1/2/2020
Under Brazilian laws, there is a point in time in dispute proceedings beyond which pleadings can no longer be amended and adjudicators must respect such limits when making their decisions. This is why it is so important to know exactly what that point in time is, for both judicial disputes and arbitration proceedings.
When it comes to judicial lawsuits, the rule in the Code of Civil Procedure (section 329) is clear: Pleadings can be amended (i) until service of process, regardless of the defendant’s consent, or (ii) until the pretrial stage of the case, with the defendant’s consent. After that, no amendment can be made. The Arbitration Act (Law No. 9.307/96), however, makes no reference to such a limitation time for arbitration proceedings. Traditionally, it is understood that no amendment is to be made after the execution of the Term of Reference by the parties or, at the most, upon submission of the Initial Arguments.
However, the São Paulo State Court of Appeals (2nd Corporate Law Chamber)[1] has recently ruled that pleadings can be amended at a later stage in arbitration proceedings.
In the case in hand, plaintiff Unimed Paulistana Sociedade Cooperativa de Trabalho Médico had filed a suit to annul an arbitral award against defendant, Unimed de Santos Cooperativa de Trabalho Médico, under the allegation that the defendant added new pleadings during the proceedings – to which plaintiff had no opportunity to respond.
The São Paulo State Court of Appeals issued an unprecedented decision and did not rule for the annulment of the award, under the allegation that, in arbitration proceedings, unlike judicial proceedings, pleadings can be amended at a later stage – even after the execution of the Term of Reference –, provided that the principle of adversary system and the right to full defense are respected.
It remains to be seen what the position of other state courts and of the Brazilian superior courts will be in this respect.
[1] Civil Appeal No. 1117726-42.2018.8.26.0100, judged on 10/22/2019.
