KluwerArbitration

Wolters Kluwer Internal Sequence No. [42917]

23 February 2017 - Final Award
Details

Status of Proceeding Concluded

Who initiated the AdvanSix Inc.

proceeding

Outcome of the
proceeding/Decision

Commencement Date 23/02/2014

Date of outcome 23/02/2017

Representatives

Method of
Full name Nationality Firm Role Status of person
appointment
Luiz Olavo Brazil Expert (Legal) Claimant(s) Active
Baptista
Walter G. Gans United States of Sole Arbitrator Parties Active
America
Gilberto Giusti Brazil Expert (Legal) Respondent(s) Active

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 Document text

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Exhibit B
INTERNATIONAL CENTRE FOR DISPUTE RESOLUTION
International Arbitration Tribunal
ADVANSIX INC, f/k/a
HONEYWELL INTERNATIONAL INC.
“Claimant,”
and
BRASILFERT COMERCIO E REPRESENTACAO, LTDA.
“Respondent“
Case No: 01-15-0005-8912

Final Arbitration Award

I, THE UNDERSIGNED ARBITRATOR, having been designated in accordance with the arbitration agreement entered into between the above-
named parties and dated January 1, 2009, and having been duly sworn, and having heard the proofs and allegations of the parties, do
hereby AWARD, as follows:

I Background and Facts (1)

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2 Honeywell commenced this arbitration on December 4, 2015 pursuant to the arbitration clause contained in the Sales Representation
Agreement (“SRA“) entered into by the parties effective as of January 1, 2009.
1.2 That clause, Article 8A, provides for the arbitration of any dispute, controversy or claim arising out of the SRA or the breach, termination
or invalidity thereof, in accordance with the International Rules of the American Arbitration Association. Article 8C designates the place of
arbitration as New York, New York and requires the Tribunal to apply the law of the State of New Jersey to all disputes.
1.3 Following Claimant's termination of the SRA effective December 31, 2013, the Respondent in its February 12, 2014 letter asserted its
entitlement to compensation in the form of an indemnity prescribed by Art. 27j of the BSRL by reason of its termination by Honeywell.
1.4 On February 27, 2014 Claimant responded by noting that Article 5C of the SRA precludes the right to compensation or damages by reason
of termination.
1.5 On May 27, 2016, Brasilfert made a motion to dismiss the arbitration (“Motion“) asserting that this Tribunal lacks jurisdiction, by virtue of
mandatory Brazilian law, to decide the dispute and that the claims and defenses pled by the parties are non-arbitrable.

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3 On July 7, 2016, the Tribunal issued an Order denying Respondent's Motion, and the parties proceeded with evidentiary hearings, which
took place on November 7 and December 12, 2016. (2)
1.7 After receiving Claimant's letter rejecting Respondent's damages claim for compensation based on Art. 27j of the BSRL, Brasilfert
commenced a proceeding in the Sao Paulo State Justice Court (“SPJC”) based on that provision.
1.8 In August 2016 the SPJC “dismissed” the proceeding in view of the arbitration clause in the SRA, citing the “absolute” nature of the
Brazilian Arbitration Law in lieu of the “natural jurisdiction of courts of law.” (3) Cl. Exh. 2.
1.9 The sales representation relationship of the parties or their predecessors in interest dates back to at least 1977. (See Agreement dated
April 27, 1977 produced during the November 7, 2016 evidentiary hearing as Cl. Exh. 18). There followed a succession of agreements, including
extensions of existing agreements, prior to the SRA. In each such agreement or extension Brasilfert waived or renounced any claims made
on account of its termination. See Cl. Exhs. 1-17.
1.10 Beginning with the 2001 Agreement and continuing with the 2004 and 2007 Agreements, the parties agreed to a Commonwealth of
Virginia choice of law provision, a Virginia state and federal courts' forum provision and an express waiver by Brasilfert of the application of
the laws of Brazil. Cl. Exhs. 3-12.

