Report: International Trade and Dispute Resolution. The Swedish and Brazilian Experience in Arbitration and Mediation
11 May 2015
Carolina da Rocha Morandi
Deputy Secretary General of AmCham Brazil Arbitration and Mediation Center
On 28 April, AmCham Brazil Arbitration and Mediation Center hosted, in cooperation with the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) and Swedcham, the Conference International Trade and Dispute Resolution. The Swedish and Brazilian experience in arbitration and mediation. The event took place at AmCham São Paulo and had the support of GAR and TDM-Ogemid, as media partners. About seventy people participated in the discussion involving the mechanisms of solving disputes arose from international trade.
Brazil - Sweden Relationship
The morning sessions focused on the commercial relationship between Brazil and Sweden and on the mechanisms chosen by both countries to solve disputes related to international trade transactions.
In the beginning of the day, one of the prominent points was the presence of the Swedish Ambassador to Brazil, Per-Arne Hjelmborn. The Ambassador highlighted the importance of facilitating and promoting free trade. He emphasized the growth of the relationship between both countries, since Brazil is the Swedish most important trading partner in Latin America. That partnership is strategic, comprising different areas, such as defense, climate change, political dialogue, trade investments, environment. In fact, the Swedish-Brazilian relationship started being built in late 19th century and, nowadays, there are around two hundred Swedish companies in Brazil (most of them in São Paulo).
Making a parallel with the topics of the conference, the Ambassador pointed out the role of legal stability and predictability in order to grow and build business. In this sense, arbitration is seen as an advantageous tool, as it has its well-recognized benefits: confidentiality, speed resolution and finality, privacy, flexibility and enforceability. He also highlighted the role of the SCC, founded in 1917, and recognized as one of the main international arbitration institutions.
Speaking on behalf of Swedcham and AmCham, Jonas Lindström (Managing Director of Swedcham) and Crina Baltag (Secretary General of AmCham Arbitration and Mediation Center), respectively, emphasized the growth of Brazilian-Swedish relation and the strategic role of choosing the suitable mechanism in solving international commercial disputes.
Solving an international dispute: options and choices
After the first impressions given by the Ambassador, Welber Barral, Barral M Jorge Consultores Associados (Brazil), former Brazilian Secretary of Foreign Trade, and Ulf Franke, Chairperson, SCC, opened the first panel of the event: International Trade and Dispute Resolution. Reflections on the Topic.
Ulf Franke explained that there are, basically, three main dispute resolution options: Arbitration, Mediation and Litigation. He summarized the main advantages of each mechanism and, as a practitioner in the arbitration field for forty years, concluded that the only viable method to settle an international commercial dispute is arbitration. To support his point of view, he mentioned several arbitration advantages, such as speed, privacy, expertise and possibility of agreeing the procedure's venue, language and law. He also emphasized the enforcement of the award. While a court decision is enforceable in the state where it was given (save applicable treaties), the arbitral award may be enforced in all the countries who signed the New York Convention. Besides this, Ulf Franke continued, the state may support arbitration and mediation by adopting specific legislation and offering the court assistance in this respect.
Following Ulf Franke's presentation, Welber Barral discussed the Brazilian approach to arbitration and international trade. He pointed out several mechanisms used by the country for solving disputes in international trade scenario: International Regional Courts (mainly Mercosul) and Trade Resolution System of the WTO (World Trade Organization), emphasizing that the Brazilian focus is the WTO system (Brazil is the developing country with the highest number of cases at WTO) and International Arbitration.
Another interesting topic developed by Barral concerned the Bilateral Investment Treaties (BITs). Brazil does not have any BITs in force. As a matter of fact, in 1990's some BITs were signed, but they were never approved by the Congress. One of the reasons for that was the provision contained in the BITs related to investment state arbitration (ISDS). In Brazil there is a strong prejudice against ISDS and there were even some discussions related to its constitutionality. Later, the example of Argentina and its ICSID cases further discouraged the implementation of BITs. Recently, however, this topic started being revisited, since Brazil signed two Trade Investment Facilitation Agreements with Angola and Mozambique. These agreements, nevertheless, are less specific and do not have ISDS provisions (only a State-State arbitration).
