Brazil / 17 May 2006 / Brazil, Superior Tribunal de Justiça (Superior Court of Justice) / Oleaginosa Moreno Hermanos Sociedad Anónima Comercial Industrial Financeira Imobiliaria y Agropecuaria (Argentina) v Moinho Paulista Ltd (Brazil) / SEC 866
| Country | Brazil |
| Court | Brazil, Superior Tribunal de Justiça (Superior Court of Justice) |
| Date | 17 May 2006 |
| Parties | Oleaginosa Moreno Hermanos Sociedad Anónima Comercial Industrial Financeira Imobiliaria y Agropecuaria (Argentina) v Moinho Paulista Ltd (Brazil) |
| Case number | SEC 866 |
| Applicable NYC Provisions | II | II(2) |
| Source |
http://www.stj.jus.br (Official Website of the Superior Tribunal de Justiça) |
| Languages | Portuguese |
| Summary | Oleaginosa Moreno Hermanos Sociedad Anónima Comercial Industrial Financeira Imobiliaria y Agropecuaria (Oleaginosa) and Moinho Paulista Ltda. (Moinho Paulista) concluded 4 contracts orally for the purchase and sale of cotton. Each party was represented by different third parties when executing the contract. Oleaginosa sent confirmation telexes containing a clause providing for arbitration under the Grain and Feed Trade Association (GAFTA). Following a dispute concerning breach of the contracts, a GAFTA arbitral tribunal rendered an award in the United Kingdom in favour of Oleaginosa, which was confirmed in appellate GAFTA proceedings. Oleaginosa sought recognition and enforcement (“homologação”) of the award before the Superior Tribunal de Justiça (Superior Court of Justice). Moinho Paulista opposed recognition and enforcement on three different grounds: (i) there were no valid contracts since the third-party who represented Moinho Paulista had no authority to conclude contracts without Moinho Paulista subsequently ratifying its acceptance in writing; (ii) the arbitral tribunal had no jurisdiction because there was no arbitration agreement in writing; and (iii) Moinho Paulista’s presence in the proceedings did not show consent to the arbitration since it had raised objections to the Tribunal’s jurisdiction. The Superior Tribunal de Justiça denied the request for recognition and enforcement of the arbitral award. It quoted from Articles 38 and 39 of the Brazilian Arbitration Act (which mirrors Article V(1)(2) NYC), and held that based on these articles the review of the arbitral award could not be based on the merits of the dispute. Subsequently, it considered that the first objection concerning the validity of the contracts pertained to the merits, and could thus not be reviewed. Concerning the second objection related to the existence of a valid arbitration agreement, the Superior Tribunal de Justiça found that the Brazilian Arbitration Act (the Arbitration Act) required that the arbitration agreement shall be in writing or that it could be inserted in a document referring to it. It also analyzed Article II(2) NYC to determine that the parties could have agreed to a valid arbitration agreement through an exchange of letters or telegrams. However, it considered that there was no evidence that Moinho Paulista agreed to the arbitration agreement included in the telexes because there was no signature or any other form of consent to the arbitration agreement. The Superior Tribunal de Justiça concluded that the recognition and enforcement of the award would violate Brazilian public policy because the recognition of an arbitral award is predicated upon the existence of an arbitration agreement pursuant to Article 37(II) of the Arbitration Act (which mirrors Article IV(1)(b) NYC). The Superior Tribunal de Justiça also noted that the participation of Moinho Paulista in the arbitral proceedings would have demonstrated consent to the arbitration agreement had it not raised objections to the validity of the arbitration agreement. |
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Attachment (1)
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