Judicialization of arbitration

Vamilson José Costa

Even with the arbitration clause, the parties may seek the Judiciary in specific circumstances.

The choice of the arbitration institute as means to solve controversies has increased over the last few years and it is currently used in various areas – from civil construction to services related to technology of information – and by various parties – from the business man to the public entity. However, due to its own procedure and its legal limitations, in some situations arbitration may not offer the most adequate answer to the parties’ needs, leading them to seek the Judiciary.

The Arbitration Law, at the chapter that discusses urgent and injunctive relief, provides the possibility to seek the Judiciary, before the commencement of the arbitration, whenever there is the need to avoid irreparable damage to one of the parties, or even to ensure the useful result of the object involved in the arbitration. In these cases, the party may seek the Judiciary by means of injunction relief – provided that the probability of the right claimed is characterized. Once obtained the injunction relief, it is necessary to request the arbitration institution within 30 days, or the measure will perish, and the injunction relief granted shall be subject, yet, to the Arbitration Tribunal’s appreciation, which may confirm it or not.

Another hypothesis of judicialization of arbitration is in cases when the arbitration clause is “empty”. The situation occurs when the terms of the arbitration clause are not enough for the interested party to immediately commence the arbitration procedure, once said clause lacks requisites that are essential to the commencement of the arbitration – such as if the clause does not provide the quantity of arbitrators, the way they shall be elected or the location of the arbitration, among other details. In these cases, the Arbitration Law provides that the party shall seek the Judiciary so that it can fill the existing gaps, seeking jurisdictional relief in order to set the arbitration clause in a hearing called for said specific purpose.

Moreover, once the Judiciary has exclusive powers to coerce, it can enforce the arbitration award when the losing party is not willing to do it voluntarily. The Judiciary may even determine punitive measures with the purpose to ensure the arbitration award. Accordingly and as an example, the Arbitration Tribunal does not have powers and shall not enforce the payment of a debt instrument, even if derives of its own decision – after all, the Judiciary has exclusive powers to do so.

Finally, the Judiciary has exclusive powers to control the legality, both relating to the arbitration clause agreed upon and to the arbitration procedure put in place. If the party understands that the arbitration clause or arbitration award does not comply with the law, it can seek the Judiciary on such matter – and the Judiciary has the power to declare its nullity.