At a trial session held on September 18, 2018, the Superior Court of Justice ("STJ") — the highest appellate court in Brazil for non-constitutional questions of federal law — dismissed the Special Appeal No. 1,639,035-SP [2015/0257748-2] that questioned the possibility of extending the effects of an arbitration clause contained in a credit facility agreement to its related swap agreements, despite the latter establishing that local courts would have jurisdiction to hear disputes arising thereof.

In assessing the question, the Third Chamber of the STJ confirmed, by a majority of votes, the reasons for judgement issued by the State of São Paulo Court of Appeals, holding that, in this particular case, the credit facility agreement and its swap agreements were interconnected and interdependent, whereby the former constitutes the main agreement, and the latter its related agreements (i.e., "group of contracts doctrine").

According to the reporting justice, Honorable Paulo de Tarso Sanseverino, in the case of contracts that are related, the interpretation and construction of the obligations established must take into account the circumstances of the operation in its entirety, in particular the economic goals pursued by the signatory parties.

The credit facility agreement, understood and held by the Court to be the principal contract, shall set and guide the rules that must be followed by other instruments (i.e., swap agreements), in order to conform to the main agreement. Allowing for this approach, the arbitration clause contained in the credit facility agreement shall have its effects extended to the others (i.e., "principle of legal gravitation"), as all of the agreements fall within a single economic operation.

Although there is consensus among the 3 justices1 regarding the existence of contractual connection between the credit facility agreement and the subsequent swap agreements, the Honorable Justice Luis Felipe Solomon stated in his dissenting vote that "the absence of an arbitration clause in the swap agreements prevents the disputes arising thereof to be settled by arbitration, which otherwise constitutes a violation of the basic principle of 'party autonomy'", a principle considered one of the pillars of the arbitration system.

1 The special appeal No. 1,639,035-SP was decided by the Honorable Justices Luis Felipe Solomon, Marco Buzzi, and by Judge José Lázaro Alfredo Guimarães of the Federal Appelate Court for the 5th Region (TRF-5) because the three sitting justices that compose the Third Chamber of STJ: Honorable Justices Nancy Andrighi Marcus Aurelius Bellizze and Moura Ribeiro declared themselves partial to hearing the case.