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

Brazil is a significant participant in international trade, and with the signing of the Mercosur- European Union trade Agreement and the continued growth of export of Brazilian products to Asian markets (including China, India, Viet Nam and Singapore), there is an increasing need for dispute resolution mechanisms that can respond effectively to the demands generated by cross-border commerce.

Opportunely, Brazil is considering a major reform of its Private International Law legislation. On 4 December 2025, the Draft General Law on Private International Law (the “Draft Bill”), was submitted for review by the Brazilian Executive Branch, with a view to its subsequent referral to the Brazilian Congress.

The Draft Bill modernizes Brazil’s rules on connecting factors and international jurisdiction, placing them closer to the approach taken in more internationalised jurisdictions. Notably, it also aligns certain aspects of court practices with solutions long familiar in international arbitration.

For present purposes, two features are particularly significant: (i) party autonomy on choice of the applicable law to international contracts; (ii) the exercise of international jurisdiction, specifically in relation to interim relief in aid of proceedings abroad and the treatment of forum selection clauses.

These developments, as discussed below, narrow the gap between domestic litigation and arbitral practice and may, indirectly, strengthen international arbitration in Brazil.

Choice of Applicable Law

The choice of applicable law is a core feature of international contracting and an expression of party autonomy. Under Brazilian Law, however, two regimes currently coexist depending on whether a dispute is brought before the Brazilian courts or resolved by arbitration.

Under Law No. 9,307/1996 (the Brazilian Arbitration Act), the parties may choose the substantive law governing the merits, including non-state rules, as provided in Article 2, paragraphs 1 and 2. Accordingly, where an agreement provides for arbitration, the contract may be governed by the law selected by the parties without major impediment.

By contrast, where a dispute is submitted to the Brazilian courts, the judge is bound by the Law of Introduction to Brazilian Law (“LINDB”). The LINDB adopts the private international law principle of lex loci contractus, under which contracts are governed by the law of the place where they were concluded (Article 9). Although the Brazilian Superior Court of Justice (“STJ”) has issued decisions recognising party autonomy in international contracts (see STJ. Special Appeal (REsp) No. 1,280,218/MG, Third Chamber, reporting Justice Marco Aurélio Belizze, judgment of 21 June 2016), the legal framework has stayed strict compared to arbitration since the law hasn't changed in 80 years.

The Draft Bill seeks to harmonise these approaches by expressly permitting the parties to choose the applicable law, as set forth in Article 29:

Article 29. Except in cases of abuse, obligations arising from international contracts shall be governed by the law chosen by the parties.

Where the parties have made no choice, the Draft Bill retains lex loci contractus as a subsidiary rule (Article 29, paragraph 6). Even then, it contemplates the application of another law where, based on its circumstances, a different system has a clearly closer connection to the matter in dispute than the law of the place of contracting, as provided by its Article 16:

Article 16. In exceptional circumstances, the law designated by this Law shaw not apply if, having regard to all the circumstances, it is evident that the case has only a weak connection with that law and a manifestly closer connection with the law of another State.

In practical terms, the Draft Bill would bring the judicial regime closer to the arbitral regime, updating the conflict-of-laws rules applicable to international contracts and reinforcing party autonomy.

International jurisdiction in support of international arbitration

The Draft Bill also clarifies and develops the international jurisdiction of Brazilian courts. Several provisions may be particularly relevant to the supportive role of courts in relation to cross-border disputes, including arbitration.

• Preliminary relief in aid of proceedings abroad

Of particular attention is Article 3, paragraph 1, which provides as follows:

Article 3. The Brazilian judicial authorities shall have jurisdiction in the circumstances provided for in procedural law and in the treaties to which the Federative Republic of Brazil is a party.

Paragraph 1. The Brazilian judicial authorities shall have jurisdiction to hear and determine applications for interim relief where they have jurisdiction over the main proceedings, or where such relief is necessary to preserve situations or rights to be exercised in Brazil, even if the main proceedings have been, or are to be, brought before a foreign court.

In effect, this rule facilitates applications in Brazil for urgent measures in support of foreign proceedings. Such measures may be sought, for example, to secure evidence located in Brazil, preserve the status quo, or prevent the dissipation of assets within Brazilian territory, thereby supporting the effectiveness of any eventual foreign judgment. Importantly, the provision is framed to reduce reliance on formal channels of international judicial cooperation (such as letters rogatory), allowing an application to be made directly to Brazilian courts.

This is also relevant in the context of arbitrations seated abroad where Parties may need interim relief in Brazil.

Article 22-A of the Brazilian Arbitration Act permits parties to seek provisional measures and urgent relief from the local courts before the commencement of the arbitration. Local courts may also grant injunctive relief where the arbitral tribunal has already been constituted but is unavailable to act. The provisions of the Draft Bill expand it further, to allow for provisional measures even if the tribunal is seated abroad.

