The Mergers & Acquisitions Litigation Review: Brazil

Overview

Brazil has a thriving and sophisticated M&A market. Because of the ever-growing number of deals, there is a rising number of disputes opposing buyers and sellers. Certain key concepts in M&A litigation may not be as fully tested in Brazil as in certain other jurisdictions, such as the United States; however, the consistent increase in M&A transactions in Brazil will inevitably lead to an increase in M&A disputes between different stakeholders and related to different phases of a transaction.

A distinctive trait of Brazil in relation to M&A litigation that finds no support in virtually any other jurisdiction is the fact that some publicly held companies are required to include an arbitration agreement in their by-laws. Such arbitration agreement is binding upon all shareholders, officers, directors and on the company itself. This requirement is currently imposed on around 200 out of 400 publicly held companies that have their shares traded at the São Paulo stock exchange (the only stock exchange currently operating in Brazil) and are listed in the special segments that impose corporate governance rules more stringent than those required by law.

Brazilian case law related to M&A transactions is scarce because most disputes arising out of corporate transactions in Brazil are submitted to arbitration by virtue of arbitration agreements contained in the company by-laws, shareholders' agreements, share purchase agreements or other transaction documents. Although the Brazilian Arbitration Act does not provide for confidentiality as being mandatory in arbitration proceedings, parties are free to agree that any dispute submitted to arbitration shall be treated as confidential, except disputes involving the public administration, which must always be public. In addition, most Brazilian arbitral institutions provide for confidentiality by default in their procedural rules, including the Market Arbitration Chamber (CAM B3). Consequently, disputes submitted to arbitration in Brazil are often confidential.

Nonetheless, even when covered by confidentiality obligations, some M&A disputes are made public by means of limited press coverage, publication of summaries of arbitral awards,2 or when the disputes are taken to the courts for provisional or urgent measures prior to the constitution of an arbitral tribunal or enforcement proceedings of arbitral awards.

Certain Brazilian courts have consistently ruled that they are not bound to the confidentiality agreed upon by the parties or provided for by the procedural rules of the arbitral institution.3

Further, in early 2021, the Brazilian securities and exchange commission (CVM) issued a public hearing notice4 aimed at amending the rules for disclosure of corporate and securities disputes. According to the proposal, publicly held companies would have to disclose certain information regarding judicial or arbitration proceedings involving the company, and its controlling shareholders, officers or directors that are related to diffuse, collective or individual homogeneous rights or interests, or in which a decision may affect the legal sphere of the company or other stakeholders who are not part of the proceedings. As an example, the proposal mentions lawsuits for annulment of corporate resolutions and action for civil liability against officers, directors and controlling shareholders. The proposal is currently under debate within the CVM and has yet to become a finalised rule.

A minority of M&A disputes that are not subject to arbitration agreements are occasionally taken to Brazilian courts for judgments on the merits (and not just for provisional or urgent measures prior to the constitution of the arbitral tribunal or enforcement proceedings of arbitral awards). When this is the case, most disputes are filed with the courts of São Paulo, where most Brazilian companies are headquartered, and which can be chosen by the parties as the appropriate venue for disputes arising out of an agreement or the company's by-laws.

Since 2017, the state of São Paulo (whose GDP represents nearly one-third of the GDP of Brazil) has created four trial courts that specialise in disputes related to corporate and arbitration matters,5 and, since 2011, the same state has two courts of appeal dedicated exclusively to business law.6 Other states have also implemented specialised courts that deal with corporate disputes, including Rio de Janeiro, Minas Gerais and Rio Grande do Sul.7 There is a debate among legal practitioners as to whether specialised courts could be a viable alternative to arbitration for M&A and securities litigation involving publicly traded companies, because arbitral proceedings are often subject to confidentiality provisions and were not initially designed to deal with multi-party and collective disputes.

Legal and regulatory background

For historical reasons, Brazilian law is mainly based and inspired on civil law systems of European countries. For this reason, Brazilian law is mostly based on statutes, many of which are codified. The rules that generally apply to an M&A transaction governed by Brazilian law are those contained in the Brazilian Civil Code (Federal Law No. 10,406/2002), which include provisions on contract law and limited liability companies, and those in the Brazilian Corporations Act (Federal Law No. 6,404/1976).

