"The proceedings will be dismissed, since there is an arbitration clause in the agreement discussed in the lawsuit.
Indeed, arbitration, set forth in Law no. 9,307/96, is absolute and removes the natural jurisdiction of courts of law. It constitutes an allowed exception to the official monopoly (article 5, XXXV, of the Federal Constitution). It is inadmissible only when non-waivable rights are at stake or when inserted into an adhesion contract without the consumer being able effectively to be aware of and understand the effects of this method of dispute resolution.
This is not the situation in the case records.
Thus, there is no reason to bend, in this particular case, the principal of pacta sunt servanda, given that the choice of arbitrators to resolve potential contractual disputes was decided with absolute transparency, revealing the complete exclusion of the state jurisdiction, as can be seen from the agreement." Brasilfert Comercio Representacao Ltda. v. Honeywell Internacional, Inc., 8.19.2016 Summary Rpt. No. 1024873-53 2014.8.26.0100, Cl. Exh. 2. (emphasis added)
To the extent, therefore, that an agency relationship, such as was the case between Honeywell and Brasilfert, more closely resembled an employment or master/servant relationship protected by the Brazilian labor law, the more likely the law protecting the Brazilian agent would be held to be mandatory and unwaivable.
"...In other words, the violation of Brazilian public policy will only take place if the choice of a foreign law contravenes an important principle of the Brazilian legal system, such as a constitutional principle, or in the case of a fraud of law, when the parties purposely try to circumvent a Brazilian public rule by selecting foreign legislation.
In summary, the determination of whether a given decision violates public policy is a case-by-case analysis, which will depend on the circumstancesin concerto.This is because, as pointed out by Brazilian scholars, public policy is a concept that is relative, unstable and contemporaneous by essence." (emphasis added)
A relationship going back to 1977 (although the indemnity claimed by Brasilfert is based on commissions and fees paid from 1986 to the end of 2013).
A contractual waiver throughout the relationship by Brasilfert of any claims on account of termination of the applicable agreement.
The parties’ agreement for several years prior to the SRA to judicial resolution of disputes by courts in the Commonwealth of Virginia with disputes governed by Virginia law.
The parties’ agreement under the SRA to arbitration of disputes under the International Rules of the American Arbitration Association applying New Jersey Law in a New York forum.
Monesmith’s uncontroverted and Unchallenged testimony at the evidentiary hearing that (a) Honeywell was paying Brasilfert much higher compensation than its competitors, including Ameropa and Cargill, for the same services. Tr. 1 at 116. (b) at a time when there were less sales Brasilfert "received $25,000 a month to cover their costs" plus a percentage of the FOB price of product. Id. at 117, and (c) for each year from 2007 through 2013 "Brasilfert collected between $450,000 and $500,000."
On cross examination by counsel for. Brasilfert, Monesmith was asked:
"Q. Did Brasilfert open the Brazilian market to the Claimant?
A. To answer that question, I would say no, but it needs explanation. The market was opened by my former boss, Mr. Ward Rowley, and he worked with someone by the name of Alfredo Mendes, who became an employee of Allied Chemical [later merged with Honeywell].
And between Mr. Mendes as an employee and Mr. Rowley as a representative from the United States, they opened the market.
THE ARBITRATOR: When was that?
B. I believe that was in the middle - middle, early 1970s." Id. at 130."
Alves testified that Brasilfert represented Ameropa and Cargill, both active participants in the Brazilian fertilizer market, but those companies terminated their representation agreements with Brasilfert in the 2002 and 2003 timeframe. Tr. 1 at 138-140.
Alves became a shareholder of Brasilfert in 2009 and was by then the only executive remaining at Brasilfert. At that time Aldir Correia and Gustavo Correia together owned the majority of the shares of Brasilfert. Aldir Correia ("Correia") left Brasilfert in 2003 when he went to work for Ameropa until 2013, but he retained his shares in Brasilfert and became the majority shareholder in 2008. Tr. 1 at 198.
Correia had not worked at Brasilfert since 2004.
Other Brasilfert employees left Brasilfert for Cargill and Ameropa following those companies’ termination of Brasilfert.
Alves testified that Brasilfert never demanded indemnity under the BSRL from either Cargill or Ameropa after their termination of Brasilfert. Tr. 1 at 162. Correia said Brasilfert was paid "some amount." Tr. 1 at 233.
Correia agreed that Honeywell kept Brasilfert afloat for eight years after it was terminated by Cargill and Ameropa. Tr. I at 203.
Correia acquired from Alves his Brasilfert shares at a nominal value when Alves in 2014 went to work for Honeywell, Tr. 1 at 221-223. Correia thus became the sole shareholder of Brasilfert, testifying that should Respondent be successful in its 27j indemnity claim all the money would go to his retirement. "If I win, it is my money. I do what I want with it." Tr. At 209.
(a) Like Brazilian labor law, criminal, tax and administrative law, 27j is not waivable and the prior waiver of rights, by Brasilfert, which it contends, was "forced" on Brasilfert, amounts to "legal fraud." See Resp. Post-Hearing Brief at 4-6, 14.
(b) The SRA with an arbitration clause "was, in fact, a childish attempt at legal fraud," in part because there is no connection between New Jersey law and an agent that is "granted labor law guarantees," and the Brazilian arbitration law only permits arbitration of disputes relating to waivable property rights. Id at 7, 8.
(c) Claimant "by changing the applicable law of the contractual relationship as from January 2009 and ‘armoring’ such change with the ‘Arbitration Clause’" was not acting in good faith and had the intent to perpetuate "fraud of the law." Id. at 21.
"[I]t is not enough not to accept a legal institution through legislation to prevent the recognition of the foreign law that allows it, but it is necessary also that this institution goes against the widespread and common sense of the international community (such as, for example, polygamy, slavery etc.), it is not enough either, that the rule is of a cogent nature relating to citizens, in order to create, for that reason alone, an impediment to the discipline, through another rule, on the relationships between foreigners (such as, for example, those relating to the status and capacity of persons, to succession); what is needed is, on the contrary, for it to be so, that it cannot accept, without serious disturbance to public order or offense to good morals, a different regulation, even applicable only to foreigners. Therefore, the sphere of public order, for the purposes of international law, is stricter than the sphere of public policy for the purposes of domestic order; and an abstractly and theoretically stricter delimitation is not possible due to the nature of the concept of public order, which is essentially variable and contingent: its determination must be trusted for each case to the prudent arbitration of the judge."21 (emphasis added).
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