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4 Fred Monesmith, (“Monesmith“) a retired Honeywell executive who was the principal Honeywell contact with Brasilfert from the late

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 1980s responsible for ammonium sulfate sales in Brazil, testified credibly that compensation payable to Brasilfert for its services was the
subject of periodic negotiations during the various agreement renewals but never to his recollection was there any objection on the part of
Brasilfert to the limitation of remedy, the choice of law or the choice of forum provisions, or in the case of the SRA, the arbitration clause.
(4)
1.12 Francisco Alves, (“Alves“) who during the SRA negotiation was at that time the only Brasilfert shareholder who was working at Brasilfert
actively as an executive, corroborated Monesmith's testimony that Brasilfert had no objections to the choice of law and forum and
limitation of remedies clauses in the SRA. (5) Tr. 1 at 142, 143, Cl. Exh. 1.
1.13 Brasilfert's indemnity claim is based on commissions and fees paid to it by Honeywell from 1986 and continuing through the five years
under the SRA amounting to R$82,000,000 (US$25,500,000 at current exchange rates). Cl. Exh. 11.
1.14 Although the SRA was terminated effective December 31, 2013, Alves testified that he was notified in person of the effective date of the
termination in July 2013. Tr. 1 at 159, 160, Exh. 1.

II The Parties' Claims

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5 Brasilfert seeks the equivalent in Brazilian currency of US$1,800,000 based on US$5,400 per month for compensation for 27 years of
representation of Honeywell as a non-exclusive sales agent for the sale by Honeywell of ammonium sulfate for a fixed and variable monthly
commission.
2.2 Brasilfert's claim for an indemnity is based on what it alleges to be the mandatory requirements of Article 27j which are non-waivable.
Brasilfert notes that the indemnity provision of the BSRL was enacted in 1965 and was amended without modification in 1992 and 2010.
2.3 Brasilfert asserts that it was “forced” to enter into the SRA and that the limitation of liability provision, New Jersey governing law clause
and imposition of “international arbitration” were attempts at “defrauding the mandatory law imposed on everyone who hires Commercial
Agents in Brazil.” (6) Respondent concludes by requesting this Tribunal to refuse jurisdiction in favor of the Brazilian Courts in light of
Claimant's “bad faith” and “attempted fraud.” (7)
2.4 Respondent seeks reimbursement for all its expenses resulting from Honeywell's “fraudulent claims.” (8)
2.5 Claimant seeks a declaration that the SRA is fully valid and enforceable, including its Article 5C by which Respondent agreed that
Honeywell would not be required upon termination of the SRA “to make any payment to Brasilfert beyond compensation earned prior to
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6 (9)
2.6 Claimant further seeks all costs against Respondent of this arbitration and reimbursement by Respondent of all Claimant's “attorney's
fees incurred … herein in accordance with Article 34 of the ICDR Rules for International Dispute Resolution.” (10)

III Issues
3.1 Is the SRA and in particular Article 5C valid and enforceable as written to obviate any right to payment by Honeywell to Brasilfert of
compensation under 27j?
3.2 Put differently, is the BSRA, and specifically 27j, a mandatory law that cannot be waived as a matter of Brazilian public policy or
international public policy, even if such waivers are enforceable against Brasilfert under chosen governing law and law of the arbitration
forum?

IV Discussion
4.1 Each party had a qualified Brazilian and international law expert who testified with respect to the Brazilian and international legal
issues of the case and in particular the applicability of 27j to the dispute.
4.2 Respondent's expert, Professor Gilberto Giusti, testified in essence that 27j is both mandatory and non-waivable by Respondent,
regardless of the facts underlying its representation and its agreements with Honeywell over the years as to choice of law, choice of forum,
limitation of liability, and, finally, arbitration under the SRA of any dispute with Honeywell.

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P4.3
7 By contrast, Claimant's expert, Professor Luiz Olavo Baptista, testified that Brazilian law permits and respects the freedom of the
parties to choose arbitration and applicable law, including foreign arbitration and law, and that 27j is a temporal law that, though
“mandatory”, will be subordinated to valid and enforceable waivers under agreed foreign law and arbitration consistent with Brazilian
public policy.
4.4 The primacy of arbitration in the circumstances of the parties' dispute over post-termination indemnity was underscored by the Sao
Paulo State Justice Court's August 19, 2016 judgment in favor of Honeywell on the pleadings. Although that judgment was not a decision on
the merits, it illustrates the evolution of the importance of arbitration under Brazilian jurisprudence in the context on international
commercial transactions and relationships. Acknowledging the concept of party autonomy, exemplified by the SRA, the Court stated:
“The proceedings will be dismissed, since there is an arbitration clause in the agreement discussed in the lawsuit.
Indeed, arbitration, set forth in Law no. 9,307/96, is absolute and removes the natural jurisdiction of courts of law. It constitutes
an allowed exception to the official monopoly (article 5, XXXV, of the Federal Constitution). It is inadmissible only when non-

