How to set aside Arbitral Awards in Brazil

In Brazil, arbitral awards are final and binding and not subject to appeal. While review of the merits is expressly prohibited, judicial intervention is permitted where formal defects may justify setting the award aside.

The principal mechanism to challenge an award is the annulment action (the Brazilian equivalent of a setting-aside application), governed by Articles 32 and 33 of Law No. 9.307/96, the Brazilian Arbitration Act. Article 32 sets out a list of grounds on which an award may be declared null, while Article 33 establishes the procedural framework for bringing the action.

Jurisdiction to hear an application to set aside an arbitral award lies with the ordinary courts of first instance: a state civil court in most cases, or a federal court where a federal entity is a party. The action is therefore filed before a trial court, and its decision may be appealed to the State Court of Appeals (Tribunal de Justiça). On questions of federal law, the Superior Court of Justice (STJ) acts as the final appellate instance.

An arbitral award may be set aside only through an annulment action (Articles 32 and 33 of Law No. 9.307/96). Article 32 provides the list of grounds, namely:

(i) the arbitration agreement is invalid;

(ii) the award was rendered by someone ineligible to serve as an arbitrator;

(iii) the award lacks formal requirements, missing mandatory content (Article 26);

(iv) the award exceeds the limits of the arbitration agreement;

(v) the award is proven to have been procured through malfeasance, extortion, or passive corruption;

(vi) the award was rendered after the applicable deadline; and

(vii) the award breached the due-process principles set out in Article 21, § 2.

These grounds are interpreted strictly. The list in Article 32 is exhaustive: a court may set aside an award only on one of the grounds it sets out and may not review the merits of the dispute. Accordingly, the court cannot reassess the arbitral tribunal's legal reasoning or its assessment of the evidence.

A setting-aside application (annulment action) must be filed within a period of 90 days, running from the party's receipt of notice of the arbitral award  or, where a request for clarification has been filed, from notice of the decision on that request.

The filing of a setting-aside application does not automatically suspend enforcement of the award. The applicant may, however, seek interim relief to stay enforcement, which the court may grant where fumus boni iuris and periculum in mora are shown.

Parties cannot waive in advance their right to seek the setting aside of an award. The grounds for annulment under Article 32 of the Brazilian Arbitration Act are mandatory in nature and may not be restricted or excluded by agreement, as they safeguard due process and public policy. A full waiver of the right to challenge an award would also conflict with the constitutional guarantee of access to the courts (Article 5, XXXV, of the Federal Constitution) and is therefore regarded as ineffective.

The annulment (setting-aside) action is filed as an ordinary civil action before the competent first-instance court and must meet the general requirements for civil claims under the Code of Civil Procedure, including:

• a written initial petition identifying the parties, the award challenged, the grounds relied upon, and the relief sought;
• the documents essential to the claim, in particular the arbitral award and the arbitration agreement, in Portuguese or sworn translation;
• payment of court filing fees.

A setting-aside action may result in the court's decision to:

• dismiss the action, leaving the award fully valid and enforceable;
• partially annul the award, setting aside only the part affected by a ground listed in Article 32 of the Brazilian Arbitration Act;
• fully annul the award; or
• remit the matter to the arbitral tribunal, in two situations: (i) under Article 33, § 2, where, having declared the award null on a ground listed in Article 32, the court orders the arbitrator or tribunal to render a new award, where appropriate; and (ii) under Article 33, § 4, where the award has failed to decide a claim submitted to arbitration and the court, rather than annulling it, refers the matter back to the tribunal for a supplementary award.

Yes. Because the annulment action is governed by the Code of Civil Procedure, prevailing-party attorneys' fees are available regardless of whether the contract provided for them. Under the CPC, the prevailing party's counsel is entitled, in their own right, to statutory fees payable by the losing party, set at between 10% and 20% of the amount of the judgment, the economic benefit obtained, or the value of the claim, as fixed by the court.

Brazilian courts take a restrictive approach to the annulment of arbitral awards, consistently refusing to treat annulment proceedings as a means of reviewing the merits of arbitral decisions.

Recent case law reflects this. The São Paulo (Case No. 2097304-62.2023.8.26.0000) and Paraná (Case No. 0000666-16.2019.8.16.0001) Courts of Appeals have reaffirmed that annulment actions cannot be used to revisit the factual findings or legal conclusions of the arbitral tribunal. At the same time, courts have shown a willingness to remit awards for supplementation rather than annulling them outright, as in decisions from São Paulo (Case No. 1000003-40.2023.8.26.0354) and Goiás (Case No. 5161145-92.2023.8.09.0051), in both of which the award was ordered to be supplemented, rather than annulled, for failing to address arguments raised by the parties.

As to the likelihood of success, empirical data confirms that annulment remains an exceptional remedy. A study on annulment actions by the University of São Paulo researchers found that, between 2011 and 2022, approximately 73% of challenged awards were upheld in full at the appellate level, while 16.9% were partially annulled and 10.1% were fully annulled: an overall annulment rate of 27%.

A separate, nationwide study by FGV Justiça covering 2018–2023 found that courts granted annulment in roughly 22.6% of appeals before the State Courts of Appeals.

The data therefore confirms that setting-aside applications face a high threshold in Brazil, and that successful challenges remain the exception rather than the rule.