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Duty to Disclose: Insights from Recent Brazilian Arbitration Case Law
Duty to Disclose: Insights from Recent Brazilian Arbitration Case Law
Introduction:
The duty to disclose plays a pivotal role in ensuring the impartiality and independence of arbitrators in Brazil. Recent jurisprudence, exemplified by a decision from Justice Humberto Martins of the Superior Court of Justice (STJ), sheds light on the complexities surrounding this duty, particularly concerning government attorneys acting as arbitrators. This article delves into the implications of this decision, examining the applicable regime for government attorneys in arbitration and the interplay between the duty to disclose and the parties' duty of curiosity.
The Duty of Arbitrators and Implications for Government Attorneys:
Under Brazilian law, arbitrators must disclose any circumstances that may cast doubt on their impartiality and independence. Failure to disclose such information may render an arbitral award null and void. The case before the STJ involved a government attorney who served as an arbitrator, raising questions about conflicts of interest and adherence to applicable regulations, including those governing government attorneys and public servants.
The Intersection of Regulatory Frameworks:
The involvement of government attorneys in arbitration raises unique considerations due to their status as public servants. Laws regulating the activities of government attorneys and public servants, alongside arbitration laws, create a complex web of obligations and potential conflicts. In the case at hand, the arbitrator's previous roles at a governmental entity tasked with overseeing pension funds added layers of complexity to the analysis of impartiality and independence.
Justice Humberto Martins' Decision and Its Implications:
Justice Humberto Martins' decision highlighted the need for robust disclosure practices among arbitrators, particularly in cases involving government attorneys. The decision emphasized the importance of transparency in maintaining public trust in arbitration proceedings. By issuing provisional measures suspending the effects of the arbitral award, the STJ signalled a commitment to upholding the integrity of arbitration in Brazil.
Parties' Duty of Curiosity:
While arbitrators bear the primary responsibility for disclosure, parties also must exercise curiosity and diligence in uncovering potential conflicts of interest. International best practices, such as those outlined in the IBA Guidelines, underscore the importance of parties' proactive investigation of relevant information. In the Brazilian context, where certain information may be publicly available or easily accessible, parties are expected to conduct thorough due diligence to ensure the integrity of the arbitration process.
Conclusion:
The recent decision by Justice Humberto Martins underscores the evolving landscape of arbitration law in Brazil. As the country seeks to align its practices with international standards, clarity and coherence in arbitration jurisprudence are paramount. Government attorneys acting as arbitrators must navigate a complex regulatory framework while upholding principles of impartiality and independence. Moving forward, adherence to robust disclosure practices and proactive diligence by parties will be essential in maintaining the integrity of arbitration proceedings in Brazil.
Written by: Trupti Shetty
Supervised by: Adv. Kalyan Khrishna Bandaru
- Under Brazilian law, arbitrators must disclose any circumstances that may cast doubt on their impartiality and independence.
- While arbitrators bear the primary responsibility for disclosure, parties also have a duty to exercise curiosity and diligence in uncovering potential conflicts of interest.
- Failure to disclose such information may render an arbitral award null and void.
