Challenges and opportunities

Despite the pandemic, CAM-CCBC maintained good results in its arbitration and mediation procedures throughout 2020

By Sérgio Siscaro

Although it affected practically all segments of the economy last year, the Covid-19 pandemic did not hinder the growth trend in the use of alternative methods for dispute resolution (ADRs), in Brazil. Quite the contrary: as the statistics recently released by CAM-CCBC for the year 2020 indicate, the market for arbitration and mediation is on the rise.

Between January and December, 105 arbitration proceedings were initiated, which is equivalent to an increase of 8.2% in relation to 2019. The total value of these operations has reached R$ 9.05 billion, with an average value per procedure of R$ 88.8 million, numbers which represent 6.47% and 0.9%, respectively, in relation to the ones observed along the previous year. There were 95 closed cases in 2020, and a total of 324 were in progress at the end of the year.

As far as mediation procedures are concerned, the results have shown a tendency for a significant increase. In 2020, 15 procedures were initiated, which was 87.5% more than in 2019. The values involved went up 29 times, going from R$ 195.8 million to R$ 5.68 billion, with medium value per procedure of R$ 568.21 million. Six procedures were closed throughout the year, and 11 others were in progress at the end of the year.

Both in arbitrations and in mediations administered by CAM-CCBC, it is observed a tendency of stability in the volume of procedures initiated over time, with a slight upward bias.  In 2018, the number of arbitrations was 101. But it dropped to 97 in 2019 and increased to 105 in 2020.  As for mediation, the increase was constant: from four procedures in 2018 to eight in 2019, and 15 last year.

The factor Covid-19

These results were obtained during a challenging year that was full of uncertainties. In the case of CAM-CCBC, there was no interruption in its activities: all procedures continued their normal course, and the Centre functioned normally, even though it adapted itself to the demands of social distancing, brought by the pandemic of the new coronavirus. In a matter of days, virtual platforms had already been established for all procedures, and case managers were already prepared to assist lawyers and arbitrators with the new technological tools.

Several arbitration and mediation activities have migrated to the virtual environment, establishing safe conditions for holding remote hearings. This digitalization made the continuity of CAM-CCBC’s activities possible and also provided more agile and practical ways for the conduction of the processes, avoiding the need for presential displacements, for example.

According to the vice president of CAM-CCBC Directorate, Rodrigo Garcia da Fonseca, the insecurity, brought about by the Covid-19 pandemic throughout 2020, has encouraged companies to seek a negotiated solution to their disputes, for after all, they would have a potentially more serious problem to deal with. This way, the adhesion to ADRs turned out to be a safe and advantageous way to solve disputes, saving energy to face the new coronavirus.

Covid-19 has created a stressful situation in companies, affecting many of their contracts“, he says. According to him, this scenario ended up reinforcing, in the corporate environment, the perception that ADRs constitute an important solution for dispute resolution.

ADRs most present

The vice president of CAM-CCBC commented that the trend of growth in the use of arbitration with the public administration has been maintained in 2020. “We noticed several cases in which, because of Covid-19, public service concessionaires had their invoicing affected, and sought the rebalancing of the terms of their contracts. This use of arbitration in public administration should continue in 2021“, he adds.

In the case of mediation, Fonseca states that the method has been increasingly mentioned in contractual clauses, which reinforces its use, and helps to explain the rise in the number of cases received by CAM-CCBC, in 2020. “We must remember that mediation only became part of Brazilian legislation in 2015, while arbitration has been consolidated for much longer“.

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