In 2026, the Corporations Law (Lei das SA) will be 50 years old, and the Arbitration Law, 30. These are distinct ages for legislations that, although conceived in very different contexts, ended up intertwining in a way that perhaps none of their authors could have anticipated. Together, they shaped the legal framework that helps Brazil raise capital, organize business activity, and resolve conflicts at standards minimally comparable to those of more mature markets.
There is an uncomfortable truth about economic development that economists repeat, but policymakers don't always consider: without reliable institutions, capital doesn't stay. Investors tolerate market volatility; what they don't tolerate is the feeling that the rules might change mid-game or that, should a dispute arise, there will be no appropriate forum to resolve it. It is at this point that the trajectories of these two laws intersect.
When it was enacted in 1976, the Corporations Law sought to solve a concrete problem: Brazil needed large companies, but the existing legal system did not offer sufficient protection for those investing money in other people's ventures. The new legislation regulated the duties of administrators, created oversight mechanisms and — most importantly — made it less risky for the average investor to entrust their resources to publicly traded companies.
The merit of the Brazilian Corporations Law, however, does not end with the original text. The 2001 reform, for example, rebalanced minority rights at a time when the Brazilian market was undergoing a wave of privatizations and restructurings. Later, the creation of the B3's special listing segments—which require governance standards higher than those of the legislation—was only possible because the law already offered the structure upon which these requirements could be based.
Although arbitration as a means of dispute resolution had existed in Brazil for a long time, the 1996 Law addressed another bottleneck. At that time, the Brazilian Judiciary was backed up with millions of cases, and sophisticated commercial disputes involving earn-out clauses, claims for breach of representations and warranties, or conflicts between partners over business strategy, simply did not find a suitable environment in state courts.
It is true that every functioning economy produces litigation—and that is not necessarily a problem. The problem arises when the resolution of this litigation drags on for years, consumes disproportionate resources, and generates unpredictable decisions. For mergers and acquisitions, project finance, or international joint ventures, this inefficiency represented, and to some extent still represents, a real cost that is incorporated into the deal price.
Arbitration presents itself as an alternative. It is not a perfect mechanism. Generally, arbitration procedures are expensive, are not suitable for all types of disputes, and have known limitations regarding the production of public case law.
But for highly complex commercial disputes, arbitration brought something that the judicial system struggled to deliver: technical decisions, within a reasonable timeframe, issued by people who truly understand the subject matter in dispute. When the Supreme Federal Court confirmed the constitutionality of the law in 2001, it removed the last significant uncertainty that still hung over the institution.
Thirty years later, Brazil is home to arbitration chambers that manage disputes worth billions of reais. And the data they release show consistent growth in both the volume of cases and the amounts involved. In corporate, infrastructure, and energy disputes, arbitration has ceased to be an alternative option and has become the natural course of action.
What perhaps wasn't so evident in 1996 is that the Brazilian Corporations Law and the current Brazilian Arbitration Law would end up complementing each other to a significant extent. The growth of the national capital market generated more complex operations, which in turn demand more sophisticated dispute resolution mechanisms. Arbitration, by offering this mechanism, reduces a risk factor that can inhibit the very sophistication of corporate structures.
Today, publicly traded companies listed on the Novo Mercado or Level 2 of the B3 stock exchange adopt arbitration clauses in their bylaws. This also applies to many shareholder agreements in private equity transactions. Arbitration has ceased to be a stylistic clause and has become a contractual infrastructure, as integrated into governance as the board of directors or the audit committee.
From a strictly economic point of view, what this combination produces is a reduction in so-called "legal risk"—a component that, in countries with weaker institutions, increases the cost of capital and shortens the investment horizon. It is no coincidence that the simultaneous maturation of these two legislations has coincided with the period of greatest expansion of the Brazilian capital market.
Clearly, the next 30 or 50 years will bring challenges that these laws, as conceived, were not designed to address. The tokenization of assets, for example, questions traditional concepts of securities; artificial intelligence raises unprecedented issues regarding the liability of administrators; and the ESG agenda is pushing for broader fiduciary duties than those contemplated by the 1976 law. Adaptation will be necessary, as has already been done several times.
If there's one thing the trajectory of these laws teaches us, it's that good legal institutions are not a luxury reserved for rich countries, but rather essential conditions for a nation to develop and prosper. Brazil doesn't always get this right, but in these two cases it did. And it didn't get it right by chance: both the Corporations Law and the Arbitration Law were the product of serious technical work, involved top-tier professionals, and knew how to balance reformist ambition with practical feasibility.
In celebrating them, it's worth resisting the temptation to treat them as finished works. Their true legacy lies not in the text that remained unchanged, but in the demonstrated ability to evolve without losing coherence. It is this balance between stability and adaptation that the Brazilian market will need to preserve in the decades to come.
* Fernando Eduardo Serec is CEO of TozziniFreire Advogados; and Rafael Medeiros Mimica is a partner in the Litigation area of TozziniFreire Advogados.
