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Arbitration and Foreign Jurisdiction Clauses in Contracts for the Maritime Transport of Goods in Brazilian Law

View profile for Luiz Roberto Leven Siano
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Maritime Lawyer, Member of Law Firm SMA, Master of International Law and Economic Integration from UERJ, Full Member of the International Maritime Committee - WCC, Guest Professor of Maritime Law, University of Southampton, United Kingdom.

Abstract: The new Brazilian Procedural Code adopted a Supreme Court ruling that arbitration clauses do not violate the right of access to Justice and brought new provisions about foreign forum choice clauses. The article analyses the current situation of such clauses in jurisprudence, especially when they are included in contracts of carriage of goods by sea, and how this new paradigm may impact them.

Keywords: Conflict of procedural laws; procedural law:- shipping law; arbitration clauses; foreign forum selection clauses; exclusive and concurrent jurisdiction; carriage of goods by sea contract; bill of lading; lex mercatoria ; separability; konpetenz-konpetenz ; subrogation; standard form contracts.

Summary: 1 Introduction: articles 3, § 1, 25 and 63 of CPC/2015; 2 Arbitration clause, forum-selection clause and choice of law clause; 3 Precedents prior to CPC/2015; 4 Considerations on carriage of goods by sea contract and standard form contracts; 5 The effects of subrogation; 6 Control of validity of clauses. The doctrine of separability. konpetenz-konpetenz Principle; 7 Conclusions.

Introduction: Articles 3, 1, 25 and 63 OF CPC/2015

CPC/2015 clarifies, in article 3, paragraph 1, that arbitration is allowed as provided by law, precisely in the normative provision whose head provision reflects the constitutional guarantee of the right of access to Justice stating that "any threat to or violation of rights shall be considered by the court", consolidating the position in the precedents of the Supreme Court x [1] on the constitutionality of articles 6, single paragraph, 7 and its paragraphs, 41 and 42 of Law No. 9.307/1996 and articles 267, VII [2] , and 301, subsection XI [3] , of CPC/1973, recognizing the validity and supremacy of the arbitration clause in neutralizing the originally state jurisdiction by the will of the contracting parties.

CPC, establishes, in article 25, the lack of jurisdiction of the Brazilian judicial authority to process and judge actions when there is an exclusive foreign forum selection

clause in an international contract, defended by the defendant in its defence except in the case of exclusive jurisdiction provided for in article 23, according to § 1 of article 25.

In addition, pursuant to § 2, the provisions of article 63, §§ 1 to 4 also apply, with respect to the clause having to be proved in writing and referring to a certain legal transaction (Paragraph 1) and binding heirs and successors (§ 2) [4] . It is difficult to conceive practical application to §§ 3 and 4 of article 63, on the control of the validity of the clause, in the case of foreign jurisdiction, as these would be national procedural provisions that cannot be expected to be observed by the foreign judge, who will process and judge the action according to the foreign law. It applies, however, to the case of election of Brazilian forum, a case also possible, also used to clarify that the elected judicial authority has the duty to control unconscionability in either case.

The article proposes to analyze general aspects of these rules and their impact, especially with regard to carriage of goods by sea contracts. Initially, it should be established that the foreign forum selection clause should express that the jurisdiction chosen is exclusive, otherwise, it will be a case of concurrent jurisdiction, if the situations of article 21 of CPC/2015 apply (i.e., the defendant is domiciled in Brazil, Brazil being the place where the obligation must be performed, and the grounds of the action to be a fact or act practiced in Brazil).

Paragraph 1 of Article 25 excludes from the scope of the forum selection matters that are treated as being of the exclusive jurisdiction of the Brazilian judicial authority, provided for in article 23, which are: actions relating to real estate located in Brazil; in matters related to succession, proceed with the confirmation of a private will, probate process for property located in Brazil; and, in divorce, judicial separation or dissolution of steady union, proceed with the probate process for property located in Brazil. It should be noted that the legislator does not consider that the Brazilian judicial authority must have exclusive jurisdiction for carriage of goods by sea contract, even in relation to consumption, even when the consumer is domiciled or resident in Brazil, since the provision for the case is in article 22, II of CPC/2015 and not in article 23, and article 25 on any and all matters not provided for in this article 23 of CPC/2015.

Arbitration Clause, forum selection Clause & Choice of Law Clause

It is necessary to distinguish these three types of clauses that can be found in international contracts.

The arbitration clause consists of a covenant contained in a contract providing for proprietary and available rights, in which the parties agree in advance to submit to arbitration as a way to settle any conflicts that may exist in the performance of the contract. It is a form of dispute resolution in which the parties choose arbitrators among capable persons in which they trust and who have specialised knowledge in the matter in dispute, and the parties are allowed to choose the place of the arbitration, the applicable law and the rules of procedure.

The foreign forum selection clause or the agreement on the jurisdiction governing the contract, in turn, means, according to Arnoldo Wald [5] , the choice by the parties of the Court to which they wish to submit disputes arising from their contracts. Unlike the first case, however, the parties here establish that the Judicial Authority of the chosen place will process and decide on the dispute, being a true agreement of jurisdiction, which explains that said article 25 of CPC/2015 is rightly inserted in Chapter I of Title I, designed to establish the limits of national jurisdiction, amending CPC/1973, which dealt with the chapter in International Jurisdiction. Only the initial terms of the provision may be criticized, stating the Brazilian judicial authority has no authority over the matter, since it may give the incorrect idea of dealing with competence and not jurisdiction, which would dismiss the case not by absolute lack of competence, but by lack of a prerequisite of constitution for valid and regular development, in the form of art. 485, IV of CPC/2015.

