Abstract

ABSTRACT: The Brazilian Arbitration Law (the BAL), in its art. 2, paragraph 1, refers to public policy as a limit, to which arbitrators must pay heed, on the free exercise of volition by the parties. In art. 39, II, the BAL cites public policy as grounds for rejection of an application for recognition of a foreign arbitral award by Brazilian courts (specifically the Superior Court of Justice - STJ). Public policy is therefore of major importance in arbitration but it is difficult to establish its limits and scope. The author of this paper therefore argues that the doctrine of public policy should be applied in three distinct levels, with the arbitrator/judge to decide on the relative weight of each level in accordance with the nature of the dispute in hand. The first part of this article seeks to define the concept of public policy and address its application to domestic and international arbitrations particularly those which apply foreign (i.e. non - Brazilian) law. The second part deals with public order in relation to the recognition of foreign arbitral awards, drawing on case law from the STJ on the issue.

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