From January to June of this year, 829 applications for bankruptcy and 685 applications for judicial reorganization were filed for Brazilian companies, according to Serasa Experian. The high numbers reflect Brazil’s unstable economic situation and overwhelm the Judiciary with complex bankruptcy proceedings due to the huge number of participants and the diversity of legal issues involved. To make the situation worse, there are few judicial districts where there are courts specialized in the subject matter, which further hinders the speed and effectiveness of procedures that, as a rule, are already time consuming.
To speed up the resolution of conflicts between creditors and debtors or other issues related to insolvency proceedings, the courts have authorized or ordered the use of alternative methods such as conciliation, mediation, and arbitration. This trend follows guidance No. 45 approved in the First Conference on the Prevention and Extrajudicial Settlement of Litigation in 2016 and authorizes the use of the aforementioned methods for resolving conflicts in bankruptcy and judicial reorganization proceedings.
Very recently, conciliation was authorized by the Judiciary of the State of São Paulo to resolve disputes over claims in judicial reorganization proceedings. Rather than opening an ancillary proceeding to litigate the amount of the debt, companies will be able to rely on conciliation sessions to try to reach an agreement directly with creditors. It is estimated that this represents a time savings of 6 months to 1 year.
Inepar, a company in the process of judicial reorganization since 2015, was a pioneer in adhering to this method in negotiating directly with the creditors that submitted a credit divergence. In total, 28 agreements were executed with unsecured creditors in the first joint effort organized by the company, according to the news piece published by the newspaper "Valor Econômico" on July 31 of this year.
In addition to contributing to speed up the process, the measure saves the company's financial resources, which may be better allocated to improving its financial health and paying creditors.
Governed by Law No. 13,404/15, mediation has also been explored in bankruptcy and judicial reorganization proceedings, as in the Oi case. Even if it is criticized for not abiding by the arbitration clause in the company's corporate documentation, the Superior Court of Justice – STJ has already recognized that this alternative means can be used to resolve conflicts between shareholders (Conflict of Jurisdiction No. 148,728/RJ). This procedure was also elected to litigate the divergence between the parties with respect to the competition of creditors for the debts of Anatel and the claims of smaller unsecured creditors (up to R$ 50,000), which is an extremely high number and may hamper, even in operational terms, the unfolding of a future general meeting of creditors that will deliberate on the reorganization plan. Mediation is still being used to resolve disputes involving essential services (undersea cables) provided by a significant supplier whose contract has a take or pay clause.
Regarding the issue of unsecured creditors with claims of up to R$ 50,000, mediation was suspended by a preliminary decision of the 8th Civil Chamber of the Court of Appeals of the State of Rio de Janeiro (TJ-RJ), issued with respect to interlocutory appeal No. 0033161-06.2017.8.19.0000, on the grounds that it could entail payment before the vote on the reorganization plan.
The mediation method consists of "technical activity performed by an impartial third party without decision-making power, who, chosen or accepted by the parties, helps them and encourages them to identify or develop consensual solutions to the controversy" (article 1, sole paragraph of Law No. 13,140/15). It is compatible with bankruptcy and judicial reorganization proceedings, since the subject-matter of mediation may be related to alienable rights or inalienable rights but which allow for settlements, under the terms of article 3 of Law No. 13,140/15.
In the same manner, arbitration is perfectly applicable to bankruptcy and judicial reorganization proceedings. Despite the collective interest in such procedures, the situations debated in these suits are contractual and deal with alienable rights that are amenable and subject to arbitration, by the free consent of the parties.
In this sense, there are those who argue, such as José Emílio Nunes Pinto, that arbitration agreements can be proposed even in judicial reorganization plans for the resolution of certain matters that relate to equity or are of an alienable nature. As is known, this practice has not yet been adopted, but the Judiciary has recognized the validity of arbitration agreements and has allowed companies in judicial reorganization or bankruptcy to use this extrajudicial method of dispute resolution.
This was the understanding of the STJ in precautionary measure No. 14,295/SP, as taken from the bankruptcy case of Interclínicas Planos de Saúde, and was also the position of the TJ-SP in the bankruptcy of the Diagrama Construtora, in interlocutory appeal No. 531.020.4/3-00. The situation is dealt with in guideline No. 6 of the First Conference on the Prevention and Extrajudicial Settlement of Litigation: "The granting of judicial reorganization or a decree of bankruptcy does not authorize the judicial trustee to refuse effect to arbitration agreements, does not preclude the initiation of an arbitral proceeding, nor does it suspend such a proceeding."
It is therefore hoped that the methods of conciliation, mediation, and arbitration for resolving disputes involving bankruptcy and judicial reorganization will increasingly be used to replace the numerous ancillary proceedings introduced in the course of suits of this nature and will help resolve gridlock related to alienable patrimonial claims.