On the other hand, M&A transactions in Brazil have been significantly influenced by common law practices. The structure of a share purchase agreement drafted in Brazil and governed by Brazilian law is akin to the structure of a share purchase agreement drafted by an English or American lawyer and governed by a foreign law, including provisions on representations and warranties, covenants, pre-closing conditions, indemnification, price adjustment and earn-out, material adverse change clauses and the boiler plate provisions that one expects to find in an Anglo-Saxon agreement.

If an M&A transaction involves publicly held companies and investment funds, some provisions of the Brazilian Capital Markets Act (Federal Law No. 6,404/1976) may also apply, as well as the rules issued by the CVM.

This regulatory background may be enforced by arbitral tribunals or courts, as well as by the CVM in cases involving publicly held companies and investment funds. Other governmental bodies such as the antitrust authority (CADE) and other industry-specific agencies may also intervene and play a significant role in M&A transactions involving regulated sectors such as banking and finance, insurance, telecommunications, energy, oil and gas, and aviation.

Shareholder claims

Some M&A transactions may give rise to disputes involving shareholders that are not necessarily positioned as buyer or seller, but rather minority shareholders of a company that may have a claim against officers, directors or the controlling shareholder. However, except for a few examples that occasionally hit the news and according to a report issued in October 2019 by a working group composed of members of the CVM, the Organisation for Economic Co-operation and Development and the Ministry of Economy, it is 'still relatively uncommon to see minority shareholders filing lawsuits or arbitral claims in order to seek redress from managers or controlling shareholders'.8

i Common claims and procedure

There are virtually no significant non-confidential precedents on claims raised by shareholders in the context of M&A transactions. The main claims that can be asserted by shareholders in the context of an M&A transaction in Brazil include the following:

  1. claims related to a breach of the company's by-laws;
  2. shareholders' agreements or legal provisions that have occurred in the context of an M&A transaction; and
  3. claims against officers, directors and controlling shareholders for damage suffered by the company or directly by the shareholders in the context of an M&A transaction.

Minority shareholders may have a claim in the context of an M&A transaction involving a capital increase or corporate reorganisation that results in unjustified dilution, or if the transaction is contrary to lock-up provisions, pre-emptive rights, rights of first refusal or first offer, as well as tag-along and drag-along rights established in the company's by-laws, shareholders' agreement or by law.

The procedure varies according to each type of dispute. As described above, the dispute may be subject to an arbitration agreement or, alternatively, may be filed with any state court having jurisdiction over the dispute.

In the case of claims asserted by shareholders against officers and directors for breach of their fiduciary duties, in violation of the company's by-laws or as a result of negligence or wilful misconduct, the Corporations Act provides for both derivative and direct actions.

A shareholder or group of shareholders may file a derivative action against officers or directors for compensation for damage suffered by the company. The filing of a lawsuit against officers and directors requires the approval of the shareholders in a shareholders' meeting. If approved, the company shall file the lawsuit or the request for arbitration within three months. If the company fails to do so, any shareholder is entitled to take such initiative on behalf of the company. However, if the decision to file a lawsuit is not approved at the shareholders' meeting, the shareholder or group of shareholders owning a minimum percentage of shares issued by the company have a standing to sue the officers or directors on behalf of the company in a derivative lawsuit.

The Corporations Act provides that shareholders owning shares corresponding to at least 5 per cent of the company's outstanding shares are entitled to file a lawsuit on behalf of the company. However, in June 2020, the CVM issued a new rule (Normative Instruction No. 627/2020) that establishes minimum percentages from 5 to 1 per cent, depending on the company's total capital stock. This rule applies exclusively to publicly held companies, as per the table below.

