10/31/2019
The BRICS – an association between Brazil, Russia, India, China and South Africa – held on October 2019 the 2019 Legal Forum, where an important step was made towards the creation of an arbitration center between all five BRICS countries. Taking advantage of the New Development Bank’s[1] (NBD) considerable momentum and with the purpose to concentrating contractual disputes involving the five BRICS countries, a BRICS arbitration center will be created.
With increased NDB investments and deeper relations between governments and companies – mostly related to complex infrastructure projects with high investments – it is only logical that the number of disputes between players tend to grow as well. This is why creating a dedicated BRICS arbitration center to settle any disputes arising from the projects that have been made possible by NBD investments makes perfect sense.
Even though the BRICS countries rely on the same source of arbitration rule – the 1985 UNCITRAL Model and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards –, the way arbitration is operated and organized within each country is different and varies accounting to local legal cultures.
The BRICS arbitration center will seek to level such legal and cultural differences by bringing together the local arbitration chambers designated by the Bar Association from each of the five BRICS countries. These arbitration chambers will create a body to lay down the arbitration rules that are to apply to the contracts and agreements involving the BRICS countries.
In Brazil, the Brazilian Bar Association (local acronym OAB) special commission is in charge of designing such a body that will draw up specific arbitration rules and compile a list of chambers and arbitrators that will be appointed to serve in BRICS-related disputes. The commission’s work will begin this year together with the launch of the NDB office in São Paulo.
In order to make the administration of disputes between the five countries possible, collaboration from the NDB will be needed. One of the options is to have in place a provision stating that arbitrations dealing with disputes related to contracts involving the NDB will be administered by the BRICS arbitration center. Although incipient, the BRICS arbitration center is expected to begin operating soon and gain a prominent position in the BRICS.
Having specific rules and dedicated arbitration chambers in place will make the settlement of dispute resolutions a faster procedure as well as will help the conduction of businesses and affairs between the countries. With an eye on this new reality, L.O. Baptista has expanded its activities to China with the purpose of serving both Brazilian companies wishing to do business in Asia and Chinese companies that wish to enter the Brazilian market.
[1] For more information on the BRICS Development Bank, please go to: https://www.ndb.int
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