Arbitration. The IBA Guidelines for the Representation of Parties in International Arbitrations. Revista Brasileira de Arbitragem, n. 53, jan.-mar. 2017, p. 29. [14] Ethics in arbitration is detailed by Catherine A. Rogers, especially in the international field, where, according to the author, the need for a “self-regulation” of the system, based on clear and ethical rules, reinforces the credibility of arbitration. As stated originally: “While ‘regulation’ is a term that is generally resisted, self-regulation in international arbitration is a healthy way to preserve existing structures and strengthen the regime. The legitimacy of international arbitration is predicated in substantial part on the integrity and professional conduct of its founders and of its modern custodians – the arbitrators, counsel, experts, and administrators of arbitral institutions who manage and decide the disputes. These participants build and sustain the legal frameworks and procedures on which the legitimacy of international arbitration is founded. Clearer ethical norms and a reliable enforcement regime are essential to that function and have evolved organically in international arbitration”. ROGERS Catherine A. Ethics in International Arbitration. Oxford University Press, 2014, p. 272. [15] In this regard, MARÇAL, Juliana. A Ética como Elemento Caracterizador da Arbitragem. Revista de Arbitragem e Mediação, v. 62, p. 157-165, jul-set. 2019. [16] For the professionals who act as arbitrators, the CIArb’s performance is highlighted by Catherine A. Rogers: “For arbitrators, specifically, the Chartered Institute of Arbitrator, or ‘CIArb’, has a well- established certification program. The CIArb refers to itself as a ‘Professional Organization for Arbitrators, Mediators and Adjudicators’, and lists having a ‘prestigious secondary professional qualification’ as among the benefits of membership. The CIArb has stringent, published entry requirements, which may include extensive training, passing an examination, and completing an interview. It also has a relatively detailed code of ethics and related practice guidelines that pertain to arbitrator members”. ROGERS Catherine A. Ob. cit., p. 255-256. [17] Accordingly, see the study conducted by ZHARILOV, Andri. Conflicts and Ethics in International Arbitration in Arbitration. The International Journal of Arbitration, Mediation and Dispute Management, v. 85, issue 1 (2019), p. 36-48. [18] According to Tim Hardy, FCIArb and Elina Elina Zlatansla, FCIArb: “It is important to bear in mind that the Guidelines are designed for international commercial arbitrations although the principles and standards are equally applicable in domestic arbitrations. The Guidelines are not prescriptive and do not contain any legal or professional advice. Rather they contain suggestions and recommendations that can be used to promote consistent decision-making. They shall not be treated as binding upon the parties or the arbitral tribunal and therefore non-compliance shall not be sanctioned or interpreted as a ground for the setting aside of any award”. CIArb Arbitration Practice Guidelines: An Overview, p. 3. Available at: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3019022>. Accessed on 1 March 2021. [19] The so-called extraneous experiences that are practiced by other populations of the globe can be beneficial for the improvement of the internal system. In this regard, see WISE, Edward M. The Transplant of Legal Patterns. The American Journal of Comparative Law, v. 38, 1990, p. 5.