Finally, there is the choice of law clause, which, as a rule, is incorporated by the foreign forum selection clause or by the arbitration clause, being, usually, but not necessarily, the applicable law in the place of arbitration or in the jurisdiction.

Precedents Prior To CPC/2015

Concerning the arbitration clause, as seen, the position adopted was that, once agreed between the parties that the arbitration would be the type of dispute resolution, the parties can no longer appeal to the courts, except for the grounds of nullity provided for in article 32 of Law No. 9.307/1996 and as provided in article 33 of the same law. We shall examine below questions concerning the possible annulment of the arbitration agreement in standard form contracts and subrogation.

As for the foreign forum selection clause before the new rule of article 25 of the CPC/2015 entered into force, the STF consolidated the position to recognize the validity of said clause, without this meaning, however, that the foreign judicial authority would have exclusive jurisdiction, if it were one of the cases of the old article 88 of CPC/1973 [6] (current article 21 of CPC/2015 [] ), which is the case of concurrent jurisdiction.

Actually, in Foreign Judgment No. 4469 (Judge-rapporteur and Justice Marco Aurelio, RTJ 152, p. 474, dated 12.10.1993), the STF understood that, if the case was a concurrent and not exclusive jurisdiction of the Brazilian judicial authority, the foreign judgment should be ratified, validating the selection of a foreign court, as in Foreign Judgments Nos. 3534- 1, (Judge-rapporteur and Justice Sydney Sanches), 2912-0, (Judge-rapporteur and Justice Neri da Silveira), 2178 ( RTJ 91, p. 48 and 92, p. 515), 4474 (Judge-rapporteur and Justice Octávio Gallotti, RTJ 142, p. 128, Aug. 21, 1992) and 4948 [8] .

Exequatur was also granted in Internal Interlocutory Relieves in Letters of Request Nos. 4982, ( RTJ 152, p. 118; and RTJ 149, p. 787, 09.02.1993, Justice Sydney Sanches), 5885 ( RTJ 143, p. 75, 07.10.1992), 4964 (Chief Justice Néri da Silveira, DJ, 08.16.1991), 4274 (Chief Justice Moreira Alves, RTJ 115/616), 4707 (Chief Justice Rafael Mayer, RTJ 126/86), 5815 (Chief Justice Sydney Sanches, DJ, 13.11.1992), 6365 (Chief Justice Octavio Gallotti, DJ, 06.08.1993), 4707 (Judge-rapporteur and Justice Rafael Mayer) and 7311 (Judge-rapporteur and Justice Celso de Mello).

In all these cases, a foreign judgment was ratified or exequatur was granted for situations involving contractual disputes in which there was a foreign forum selection clause, even if they were some of the cases of application of the Brazilian jurisdiction.

However, the same basis of concurrent jurisdiction that allowed for the execution of a procedural remedy or the execution of the judgment rendered by the elected foreign jurisdiction in the Brazilian territory, in turn, also authorized that the Brazilian jurisdiction applied to international contracts with a foreign forum selection clause, when any of the cases of article 88 of CPC / 1973 applied.

As, for example, in REsp 251.438/RJ [9] , which decided on a discussion of financial guarantees provided to ensure the conversion of a ship into a floating unit, in which an action had been previously filed in the elected jurisdiction, that the concurrent jurisdiction of the Brazilian Court could not be ruled out by the will of the parties, no matter if the action had been filed in a foreign country, due to the absence of international lis pendens.

Lastly, there is also Precedent No. 335 of the STF, which establishes that the foreign forum selection clause arising from the agreement is valid, and it should be noted that this precedent was issued in a discussion of a case on the acquisition of property in national territory, although Luiz Olavo Baptista defends application thereof to the foreign forum selection [10] .

As it turns out, the Brazilian jurisdiction, in short, accepted the validity of the foreign forum selection clause, but without this ruling out national jurisdiction, which generated a great deal of legal uncertainty, since the agreement between the parties as to the place of dispute could be disregarded by any party wishing to do so, in violation of the pacta sunt servanda and contractual good faith, in addition to rendering ineffective the choice of the parties themselves at the time of entering into the contract, often generating duplicate efforts by the Courts, because of the absence of international lis pendens in Brazil (former article 90 of CPC / 1973, current art. 24 of CPC / 2015).

Especially with regard to maritime transport, the Brazilian jurisdiction was also applied in case of unloading in Brazil on the basis of concurrent jurisdiction upon application of article 88, II of CPC / 1973, notwithstanding the existence of a foreign forum selection clause (AR 133/RS, 2nd S., Judge-rapporteur and Justice Claudio Santos, decided on 08.30.1989, DJ 10.02.1989, p. 15345).

There are also decisions of the Third Panel of the STJ establishing that the foreign forum selection clause does not apply in an action filed by a cargo insurer, on the grounds that it is subrogated to the credit of the insured, but not to the contractual terms, especially with regard to the choice of jurisdiction, as seen in REsp 1.038.607/SP (3rd Panel, Judge-rapporteur and Justice Massami Uyeda, decided on 05.20.2008, DJe 08.05.2008) and in AgRg-Ag 459.668/RJ (3rd Panel, Judge-rapporteur and Justice Carlos Alberto Menezes Direito, decided on 11.19.2002, DJ 12.16.2002, p. 334), although with a more recent contrary precedent of the TJSP (14th CDPriv., Judge-rapporteur and Justice José Tarciso Beraldo, decided on February 4, 2009), in the event that the arbitration clause applied to the subrogated insurer, dismissing the case due to the application of an arbitration agreement.