While Brazilian legislation has not historically addressed this issue expressly, scholarship  and precedent support the view that Brazilian courts may grant preliminary injunctions, provided that a recognised basis of international jurisdiction exists under current Brazilian Law ((see Arnoldo Wald, ‘Medidas cautelares fora da sede da arbitragem’ (2014) Doutrinas Essenciais Arbitragem e Mediação vol 2, 1073–1094; Roberta Menezes Couceiro, ‘Da Concessão Pelo Juiz Brasileiro de Tutela Cautelar Antecedente à Instituição de Arbitragem com Sede Fora do Brasil’ (2017) Revista de Arbitragem e Mediação vol 52, 123–139; Pedro Guilhardi, ‘Jurisdiction of National Courts for Interim Reliefs in Aid of Foreign Arbitral Proceedings: a Proposed Solution under the New York Convention’ (2012) Revista Brasileira de Arbitragem 56–89; TJRJ, Appeal No. 0009564-46.2010.8.19.0002, Rapporteur: Judge Lucia Maria Miguel da Silva Lima, judgment of 24 May 2011, Twelfth Civil Chamber; TJSP, Interlocutory Appeal (AI) No. 0028833-77.2013.8.26.0000, Rapporteur: Judge José Reynaldo, judgment of 6 May 2013, 2nd Reserved Chamber for Business Law, published on 7 May 2013; TJSC, Appeal No. 5001183-19.2022.8.24.0126, Rapporteur: Judge Soraya Nunes Lins, judgment of 30 November 2023, Fifth Chamber of Commercial Law).

The Draft Bill expressly contemplates the granting of interim relief “where [such measures] are necessary to preserve situations or rights to be exercised in the country”. This formulation sits alongside (and appears to go beyond) the jurisdictional gateways under the current procedural legislation, which generally recognises international jurisdiction only where: (i) the defendant is domiciled in Brazil; (ii) the obligation is to be performed in Brazil; or (iii) the claim arises out of a fact occurring, or an act performed, in Brazil (as provided by Article 21 of the current Brazilian Code of Civil Procedure ).

In practice, certain applications—such as an asset-freezing order—do not always fall neatly within those three grounds. This may occur, for example, where the assets are located in Brazil but the local courts lack personal jurisdiction over the defendant, which may prompt challenges to the Brazilian courts’ international jurisdiction. The Draft Bill’s wording, however, appears sufficiently broad to capture such cases, insofar as it focuses on the need to preserve situations or rights to be exercised in Brazil, a test that could be considered wider than the current procedural criteria.

Overall, the Draft Bill would reduce uncertainty as to the availability of interim relief in Brazil in support of arbitrations seated abroad.

• Forum selection clauses in international contracts

The Draft Bill also addresses uncertainty arising from the 2024 amendment to Article 63, paragraph 1 of the Brazilian Code of Civil Procedure, which introduced restrictions on forum selection clauses by requiring a connection between the chosen forum and the parties’ domicile/residence or the place of performance (subject to a consumer-law exception).

Because Article 25 of the Code of Civil Procedure (which deals with foreign forum clauses in international contracts) refers to Article 63 for formal requirements, questions have arisen as to whether the requirement for a connection between the chosen forum and the domicile of one of the parties or the place of performance of the obligation also applies to international contracts.

This issue is relevant to arbitration because parties frequently designate a forum—whether domestic or foreign—for matters such as the enforcement of an arbitral award, applications for urgent relief, or even set-aside proceedings. In international practice, parties to cross-border contracts often choose a foreign forum not because it has a particular connecting factor to the dispute, but because they trust its neutrality and predictability. The current wording of Article 63 of the Code of Civil Procedure, however, may create uncertainty as to the validity and effectiveness of such contractual provisions.

Article 4 of the Draft Bill would resolve this issue by stipulating that:

 "The unequivocal choice of national or foreign jurisdiction in international contracts shall not depend on any prior connection with the chosen jurisdiction, nor shall it require the indication of the reasons justifying such choice."

If enacted, this would preserve party autonomy in international commerce and reduce uncertainty about the choice of a forum for arbitration purposes.

Conclusion

The Draft Bill does not regulate arbitration directly. Nonetheless, some of its key choices reflect concepts familiar from international arbitration, while at the same time resolving uncertainties that also affect arbitration as practised in Brazil.

In particular, the Draft Bill would: (i) consolidate party autonomy in relation to the governing law of international contracts; and (ii) strengthen the statutory basis for the exercise of international jurisdiction by Brazilian courts, including the granting of interim relief in aid of proceedings abroad and the protection of forum selection clauses in international contracts. Taken together, these reforms represent a meaningful step towards a more modern and internationally attuned framework for dispute resolution in Brazil.