The Brazilian arbitration statute is only four years old, so arbitration is 
still somewhat of a new concept.  However, businesspeople in the more 
sophisticated commercial centers (Sao Paulo and Rio) are comfortable with it, 
as are those companies that have been involved in international projects, are 
subsidiaries of multi-national companies, or that have relied on offshore 
financing.  Governmental and quasi-governmental entities, including 
utilities, have been resistant to it, in part because there is language in 
the Brazilian Constituition that could be interpreted to forbid waiving 
resort to the courts where natural resources ("patrimonial rights") are 
involved.  I think where we will get pushback on this policy is with respect 
to the language of the arbitration and the ICC.  For that reason, I suggest 
we go ahead and "pre-qualify" the acceptance of Portugese for contacts where 
less than $5 million is involved, and the acceptance of alternative arbitral 
bodies (the Canadian Chamber of Commerce and perhaps FIESP) where less than 
$3 million is involved.  

 -----Original Message-----
From:  Haedicke, Mark  
Sent: Tuesday, April 03, 2001 10:50 AM
To: Williams, Robert C.
Subject: RE: Brazil Arbitration

Bob:

What is the view in general re arbitration of Brazilian companies?  Should we 
expect many objections to our new policy?  Don't get many objections in the 
US.

Mark




	Robert C Williams/ENRON@enronXgate 04/02/2001 06:11 PM 	   To: Michelle 
Blaine/ENRON@enronXgate, John Novak/SA/Enron@Enron  cc: Richard B 
Sanders/HOU/ECT@ECT, Rob Walls/ENRON@enronXgate, Mark E Haedicke/HOU/ECT@ECT  
Subject: RE: Brazil Arbitration


Michelle, I did not speak with Jim or Rob about this, so I am assuming that 
you did.  I think it is a good policy, although I am still not as convinced 
as Sami is that the courts in Brazil will so cavalierly disregard 
international arbitration provisions. Nevertheless, I think it was necessary 
to change our policy from a commercial perspective; we were getting too much 
resistance to foreign arbitration.  Now the question is, do we go the next 
step and see if Jim will approve submitting to the jurisdiction of some 
courts in Brazil which are generally reliable and free of corruption (e.g., 
Sao Paulo and Rio) if the counterparty rejects arbitration, and the largest 
sum of money that would ever be in dispute would be less than $500,000?  I 
think we will face that soon, so we may as well raise it now.

 -----Original Message-----
From:  Blaine, Michelle  
Sent: Monday, April 02, 2001 4:41 PM
To: Novak, John; Arap, Sami; Watanabe, Luiz; Kishkill, Joe; Wiggs, Brett; 
Albuquerque, Joao Carlos; Rosenberg, David; Collonges, Remi
Cc: Sanders, Richard; Williams, Robert C.; Walls, Rob; Haedicke, Mark
Subject: FW: Brazil Arbitration

FROM: MARK HAEDICKE & MICHELLE BLAINE

Effective immediately, trading contracts to be performed in Brazil between a 
Brazilian Enron entity and another Brazilian entity, may contain agreements 
for arbitration in Sao Paulo using the ICC administration and rules, to be 
conducted in the English language as a first choice or English & Portuguese 
as a second choice.  Attached is the rationale for this exception to the 
policy favoring foreign arbitration and a model clause.  Legal will continue 
to monitor how the Brazilian courts react to arbitration both foreign and 
domestic and reevaluate the policy in 2002.  Please call Michelle Blaine if 
you have any questions. 

 << File: Arbitration Agreement Terms for Enron-Brazil Agreements.doc >>  << 
File: Enron-Brazilian Model Arbitration Clause.doc >>