Data

Date:: 21-12-2005
Country:: Arbitral Award
Number:
Court:: Ad hoc Arbitration (Brazil)
Parties:: Unknown

Keywords

CONTRACT OF CARRIAGE OF GOODS BY SEA - BETWEEN TWO BRAZILIAN PARTIES - REFERENCE TO UNIDROIT PRINCIPLES IN SUPPORT OF CONCLUSION REACHED UNDER APPLICABLE DOMESTIC LAW (BRAZILIAN LAW)

CABOTAGE CONTRACT OF CARRIAGE BY SEA BETWEEN TWO BRAZILIAN COMPANIES GOVERNED BY BRAZILIAN LAW – CONTRACT CONTAINED HARDSHIP CLAUSE BUT WITH NO CRITERIA FOR ADAPTING THE CONTRACT - BRAZILIAN CURRENCY DEVALUATION – ALLEGED HARDSHIP – AGREEMENT REACHED BY THE PARTIES – SUBSEQUENT REQUEST FOR ARBITRATION BY ONE PARTY – REFERENCE BY ARBITRAL TRIBUNAL TO ARTICLE 478 OF BRAZILIAN CIVIL CODE AND TO UNIDROIT PRINCIPLES (ART. 6.2.2) TO ASSERT EXISTENCE OF HARDSHIP AND TO SUPPORT THE AGREEMENT PREVIOUSLY REACHED BY PARTIES

Abstract

In the context of a domestic cabotage contract of carriage by sea, subject to Brazilian law, the parties agreed upon a hardship clause which, however, did not contain any criteria or parameter for the adaptation of the contract in the event of hardship.

Following devaluation of the Brazilian currency, the parties reached an agreement whereby they shared the costs of such devaluation, expressly indicating that the agreement would be applicable to the performance of the contract in 2005. Dissatisfied with the agreement reached, one of the parties applied for arbitration.

On the grounds of Article 478 of the Brazilian Civil Code, Plaintiff asked the Arbitral Tribunal to adapt the contract to take into account the devaluation of the Brazilian currency.

Defendant objected that the agreement previously reached by the parties was an application of the hardship clause contained in the contract so that there was no room left for the application of Article 478 of the Brazilian Civil Code.

Both parties invoked the UNIDROIT Principles in support of their respective arguments based on the applicable Brazilian law.

The Arbitral Tribunal acknowledged that the UNIDROIT Principles set forth the elements that defined hardship as a state of adversity that, by imposing substantial onerosity on one of the parties, results in a fundamental alteration of the equilibrium of the contract. According to the Tribunal the hardship clause agreed upon by the parties was in line with international standards as well with Brazilian law. It also noted that the parties, on the basis of the principle of freedom of contract, are entitled to agree upon situations not contemplated by the applicable domestic law and establish less stringent criteria for the existence of hardship under their contract, and stated that “once the hardship clause is inserted in the contract, it must be observed in deference to party autonomy and the constitutional principle of free initiative". The Arbitral Tribunal concluded that the agreement previously reached by the parties for the year 2005 was a reasonable indication of their common intention to share the costs arising from the devaluation of the domestic currency, and that the agreement had fulfilled the parties´ intention to re-establish the equilibrium of the contract, not only with respect to that particular year, but until the contract came to an end.

Fulltext

EXCERPTS:

“Já os princípios do Instituto para Unificação do Direito Privado (UNIDROIT), citados ao longo da arbitragem tanto pela Requerente quanto pela Requerida, também prevêem, apesar de não identicamente aos Principles of European Contract Law, as condições necessárias para a existência, na relação contratual, de um estado de hardship, isto é, de um estado de adversidade, que, ao impor graves prejuízos apenas para um lado da relação, tem como resultado a desproporção no equilíbrio entre as prestações devidas.”

“Vê-se, portanto, que a revisão contratual pactuada no negócio jurídico em exame demonstra-se compatível com as tendências assinaladas e com a legislação brasileira, sendo lícito que as partes, no livre exercício de sua autonomia privada, contemplem situações não previstas pelo ordenamento positivo, ou atenuem o rigor interpretativamente atribuído aos requisitos para a restauração do equilíbrio contratual. Uma vez inserida no contrato cláusula de hardship, sua observância se impõe pelo respeito à autonomia privada, informada pelo princípio constitucional da livre iniciativa.”

“Em razão disso, e após exaustiva análise dos possíveis critérios lógicos e razoáveis para a fixação da base de reequilíbrio em consonância com os termos decididos pelos árbitros, haja vista a ausência de parâmetros pré-determinados no bojo da cláusula hardship, o Tribunal Arbitral concluiu que o Acordo entabulado pelas Partes para o ano de 2005 atendia o objetivado reequilíbrio. Destarte, o Tribunal Arbitral decide privilegiar o Acordo firmado entre as partes para o ano de 2005 e utilizá-lo como critério de reequilíbrio para a relação contratual até o seu término. O Acordo constitui uma indicação razoável da vontade das partes quanto à divisão dos custos da oscilação cambial. Dessa forma, decide o Tribunal que o critério adotado para o reequilíbrio contratual deve ser aquele sobre o qual as partes concordaram de maneira expressa, ainda que por período de tempo pré-determinado.”}}

Source

}}