Also in decisions by lower courts in Interlocutory Appeals Nos. 474.522/SP and 1.109.719/SP, Justices Aldir Passarinho Junior and João Otávio de Noronha upheld, albeit for reasons of inadmissibility in appeal, a decision of the Court of Justice of the State of São Paulo in the sense that a forum selection clause does not apply to carriage of goods by sea standard form contracts, however, the most recent lower court decision was rendered by João Otávio de Noronha in the Interlocutory Appeal on Special Appeal No. 91.053/SP, on May 21, 2014, upholding a decision of the same Court appealed to defend the forum selection clause in carriage of goods by sea contracts.

It is therefore clear that, although the case-law was not exactly settled with regard to carriage of goods by sea contracts, the discussion on the question of the validity of the forum selection in carriage of goods by sea standard form contracts, and the extension of the scope of forum selection clauses in subrogation was pointless in view of the general position on concurrent jurisdiction, which would in itself be sufficient to authorize prosecution and trial by the Brazilian courts, according to the majority case law.

The position with respect to the foreign forum selection clause, however, was incongruous when faced with the position regarding the foreign arbitration clause, since in the latter the possibility of the state court to process and judge the subject matter of the arbitration was ruled out, even if it were a case of concurrent jurisdiction of the Brazilian Justice, so that the choice of a foreign private justice neutralized the national state court, but not the choice of a foreign state court.

The entry into force of articles 25 and 63 of CPC/2015, extending the provisions of national jurisdiction of article 63 to article 25, however, will require that all such issues have to be reviewed and dealt with under the new view that the choice of contractual forum empowers the elected judicial authority of exclusive jurisdiction and no longer the concurrent jurisdiction. The need to re-examine the subject is very clearly evidenced when one observes that one is faced with a Code that values the autonomy of will, which can be exemplified simply with the authorization of the legal transaction, according to article 190 of CPC/2015.

Considerations On Carriage Of Goods By Sea Contract And Standard Form Contract

Before beginning the analysis of article 25 and 63 of CPC/2015 and impact thereof on the carriage of goods by sea contracts, the specific contours of this type of contract must be put into context, which will provide better elements to address the issue.

Article 730 of the Civil Code establishes that a carriage contract is one in which somebody undertakes, by means of compensation, to carry, from one place to another, people or things . Accordingly, a carriage of goods by sea contract is the contract in which someone undertakes to take the necessary precautions to conduct things entrusted to transport to an agreed place upon the payment of transportation expenses.

The parties to the contract are:

  1. the carrier, i.e., the one issuing the bill of lading, a document which, among other functions, operate as a receipt for the goods delivered on board, which may be remarked, whenever the cargo can be verified when being shipped, to note the existence of damages or pre-shipment losses; and
  2. the party to which the goods will be shipped, which, in international trade, may be the exporter or importer of the goods, in accordance with what is established between them, in the contract of sale and purchase of the goods to be transported from the country of the former to the country of the latter.

The contract is evidenced in writing and the charter party and the bill of lading operate as instruments of this carriage contract, as established by art. 566 of the Commercial Code. In this respect, it should be noted that every carriage contract corresponds to a charter party, but not every charter party corresponds to a carriage contract. The charter is the assignment of total or partial use of the ship, and may be by isolated voyage, consecutive voyages, time or bareboat charter. For the present analysis, only charter by isolated voyage affecting wholesale or retail carriage contracts will be considered.

Wholesale carriage is that of large lots of solid or liquid bulk, steel products, ores and others. In such cases, in addition to the bill of lading, charter will be formalized by charter parties, in which standard contracts are complemented by dozens of additional clauses negotiated by the parties, and hence the existence of standard forms of which Congenbill is a typical model, and it cannot be said that all international maritime carriage is formalized by an standard form contract [11] , which must be observed on a case-by-case basis.

Retail transport is the one used, as a rule, for general cargo transported in containers , and, in this case, are formalized only by a bill of lading. It should be noted that not only printed clauses but also clauses inserted by the master of the ship attesting to the state that the cargo was received on board and others as determined by the shipper itself, as provided in article 744 of the Civil Code. However, even these printed clauses do not arise from the imposition of abusive or illegal rules, but, on the contrary, they represent a preexisting set of customs applied internationally and consolidated by the practice of hundreds of years that culminated in contracts, clauses and even typical expressions of the sector, it being a mistake to ignore such clauses and not apply them, as in certain cases in which they are not even translated into Portuguese. In this regard, attention must be paid to the procedural assumption of the heterotopic rule of article 589 of the Commercial Code, which requires the insertion in the proceedings of the original bill of lading for any action brought between carriers, contracting parties and insurers, referring to the fact of transportation, which is explained by the possibility that the bill of lading operates as a negotiable instrument or an instrument representing goods, allowing the circulation and sale thereof by simple endorsement, when issued as ordered or to the bearer.

The case of carriage of goods by sea contract is not the same as those cases of standard form contracts for consumer relations or others in which it is intended to harm a vulnerable party by means of malice of exploitation, not being standard form contracts in this sense, but rather standard contracts, consolidating customary practices and facilitating commercial understanding. They arise from a commercial need in the market, usually elaborated by international associations representing traders in the sector, precisely so that the negotiations are more agile and can flow and be understandable to traders from almost two hundred different countries with different languages ​​and legal cultures. They thus reflect a customary commercial practice widely adopted throughout the civilized world.

Imagine a ship transporting containers with 4,000 containers to be shipped awaiting, at a very high cost, thousands of lawyers discuss different clauses to negotiate and sign thousands of contracts. In other words, the operational dynamics of the business requires standardization that is based, in fact, on the principles and sources comprising the maritime commercial law.

