The Growth of ADR in Brazil

ADR has been gaining momentum in Brazil for many years, sparked in part by a rise in foreign investment, the export of capital abroad, and distinct public policy shifts.  The Brazilian Supreme Court affirmed the constitutionality of the Arbitration Act in 2001, and the country adopted the New York Convention in 2002. There have been several advances since, including the recognition and enforcement of foreign arbitration awards, the creation of court centers devoted to administering and incentivizing ADR, and the development of ADR programs in law schools.

Arbitration in particular is increasingly used as a substitute for Brazil’s historically slow and somewhat disjointed legal process.  Mediation so far is primarily employed in small claims areas, such as family and criminal cases, and has not yet gained momentum in commercial cases.  This is because federal law on mediation is still in development. However, there has been progress. The new Brazilian Civil Code of Procedure, likely to take effect in 2014, mandates that parties first try mediation in an attempt to resolve disputes. The Brazilian Senate has also appointed a commission to prepare a mediation bill for the country’s Congress, which will be another crucial step in moving mediation forward.

From what we can see, arbitration is relatively well established in Brazil.  However, the development of new laws on mediation, likely followed by slow implementation means that mediation may not be widely accepted there for several years.  The developments for ADR in Brazil are very positive — and as ADR gains acceptance, and Brazil sees the impact on the judicial efficiency as well as the economy, its use is likely to spread even more.