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 waivable rights are at stake or when inserted into an adhesion contract without the consumer being able effectively to be aware
of and understand the effects of this method of dispute resolution.
This is not the situation in the, case records.
Thus, there is no reason to bend, in this particular case, the principal of pacta sunt servanda, given that the choice of arbitrators
to resolve potential contractual disputes was decided with absolute transparency, revealing the complete exclusion of the state
jurisdiction, as can be seen from the agreement,” Brasilfert Comercio Representacao Ltda. v. Honeywell Internacional. Inc.,
8.19.2016 Summary Rpt. No. 1024873-53 2014.8.26.0100, Cl. Exh. 2. (emphasis added)
4.5 The overarching issue to be resolved in this arbitration is whether the SRA, freely entered into by a United States based principal and a
Brazilian sales agency, containing New York choice of forum and New Jersey choice of law provisions and an arbitration clause requiring
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8 resolution under AAA international rules, should be disregarded by the Tribunal in favor of a Brazilian law that allegedly requires a
post-termination indemnity payment to the sales agency.
4.6 There was no credible testimony adduced at the evidentiary hearing that the now challenged provisions of the SRA were not agreed
contemporaneously by the parties, freely and in good faith, reflective of a multi-decade commercial relationship, the terms of which were
memorialized in successive agreements culminating with the SRA.
4.7 The presumed rationale for 27j as a “mandatory” law is that it represents a public interest law that “[R]egulates the activities of self-
employed sales agents.” See BSRL introductory sentence.
4.8 The inquiry then is whether 27j is in the nature of a public interest law that has mandatory application to override party autonomy in an
agreement wherein the applicable law permits the express waiver of claims of indemnification of the type set forth in 27j.
4.9 There are several types of mandatory laws. There are those that represent a state's economic, administrative or social interests, such as
exchange control and currency regulations, export and import control regulations, competition or antitrust laws. On the other hand, there
are those that represent rules to protect the deemed-to-be weaker party in certain relationships such as landlord-tenant, employer-
employee, insurer-insured, merchant-consumer or principal-sales agent.
4.10 This Tribunal recognizes that in the international commercial law arena the inherent conflict between party autonomy in selecting the
governing contractual law and contrary mandatory law in a different jurisdiction (albeit one connected to the underlying issues) can be
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9 and subject to different views. This tension or conflict supports the view that each case, this one included, should be decided
on its own merits taking into account hot merely the legal analysis in interpreting competing law and jurisprudence but the particular facts
and circumstances of the parties' lengthy relationship.
4.11 In assessing the facts and circumstances and the relative merits of party autonomy versus mandatory, unwaivable law, the
determination of what constitutes unwaivable public policy and morals is paramount. On the one hand, there clearly is a type of public
policy that overrides contrary party autonomy. If choice of law is made for a fraudulent purpose such as to avoid tax or currency regulations
or application of competition laws where there is a clear and unmistakable national or internal purpose, such a public policy is doubtless
unwaivable. In such a case an arbitral award which contravenes such a clearly mandatory national policy is unlikely to be enforceable
under the New York Convention.
4.12 Another form of national public policy is typically that which provides statutory protection to employees in the form of notice and
severance provisions, maternity and paternity rights, work hours, or other workplace factors. Employees are deemed to be weaker and thus
require protection against employers. Such protection, for example, is afforded employees under Brazilian labor laws.
To the extent, therefore, that an agency relationship, such as was the case between Honeywell and Brasilfert, more closely resembled an
employment or master/servant relationship protected by the Brazilian labor law, the more likely the law protecting the Brazilian agent
would be held to be mandatory and unwaivable.

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4.13 One commentator emphasizing the limitation on using Brazilian public policy to override chosen foreign law expressed the need for
factual analysis thus: (11)
“…In other words, the violation of Brazilian public policy will only take place if the choice of a foreign law contravenes an
important principle of the Brazilian legal system, such as a constitutional principle, or in the case of a fraud of law, when the
parties purposely try to circumvent a Brazilian public rule by selecting foreign legislation.
In summary, the determination of whether a given decision violates public policy is a case-by-case analysis, which will depend
on the circumstances in concerto. This is because, as pointed out by Brazilian scholars, public policy is a concept that is relative,
unstable and contemporaneous by essence.” (emphasis added)
4.14 Professor Baptista opines that the 27j rights afforded to a sales agent under the BSRL are freely disposable and waivable, in part
because 27j is temporal and does not reflect the principles essential to the Brazilian legal system and interests of society as a whole. These
rights must be interpreted in the context of the distinct facts underlying the parties' relationship. Such facts in the instant proceeding, the
Tribunal finds, include the following:
• A relationship going back to 1977 (although the indemnity claimed by Brasilfert is based on commissions and fees paid from 1986 to
the end of 2013).
• A contractual waiver throughout the relationship by Brasilfert of any claims on account of termination of the applicable agreement.