Institutional Arbitration and Mediation: the role of the Institutions in ADR
The second panel of the Conference treated the arbitration and mediation from an institutional perspective. Nina Berggren, Legal Counsel of Arbitration Institute of the SCC, presented the Arbitration Institute of SCC. She presented the history of the Institute, accompanied by some data and statistics, showing that the SCC is world-wide recognized as an important institution for international arbitration. She also brought up mediation and provoked the audience with some thoughts regarding the rare use of mediation in Sweden.
Crina Baltag, Secretary General of AmCham Brazil Arbitration and Mediation Center, began her presentation describing the Center's activities and statistics. She, however, dedicated her presentation to discuss the role of an institution while administering arbitration and/or mediation. She called the attention to the fact that, nowadays, arbitration is facing a judicialization, dissociating itself from its roots and principles, and start trigging a general sense of frustration on its users. Is it too overregulated? Has it incorporated many litigation tatics? Is it becoming expensing, too similar to litigation? In this sense, she highlighted the role of arbitration and mediation institutions in assuring these mechanisms' effectiveness. A step back is required. Institutions must remind the parties of the significance of arbitration and mediation and of the fact that they have been developed as an alternative to litigation.
Lessons from Corporate Counsel
The afternoon started with a very interesting panel: How to Handle International Trade Transactions and Disputes from a Corporate Perspective. Six in-house lawyers from multinational companies (Carmen Backsmann - Volkswagen Brazil; Carolina Azevedo - Ericsson; Christy Reckziegel Lopes - Pöyry; Daniel Esteves - Skanska Brazil; Ligia Neves - Camargo Corrêa and Rogério Zacchi R. da Silva - Sandvik) shared their experiences in the panel moderated by Alessandra Machado and Luis Peretti, lawyers at Trech, Rossi e Watanabe. The main points discussed concerned the importance of choosing the suitable mechanism of solving a dispute: which factors should be taken into consideration, the advantages and disadvantages of each mechanism, how to choose an arbitrator and a mediator. It was also discussed the role of the in-house counsel in assuring that arbitration and mediation are cost-effective alternatives to litigation.
Moreover, a very interesting contribution was made by Carolina Azevedo, Head of Legal Latin America for Ericsson, bringing a very interesting case of a successful mediation in one of Ericsson's cases. She explained briefly how it worked and said that, unfortunately, people tend only to believe it after experiencing it, but she could assure that her experience worked really well and now she is a supporter of commercial mediation. Mediation, according to her, allows a fast resolution of the problem, satisfactory for both parties and ends up being much cheaper and less time consuming.
Lawyer's point of view
The last panel, moderated by Renato Pacheco, Pacheco Neto, Sanden, Teisseire Advogados (Brazil) and Swedish Honorary Consul General in São Paulo, highlighted the main concerns of the lawyers when advising a multinational company with respect to arbitration and mediation. Kristoffer Sträth, partner at Törngren Magnell (Sweden), presented the general features of the mechanisms for solving international disputes, pointing out the pluses and minuses that should be taken into consideration when choosing these mechanisms. Kristoffer Sträth also discussed the cultural differences that have to be considered in international arbitration.
Eliana Baraldi, De Vivo, Whitaker e Castro Advogados (Brazil), talked about applicable law and iura novit curia, by comparing different jurisdictions. Other subjects, such as the advantages of institutional arbitration, tips while negotiating an arbitration clause and the steps to consider when advising the clients were also discussed by Fernando Serec, TozziniFreire Advogados (Brazil), Stefan Bessman, Baker & McKenzie (Sweden) and Rafael Gagliardi, Demarest Advogados (Brazil).
The closing remarks were given by Lauro Gama Jr., Binenbojm, Gama & Caravlho Britto Advogados (Brazil), President of the Brazilian Arbitration Committee (CBar). After interesting comments related to the presentations, Lauro Gama spoke of the future of arbitration and mediation in Brazil, considering the amendment of the Arbitration Law no. 9 307 of 1996 and the proposal of a Mediation Law.
ADR mechanisms, especially arbitration and mediation, are presented as suitable solutions for dispute resolution in international trade transactions. Sweden is recognized as an important seat of arbitration, especially due to the SCC. In Brazil, arbitration, although more recent, has emerged as a viable alternative for dispute settlement. Mediation in both countries is still developing. With the strengthening of the relations between Brazil and Sweden, it has become more and more important to find the best alternative to potential disputes. Conferences like this, then, represent an important step in this process.
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