31/10/2012
Economic efficiency marks the discussion about arbitration Autor: Revista Consultor Jurídico / Jomar Martins
In 2012, the monetary value involved in cases decided by way of arbitration in Brazil amounted to 2.3 billion reais (about 1 billion dollars). The economic efficiency of the tool was the focus of the discussions of the XI International Arbitration Congress, which gathered approximately 400 people in Porto Alegre between September 13 and 15. The Economic Analysis of Law, a theory also known as Law and Economics, gave the tone of the discussions.
For the adepts of Law and Economics, it is possible to analyze legal phenomena and juridical institutions through an economic perspective. The main authors in this line are Ronald Coase, an American economist, with his work “The Problem of Social Cost”, and judge Richard Posner, with “Economic Analysis of Law”—that became the “bible” of this school of thought.
“Brazil was stopped in time regarding arbitration, until the Supreme Federal Court, in December 2001, unlocked this practice, recognizing the constitutionality of Law 9.307/96”, said the former president of the court, Ellen Gracie, today vice-president of the Center for Arbitration of the Federation of Industries of the State of São Paulo (Fiesp/Ciesp).
Since then, a growing enthusiasm has been seen. Today, Brazil occupies the fourth place in the international arbitration ranking, only behind commercial powerhouses such as the United States, France and Germany. “This event is proof of this growth. Many young people, lawyers and professors have dedicated themselves to deepening the understanding of this topic, bringing arbitration up to international standard”, commemorated the Minister of the Supreme Federal Court.
Economy of evidence
The economic aspects of Law have influence even on the production of evidence in an arbitration process. “The production of evidence must be efficient, because it serves a purpose—it is not an end in itself. One may not call an endless number of witnesses, nor go around scheduling expert testimonies that will not contribute to the resolution of controversies. This makes the process exhausting, expensive and long”, cautioned lawyer Joaquim Muniz, president of the Arbitration Commission of the Brazilian Bar Association in Rio de Janeiro.
The practice of arbitration is a simple procedure compared to the rites of the state Justice. “In an arbitration process under the principles espoused by Law and Economics, we will move aside the Civil Procedure Code (CPC) and put in center stage the notions of business management, which are friendlier to making the process more agile than the legalistic scope, suggested Muniz.
The tools of modern management, also used by engineers, can help a great deal in controlling the length of the process and, even more, in defining the scope of the arbitration—with the aim of not losing focus. The secret is to anticipate all the steps, stage by stage, and to schedule the hearings in advance. Muniz says that incidents may happen, but the route is corrected during the process. “This will generate a commitment with deadlines that nowadays does not exist. This lack of commitment is due not to the arbiters, but to the lawyers.”
In terms of scope, Muniz does not defend rigidity in establishing the focus of the demand, but considers important for the arbiters to interfere, from time to time, to clarify the objectives of the arbitration process. The arbiters have to schedule a meeting with the parties and state clearly what they want from the resolution of the lawsuit, discarding the aspects that do not contribute to the case in focus. “This is important also for the lawyers, because if they do not know how the process of convincing the arbiters occurs, they will produce inefficient evidence”, he pondered. This waste of time and resources mines the rationality of the whole process.
“It doesn’t matter how many documents the party brings to the process. It is up to the judge to ask him to explain why the document is relevant to the resolution of the case”, complemented Yves Derains, arbiter and lawyer based in Paris and member of the Board of the International Council for Commercial Arbitration (ICCA).
When dealing with contenders of diametrically opposed profiles—one very large, the other small—the judge cannot get intimidated, recommended Yves. It is enough to look at the case, rather than at the parties in isolation. The problem is not the situation of each party, but the case itself. Also in this particular, the judge can annul the imbalance of power by defining correctly the elements of evidence—and these have to be the same for both litigants.
Sometimes, a party wants to produce evidence, and the arbiter does not allow it, because he understands that it will lead nowhere. Another situation is when the court of law itself wants to produce evidence, but the parties refuse to authorize it, because of the cost. In these situations, according to São Paulo lawyer Marcelo Muriel, the arbiter must make his authority count: imposing limits and orientating about the arbitration procedures. “He cannot let it run loose”, advised Muriel.
For Muriel, the court of law has the duty of conducting the procedure in an efficient and cost effective way for the parties involved, given the interest in ending the whole procedure as soon as possible. And arbiters have the obligation, according to the Arbitration Law, of taking the necessary steps to successfully complete their work. The panel had the presence of Fernando Mantilla-Serrano, lawyer and arbiter in Paris.
