Although using the Market Arbitration Chamber (CAM) is only mandatory for companies listed on the Novo Mercado, Nível 2 and Bovespa Mais tiers of the BM&FBovespa, nothing keeps other segments from voluntarily resorting to arbitration for conflict resolution. The possibility does not seem very attractive, however. Out of the 140 companies registered with the CAM, only 13 (9%) are listed on the Traditional or Nível 1 segments.

Using the Arbitration Chamber to solve conflicts benefits investors for a number of reasons. Principal among them are the greater agility and lower costs compared to traditional court proceedings. According to the Arbitration Act, the process must be completed in a maximum of 180 days unless otherwise specified by the parties involved.

The CAM is comprised of professionals with in-depth knowledge of the capital market. Accordingly, they are able to see the big picture when a conflict is placed before them. That skill enables them to analyze disputes comprehensively, often without having to call in specialized technicians or experts. The arbiters are also appointed by the parties involved.

The Brazilian Institute of Corporate Governance (IBGC) recommends arbitration as a component of good corporate governance. Its new code states that "conflicts between partners and managers or between managers and the organization are to be resolved preferably by mediation, or by arbitration if no agreement can be reached. We recommend including the aforesaid mechanisms in the by-laws or in a commitment executed by the parties."

Usiminas prefers to await the consolidation of arbitral decisions that could reveal the chamber's positions

Out of the 80 companies sampled for this month's Comply or Explain section, 29 do not employ arbitration for conflict resolution. AmBev and Bradesco are considering the option of using the CAM. Bradesco argues that as the arbitration chamber has never been used, there is no way of proving "the CAM's effectiveness in resolving ownership controversies, or knowing how future proceedings would be processed when its arbiters are naturally replaced, or after any modifications to its by-laws".

Braskem emphasizes that its non-adhesion to the Market Arbitration Chamber does not mean a rejection of the concept of arbitral judgment that each company can freely adopt, but rather a certain amount of insecurity regarding, for instance, the non-existence of accessible jurisprudence on proceedings previously submitted to the CAM. Itaú Unibanco argues that none of its shareholders have asked why the arbitration option was not adopted to date.

Likewise, Usiminas believes it prudent to await the consolidation of arbitral decisions which might provide a deeper and clearer view of the Chamber's position regarding sensitive issues of company relations with their shareholders. Thus, "despite acknowledging the many benefits brought by arbitration, the company has decided to refrain from that practice at this time."

Copel, in turn, explains that it "prefers to maintain its right to engage the courts to resolve any conflicts, should that alternative be deemed most adequate." Therefore, submitting to the Chamber will only be considered an option if the company changes its listing tier to Nível 2. Copel also explains that some interpretations declare that the state cannot be subjected to arbitration, due to the legal principle of non-disposability of the public interest. According to that principle, the state, or more precisely the state's administrators, do not enjoy ownership rights over the public interests entrusted to them, and thus must act strictly in accordance with the limits imposed by law.

CTEEP informs that it seeks internal solutions for any corporate conflicts. However, it is not opposed to the concept of an arbitral judgment that each company may freely adopt. Klabin clarifies that it engages the traditional legal means to resolve any litigations. "The company believes that these channels always produce fair agreements for the parties involved when a conflict arises."

Confab notes that there has never been a conflict between its partners and/or managers since its IPO. For that reason, the feasibility of submitting to the Bovespa's Arbitration Chamber has not been discussed to date.

Cemig states that the true benefits of using the Chamber have not yet proven sufficient to justify the decision. "If the conclusions of our studies point to gains in corporate governance, Cemig will endeavor to make that option possible.