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 • The parties' agreement for several years prior to the SRA to judicial resolution of disputes by courts in the Commonwealth of Virginia
with disputes governed by Virginia law.
• The parties' agreement under the SRA to arbitration of disputes under the International Rules of the American Arbitration Association
applying New Jersey Law in a New York forum.
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•
P 11 Monesmith's uncontroverted and unchallenged testimony at the evidentiary hearing that (a) Honeywell was paying Brasilfert much
higher compensation than its competitors, including Ameropa and Cargill, for the same services. Tr. 1 at 116. (b) at a time when there
were less sales Brasilfert “received $25,000 a month to cover their costs” plus a percentage of the FOB price of product. Id. at 117, and
(c) for each year from 2007 through 2013 “Brasilfert collected between $450,000 and $500,000.”
• On cross examination by counsel for Brasilfert, Monesmith was asked:
“Q. Did Brasilfert open the Brazilian market to the Claimant?
A. To answer that question, I would say no, but it needs explanation. The market was opened by my former boss, Mr. Ward
Rowley, and he worked with someone by the name of Alfredo Mendes, who became an employee of Allied Chemical [later
merged with Honeywell].
And between Mr. Mendes as an employee and Mr. Rowley as a representative from the United States, they opened the
market.
THE ARBITRATOR: when was that?
B. I believe that was in the middle – middle, early 1970s.” Id. at 130.”
• Alves testified that Brasilfert represented Ameropa and Cargill, both active participants in the Brazilian fertilizer market, but those
companies terminated their representation agreements with Brasilfert in the 2002 and 2003 timeframe. Tr. 1 at 138-140.
• Alves became a shareholder of Brasilfert in 2009 and was by then the only executive remaining at Brasilfert. At that time Aldir Correia
and Gustavo Correia together owned the majority of the shares of Brasilfert. Aldir Correia (“Correia“) left Brasilfert in 2003 when he
went to work for Ameropa until 2013, but he retained his shares in Brasilfert and became the majority shareholder in 2008. Tr. 1 at 198.
• Correia had not worked at Brasilfert since 2004.
• Other Brasilfert employees left Brasilfert for Cargill and Ameropa following those companies' termination of Brasilfert.
• Alves testified that Brasilfert never demanded, indemnity under the BSRL from either Cargill or Ameropa after their termination of
Brasilfert. Tr. 1 at 162. Correia said Brasilfert was paid “some amount.” Tr. 1 at 233.
• Correia agreed that Honeywell kept Brasilfert afloat for eight years after it was terminated by Cargill and Ameropa. Tr. 1 at 203.
• Correia acquired from Alves his Brasilfert shares at a nominal value when Alves in 2014 went to work for Honeywell, Tr.1 at 221-223.
Correia thus became the sole shareholder of Brasilfert, testifying that should Respondent be successful in its 27j indemnity claim
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P 12 all the money would go to his retirement. “If I win, it is my money. I do what I want with it.” Tr. At 209.
4.15 The foregoing facts reflect collectively less “the. activities of self-employed sales agents” which the BSRL regulates but more a
successful company from which its shareholders and executives, including corporate shareholders at times, have benefited in the form of
compensation and commission over the years from sales representation of several foreign entities such as Honeywell.
4.16 Brasilfert's lawyers made several arguments, including:
(a) Like Brazilian labor law, criminal, tax and administrative law, 27j is not waivable and the prior waiver of rights, by Brasilfert, which it
contends, was “forced” on Brasilfert, amounts to “legal fraud.” See Resp. Post-Hearing Brief at 4-6, 14.
(b) The SRA with an arbitration clause “was, in fact, a childish attempt at legal fraud,” in part because there is no connection between
New Jersey law and an agent that is “granted labor law guarantees,” and the Brazilian arbitration law only permits arbitration of
disputes relating to waivable property rights. Id at 7, 8.
(c) Claimant “by changing the applicable law of the contractual relationship as from January 2009 and ‘armoring’ such change with the
‘Arbitration Clause’” was not acting in good faith and had the intent to perpetuate “fraud of the law.” Id. at 21.
4.17 Respondent's Post-Hearing brief conflates employment and labor relations with the commercial character of the SRA and the actual
relationship of the parties.
4.18 Baptista asserts that Brasilfert's arguments fail for several reasons. Brasilfert's argument that 27j is statutory and non-waivable would
per se incorrectly equate it with a labor statute and obviate agreed arbitration, choice law and choice of venue. Moreover, the Tribunal
notes that the Sao Paulo State Justice Court has already rejected that argument in its dismissal of Brasilfert's action based on the
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arbitration clause in the SRA, finding that the 27j rights can only be disregarded if they are either non-waivable rights or an adhesion
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contract is involved, and that neither existed. (12)
4.19 The Sao Paulo Court's finding is consistent with Dr. Baptista's opinion that the Brazilian Law of Arbitration does not address the so-
called “weakness” of a party but requires only that patrimonial and waivable rights be involved. Cl. Exp. Rep. at 68.
4.20 The STF, the highest court for constitutional matters, in recognizing the constitutionality of the Brazilian Arbitration Law, acknowledged
sales representation rights as “unquestionably waivable.” Cl. Exp. Rep.¶¶ 65, 66, citing STF, Full, Aug. Req. in Foreign Decision no. 5, 206-7 –
Kingdom of Spain. Reporting Justice Sepúlveda Pertence, judged on December 12, 2001.