In this regard, case commercial maritime law comes from the same sources as lex mercatoria , which seeks to build a private legal system aimed at prescribing these usages and customs, systematizing it through the rules of private commercial associations, arbitration, standard clauses and the so-called standard contracts [12] , including the bills of lading and the charter parties usually used throughout the world in a uniform way, in order to comply with the principles that govern the activity, especially customary origin and universality.

Thus, the standard contracts and standard clauses that usually comprise the bills of lading are far from being an imposition; instead, they are a list of the commercial customs admittedly used in the activity worldwide, and the option to settle the disputes by means of arbitration or jurisdictions which are used to dealing with these matters is also part of such list of customs. In this particular case, the choice of the place of arbitration or the jurisdiction of the dispute is not merely a matter of convenience of one party to the detriment of another but of the international recognition of traders operating in international trade that there are places where substantive rules, not only in material law but also at lower legal interest rates that are more desirable, are more in line with this activity and procedural rules are known to be developed to deal with international disputes, with greater agility to communicate acts, hearings, production of evidence, fees for loss of suit and means of execution, among other aspects. In view of such dynamics, the interpreter can verify that such arbitration clauses or forum selection clauses do not impede the realization of rights of anyone, on the contrary, they are the best guarantee of the reliable application of the terms of the legal transactions agreed by the parties as recognized by themselves when they repeatedly enter into their contracts, submitting voluntarily and repeatedly to the same terms, and it is certain that the election of a foreign forum that is more used to specialized maritime issues represents, on the contrary, the realization of rights.

Thus, the bill of lading, as an instrument of the carriage of goods by sea contract, will enable an importer to receive the imported cargo and an exporter to receive payment from the importer through a financial institution against the presentation of this document, or will allow the resale, by means of a simple endorsement, of this cargo shipped, perhaps dozens of times, during the voyage, due to its third function, which is to be used as a negotiable instrument or an instrument representing goods. In this regard, the United Nations Convention on Contracts for the International Sale of Goods of Vienna, 1980, within the scope of Uncitral, agreed by Brazil and enacted by Decree No. 8.327/2014, establishes the need to comply with good faith in international trade and customs respectively, in articles 7 and 9.

The victimization of the importer or its subrogated insurer, which are often large multinationals, trades , economic conglomerates, financial institutions or large companies, reflects much more a forensic opportunism than a practical reality of the business life of these companies. In this regard, the Courts are realizing that this vulnerability does not exist, and the STJ has, lately, been putting an end to the issue, in view of a recent decision in REsp 1.391.650/SP (Judge-rapporteur and Justice Nancy Andrighi, decided on October 18, 2016), in which the CDC was deemed to be inapplicable as a general rule to carriage of goods by sea contracts because of the difficulty to classify the contracting parties as consumer .

It is worth mentioning that the carriage of goods by sea contract is nothing more than a consequence of a previous international contract of sale, from which the need for international shipping arises, whose contract will be at the expense of whoever has been bound by the terms of the contract of purchase and sale. The same importer and its insurer, which dispute the validity of arbitration clauses and forum selection clauses, should they have a problem with the purchase and sale contract, they will settle their disputes by arbitration in the International Chamber of Commerce in Paris or in other foreign jurisdictions used to this type of dispute, there being no need reason not to follow a similar route with regard to maritime carriage issues, usually even less than the issues of purchase and sale.

Actually, when dealing with carriage by sea in favor of third party, our Civil Code, in the sole paragraph of article 436, clearly states that the third party is entitled to demand the obligation, but always subject to the conditions and rules of the carriage contract, giving the consent when it has paid for the goods before the presentation of the instrument of that contract, which is the bill of lading.

However, foreign arbitration or forum selection clauses would not only prevent importers or their insurers from claiming carriage facts in the country, but also carriers from claiming in national territory against importers issues such as demurrage of containers , storage, damage caused by stevedores and others, it being the case of a double-edged sword.

It should be noted, however, that the election of a foreign court or arbitration clause in no way represents a denial of justice, because the interested party can perfectly claim what it deems to be entitled to in the chosen judicial or arbitration means, and the justification of any difficulty in taking legal action in a foreign country cannot be claimed, since the parties that relate to this activity freely chose to undertake international and non-domestic business. This is a natural consequence that they may have to dispute in another jurisdiction, in the same way that they spread their products, services, acquisitions or investments, thus they are used to international trade.

In fact, it is worth mentioning that part of doctrine has adopted concepts about carriage of goods by sea contract challenging the aforementioned lex mercatoria , which informs the sector and do not find legal support in the legal system itself, and has even induced misleading precedents. In this context it is submitted that the liability of the maritime carrier is, for example, strict and with respect to result. Not infrequently, even article 927, sole paragraph, of the Civil Code is applied.

First of all, it should be noted that the carriage of goods by sea contract, without being redundant, is a contract and, as such, is subject to contractual liability. In fact, the legal relationship established between the parties is framed through a bilateral agreement with compensation, in which a party undertakes to transport things from one place to another, while another party pays it a price called freight for such purpose, by way of consideration. Since the carriage of goods by sea contract is complex and has a number of specific features, a number of ancillary obligations are agreed, including, for example, port stays, geographical rotation, delay in delivery, the way goods are packed, voyage time, port expenses, inspections, scheduling, packaging, regulation of damages, insurance, exclusions of liability, certifications, etc., and it is indispensable that, in order to produce a fair judgment, any dispute on liability related to the carriage contract examine its clauses, which are sometimes not even translated into Portuguese in court.

