Market Arbitration Chamber publishes four new resolutions that provide for arbitrations

In the first half of January 2024, the Brazilian Market Arbitration Chamber (“CAM”) published four new resolutions regarding arbitrations within its scope:

• CAM Resolution 01/2024, which provides for the new Conflict of Interest Verification Questionnaire, which arbitrators must fill out after being appointed to arbitrate in the CAM’s arbitrations¹.
• CAM Resolution 02/2024, which provides for the financing of third parties in arbitrations².
• CAM Resolution 03/2024, which provides for personal data protection in arbitrations³.
• CAM Resolution 04/2024, which provides for the CAM’s procedure regarding compliance with Annex I to Resolution No. 80/22 of the Brazilian Securities and Exchange Commission ⁴(“CVM”).

Below are the main topics of each resolution, which aim to guide both arbitrators and parties to arbitrations .

CAM Resolution 01/2024:

CAM Resolution 01/2024 (“Resolution 01”) updates the Conflict of Interest and Availability Questionnaire in order to guide arbitrators in filling it out, especially with regard to compliance with the duty to disclose facts and circumstances that can affect their independence, impartiality and availability.

Resolution 01 clarifies that the responses provided in the questionnaire in force until January 07, 2024, do not necessarily constitute a violation of the duty to disclose, nor do they authorize parties to challenge the arbitrator due to failure to submit information regarding the updated questionnaire, in force since January 08, 2024.

In addition, the resolution clarifies that the CAM’s Declaration of Impartiality and Independence remains unchanged.

Questionnaire changes

The resolution states that the facts and circumstances that can affect the arbitrator’s independence, impartiality and availability are those that concern both their personal and professional life.

In addition, the resolution recommends consulting the “Brazilian Arbitration Committee (CBAr) Guidelines for the arbitrator’s duty to disclose” [5]and the “IBA (International Bar Association) Guidelines on Conflicts of Interest in International Arbitration”⁶.

Resolution 01 also clarifies that any associative or professional relationships and other information that is public and easily accessible by the parties are not necessarily subject to disclosure.

It also establishes a three-year period as a parameter for potential disclosures by the arbitrator, without prejudice to the duty to disclose facts that can affect their impartiality and independence, even if they occurred prior to the established three-year period.

Lastly, the questionnaire includes in its introduction a few definitions and guidelines for its completion, not only by the arbitrator, but also by the parties. As an example, we cite the definitions of “Party”, “Administrator” and “Related Parties”.

It is worth highlighting that the parties must appoint any “Related Parties”, which entails controlling companies, subsidiaries, affiliates or those under common control or significant influence. They must also list the lawyers involved in the arbitrations, including any other lawyers who are members of the company, when filling out the questionnaire.

In short, the changes introduced by Resolution 01 have simplified the process for  parties and arbitrators.

CAM Resolution 02/2024:

CAM Resolution 02/2024 (“Resolution 02”) aims to address the omission in CAM’s Arbitration Regulations regarding third-party funding in arbitrations, since the existence of a third-party financier can raise doubts as to the arbitrator’s independence or impartiality, due to the potential relationship between the arbitrator and the third-party financier.

To this effect, as in RA 18/2016⁷ of the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (“CAM-CCBC”), in Articles 9.5, 9.6 and 97 of its Regulations, as well as in Resolution No. 6/2019⁸ of the Chamber of Conciliation, Mediation and Arbitration (“CIESP/FIESP”), Resolution 02 advises the arbitrators and the parties on how to address the existence of a third-party financier, and also establishes a procedure to be adopted by CAM’s Secretariat.

In particular, Resolution 02 introduces the definition of “third-party financier” and establishes the duty to disclose.

Given its importance, Art. 1 of Resolution 02, whose definition of “third-party investor” is similar to that provided for by the abovementioned CAM-CCBC RA 18/2016 and CIESP/FIESP Resolution No. 6/2019, is as follows:

Article 1. A third-party financier is any natural or legal person who is not a party to an arbitration, but who provides full or partial financial support to the parties in relation to the costs and expenses of the arbitration. In return, such third-party financier receives part or a percentage of the economic benefit obtained from an arbitration award or agreement  and has, as such, an economic interest in its outcome.

