The state reinsurance monopoly has now been lifted with the enactment of Constitutional Amendment No. 13 of August 21 1996. In accordance with the new wording of Article 192, II of the Constitution, licensing requirements and other conditions applicable to reinsurance shall be regulated in a complementary law. There are at present two bills on the subject being examined in Congress.
Some members of Congress are of the opinion that until such time as the complementary law is enacted, reinsurance operations can be contracted, subject to the prior and express approval of the Institute of Reinsurance of Brazil in accordance with prevailing legislation. In any case, the full regulation of the sector is due shortly. Electricity Sector:
The governor of the state of Sao Paulo is taking suggestions for the definition of the rules for the sale of the three biggest electricity companies.
A block of 45% of the common shares of the federally-owned mining company, Companhia Vale do Rio Doce, is due for sale in February by means of a special purpose vehicle.
Until very recently, for an international arbitration award to be enforced in Brazil, it had to be ratified by the local judicial court, and further ratified by the Brazilian Supreme Federal Tribunal. It was only after this double ratification that the award could be executed through a separate judicial proceeding.
Both the judicial ratifications and the judicial execution were subject to challenges based on one of the various specific reciuirements for a valid award.
These included the following:
* It was essential that the defendant domiciled in Brasil had been properly summoned by means of rogatory letters, in accordance with the Brazilian provisions on the matter. Service of process made by any other means (eg by publication, mail or diplomatic representatives) did not constitute valid summoning.
* The Supreme Federal Tribunal would not ratify awards based on submission clauses drawn up before the parties had any concrete dispute.
Some of these difficulties were addressed in relation to arbitration awards issued in any of the signatory countries of the Panama Convention of Janury 30 1975, in force in Brazil since December 27 1995.
A further significant improvement is now due under Law No. 9307, which will came into force as of November 24 1996.
Relevant provisions include:
* International arbitration awards shall be dependant on ratification by the Supreme Federal Tribunal only and shall be enforceable in Brazil in accordance with the applivable international treaties with effect in Brazil and, in their absence, strictly in accordance with the provisions of Law No. 9307/96.
* The award can be based on submission clauses, whose validity will survive the relevant agreement.
* Defendants resident or domiciled in Brazil can be summoned in accordance with the applicable international treaty or foreign law. Even summoning by mail with receipt acknowledged is allowed, provided the Brazilian party is granted enough time to presents its defence.