Law 14,879/2024, enacted in June 2024, amended Article 63 of the Code of Civil Procedure, imposing new rules for the forum selection clause in business and civil contracts. Now, this clause must respect the place of domicile of one of the parties or the place where the obligation provided for in the contract will be fulfilled. Consumer relations continue to have the legal protection that the choice of forum must favor the consumer.
This change is relevant because it limits the freedom of the parties to choose the forum. Furthermore, the clauses that deal with dispute resolution and the choice of forum have a major impact on the legal certainty of contracts.
When signing a contract, the parties can decide whether any disputes will be resolved in court or through arbitration, and may also provide for prior mediation. This choice should take into account factors such as the desired confidentiality and the amount involved. While arbitration guarantees confidentiality as a rule, in judicial proceedings this depends on a specific decision by the judge, with exceptions provided for in the legislation.
Another important point is the choice of the arbitration or mediation chamber, if this route is adopted. The costs of this procedure vary according to the value of the dispute and the number of arbitrators involved (one or three). Therefore, in contracts of lower value or involving individuals, the cost may become a factor that discourages arbitration.
To avoid future problems, the arbitration clause must be clear and objective, indicating the chosen chamber, the location of the proceedings and the language used. It is also recommended that the parties provide for a judicial forum for urgent situations. The careful inclusion of these clauses, with adequate analysis of which mechanism best applies to the contract (judicial or arbitration), reduces the risk of preliminary disputes over the jurisdiction of the court, which can delay the resolution of the conflict and increase the costs involved.
Our Civil Litigation and Arbitration team is available for any clarifications or questions.