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 4.21 Baptista cited another case, in which the STF ratified a foreign arbitration award which addressed indemnification for commercial
disputes arising from termination of sales representation agreements, In granting the request to ratify the foreign arbitration award the
Court noted that the claimed indemnification resulting from termination of the agreement does not violate “domestic procedures or, also,
sovereignty and legal order.” (13)
4.22 Each party has cited the Hague Principles, regarding choice of law, to support its argument. This Tribunal by its July 7, 2016 Order ruled
that the parties' choice of New Jersey laws was valid and enforceable. Order at ¶s 3.3, 3.4;

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4.23 The application of the parties' chosen New Jersey law is valid under the Hague Principles if it does not offend fundamental notions of
ordre public of the forum, in this case the State of New York. (14) Notably, “[N]o connection is required between the law chosen and the
parties or their transaction.” (15) The SRA's limitation of liability provision obviating Respondent's 27j indemnity claim not only is valid
under New Jersey law, (16) but enforceable under New York law, and no evidence has been adduced or authority presented that exclusion of
the 27j indemnity violates New York public policy. (17)
4.24 As noted, the Brazilian Arbitration Act permits parties significant autonomy to select applicable law and the situs or place or
arbitration, particularly in international agreements.
4.25 The STJ stressed the paramount nature of party autonomy in international commercial contracts when it ruled that the Brazilian
Consumer Protection Code (“BCPC“), though an expression of public policy, defers to the parties' freely chosen governing law, thereby
deciding in favor of the American company against the Brazilian company seeking protection under the BCPC. (18)

V Conclusion
5.1 This Tribunal credits the opinion given by Baptista that while 27j is by its literal language a “mandatory” provision, it is temporal and not
absolute and should be interpreted on a case-by-case basis. That view is supported by Brazilian court decisions of the STF and STJ and
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commentaries cited in his expert report and in Claimant's Post-Hearing brief. In fact, Professor Gusti evidently agrees in that respect, (19)
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although he appeared to reach the conclusion nonetheless that 27j represents a public policy law so essential to the collective interest that
it is non-waivable.
5.2 The Tribunal disagrees with Giusti and agrees with Baptista's opinion that 27j under the facts of this case is waivable.
5.3 The facts underlying the long-standing relationship between, the parties as reflected in the testimony and evidence given at the
evidentiary hearing demonstrate a successful and evidently harmonious business relationship far removed from an employment or other
relationship between a “weak” agent and a “strong” principal. Shareholder executives, the evidentiary record shows, periodically left
Brasilfert on their own volition to become employed by other manufacturing companies in the industry.