What matters here is that, since it is a question of contractual liability, it is not fitting to refer to that liability as being fault-based or strict, since such a classification is related to non-contractual liability, which is not the case of carriage by sea. Therefore, what should be applied with regard to the liability of the maritime freight carrier is the general provision in article 389 of the Civil Code (intended to regulate contractual liability) and not the one of the sole paragraph of article 927 of the same substantive law (intended to regulate non-contractual liability) plus the provisions of articles 436 to 438 and 743 to 756 of the Civil Code and articles 566 et seq. of the Commercial Code. In this particular case, Orlando Gomes [13] also pointed out that the breach of contract is not an unlawful act, it being understood that the head provision of article 927 regulates exactly the case of an unlawful act, inapplicable to contractual liability.

Neither can it be said that the obligation of the carrier to deliver the thing transported to the destination is that of result, it being enough to verify what establishes article 749 of the Civil Code, which stipulates that the carrier shall take the thing to its destination, taking all necessary precautions to keep it in good condition and deliver it within the set or expected time. Now, those who have to take precautions to fulfill certain obligation to do are faced with an obligation of means and not of result. Note that when the legislator wished to establish an obligation of result, it made it very clear, as in the case of passenger transport, as can be seen from the rule of article 734 of the same law, which states that the carrier is liable for damages caused to the persons transported and their luggage, except for reasons of force majeure, and any exclusion clause .

Indeed, these doctrinal considerations are a mistaken synthesis to clarify the system of liability of the maritime freight carrier, which is nothing more than contractual liability with presumption of guilt, in view of the issuance of unqualified bill of lading. It follows that the cargoes were delivered in apparent good order and condition, presuming that any loss or damage at the destination took place on board the ship during the voyage, but the carrier may object to it, by means of the clauses agreed in the carriage contract. Furthermore, the carrier must prove that it has taken all the necessary precautions to bring the goods entrusted to it to destination, or that any of the exclusions provided for in the contract have occurred, or that it has already received on board the damaged goods, without the ship's master having been able to verify them, as is the case in situations where it receives containers sealed for transport. Finally, from a perspective of a country like Brazil that wants to develop, attract investments and combat the high level of unemployment affecting the country, before a modern procedural law favoring the autonomy of the will of the parties and, also, with a Legal System where settlement, mediation and arbitration increasingly represent instruments of release to enable more efficient relief, it seems retrograde to allow international insurers and carriers and businessmen of foreign trade to clutter the Courts with issues they themselves know very well how they work, since the world began and have decided to undertake this activity, not having any surprise in the business models to which they are subject.

Effects Of Subrogation

It was found that there are decisions of the Third Panel of the STJ establishing that the foreign forum selection clause does not apply to the detriment of a cargo insurer, on the grounds that it is subrogated to the credit of the insured, but not to the contractual terms, especially with regard to the choice of jurisdiction, as in REsp 1.038.607/SP (3rd Panel, Judge-rapporteur and Justice Massami Uyeda, decided on 05.20.2008, DJe 08.05.2008).

With due respect, I understand it to be incomprehensible that subrogation is only in respect of the credit and not in respect of all the terms of the contract, since the insurer is nothing more than a successor of the insured, paying it the indemnity and subrogating, as if it were the insured, which will then be able to exercise its rights of reimbursement to the extent its insured could do.

The essence of the insurance contract comprises the usual rules that the loss should be informed immediately to the insurer, that the insured must always act in a way as if the insurance had not been taken out, it must mitigate losses, not waive rights and others, all that it can do to preserve the full exercise of the rights of reimbursement that the insurer can effect, replacing the insured, after indemnifying it under the insurance contract. In this regard, see article 768 of the Civil Code, according to which the insured party shall forfeit the right to the guarantee if it intentionally aggravates the risk covered by the contract; article 769 of the Civil Code, according to which the insured is obliged to inform the insured of any incident liable to aggravate the covered risk considerably, failing which the right to the guarantee will be forfeited; and article 771 of the Civil Code and article 719 of the Commercial Code, according to which the insured will inform the loss to the insurer and will take the necessary measures to mitigate the consequences.

After the damages are paid, the subrogation must take place within the limits of the credit paid, but also to the rights and actions entitled by the insured against the author of the damage, according to article 786 of the Civil Code and 728 of the Commercial Code. However, any right presupposes a duty, and it is unimaginable that the insurer subrogating to contractual rights should not exercise it under the contract signed by the insured.

In this regard, prior to the entry into force of CPC/2015, the Court of Justice of the State of São Paulo had already attempted this situation in a decision mentioned above of the 14th Private Chamber of Law (Judge-rapporteur and Justice José Tarciso Beraldo, decided on February 4, 2009), in which the following was established:

The exercise of the action, in this case, arises from the subrogation made to the appellee to the rights that its insured had against appellant, in the form of the provisions of Precedent No. 188 of the Supreme Federal Court [...].

Such rights - it is intuitive to recognize - the insured was guaranteed by the contract that it entered with the appellant, which, likewise, imposed obligations, rights and duties as well, otherwise owned by both contracting parties.

That being said.

Among the obligations assumed by the insured, the following is provided for in the arbitration clause [...]

As a consequence, the case is dismissed based on the provisions of item VII of article 267 of the Code of Civil Procedure (REsp 712.566/RJ).

However, despite the aforementioned debate, it is a fact that a new legal situation is imposed with CPC/2015 regarding the foreign forum selection clauses, which is the provision of § 2 of article 63 of CPC015, since it establishes that the contractual venue binds the heirs and successors of the parties. One may inquire what would be the novelty, since this rule was already provided in CPC / 1973 with the same wording as article 111.