Publicly held company's total capital stock (in reais)Minimum share ownership (% of outstanding shares)
From zero to 100 million5
From 100,000,001 to 1 billion4
From 1,000,000,001 to 5 billion3
From 5,000,000,001 to 10 billion2
Above 10 billion1

Besides the derivative lawsuit that shareholders may file on behalf of the company, any shareholder may file a direct action against officers and directors for direct damage suffered by themselves, as per Article 159, Paragraph 7 of the Corporations Act. The Superior Court of Justice has ruled that a devaluation of the company's shares does not amount to a direct damage to the shareholder, but rather a direct damage to the company, and therefore the shareholder is not entitled to compensation.9 However, a recent and unprecedented arbitral award deviated from such understanding by finding that Petrobras was liable for direct damage caused to its shareholders as a consequence of corruption scandals and misleading information that inflated its share price and caused losses once they were uncovered. Petrobras filed a motion to vacate the arbitral award at the courts of Rio de Janeiro and the award was partially overturned, but the decision is still subject to appeal and the proceedings are under seal.10

The direct action does not depend on the ownership of a minimum percentage of shares. According to the same provision, third parties that are not shareholders may also have standing to sue officers and directors for direct damage inflicted on them.

Similarly, the Corporations Act expressly provides for derivative and direct actions against controlling shareholders for abuse of controlling power.

The derivative action filed by shareholders on behalf of the company against the controlling shareholder is also subject to the above-mentioned minimum percentage of 5 per cent (with the same reductions that have been recently enacted by the CVM in the case of publicly held companies). However, any shareholder, regardless of how many shares it holds, may also file a claim on behalf of the company against the controlling shareholder, provided that it offers a security for costs and lawyers' fees in advance. This is aimed at preventing strike suits and frivolous litigation by minority shareholders.

If a shareholder or group of shareholders is successful in a derivative claim against the controlling shareholders for damage caused to the company, the Corporations Act provides that, on top of the damages paid to the company, the controlling shareholder must pay a bonus of 5 per cent of such damages to the shareholder who filed the claim and a bonus of 20 per cent to the lawyer who represented the plaintiff shareholder in court or arbitration.

This incentive for shareholder activism, however, has recently caused disputes among the shareholders themselves. In 2018, two groups of minority shareholders filed lawsuits against the controlling shareholder of a large Brazilian conglomerate claiming billions of reais in damages due to alleged unlawful acts investigated by Operation Car Wash, a major investigation by Brazilian prosecutors of white-collar crimes with impacts on the politics and economy of Brazil and other Latin American countries. However, the minority shareholders also engaged in a parallel dispute to determine which of them should be considered the plaintiff for the purpose of receiving the percentage bonus.

The Corporations Act contains specific provisions that may apply in the case of a breach of a shareholders' agreement. Article 118 of the Corporations Act sets forth that shareholders' agreements regulating the purchase and sale of shares, preference to acquire shares, exercise of voting rights and exercise of corporate control are binding not only in relation to the signatory parties, but also the company and its officers and directors, provided that it is duly filed at the company's head office. The same provision sets forth that a shareholders' agreement is enforceable against third parties when duly entered in the register books and on the share certificates, as applicable.

Finally, when an M&A transaction is subject to approval by the shareholders' meeting or by the board of directors, shareholders may also assert claims related to the validity of decisions taken at these meetings when they have been invalidly called or installed, or if the votes were cast in conflict of interests or contrary to a shareholders' agreement provision.

 

ii Remedies

Depending on the nature of the dispute involving an M&A transaction, the shareholder may be entitled to different kinds of remedies.

First, as a general principle of Brazilian law and regardless of the subject matter of the dispute, any individual has the right to seek injunctive relief aimed at preventing an imminent loss or preserving the successful outcome of a lawsuit. This right is subject to two requirements: likelihood of success on the merits of the claim and risk of irreparable harm.

At the early stages of M&A disputes, parties often battle for court injunctions seeking to prevent or complete a transaction or to stay its effects. As a general rule, courts are not allowed to modify the terms of the deal, but only to review its validity and effects. On the other hand, if an M&A transaction is subject to prior approval by the antitrust authority, the antitrust authority may request the modification of certain terms of the deal and disposal of assets to comply with antitrust regulations.

Claims against officers and directors, either asserted by means of derivative or direct actions, are generally aimed at compensation for damage, as per Article 159 of the Corporations Act.

As to claims grounded on rights provided for in shareholders' agreements, the Brazilian law on contractual liability allows the aggrieved party to seek specific performance, without prejudice to compensation for damage. Specific performance as the chief remedy for breach of contract is reinforced in cases involving a shareholders' agreement, because Article 118 of the Corporations Act expressly provides that 'subject to the terms of the agreement, shareholders may seek specific performance of the obligations undertaken therein'.

