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

Article 6:

"In the absence of any provision as to the method for commencing arbitration, the interested party shall notify the other party, either by mail or through any other means of communication, with proof of receipt, of its intention to commence arbitration, requesting its presence for the conclusion of the submission agreement at a certain day, hour and place. Sole Paragraph: If the notified party fails to appear, or refuses to sign the submission agreement, the other party may file the action provided for in Article 7 of this Law, at the State Court originally competent to decide the dispute."

Article 7:

"If there is an arbitration clause and one of the parties resists the commencement of the arbitration, the interested party may request the other party be summoned to appear in court for the conclusion of a submission agreement, in a special hearing to be designated for this purpose."

Article 535 of the Brazilian Civil Procedure Code (CPC) provides that:

"A motion to clarify can be rendered when:

I – There is a contradiction or ambiguity in the decision;

II – There is an omission of an issue that should have been addressed by the judge or court of appeal."

A dispute arose between two parties regarding a lease agreement which contained a "blank" arbitration clause (that is, there was no prior agreement on the manner of initiating arbitration). As the parties had not agreed on the terms for constituting an arbitral tribunal or how to initiate arbitration, the claimant filed a motion to have the Mediation and Arbitration Chamber of Cuiabá, as the arbitration institution administering the dispute.

A first decision was rendered by a lower court judge, partially granting the claimant's request by deciding that a submission agreement should be respected by the parties. The court held that the arbitration clause was valid, but ruled that a different arbitration institution should conduct the arbitral proceedings. The court also recognised that it had jurisdiction to determine the details of arbitration that were not established in the "blank" arbitration clause, which were essential for allowing arbitration to be initiated. The court also provided for attorneys' and arbitrators' fees in the submission agreement.

The defendant appealed, questioning whether the provision for attorneys' and arbitrators' fees should be part of the submission agreement. The TJMT dismissed the appeal, arguing that such a dispute should not have been brought to court, as the parties had agreed to resolve any dispute related to the contract by arbitration.

Subsequently, a special appeal for the annulment of the TJMTs' decision was filed with the STJ, based on Article 535 of the Brazilian Civil Procedure Code and Articles 6 and 7 of the BAA. It was argued that the TJMT had made contradictory statements in its decision. The TJMT had acknowledged the possibility of the parties seeking judicial assistance for establishing a submission agreement whenever there is a "blank" arbitration clause and that the parties had not agreed on the details to initiate arbitration. However, the TJMT dismissed the appeal, stating a lack of competence of the courts.

Therefore, the appellant requested clarification as to the judiciary's competence to conclude submission agreements in this situation, and whether the provision for the attorneys/ and arbitrators' fees should have been included.

The STJ overturned the TJMT decision on three main grounds:

The STJ held that the decision by the TJMT was inconsistent and contradictory. Even though the TJMT dismissed the appeal, it had explicitly identified the competence of the judiciary to solve issues arising from parties who had agreed to a "blank" arbitration clause, and had, therefore, not settled the details of how to initiate arbitration.

Furthermore, it recognised that the judiciary had authority to rule over the issue as arbitration proceedings had not yet commenced. The arbitration clause itself did not contain all the details of how the parties could commence arbitration proceedings or what arbitration institution they should use. Therefore, the issue had to be resolved by a judge, who would make a submission agreement expressing all the details of the proceedings.

The STJ expressed the view that, according to Article 6 of the BAA 1996, if one party refuses to conclude a submission agreement, the other party may file a motion under Article 7. Since the parties only disagreed on the terms of the submission agreement, rather than on the merits of the dispute or the validity of the arbitration clause, the decision rendered by the court was technically incorrect. Therefore, the only possible motion available to the claimant was in Article 7 of the BAA 1996, which does not prevent the parties going to court because they have entered into a "blank" arbitration clause.

In this case, the STJ corrected the TJMT's mistake of dismissing the case because of a lack of judicial competence. The STJ decision recognises and strengthens the purpose of Articles 6 and 7 of the BAA 1996, which is to make the parties respect the arbitration clause and allow them to have their dispute settled by arbitration. The decision is also important as it expresses the need for judicial assistance when parties have only agreed on a "blank" arbitration clause and have not agreed on necessary details, such as how to commence arbitration.