The difference is that these provisions addressed only domestic forum selection and now also regulate the election of foreign forum by means of the provision of § 2 of article 25, although this case was not standardized in CPC/1973.

Therefore, CPC/2015 establishes that the election of foreign forum binds the heirs and successors of the parties, and the subrogated insurer is the successor of its insured, and can no longer fail to comply, at least, with the forum selection clause, under penalty of violation of articles 25, head provision , § 2, and article 63, § 2, of CPC / 2015.

In any case, the subrogation of articles 786 of the Civil Code and 728 of the Commercial Code should be interpreted not only to contemplate the foreign forum selection, but also the arbitration clause, under the risk of depleting maritime arbitration and not contributing to alleviate the burden of the Legal System, which seems to me quite undesirable.

Control Of Validity Of The Clauses. Doctrine Of Separability. KOMPETENZ-KOMPETENZ Principle

As explained above, there is no abuse in inserting arbitration and foreign forum clauses in commercial contracts, including international purchase, sale and charter of goods, even when formalized by an standard form contract, by means of bills of lading, being habitual and customary practice internationally used in this activity.

However, one cannot reject the idea of ​​allowing the parties to the carriage contract to question the existence, validity or effectiveness of any arbitration or foreign forum selection clauses that may have been agreed upon. Such a questioning can be directed to any defect of will or consent, such as error or ignorance, fraud, coercion, state of danger and injury or even social defects such as fraud against creditors and simulation.

In matters of international arbitration, the doctrine of separability is established, which is clarified by Felix Sparka [14] and is present in most jurisdictions in the world. In Brazil, it is settled in the autonomy that is conferred upon the arbitration clause with respect to the contract in which it is inserted, according to article 8 of Law No. 9.307/1996: "Article 8 The arbitration clause is autonomous in relation to the contract in which it is inserted, in such a way that its nullity does not necessarily imply the invalidity of the arbitration clause.

The kompetenz-kompetenz principle, which draws inspiration from the law of judicial organization in Germany and concerns the subject of the competence of judges, stating that it is for the judge to decide its competence. This principle is widespread in the field of international arbitration, according to which it is up to the arbitrators to decide on their own competence. Law 9.307/1996 supports the principle in the sole paragraph of article 8: "The arbitrator shall decide on its own initiative, or at the instigation of the parties, the issues concerning the existence, validity and effectiveness of the arbitration agreement and the contract containing the arbitration clause."

Fredie Didier Jr. [15] , which also names this principle as atomic jurisdiction, explains: "According to the rule of the kompetenz-kompetenz principle, every court has authority to judge its own competence. The judge is always the judge of its competence. "

Thus, the Arbitration Law establishes the autonomy of the arbitration clause with respect to the contract, so that the nullity of the contract does not imply the nullity of the arbitration clause.

In addition, the arbitrator must decide on the existence, validity and effectiveness of the arbitration clause.

In Brazil, kompetenz-kompetenz principle , besides being provided in article 8 of Law No. 9.307/1996, has been adopted in the precedents of the STJ, as in the case of REsp 1.278.852 / MG (4th, Judge-rapporteur and Justice Luis Felipe Salomão, J. 05.21.2013), whose excerpt of the head note is transcribed as follows:

  • In fact, the coexistence of the arbitration and jurisdiction judgments with respect to the issues inherent in the existence, validity, extension and effectiveness of the arbitration agreement is certain. In fact - excluding the hypothesis of a pathological compromise clause ("blank") -, what is noticeable is an alternation of competence between the aforementioned bodies, since they show it at different procedural moments, that is, the possibility of action by the Judiciary is possible only after the delivery of the arbitration award, under the terms of arts. 32, I, and 33 of the Arbitration Law.


In this regard, see also: REsp 1.288.251/MG, 1.279.194/MG, REsp 1.327.820/MG, REsp 1.311.597/MG (Judge-rapporteur and Justice Sidnei Benetti, DJe 10.16.2012).

The conclusion is that the control of validity of the arbitration clause must be exercised by the arbitrator, and the Legal System can only act as to such control, after an arbitration award is entered.

Felix Sparka [16] , however, makes it clear that the konpetenz-konpetenz principle should go further than just complying with the exclusivity of the arbitration authority indicated in the contract to deliberate on its own jurisdiction and to exercise control of the validity of the clause inserted in the contract, and should also contemplate the finality of the decision of the arbitrators in this respect, which would be in violation of article 32, I, of Law No. 9.307/1996, which stipulates that the Arbitration Agreement being null and void is one of the cases of nullity of the arbitration award.

Lower Court Decisions by Justice Ricardo Villas Bôas Cueva, in REsps 1.283.388/MG and 1.327.085/MG, confirm that the understanding, for the time being, is in fact settled, at least with regard to the exclusivity of the arbitrators to deliberate on the control of validity of the arbitration clause:

  • The precedents of this Court are consolidated along the same lines as the argument put forward in the grounds of the Special Appeal, in the sense that the claim of nullity of the arbitration clause established in an approved judicial settlement must be submitted, first, to the decision of the arbitral tribunal itself [ ...].

Thus, any defects of will or social and even formal defects of compliance with the requirements of § 2 of article 4 of Law No. 9.307/1996 that stipulate how an arbitration clause should be inserted into standard form contracts must have its control of validity considered by the Arbitral Tribunal of the place established in the arbitration clause.