Hence, shareholders may seek equitable relief for breaches of shareholders' agreements, such as the annulment of an M&A transaction that is contrary to its provisions. If specific performance is found to be impossible or unfeasible in light of the actual circumstances of the case, it may be converted into compensation for damage, which may include actual damage and loss of profits (unless excluded by the parties).

Certain shareholders' rights may be affected by the structure of an M&A transaction, particularly those involving corporate reorganisations such as mergers, amalgamations and spin-offs. In such cases, shareholders that are not directly involved in the transaction may challenge the exchange rate of shares of the corporation being merged, amalgamated or spun-off for shares in the surviving entity. Another alternative for dissenting shareholders in privately held companies and certain publicly held companies is to exercise the right of withdrawal, in which case they may challenge the amount to be paid in exchange for their shares.

Finally, certain M&A transactions involving publicly held companies (in particular, transactions involving tender offers) may be subject to approval by the CVM, and the CVM has the power and authority to impose penalties and fines in cases of violation of the applicable laws. For this reason, publicly traded corporations subject to a transfer of control or other M&A activity could be party to punitive administrative proceedings undertaken by the CVM.

iii Defences

The internationally well-known business judgement rule is recognised by Brazilian law and enshrined within Article 159, Paragraph 6 of the Corporations Act. It is usually raised as a defence by officers and directors to prevent liability for the adverse consequences of their business decisions, provided that they acted in good faith, in accordance with their fiduciary duties and with the goal to fulfil the greater corporate interests.

iv Advisers and third parties

Although shareholders may bring claims against third-party advisers that assist in M&A transactions, in practice this is not common. Third-party advisers such as lawyers and consultants have a duty of care regarding their work. They are bound to act diligently and apply their technical skills properly, but they cannot be held liable if they fail to reach the intended outcome.

However, when third-party advisers fail to act with the required diligence, the aggrieved party will most likely be the company. The shareholders do not have standing to sue a third party for damage caused to the company, even by means of derivative action, which is only allowed against officers, directors and controlling shareholders. Nevertheless, if a shareholder suffers direct damage that can be attributable to a third-party adviser, such shareholder will be entitled to claim damages on its own behalf, based on general principles of tortious liability.

v Class and collective actions

Brazilian law allows class and collective actions in specific cases and subject to certain requirements, usually in relation to diffuse and collective rights.

The way class and collective actions work in Brazil is different than other jurisdictions. For example, only a few entities have standing to sue for such claims, namely, the federal government, states and municipalities, state owned companies, foundations and mixed capital corporations, the public prosecutor's office, the public defender's office and associations that have been incorporated for at least one year and whose institutional goals include the protection of rights that are the subject matter of the class action.

In theory, it is possible to have a class or collective action in the context of an M&A transaction. The legal framework includes Federal Law No. 7,347/1985, which applies to class actions in general, and Federal Law No. 7,913/89, which applies specifically to securities class actions, defined as those related to damage caused to investors in the capital markets.

Enforcement

Although Federal Law No. 7,913/89 has been in force for over 30 years, class and collective litigation related to securities and M&A litigation has been used sporadically. Most disputes are initiated by individual or small groups of shareholders and submitted to confidential arbitration.

According to a study published in October 2019, only 11 shareholder-related collective actions had been filed by 2018,11 usually related to breach of duty to disclose and unrelated to M&A transactions.

Potential explanations range from possible lack of shareholder activism when compared to other jurisdictions. and to the public prosecutor's office's limited resources compared to its broad constitutional mandate.

In any event, decisions rendered in class actions are not limited to the individual interests of shareholders or companies that are part of the proceedings; they are rather aimed at protecting the regular functioning of the economy and the capital markets. The effects of a decision may benefit shareholders that have not participated in the proceedings but can join the procedure at a later stage to have their damage quantified and indemnified.

vi Insurance and indemnification

Because of Operation Car Wash, the demand for directors' and officers' liability (D&O) insurance has significantly increased. Consequently, the Superintendence of Private Insurance, the governmental authority responsible for the supervision and control of the insurance, open private pension funds and capitalisation markets in Brazil, regulated the minimum requirements for the underwriting of D&O policies (Normative Instruction No. 553/2017).

