Special Appeal No. 1.818.982/MS
By unanimous decision, the Third Panel of the Superior Court of Justice (STJ), in the Special Appeal No. 1.818.982/MS, upheld a decision rendered by Mato Grosso do Sul State Court of Appeals (TJMS), which recognized as valid an arbitral award issued on the basis of an arbitration agreement that was not signed by one of the parties.
The special appeal sought to declare the arbitral award null and void, on the grounds that the document entitled "Confirmation of Transaction"—which contained an arbitration clause for the resolution of disputes arising out of the contract—was not signed by one of the parties, the appellee. During the course of the proceedings for enforcement of arbitral award, the appellant filed a motion claiming that the arbitral award was null and void as it was rendered by an arbitral tribunal without jurisdiction.
In the present case, the parties had first entered into a purchase and sale agreement, signed both by the appellant and the appellee, which contained a choice of forum clause electing the court of the district of Costa Rica, in the state of Mato Grosso do Sul, as the competent court for settling any disputes arising from the contract. However, later on the same day, the parties concluded a standalone document entitled, "Confirmation of Transaction," concerning the same legal transaction, i.e., the purchase and sale agreement. The "Confirmation of Transaction," signed only by the appellant, provided for, among other issues, that all disputes regarding the "present contract" should be submitted to an arbitral tribunal.
According to the STJ decision, "it is indisputable that the second document refers to the confirmation of the purchase and sale transaction." Therefore, as it is a confirmatory document irrevocably and irreversibly providing for the submission of disputes to arbitration, the arbitration clause is binding on the parties and must be respected. In this decision, the STJ seems to have adopted a chronologic criteria for resolving the "conflict of choice." Since the parties expressed their choice to submit any dispute to arbitration after expressing their choice to refer their disputes to state courts, the STJ ruled that the choice for arbitration must prevail.
The fact that the appellee had not signed the "Confirmation of Transaction" was not considered a cause of nullity of the arbitral award for three main reasons. First, because the document had been signed by the appellant (the debtor). Second, due to the fact that the document containing the arbitration clause provided for a place for the appellee to sign it. Finally, the appellee's consent to arbitration was clear, since it was the appellee itself that initiated the arbitration proceedings. Hence, the STJ confirmed the understanding regarding the possibility of determining consent to arbitration through the party's behavior. Moreover, by doing so, the STJ confirmed its position expressed in previous rulings, pursuant to which the requirement of the Arbitration Law that the arbitration clause be in writing does not require it to be signed. The STJ could also have based its decision on the fact that the appellee had expressly agreed to the arbitration when it signed the terms of reference, as provided for in the rules applicable to the procedure.
Finally, the decision emphasized that pursuant to the principle of Kompetenz-Kompetenz, it is for the arbitrators to decide matters arising from the contract, including issues related to the existence, validity and effectiveness of the arbitration clause. Thus, in case of uncertainty as to the existence of consent to arbitration, "such matter should be settled by the arbitrator, and it is not for the party to attempt to do so before the state court."
For more information about the topics raised in this Legal Update, please contact our Litigation & Arbitration team.