The Brazilian Arbitration Act 1996 (Law No. 9,307/1996) provides as follows:

The ICC Arbitration Rules 1998 (ICC Rules 1998) provide as follows:

A dispute between YPFB Andina S/A (Andina) and Univen Petroquímica Ltda (Univen) arose under a sales and purchase agreement. After about two years, Andina sought to terminate the agreement and Univen initiated ICC arbitration proceedings. Univen argued that there was no force majeure event or impediment beyond Andina's control to justify Andina's failure to perform its contractual obligations. Further, Univen claimed that Andina had attempted to terminate the agreement in order to profit from the soaring prices of natural gas in the international market. However, the ICC arbitral tribunal held in its award that Andina had validly terminated the agreement and Andina moved for its recognition before the Brazilian Superior Court of Justice (STJ) in order to enforce it against Univen in Brazil.

In the recognition proceedings, Univen claimed that the award was unenforceable because it had been rendered by arbitrators who were not impartial. Univen alleged that the arbitrators had hidden facts which demonstrated their partiality and that this rendered the award null and void. Andina on the other hand, argued that Univen had not raised any questions regarding the arbitrators' impartiality at any time during the course of the arbitration proceedings and were, thus, estopped from making such an argument.

Univen also argued that the basis of the tribunal's decision (that a resolution passed by the Bolivian government was a supervening or force majeure event that entitled Andina to terminate the agreement) meant that the recognition of the arbitral award would infringe Brazilian public policy. In response, Andina claimed that the STJ was prevented from re-opening the subject matter of the dispute.

Finally, it was also claimed that the recognition proceedings should be suspended pending the determination of a motion before the Uruguayan courts seeking to vacate the award.

In a unanimous decision dated 15 August 2012, the STJ recognised the award handed down by the ICC arbitral tribunal. The court ruled that Univen was estopped from challenging the arbitrators' impartiality at such a late stage when, according to the ICC Rules 1998, it should have done so as early as possible in the arbitration proceedings. The STJ found that the parties were duly notified of the appointment of arbitrators and no challenges were made at that time. Moreover, Univen was estopped from challenging the impartiality of the arbitrator that it had itself appointed.

With regard to the suggestion that recognition of the award would offend against Brazilian public policy, the court ruled that it was prevented from re-opening the merits of the dispute, including the reasons which led to a valid or invalid termination of the agreement between the parties. According to Articles 38 and 39 of the Brazilian Arbitration Act 1996, no court is allowed to re-analyse the merits of a dispute submitted to arbitration. As a consequence, the court rejected Univen's requests for orders declaring the contract valid and holding Andina responsible for loss and damage.

Finally, the court rejected the argument that recognition should be stayed because there was an application for annulment of the award before the Uruguayan Court of Appeals. Univen had not provided any proof of the current status of the parallel proceedings in Uruguay, and the court held that the mere existence of the Uruguayan proceedings was not enough to justify a stay of the recognition proceedings. In this connection, the STJ also referred to the fact that Article 28.6 of the ICC Rules 1998 clearly states that by agreeing to submit a dispute to ICC Arbitration Rules, the parties waive any form of appeal.

The decision is one of the first to consider the ICC Arbitration Rules in connection with allegations of arbitrators' lack of impartiality. The importance of this judgment relates to the fact that Brazilian case law on the standards of arbitrators' independence and impartiality is still developing. By holding that the parties were estopped from arguing partiality at such a late stage, when they ought to have presented a challenge as soon as possible, the STJ sheds light on parties' expected conduct in arbitration, namely, that they should raise any challenges to arbitrators as soon as possible.

Furthermore, by recognising the award despite the existence of parallel proceedings in Uruguay to set aside the award, the STJ gave an important indication of the standard of proof that will apply when the court is called on to assess the relevance of parallel proceedings and their effect on recognition proceedings in Brazil. Although no express reference was made to Article 38(6) of the Brazilian Arbitration Act 1996 or Article V(e) of the New York Convention, the court found that the defendant had not provided evidence on the status of the annulment of the award in Uruguay to ground its suspension. This suggests that, where a party wishes to argue that recognition proceedings should be suspended on the grounds of parallel proceedings in a foreign court, it will be important to put forward evidence of the nature and status of the foreign court proceedings. It is not enough merely to prove their existence.

Finally, in refraining from analysing the merits of the arbitral award, the decision is consistent with established arbitration jurisprudence in Brazil.