However, the recent position of the Third Class of the STJ in REsp 1.602.076/SP, decided on September 15, 2016, by Judge-Rapporteur and Justice Nancy Andrighi, was surprising, as it challenged the konpetenz-konpetenz principle in a domestic arbitration case and established that the Courts may, in cases of arbitrary arbitration agreements (defined as clearly illegal), declare the nullity of the clause, regardless of the state of the arbitration procedure. Such a decision is concerned with the importance of the development of arbitration and other forms of dispute settlement, such as mediation for the country, including as a rule in Paragraph 3 of article 3 of CPC / 2015, which establishes that settlement, mediation and other methods of consensual resolution of conflicts must be encouraged by judges, lawyers, public defenders and members of the Public Prosecution Office, including in the course of judicial proceedings .

The precedent can be dangerous, as it brings instability and risk of interpretations that are more extensive than situations, such as the case, of clearly illegal clauses, when there is a whole social demand and a demand from the Legal System itself to increase alternative forms of settlement and alleviate the courts. Even more so when it establishes that all standard form contracts, even those that do not consolidate consumer relations, must comply with the provisions of the retrograde [17] Article 4, paragraph 2, of Law No. 9.307/1996, which establishes that the Arbitration Agreement will only be effective in an standard form contract when proposed by the subscriber or when there is an express agreement in writing in an attached document or in bold with its signature specially for this clause.

First of all, the decision seems to violate the konpetenz-konpetenz principle , since the Legal System would not have the duty to analyze compliance with the formalities of article 4, paragraph 2, of Law No. 9.307/1996, but such duty would be under the responsibility of the arbitrator, according to article 8, sole paragraph, of Law No. 9.307/1996, as previously seen.

In addition, it must be verified how this decision is harmonized with article 4 of the CPC, which prescribes the speed and the primacy of merits of the case.

However, it should be clarified that this decision was restricted to the case of domestic and non-international arbitration and that the rule of article 4, paragraph 2, can only be extended to domestic arbitration, and does not apply to international arbitration. Nor can it be required that national rules be applied at the place of arbitration in another country, where the rules will be in accordance with those authorized by local law. In fact, it would be unreasonable that the control of abusiveness of the clause in another jurisdiction be exercised by means of national criterion. For example, the Brazilian law states that the clause must be in bold, but the law of country A says that it has to be underlined, the law of country B says it must be in italics, and only as an example, that of country D says it cannot be blacked out or contains an attached document. It would be an intervention that is inapplicable and contrary to the common rule of international procedural law that the procedural rule to be adopted is lex fori , that is, the law of the place of the dispute. Therefore, with respect to international arbitration clause, it is expected that the tendency to observe its autonomy and apply the konpetenz-konpetenz principle remains, according to article 8 of Law No. 9.307/1996 and its sole paragraph.

We shall now examine how the issue of forum choice clauses will be addressed. Initially, one must address how inconsistent it would be to apply the kopetenz-kopetenz principle also to the foreign forum selection clauses as it is applied to arbitration clauses, for at least two reasons. The first is that the exclusive jurisdiction of a private judge to assess the validity of the arbitration clause is presumed, and the same exclusivity would not be granted to the state court from a foreign court . The second is that the exclusion of the national jurisdiction comes from the forum selection clause, according to article 25 of CPC/2015, is essentially a procedural rule to the extent that the jurisdiction consists of a regular and valid constitution of the case, which makes it even more desirable that the judge exercising control of validity is that of the lex fori, that is, of the contractual forum, since it is not a substantive rule.

The problem, however, is not new in the world. Again Felix Sparka [18] analyzes comparative law in this particular, stating that "classification and separability are two fundamental subjects related to the fundamental doctrine about forum selection and arbitration clauses."

Hence it describes that, although obiter dictum , the US Supreme Court has ruled that the foreign forum selection clauses are autonomous with respect to the contracts in which they are inserted, such as arbitration clauses [19] . Good international doctrine adopts such position [20] . In Belgium, it is accepted that clauses for the election of foreign courts are legally autonomous, with respect to the main contract. The European Court of Justice also ruled that a foreign forum selection clause may be valid, even though the contract in which it is inserted is null [21] and void. In the United Kingdom, although the issue has not yet been entirely settled, the doctrine of separability has been quoted in some decisions [22] .

In Brazil, with the entry into force of CPC/2015, establishing a new paradigm on forum selection clauses, which excludes the originally applicable national jurisdiction, unlike in the past, when the case-law that jurisdiction was concurrent was settled among the courts, consideration must be made of the extent of the doctrine of separability, of the konpetenz-konpetenz principle and an analogy with article 8 of Law No. 9.307/1996, and it seems to me that it is more logical and coherent to maintain harmony between what is decided on the arbitration clauses and what will be decided on the forum selection clauses

Therefore, may we live to accompany how all this intriguing matter of three passionate branches of Law (international, procedural and maritime) will develop so that the country can generate more legal security and stability in the field of private international relations, which will add value to our growth and development.