Brazilian D&O policies mainly cover:

  1. officers' and directors' losses arising from lawsuits relating to allegations of wrongful acts;
  2. companies' losses due to wrongful acts of officers or directors; and
  3. companies' losses related to claims filed with the CVM, including the payment of penalties.

In relation to M&A transactions, insurance companies began offering insurance for representations and warranties in 2014, and there was an increase of 30 per cent in the number of issued policies for this type of insurance in 2018 when compared to 2017. In addition, in June 2020, insurance companies in Brazil issued the first policy replacing an escrow account. Reportedly, this type of insurance could potentially unlock up to 60 billion reais currently held in escrow accounts.

Indemnification agreements and provisions for the benefit of officers and directors may be entered into and have been recognised by the CVM as generally valid, so long as certain limits apply.

vii Settlement

Parties to an M&A dispute may settle their dispute at state courts or arbitral tribunals, in which case the settlement can be approved (homologated) and will have the same effects as a judicial decision. Alternatively, the parties may reach an out-of-court settlement via amicable negotiation or mediation.

It is also possible to settle disputes with the CVM for breach of regulations. In this case, the dispute is settled by entering into a commitment term. As per Federal Law No. 6,385/76 and CVM Normative Instruction No. 390/01, commitment terms, in which parties pledge to provide relevant information regarding their business, as well as to fulfil certain obligations, may suspend the administrative inquiry that investigates unlawful acts performed by companies, its managers or controlling shareholders.

viii Other issues

There are some recent examples of securities class and collective actions in Brazil involving the stock drop of listed companies in the oil and gas, mining and insurance markets. However, these disputes are subject to confidential arbitration and are not related to an M&A transaction, but rather to alleged failures to comply with fiduciary duties, including the duties of disclosure.

Counterparty claims

Shareholders aside, the most common types of claims related to M&A transactions are those opposing buyers and sellers on each side of the dispute, with the target company supporting one or another side of the dispute, depending on who owns it.

i Common claims and procedure

The most common claims asserted by and against counterparties to an M&A transaction can be divided according to the different phases of the transaction. Brazilian law also expressly establishes a duty to act in good faith in every phase of a transaction, which may entail pre-contractual liability and post-contractual liability.

Prior to the signing of a share purchase agreement, the parties may start a dispute regarding breach of a non-disclosure agreement, breach of exclusivity, sudden termination of negotiations and breach of memoranda of understandings or letters of intent.

Between the signing and the closing of a transaction, the parties may have a dispute regarding breach of covenants, failure to fulfil pre-closing obligations, malicious interference in conditions precedent, hardship, materiality of adverse changes or effects and payment of break-up fees.

After the closing, the parties may assert claims against each other regarding breach of representations and warranties, duty to indemnify for post-closing liabilities, non-compete and non-solicitation provisions, purchase price adjustments and calculation of earn-out provisions.

ii Remedies

As previously mentioned, aggrieved parties may resort to specific performance or unilateral termination with cause, plus compensation for actual damage and loss of profits. Although the parties may agree on different termination mechanisms and limitations to damages or specific performance, the parties may not waive certain rights, such as compensation for damage arising out of fraud or wilful misconduct.

iii Defences

Besides other defences that generally apply to fend off liability (absence of unlawful act, absence of actual damage and absence of causality) and other arguments that may vary according to the circumstances of each case, the most common defences laid out by defendants in M&A litigation depends on whether they are on the selling or the buying side of the transaction.

Sellers may invoke that the buyer has failed to conduct proper due diligence or to comply with its own duty to investigate or to mitigate any damage that it may have suffered.

iv Arbitration

As mentioned in Section I, M&A litigation and arbitration are closely connected. The Arbitration Act was enacted in 1997 and during these past 24 years it has been widely adopted in M&A agreements. In 2001, the Corporations Act was amended to include, among other things, an express provision on arbitration as a method for resolving disputes between a company and its shareholders. In 2015, the Arbitration Act and the Corporations Act were amended to include an express provision that an arbitration agreement included in a company's by-laws is binding upon all the shareholders, regardless of their vote at the relevant shareholders' meeting that approved the inclusion of the arbitration agreement in the by-laws.

