Collective arbitration is being established as a relevant instrument of access to justice. In Brazil, these forms of arbitration have become one of the most appropriate means to solve disputes of publicly traded companies (article 109, § 3, of Law 6.404/76).
In 2022, the Securities and Exchange Commission of Brazil (“CVM”) published Resolution n. 80, 2022, through which it regulated one of the most relevant topics when it comes to arbitrations involving publicly held companies: the disclosure of specifics regarding corporate disputes to the market.
However, despite the widespread use of arbitration as a dispute resolution method in the corporate environment, many of the premises that should guide the collective proceedings still need regulation, to ensure stability and legal certainty. In this scenario, on April 26 of this year, the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (“CAM-CCBC”) issued Complementary Rule 02/2023, which established the Corporate Arbitration Rules.
The requirements for the application of this new Regulation are (i) the arbitral award to be rendered is capable of affecting not only the parties that integrate the active and passive poles of the proceeding, but also the legal sphere of a corporation, limited liability company or association and, simultaneously those which the Regulation denominated as Affected Third Parties, i.e., partners, associates, shareholders, and administrators; (ii) the disputed legal nature submitted to arbitration requires a uniform decision for all affected parties; and (iii) that the by-laws or articles of association of the legal entity contain an arbitration clause, in which the parties have agreed that the arbitration will be administered by CAM-CCBC and subject to its Rules.
As an example, the new Rules will apply to arbitrations concerning (i) invalidity of shareholders’ meetings; (ii) total or partial dissolution, the (iii) liability of the controller, managers, or fiscal council members before the legal entity, its shareholders, partners or associates; (iv) liability of shareholders, partners or associates for the abusive exercise of the right to vote, among others.
The innovations brought by the Corporate Arbitration Regulation seek to remedy doubts identified by the arbitration practice regarding the administration and regulation of issues observed only in collective corporate arbitrations, such as (i) the form and manner of communication about the existence of the proceeding to interested third parties; (ii) the conditions under which interested third parties will be joining in the proceeding; and (iii) the disclosure of information relevant to the arbitration proceeding to interested third parties.
Once it is determined that the arbitration proceeding is subject to the application of the Corporate Arbitration Rules, the Presidency of CAM-CCBC shall determine that the Interested Third Parties must be notified, according to the draft notification that will be prepared and instructed by the Chamber’s Secretariat. However, sending the notification will be the responsibility of the party that initiated the arbitration proceeding, in which relevant rules about disclosure of material facts when applicable under the terms of the CVM resolutions must be respected.
For all purposes, the Interested Third Parties will be included in the arbitration as parties, even when it comes to the payment of procedural fees and arbitrators’ fees.
The Regulation also brings an important rule regarding the moment and effect of the admission of Interested Third Parties: the request for admission may be made at any time, however, the Interested Third Parties will be subject to all the acts already performed, which also includes the appointment and nomination of the arbitrators.
Finally, even those Interested Third Parties that do not take part in the arbitration may request that they be given access to all the records of the proceedings until the end of the procedure, obviously complying with confidentiality, when applicable.
With corporate disputes increasingly migrating to arbitration, which is the appropriate tool to deal with the procedural complexities involved in such cases, the Corporate Arbitration Regulation is certainly an important advancement in the sense of pacifying conflicts with legal security.
L.O. Baptista is available to assist its clients regarding the changes brought by the new Regulation, considering the specificities of each case.