According to this study, we may conclude, with respect to the arbitration clauses and the foreign forum selection in general, and especially in relation to carriage of goods by sea contract, that:

  1. CPC/2015 consolidates the position of the Supreme Federal Court (STF) in so much that arbitration does not to violate the right of access to Justice;
  2. CPC / 2015 favors the foreign forum selection clause by excluding Brazilian jurisdiction, even for the cases in which it would be originally competent, provided for in articles 21 and 22;
  3. Paragraphs 3 and 4 of article 63 of CPC / 2015 apply to the election of foreign forum only in case the foreign forum is Brazilian or in the case of the foreign forum to reinforce the konpetenz-konpetenz principle ;
  4. Not all international carriage by sea is formalized by means of an standard form contract, but when it is, it is customary and practiced in the environment, not representing any unilateral imposition, but consolidation and desirable negotiation standardization of customary and universal activity, in favor of all the players who participate in this market;
  5. The selection of arbitration or the choice of jurisdictions that are more specialized in maritime disputes are also a reflection of such list of customs;
  6. Part A or part B are not favored with the adoption of arbitration clauses or forum selection clauses, since both the carrier and the contracting party may be the plaintiff and defendant, and vice versa, in relation to the most diverse facts of maritime carriage;
  7. It is not technically appropriate to adopt the rule that the responsibility of the shipping carrier is strict and its obligation to deliver the goods to the destination is related to the result;
  8. subrogation of the insurer must be not only with respect to the insured's credit, but with respect to its actions and rights, including his submission to the arbitration clause or foreign forum selection clause;
  9. The extension of the application of § 2 of article 63 of CPC/2015 to the foreign forum selection clauses according to § 2 of article 25 of CPC / 2015 causes the submission of the subrogated insurer to such clauses to be undisputed;
  10. The doctrine of separability, worldwide adopted, implies the autonomy of the arbitration clause with respect to the contract in which it is inserted and is established as a rule in article 8, head provision , of Law No. 9.307/1996;
  11. The formalities of § 2 of article 4 of Law 9.307/1997 are only coherent and logical to be required in domestic arbitration and not in international arbitration;
  12. The konpetenz-konpetenz principle states that the arbitrator must exercise control over the validity of the arbitration clause, notwithstanding the nullity of the contract in which it is inserted or whether or not the contract is to be adhered to, and is provided for in the national law in the sole paragraph of article 8;
  13. For purposes of coherence and logic, separability and konpetenz-konpetenz must apply to the foreign forum selection clause as well.

[1] SE 5206-AgRg, Judge-rapporteur and Justice Sepúlveda Pertence, Full Court, decided on 12.12.2001, DJ 30.04.2004, p. 0029; Head Note, V. 02149-06, p. 00958.

[2] Upheld as article 485, VII, in CPC/2015.

[3] Not match in CPC/2015.

[4] This will have an impact on insurer subrogation, as will be analyzed.

[5] WALD, Arnold. Validity of agreements on contract forum. In: Commercial law studies and opinions . São Paulo: Journal of the Courts, 1972. p. 261.

[6] Art. 88 of CPC: "The Brazilian judicial authority has jurisdiction over the case when: I - the defendant, whatever its nationality, is domiciled in Brazil; II -the obligation has to be fulfilled in Brazil; III - the action originates from a fact occurred or an act practiced in Brazil. Sole Paragraph: For the purpose of the provisions of number I, the legal entity that has a branch in Brazil is considered to be domiciled in Brazil"

[7] “Art. 21. The Brazilian judicial authority must process and judge actions in which:

I - the defendant, whatever its nationality, is domiciled in Brazil;

II - the obligation has to be fulfilled in Brazil;

III - the ground is a fact that occurred or an act practiced in Brazil.

Sole paragraph. For the purpose of the provisions of item I, the foreign legal entity that has a branch in Brazil is considered to be domiciled in Brazil"

[8] Case study done according to the great final paper on the subject by MAX, Roberto. Forum Selection Clause, application, use and importance in Brazilian Compared Law. Rio de Janeiro, UERJ, 2001.

[9] STJ, 4th T., Justice and Judge-rapporteur Barros Monteiro, J. 08.08.2000, DJ 02.10.2000.

[10] BAPTISTA, Luiz Olavo. International contracts . A theoretical and practical view. São Paulo: Saraiva, 1994

[11] As stated by Paulo Henrique Cremonese in "Transport law and foreign jurisdiction: the correct application of Article 25 of the CPC." Jus Navigandi Journal, Teresina, year 21, n. 4792, Aug. 14. 2016. Available at: <>. Accessed on: November 25 2016

[12] STRENGER, Irineu. International trade law and lex mercatoria . São Paulo: LTr 1996.

[13] Obligations . 11. ed. Rio de Janeiro: Forense, 1996.

[14] Jurisdiction and Arbitration Clauses in Maritime Transport Documents, International Max Planck Research School for Maritime Affairs at the University of Hamburg. Available at: <>. Accessed on: November 25 2016

[15] Course in Civil Procedure Law . 18th ed. Salvador: JusPodivm, 2016.

[16] Op. Cit.

[17] Retrospective not because there should be no control of will and validity, but by establishing a form for it, which may not harmonize with all the various special situations that different activities may require.

[18] Op. Cit.

[19] Scherk v. Alberto-Culver Co., 417 US 506, 519 no. 14 (1974) (discussion of a case of arbitration, but also referring to foreign forum selection clauses); also Haynsworth v. The Corporation, 121 F.3d 956, 963 (5th Judicial District 1997).

[20] 514 Park, Bridging the Gap in Forum Selection: Harmonizing Arbitration and Court Selection , 8 Transnat’l L. & Contem. Probs. 19, 53 (1998); Yackee, Choice of Law Considerations in the Validity & Enforcement of International Forum Selection Agreements: Whose Law Applies? , 9 UCLA J. Int’l L. & Foreign Aff. 43, 59-60 (2004).

[21] 527 Benincasa v. Dentalkit Srl, [1997] ECR I-3767 at [21]-[32].

[22] Credit Suisse First Boston (Europe) Ltd. v. Seagate Trading Co., Ltd., [1999] 1 Lloyd’s Rep. 784, 797 (QBD); Sonatrach Petroleum Co. (BVI) v. Ferrell International Ltd., [2002] 1 All E.R. (Comm) 627 at [31] (QBD).