Appointing Arbitrators In Multiparty And Class Arbitration In Brazil

• Published date: 10 June 2021
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Fonseca E Salles Lima
• Author: Mr Rodrigo Garcia da Fonseca and Luiza Bretz

The appointment of the arbitrators and the constitution of the Arbitral Tribunal are an extremely important stage of any arbitration. As the saying goes, arbitration is only as good as the arbitrators.

In performing his/her duty, the arbitrator shall proceed with impartiality, independence, competence, diligence and discretion, as set forth in art. 13, paragraph 6, of the Brazilian Arbitration Act of 1996 (Law n. 9.307). Art. 14 of the Brazilian Arbitration Act establishes that individuals that have relevant connections with the parties or that may have an interest in the dispute are prevented from serving as arbitrators (to the extent that it may be applicable, for the same reasons and relationships that characterize the impediment or suspicion of judges, as per the Brazilian Code of Civil Procedure).

Therefore, the appointment and the constitution of the Arbitral Tribunal must be carried out in a clear and straightforward way, in order to appoint competent, impartial and independent arbitrators. The lack of impartiality or independence of the arbitrators may lead to the award being later set aside in the courts, in accordance with art. 32, II, of the Brazilian Arbitration Act.

In ordinary cases, claimant appoints one coarbitrator, respondent appoints the other coarbitrator, and either the two coarbitrators or the institution choose the President of the Arbitral Tribunal. If the case is to be handled by a sole arbitrator, either the parties agree on a name, or the appointment is made by the institution. It is a simple and fair process.

However, the constitution of the Arbitral Tribunal in a multiparty arbitration may be more complicated, as several claimants or respondents may not be able to agree on who to jointly appoint. Therefore, institutions usually provide for special rules for the appointment of arbitrators in multiparty cases.

Art. 4.16 of the Arbitration and Mediation Center of the Chamber of Commerce Brazil-Canada's Arbitration Rules (CAM-CCBC Rules) establishes that "in arbitration cases with multiple parties as claimants and/or respondents, if there is no consensus regarding the appointment of an arbitrator by the parties, the President of the CAM-CCBC shall appoint all the members of the Arbitral Tribunal, designating one of them to act as President, with observance of the requirements of article 4.12 of these Rules".

Art. 12(8) of the Court of Arbitration of the International Chamber of Commerce's Arbitration Rules (ICC Rules) defines that...