According to statistics published by major arbitral institutions in Brazil, most of the disputes submitted to arbitration are related to corporate matters. In 2020, 38 per cent of the arbitration proceedings initiated at the CIESP/FIESP Chamber of Conciliation, Mediation and Arbitration were related to corporate matters, while other commercial agreements and sales and services agreements ranked second and third (33 and 15 per cent, respectively). Similarly, the Centre for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada reported that 51 per cent of arbitration proceedings initiated in 2019 were connected to share purchase agreements, shareholders' agreements or similar corporate agreements, while arbitrations relating to sales and services agreements and construction agreements came second and third, representing 15 and 13 per cent of the caseload, respectively. The CAM B3 reported that 69 per cent of its ongoing caseload in 2019 related to corporate matters, while other general agreements came second with 22 per cent and construction third with 8 per cent.12

v Other issues

In Brazil, there are no wide discovery proceedings such as in the United States. However, the Brazilian Code of Civil Procedure enacted in 2015 included detailed provisions on proceedings allowing for early production of evidence prior to the filing of a specific claim, which is referred to as anticipated production of evidence. These proceedings are available when there is a risk that the production of evidence at a later stage may become impossible or overly burdensome, or when the production of evidence may prevent the filing of a lawsuit or facilitate settlement before a dispute arises.

Cross-border issues

As most of the M&A agreements in Brazil include arbitration clauses, cross-border issues concerning the disputes arising out of such agreements are usually related to international arbitration or to the recognition and enforcement of foreign arbitral awards.

Brazilian law does not distinguish domestic arbitration from international arbitration (except for the purposes of recognition and enforcement of foreign awards). The New York Convention was ratified and internalised by Decree No. 4,311/2002, and Brazil is a party to the Inter-American Convention on International Commercial Arbitration (internalised by Decree No. 1,902/1996).

As to the recognition and enforcement of foreign decisions rendered by state courts or arbitral tribunals, they are founded in the Brazilian Federal Constitution and regulated by international treaties and ordinary legislation. Pursuant to Article 105 of the Constitution, the Superior Court of Justice is the only competent court in the country to rule on the recognition and enforcement of foreign decisions. It does so by assessing compliance with formal requirements under Brazilian law, as well as by verifying whether a decision violates Brazilian public policy, but there is no room for reviewing the merits of decisions.

Some M&A agreements include foreign jurisdiction clauses. Since 2015, the Code of Civil Procedure has expressly provided that Brazilian courts do not have jurisdiction to hear and rule cases in which the parties to an international agreement have chosen an exclusive foreign jurisdiction and the defendant raises this argument in its defence.

As to the applicable law, Brazilian law does not expressly provide for party autonomy in relation to choice of law clauses and Brazil is not a party to the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters. Instead, Decree-Law No. 4,657/42, which is referred to as the Introductory Statute to the Norms of Brazilian Law (LINDB), as amended, expressly provides that agreements shall be governed by the law of the place in which they were executed. If the parties enter into an agreement by mail, for instance, the governing law shall be the law of the place where the proponent of the agreement is domiciled. Notwithstanding, the Superior Court of Justice has one recent precedent in which it recognised the validity of a choice of law clause established by the parties to an agreement and applied the laws of New York in relation to statutes of limitation.13 In any event, the application and enforcement of a foreign law by Brazilian courts (either by parties' autonomy or conflict of law rules) shall not violate national sovereignty, public policy and public morality, as per Article 17 of the LINDB.

Year in review

Brazilian practitioners have been experiencing a growing number of corporate litigation cases, but most of them are submitted to confidential arbitration and rarely come to light.

Outlook and conclusions

In 2019, Brazil enacted Federal Law No. 13,874/19, which is known as the Declaration of Economic Freedom Rights and marks a major move towards greater party autonomy. This Law amends various provisions of the Civil Code regarding the interpretation of parties' agreements. The new rules have not yet been sufficiently tested by the courts, but they may have an impact on contract interpretation and the effectiveness of entire agreement clauses and general rules of interpretation.

