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CASE STUDY - Special Appeal REsp 1.988.894/SP - ARBITRATION CLAUSE

View profile for Marcos Martins
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The cargo insurer is bound by the arbitration clause outlined in the bill of lading.

The Brazilian Superior Court has recently reached a unanimous verdict in a case managed by the SMA litigation team concerning a cargo claim dispute. The court's decision establishes that the cargo insurer is legally bound by the arbitration clause stipulated in the contract for the carriage of goods.

The case revolves around a shipment destined for a hydroelectric plant, loaded onto a client's vessel at the Port of Santos for transport to Barranquilla, Colombia. While en route near the Dominican Republic, the vessel encountered adverse weather conditions, allegedly resulting in damage to the cargo. The cargo insurer purportedly compensated the assured party and subsequently initiated claims in the State Court of São Paulo, in the city of Santos.

Due to the summons being served on agents lacking the authority to accept summons on behalf of the vessel’s interests, no defence was filed, leading to a default judgment issued by the first instance judge.

In response, the interests of the vessel lodged appeals. Among the arguments was the contention that the service of summons should be declared null and void and that Brazilian Courts lacked jurisdiction over the matter, as dictated by the arbitration clause in the bill of lading.

Subsequently, the Court of Appeal of the State of São Paulo (second instance) reversed the initial decision, stating the arbitration clause's validity and underscoring the cargo insurer's adherence to it.

The cargo insurers then pursued a special appeal (elevated to the third instance – the Superior Court of Justice), asserting that as a third party to the carriage contract, they couldn't be obligated by the arbitration clause and that they possessed a constitutional right to access the courts.

Nevertheless, the Superior Court upheld the Court of Appeal's ruling, reasoning that the existence of an arbitration clause constitutes a risk assessed by the cargo insurer during the issuance of the insurance policy. By choosing to insure the risk, the cargo insurer inherently incorporates the prospect of arbitrating disputes rather than litigating them, a factor reflected in the premium. Based on these premises, the Superior Court concluded that the cargo insurer is indeed bound by the arbitration clause.

The decision in the Special Appeal REsp. 1.988.894/SP was rendered on May 15th, 2023.

Following this precedent-setting decision, another analogous case handled by the SMA litigation team yielded a similar ruling from the Superior Court on August 14th, 2023 (Special Appeal REsp. 2034586/SP, presided over by Justice Gallotti.

For further information, please contact Leven Siano ( or Marcos Martins (