BRAZIL: An Introduction to Dispute Resolution: Arbitration

Brazil: A Well-Established and Even More Promising Landscape for Arbitration

Brazil’s legal landscape has undergone striking developments in recent years, and 2025 promises even more significant shifts in the economic, legal, and political factors shaping dispute resolution in the country. Notably, the growing internationalisation of arbitration in Brazil is accompanied by its increasingly specialised application in disputes related to energy, oil and gas, infrastructure, and telecommunication contracts.

This article offers a comprehensive analysis of the key factors influencing these legal trends, considering both global economic impacts and recent legislative changes in Brazil. As we traverse these legal developments, we aim to provide in-depth insights into the arbitration framework that will define dispute resolution in Brazil in the coming year.

Internationalisation of arbitration and Special Appeal No 1.851.324-RS

Brazil is becoming an increasingly prominent player in the realm of international commercial arbitration. Two-to-three decades ago, litigation in Brazil was predominantly domestic, with disputes handled by local courts, governed by Brazilian law, and involving Brazilian parties. This scenario has undergone a significant transformation. The expansion of Brazilian companies into foreign markets, coupled with growing foreign investment in Brazil, has reshaped the country’s dispute resolution landscape.

Contributing to this trend, the Brazilian Superior Court of Justice rendered a landmark arbitration-related ruling in the Special Appeal No 1.851.324-RS (Citic Construções do Brasil v Usimec Soluções em Engenharia). Issued on 21 August 2024, the decision clarified that the Brazilian Code of Civil Procedure (Law No 13.129/2015) does not apply to arbitration, even on a supplementary basis, reinforcing the autonomy of arbitration.

This ruling is set to further drive the internationalisation of arbitration in Brazil in 2025 by reinforcing Brazil’s arbitration practice with international standards, enhancing legal certainty, and promoting party autonomy. As a result, Brazil is poised to become an even more attractive venue for international arbitration, encouraging foreign investment and deepening its integration into the global arbitration community.

The oil and gas industry: a modernised framework

The oil and gas industry, known for its complexity and strategic importance, often faces high-stake economic and technical disputes. Arbitration has become a crucial tool in resolving these conflicts, offering efficient, confidential, and specialised dispute resolution for contracts involving exploration, production, and distribution. Arbitration’s flexibility allows parties to select arbitrators with sector-specific expertise, ensuring well-informed and equitable decisions.

By 2025, arbitration in the oil and gas sector is expected to gain further prominence, driven by digitalisation and sustainability trends. Digital platforms for virtual hearings and electronic document management are set to enhance efficiency and reduce costs, while the industry’s growing focus on ESG (environmental, social, and governance) standards is leading to the inclusion of dispute resolution clauses that minimise environmental and social impacts.

Arbitration institutions in Brazil are also strengthening their focus on the oil and gas sector through events and discussions often involving the National Petroleum Agency (ANP). These initiatives highlight arbitration’s role in promoting legal certainty and efficiency in this critical industry.

Arbitration and technology: exploring new frontiers

The growing importance of data protection has compelled arbitral institutions and arbitrators to adopt stringent measures in compliance with Brazil’s General Data Protection Law (LGPD – Law No 13.709/2018). Implementing robust privacy policies, safeguarding sensitive data, and ensuring all participants understand their rights and obligations are now essential components of arbitration proceedings.

In 2025, emerging digital technologies are poised to transform arbitration management significantly. Advanced online platforms for virtual hearings and electronic document handling will continue to enhance efficiency and reduce costs. These tools enable global participation without the need for travel, facilitating scheduling and coordination. Moreover, AI-powered tools for document analysis and legal research promise to streamline case preparation and decision-making, enhancing both speed and accuracy.

Blockchain technology is also expected to play a key role in promoting transparency and security in arbitration. By recording each stage of the arbitration process immutably, blockchain can boost parties’ confidence in the integrity of proceedings. Coupled with robust cybersecurity measures, these innovations ensure that arbitration in Brazil remains secure and compliant with data protection laws.

Arbitration and public administration: strengthening ties of old and new relations

The relationship between arbitration and public administration in Brazil is set to grow stronger in 2025, spurred by new legislation and regulatory frameworks that encourage alternative dispute resolution. The New Bidding and Contracts Law (Law No 14.133/2021) has already made significant strides by explicitly allowing arbitration in administrative contracts, fostering a more efficient and transparent dispute resolution environment. This enables public administration to resolve conflicts swiftly and effectively, optimising the management of public resources.

The increasing adoption of arbitration clauses in public contracts reflects a cultural shift within public administration, prioritising predictability and legal certainty. More public entities are expected to embrace arbitration in 2025, bolstering trust in arbitration institutions and enhancing professional conflict management. The ability to appoint arbitrators with specialised knowledge in administrative law further strengthens arbitration’s effectiveness in this context.

Moreover, digital technologies like virtual hearings and electronic document management will continue to make arbitration more accessible and secure for public entities, enhancing the overall efficiency of proceedings.

In conclusion, the combination of legislative advancements, cultural shifts, and technological innovations is set to significantly strengthen arbitration’s role in Brazil’s public administration and broader legal landscape in 2025.

The rise of collective arbitrations: a turning point for shareholder rights

Historically, Brazil’s legal system focused on individual shareholder rights, with few avenues for collective action. The Securities Class Action Law (Law No 7.913/1989) has resulted in only a handful of cases. Recently, however, there has been a clear move toward embracing collective proceedings, driven by legislative efforts, court decisions, and increased shareholder pursuit for mechanisms to address corporate misconduct.

A key development is Bill No 2925/2023, now before Congress, which could significantly expand shareholder collective proceedings. The bill proposes holding administrators and controlling shareholders accountable for securities law breaches and allows shareholders meeting certain thresholds—such as holding 5% of shares or stakes worth at least BRL50 million—to bring collective claims.

The bill also addresses arbitration, which is mandatory for public companies listed in top segments of the Brazilian stock exchange. It mandates public arbitration proceedings and allows other shareholders to join as co-participants. Once a collective proceeding is initiated, the issuer must disclose it to the market, giving affected shareholders 30 days to join.

The bill balances transparency with flexibility, granting authorities the power to limit the publicity of arbitration in certain cases. Anticipating these changes, CAM-CCBC has introduced new arbitration rules for corporate disputes, allowing third-party shareholders to be notified and bound by arbitral decisions, even if they choose not to participate.

While minority shareholders and their legal representatives have welcomed these changes, concerns remain. Public companies fear that broader access to collective proceedings could increase litigation risks, potentially deterring companies from going public. As Brazil navigates these changes, the impact on its capital markets remains to be seen.