Brazil / 23 November 2006 / Brazil, Superior Tribunal de Justiça (Superior Court of Justice) / First Brands do Brasil Ltda. and STP do Brasil Ltda. v STP – Petroplus Produtos Automotivos S/A PPA and Petroplus Sul Comércio Exterior S/A PSC / SEC 611
Country | Brazil |
Court | Brazil, Superior Tribunal de Justiça (Superior Court of Justice) |
Date | 23 November 2006 |
Parties | First Brands do Brasil Ltda. and STP do Brasil Ltda. v STP – Petroplus Produtos Automotivos S/A PPA and Petroplus Sul Comércio Exterior S/A PSC |
Case number | SEC 611 |
Source |
http://www.stj.jus.br (Official Website of the Superior Tribunal de Justiça) |
Languages | Portuguese |
Summary | The parties entered into three joint venture agreements. A dispute arose and an arbitral award was rendered under the auspices of the International Chamber of Commerce (ICC) in Florida. First Brands do Brasil Ltda. (First Brands) and STP do Brasil Ltda. (STP Brasil) sought recognition and enforcement (“homologação”) before the Superior Tribunal de Justiça (Superior Court of Justice). STP – Petroplus Produtos Automotivos S/A PPA (STP Automotives) and Petroplus Sul Comércio Exterior S/A PSC (Petroplus) opposed recognition and enforcement of the award on the grounds that (i) the arbitration agreement was null and void because STP Automotives was misled as to the scope of the arbitration agreement; (ii) the arbitral award was beyond the scope of the arbitration agreement; (iii) the arbitral award violated national sovereignty, since an appeal to set aside the award was still pending and the arbitral tribunal failed to apply Brazilian law; and (iv) the arbitral award violated due process. The Superior Tribunal de Justiça granted recognition and enforcement of the foreign award based on the Brazilian Arbitration Act (the Arbitration Act). It held at the outset that the Claimants presented certified copies pursuant to Article 37 of the Arbitration Act (which mirrors Article IV NYC). The Superior Tribunal de Justiça noted that the Respondents’ arguments were based on Article 38 of the Arbitration Act (which mirrors Articles V(1) NYC). After expounding that Article 38 does not allow any review of the merits, it held that despite being based on Article 38, Respondents’ arguments were an attempt to review the merits. Concerning the scope of the arbitration agreement, it held that Respondents attempted to review a jurisdictional question that had been placed before the Tribunal, concerning the participation of a controlling company named Clorox. The Superior Tribunal de Justiça asserted that it could not review the parties’ standing before the arbitral tribunal as it would be equivalent to reviewing the merits. Regarding Respondents’ argument that the award was rendered in violation of national sovereignty, the Superior Tribunal de Justiça held that a pending action to set aside the award was not one of the grounds for denial of recognition and enforcement. There would only be a bar to the recognition and enforcement if there were a final decision by a Brazilian court on the same questions as addressed by the arbitral tribunal and such decision had become res judicata. All the other arguments were dismissed as pertaining to the merits. Lastly, the Superior Tribunal de Justiça held that there was no evidence to substantiate the allegation that the Respondents had not had an opportunity to present their defence. The Justice Rapporteur also held that the question of standing to initiate proceedings before the Brazilian courts to set aside the award, in accordance with Decree No. 4.311/2002 (which directly incorporates the NYC into Brazilian law and is a translation of the NYC), is a question to be addressed by the court where such proceedings are initiated. Justice Carlos Alberto Menezes Direito had a different view and stated that all the questions related to the nullity of the arbitral award should have been decided by the Superior Tribunal de Justiça. |
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Attachment (2)
Original Language Adobe Acrobat PDF |
Unofficial Translation Adobe Acrobat PDF |