Takeaway: Brazil’s Superior Court of Justice (STJ) ruled that contracts with valid arbitration clauses must be resolved through arbitration, not by the reorganization court, even if entered into after the commencement of judicial reorganization. The Court upheld the kompetenz-kompetenz principle and limited the reorganization court’s role to actions directly impacting the debtor’s estate

On April 9, 2025, the 2nd Panel of Brazil’s Superior Court of Justice (STJ) unanimously ruled that contracts containing valid arbitration clauses must be adjudicated by the arbitral tribunal, not by the court overseeing the judicial reorganization.

The case involved a contract for industrial processing services, executed after one of the parties had entered judicial reorganization and containing a valid arbitration clause. The reorganization court terminated the contract, finding certain provisions to be abusive. However, the commercial court—designated in the agreement as the forum for pre-arbitral emergency relief—issued a provisional ruling preserving the contract’s effects until a decision could be rendered by the arbitral tribunal. The STJ upheld the primacy of the arbitration clause, holding that judicial reorganization does not displace the jurisdiction of the arbitral tribunal to adjudicate contractual disputes. The Court confirmed the tribunal’s authority to decide the merits of the case and recognized the commercial court’s interim role as the emergency forum until the arbitral tribunal is formally constituted.

The reporting Justice emphasized that the contract did not involve DIP financing nor had it been approved by the reorganization court—factors that proved decisive in upholding the arbitration clause. Because the contract was not essential to the debtor’s restructuring, the STJ ruled that arbitration should prevail, honoring the parties’ choice. The Court also recognized the provisional jurisdiction of the commercial court to grant emergency relief, pursuant to the contract’s designation of that forum as the emergency venue, and limited the role of the reorganization court to measures directly affecting the debtor’s estate.

In practice, the decision provides greater certainty for companies contracting with parties in judicial reorganization.

To read the full decision, click here.

The MAC Advogados Team is highly specialized in arbitration and ready to assist companies in drafting and enforcing arbitration clauses—even in contracts involving parties under judicial reorganization—ensuring legal certainty and effective dispute resolution.