Maritime Arbitration and an Overview on the Brazilian legal framework related to alternative dispute resolution methods

Abstract

Brazil is the largest economy in Latin America, with a population of more than 209.300.000 people and a territory of 8.515.767,049 km2, which makes the country an important player in the international trade scenario. Being Brazil a major exporter of commodities, a strong importer of goods and with a vast coastline of 8,500 km of navigable waters, the Brazilian shipping industry plays an important role in the country’s developing economy. In fact, the ports are the country’s main gate, through which approximately 95% of the foreign trade is made. In the past decades, the offshore sector of Brazil’s maritime industry played an important role considering the discoveries of oil and gas in the pre-salt layer, contributing to a significant development on the country’s shipping industry. Following that, an economic crisis hit the oil sector, with impacts worldwide. In view of the above, the arising disputes involving maritime matters have increased, and the demand for experts in this field is growing in Brazil’s current scenario. However, if in one hand Brazil faces an increase of disputes involving maritime law, on the other hand the Brazilian judicial system remains extremely bureaucratic and time-consuming, as well as, in some occasions, not properly prepared to deal with the complex maritime matters under discussion. In addition, judicial disputes in Brazil are subject to high interest and indexation rates, which can add up to 18% per year on top of the amount under dispute, plus lawyer’s fees and eventual loss of suit expenses, which can reach 20% of the condemnation amount. In this scenario, alternative dispute resolution methods arise as an important alternative to encompass these demands, offering an efficient solution, rendered in a proper time, by experts and specialists of the maritime field.