08/07/2026
The Brazilian Superior Court of Justice (“STJ”), in ruling on Special Appeal No. 2.195.061/SP, presided by Justice Ricardo Vilas Bôas Cueva, addressed a matter of vital importance to the soundness of arbitration proceedings: the limits of arbitral jurisdiction when faced with a new fact that alters the claim and the cause of action originally outlined in the Terms of Reference.
The case originates from an arbitral award rendered in an arbitration administered by the International Chamber of Commerce (“ICC”). After the Terms of Reference were formalized, the contracts that gave rise to the arbitration were terminated. Despite the stabilization effected by the Terms of Reference, the Arbitral Tribunal held that it had jurisdiction to rule on the claims for damages arising from the supervening event, ordering the party that terminated the contracts to pay the Termination Administration Fee and loss of profits.
The party that terminated the contracts filed a lawsuit for the annulment of the arbitral award, which was dismissed at the first instance and by the Court of Justice of the State of São Paulo. In the STJ, a majority opinion prevailed, holding that arbitration proceedings are characterized by their flexibility and are therefore incompatible with the strict rules governing the stabilization of claims in state court proceedings.
According to the STJ, although, as a general rule, the scope of arbitration proceedings is fixed upon the signing of the Terms of Reference, the subject matter of the dispute may be modified or expanded when the rules of the arbitral tribunal selected by the parties provide for such a possibility. This occurs in item 4 of Article 23 of the ICC Rules, which allows for the amendment of claims, even after the signature of the Terms of Reference, upon authorization by the arbitral tribunal – exactly what occurred in the case at hand.
Furthermore, the STJ emphasized the unique nature of arbitration proceedings with regard to the procedure for raising objections of nullity related to the arbitral tribunal’s jurisdiction, which, pursuant to Article 20 of the Brazilian Arbitration Act, must be asserted at the earliest opportunity. Thus, the party’s active participation in the examination of the disputed matter – without specific, immediate, and timely objection – amounts to procedural estoppel and tacit acceptance of the expansion of the scope of the dispute. Under these circumstances, the STJ upheld the dismissal of the request for annulment.
The decision highlights the Judiciary’s support for arbitration, reaffirming its commitment to the autonomy of the parties and to the continued functioning of the arbitration proceedings in the face of supervening events that affect the subject matter of the dispute.
The ruling reinforces the need for the parties and their counsel to act strategically and diligently throughout the arbitration, bearing in mind that silence or a generic statement may, depending on the circumstances, be interpreted as consent to broadening the scope of the dispute.
Ultimately, the ruling illustrates the importance of having arbitration proceedings conducted by experts who are familiar with their characteristics and with the procedural consequences of each action taken, further underscoring the importance of carefully selecting arbitrators.
The Dispute Resolution team at L.O. Baptista, a benchmark in arbitration, is available to provide specialized support to its clients on this matter.
Coauthored by: Silvia Rodrigues Pachikoski, Mariana Dias Sallowicz, José Victor Palazzi Zakia and Julia Guimarães Rossetto