Sole paragraph. The definition of third-party financier can be extended to any natural or legal person who is not a party to the arbitration, but who holds any kind of interest in the outcome of the dispute, providing full or partial financial support to the parties in relation to the costs and expenses of the arbitration, even if there is no direct pecuniary consideration involved.

CAM Resolution 03/2024: 

In light of the General Personal Data Protection Law (Law No. 13,709/2018 – “LGPD”),   of Regulation (EU) 2016/679 of the European Parliament, and of the Council of April 27, 2016 (“GDPR”), the Market Arbitration Chamber enacted CAM Resolution 03/2024 (“Resolution 03”) to provide the parties, lawyers, arbitrators and other persons involved in the arbitration with transparency regarding the handling of personal data.

Resolution 03 also provides definitions for other terms, such as: “Personal Data”; “Sensitive Personal Data”, “Data Holder(s)”, “Data Handling”, “ Data Breach”, “Members”, and “Supervisory Authorities”, while adopting other definitions provided for by the LGPD.

The resolution clarifies that the handling of personal data of data holders located in the European Union must also comply with the provisions of the GDPR, and the CAM will act as a personal data controller, in compliance with the LGPD and the GDPR.

In addition, Resolution 03 provides for the duties of CAM and its “Members” as personal data controllers. The term “Members” refers to the parties, representatives and lawyers, arbitrators, administrative secretaries, witnesses, experts, technical assistants and any other individuals who are involved in the arbitrations managed by CAM.

Lastly, Resolution 03 establishes the individual and exclusive responsibility of the “Members” and CAM for the handling of personal data, as well as the direct compensation to CAM for any damages regarding the handling of personal data arising from fault or intent by the “Members”.

CAM Resolution 04/2024:

CVM Resolution No. 80/22 establishes that certain corporate requirements in which the issuer, shareholders or administrators are a party must be communicated to the CVM, under the terms and deadlines established in Annex I.

Accordingly, in order to: (i) contribute to the effectiveness of Annex I of Resolution No. 80/22; (ii) comply with its publication, development, and integrity requirements; and (iii) enhance the transparency of the capital market, CAM enacted Resolution No. 04/2024, which establishes in article 1 that:

“Litigating parties that are considered to be issuers of securities registered with the Brazilian Securities and Exchange Commission must, at the earliest opportunity, while submitting their statements in arbitrations involving corporate claims: (i) report on the application of Annex I to CVM Resolution No. 80/22 and; if applicable, (ii) provide evidence as to compliance with such in the arbitration records”.

Demarest’s Dispute Resolution team is available to provide any additional clarifications that may be necessary.

[1] Available at: https://www.camaradomercado.com.br/assets/pt-BR/2024.01.06-resolucao-cam-n_01_2024-publicacao-do-novo-questionario.pdf

[2] Available at: https://www.camaradomercado.com.br/assets/pt-BR/2024.01.06-resolucao-cam-n_02_2024-third-party-funding.pdf

[3] Available at: https://www.camaradomercado.com.br/assets/pt-BR/2024.01.06-resolucao-cam-n_03_2024-protecao-de-dados-pessoais.pdf

[4] Available at : https://www.camaradomercado.com.br/assets/pt-BR/2024.01.06-resolucao-cam-n_04-24-ICVM-80-VF.pdf

[5] Available at: https://cbar.org.br/site/wp-content/uploads/2023/09/diretrizes-do-cbar-sobre-o-dever-de-revelacao-doa-arbitroa.pdf

[6] Available at: https://www.ibanet.org/MediaHandler?id=EB37DA96-F98E-4746-A019-61841CE4054C

[7] Available at : https://ccbc.org.br/cam-ccbc-centro-arbitragem-mediacao/resolucao-de-disputas/resolucoes-administrativas/ra-18-2016-financiamento-de-terceiros-em-arbitragens-cam-ccbc/

[8] Available at : https://www.camaradearbitragemsp.com.br/pt/res/docs/Resolucao_n_6.2019.pdf