This new Law provides clearer rules regarding the liability of investors and administrators of investment funds, which may be an incentive for an increase in the number of investment funds and the importance of institutional investors in Brazil, which are usually more prone to shareholder activism than individual investors.

The proposed new rules for disclosure of securities disputes currently under debate at the CVM, if and when they become regulations, would increase the publicity of such disputes involving listed companies, with the potential of creating precedents that would shed more light on this matter.

Footnotes

1 Arthur Gonzalez Cronemberger Parente and Daniel Calhman de Miranda are partners and João Vicente Pereira de Assis is a senior associate at Mattos Filho Advogados.

2 In December 2018, the Câmara de Arbitragem do Mercado – CAM (Market Arbitration Chamber) began an important and pioneering initiative: the publication of the summary of arbitral awards resulting from proceedings administered by the institution. According to the CAM, the publication has two goals: to increase the level of transparency in arbitration; and to reflect the specialised understanding of the application of corporate law.

3 Article 189 of the Code of Civil Procedure enacted in 2015 provides that 'although procedural acts are public, lawsuits are prosecuted under a gag order when . . . they deal with arbitration, including the enforcement of arbitral decisions by means of a letter of request sent by the arbitral tribunal to the judiciary, provided the confidentiality stipulated in the arbitration proceedings is proven before the court'. However, this rule was considered contrary to the constitutional principle of procedural publicity by some courts, most notably the Courts of Corporate and Arbitration Related Disputes of São Paulo, which were created in 2017.

4 Public Hearing Notice SDM 01/2021, available at http://conteudo.cvm.gov.br/audiencias_publicas/ap_sdm/2021/sdm0121.html.

5 These courts were created by São Paulo Tribunal Resolution No. 763/2016. They analyse all cases related to business conflicts, including the ones involving corporate rights (Book II, Special Part of the Brazilian Civil Code), Brazilian Corporate Law, Industrial Property and Disloyal Competition (Law No. 9.279/1996), Franchising (Law No. 8,955/1994) and lawsuits derived from the Arbitration Act (Law No. 9.307/96).

6 Since 2011, São Paulo has two business law courts of appeal (resolution Nos. 538 and 558/2011).

7 Since 2011, the business courts of Minas Gerais have had specific jurisdiction to solve cases involving arbitration (Resolution No. 679/2011). According to the National Council of Justice, the tribunals of Brazil's 26 states have given jurisdiction to certain courts to deal with disputes derived from the Brazilian Arbitration Law. Data available at https://cnj.jusbrasil.com.br/noticias/228236456/corregedoria-divulga-lista-de-varasespecializadas-em-arbitragem.

8 CVM/OECD/ME (2019), 'Strengthening the enforcement of shareholders' rights' (interim report, October 2019), p. 4, available at www.cvm.gov.br/export/sites/cvm/menu/acesso_informacao/serieshistoricas/estudos/anexos/interim_report_strengthening_the_enforcement_of_shareholders_rights.pdf; see also OECD (2020), 'Private enforcement of shareholder rights: A comparison of selected jurisdictions and policy alternatives for Brazil”, available at http://www.oecd.org/corporate/shareholder-rights-brazil.htm.

9 STJ, REsp 1.741.678/SP, Rapporteur: Mn Ricardo Villas Boas Cueva, 12 June 2018. See also STJ, REsp 1.014.496/SC, Rapporteur Mn Nancy Andrighi, 4 March 2008.

10 Petrobras on motion to vacate partial award in arbitration, published on 21 July 2020, available at www.agenciapetrobras.com.br/Materia/ExibirMateria?p_materia=982915; and Petrobras on partial overturn of arbitral award, published on 11 November 2020, available at https://www.agenciapetrobras.com.br/Materia/ExibirMateria?p_materia=983160.

11 CVM/OECD/ME (2019), 'Strengthening the enforcement of shareholders' rights' (interim report, October 2019), p. 4, available at: www.cvm.gov.br/export/sites/cvm/menu/acesso_informacao/serieshistoricas/estudos/anexos/interim_report_strengthening_the_enforcement_of_shareholders_rights.pdf.

12 At the time of writing, the Centre for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada and the CAM B3 had not yet published similar statistics for 2020 or 2021.

13 REsp 1.280.218-MG.

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