Modernising Brazilian Private International Law: Party Autonomy and Court Support for International Arbitration

Key Takeaways

• Draft Bill permits parties to choose contract law, limiting abuse
• Courts can grant interim relief for foreign arbitration proceedings
• Forum‑selection clauses no longer need connecting factor
• Aligns Brazilian jurisdiction rules with international arbitration standards
• Enhances legal certainty for Mercosur‑EU and Asian trade

Summary

Brazil’s Executive Branch has submitted a Draft General Law on Private International Law, aiming to modernize the country’s conflict‑of‑laws rules. The bill harmonises court and arbitration regimes by explicitly allowing parties to select the governing law of international contracts and by expanding judicial jurisdiction to grant interim relief supporting foreign arbitral proceedings. It also removes the requirement that forum‑selection clauses have a prior connecting factor, reinforcing party autonomy. If enacted, the reforms would align Brazil’s dispute‑resolution framework with leading international standards.

Pulse Analysis

Brazil’s surge in cross‑border commerce, driven by the Mercosur‑EU trade pact and expanding exports to China, India, Vietnam and Singapore, has exposed gaps in its dispute‑resolution architecture. The existing private‑international‑law framework, largely unchanged for eight decades, forces divergent outcomes: courts cling to lex loci contractus while arbitration enjoys broad party autonomy. By codifying a unified choice‑of‑law rule, the Draft Bill eliminates this split, giving litigants the same flexibility in court as they have in arbitration and signalling Brazil’s readiness to meet global commercial expectations.

A cornerstone of the proposal is the expanded jurisdiction for Brazilian courts to issue interim measures that aid foreign arbitral proceedings. Historically, parties relied on cumbersome letters rogatory or faced jurisdictional hurdles when assets or evidence lay in Brazil. The new provision authorises urgent relief—such as asset freezes or evidence preservation—whenever preserving rights in Brazil is essential, regardless of the primary forum. This aligns judicial practice with the proactive support mechanisms commonplace in leading arbitration hubs, reducing procedural delays and enhancing the enforceability of foreign awards.

Equally significant is the removal of the connecting‑factor test for forum‑selection clauses. By allowing parties to designate any national or foreign court without justifying a link, the Draft Bill restores certainty to contractual drafting and reinforces the neutrality prized by international investors. Together, these reforms modernise Brazil’s private‑international‑law regime, lower transactional risk, and position the country as a more arbitration‑friendly jurisdiction, likely attracting greater foreign investment and facilitating smoother resolution of complex, multi‑jurisdictional disputes.