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5.4 There was no evidence to support the contention that Brasilfert was ever forced or coerced into agreeing to any of the terms in the
various agreements that reflected its relationship with Honeywell since the 1970s.
5.5 In fact there was no evidence before this Tribunal to suggest that the contractual provisions were non-negotiable, let alone that
Honeywell acted “in bad faith” and fraudulently, as Brasilfert's counsel argues. To the contrary, Claimant and Baptista assert that
Respondent violated basic principles of good faith under Brazilian and international law by repeatedly accepting, without objection, the
waiver of indemnity provisions in the contracts it signed with Honeywell. (20)
5.6 Each party agreed that the Brazilian Arbitration Law validates this international arbitration proceeding provided that the “mandatory”
law, in this case 27j, is waivable. Given the nature of the relationship as a commercial one between two corporate entities and the facts
discussed above, as well as cited Brazilian jurisprudence, 27j confers a right in Brasilfert that is freely disposable and waivable as a
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property right and indeed was freely and consistently waived by Brasilfert.
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5.7 Moreover, such conclusion is consistent with international public policy, even assuming 27j is a law reflecting Brazilian public policy. In
that, regard, Baptista quotes a Brazilian legal commentator, as follows:
“[I]t is not enough not to accept a legal institution through legislation to prevent the recognition of the foreign law that allows it,
but it is necessary also that this institution goes against the widespread and common sense of the international community
(such as, for example, polygamy, slavery etc.), it is not enough either, that the rule is of a cogent nature relating to citizens, in
order to create, for that reason alone, an impediment to the discipline, through another rule, on the relationships between
foreigners (such as, for example, those relating to the status and capacity of persons, to succession); what is needed is, on the
contrary, for it to be so, that it cannot accept, without serious disturbance to public order or offense to good morals, a different
regulation, even applicable only to foreigners. Therefore, the sphere of public order, for the purposes of international law is
stricter than the sphere of public policy for the purposes of domestic order; and an abstractly and theoretically stricter
delimitation is not possible due to the nature of the concept of public order, which is essentially variable and contingent; its
determination must be trusted for each case to the prudent arbitration of the judge.” (21) (emphasis added).

5.8 Accordingly, insofar as the parties' chosen governing law is not in violation of international public policy, this Tribunal finds and
concludes that the choice of law agreed in the SRA is enforceable and is not obviated by the domestic Brazilian policy manifested by 27j or
by international public policy.

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5.9 The Tribunal finds that such waiver by Brasilfert was in accordance with the applicable law (New Jersey), the law of the forum (New York),
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Brazilian Arbitration Law and jurisprudence as interpreted by Brazilian courts and commentators, the Hague Principles and international
public policy.

VI Award
6.1 For the reasons stated above, I award as follows:
6.2 The Tribunal's July 7, 2016 Order, denying Brgsilfert's Motion to Dismiss the arbitration on the grounds that the Tribunal lacks jurisdiction
to decide the dispute and that the parties' claims and defenses are non-arbitrable by reason of the BSRL, is hereby incorporated herein.
6.3 The request from Claimant, AdvanSix,Inc.,as the successor of Honeywell International, Inc., for an award declaring that the Sales
Representation agreement is valid and enforceable as written, and that it is not required to make any payment to Respondent by reason of
its termination of the Sales Representation Agreement, is granted.
6.4 The renewed claim by Respondent, Brasilfert Comercio e Representacao, Ltda., that the Tribunal lacks jurisdiction, and its claim that it
is entitled to an indemnity in accordance with 27j of the BSRL, are denied and dismissed.
6.5 All claims for costs, expenses and attorneys' fees are denied.
6.6 The administrative fees and expenses of the ICDR totaling $5,750.00, and the compensation of the Arbitrator totaling $69,712.50, shall be
borne equally by Claimant and Respondent. Therefore, Respondent shall pay Claimant the sum of $37,731.25 to reimburse Claimant for
amounts previously advanced for the ICDR administrative fees and the Arbitrator's compensation.

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6.7 This Final Arbitration Award is in full settlement of all claims and requests submitted to this arbitration. Any claim which is not expressly
granted herein is denied.

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I hereby certify that, for the purposes of Article 1 of the New York Convention of 1958, on the Recognition and Enforcement of Foreign Arbitral
Awards, this Final Award was made in the State of New York.
2/23/17 ____
Date Walter G. Gans, Arbitrator

State of New York )

County of New York ) ss.:
)

I, Walter G. Gans, do hereby affirm upon my oath as Arbitrator that I am the individual Described in and who executed this instrument,
which is my Final Award.

2/23/17 ____
Date Walter G. Gans, Arbitrator

State of New York )

County of New York) )

On this 23rd of February, 2017, before me personally came and appeared Walter G. Gans, to me known and known to me to be the individual
described in and who executed the foregoing instrument and acknowledged to me that he executed the same.
2/23/17 ____
Date Notary Public

General Information
Court United States District Court for the Southern District of New York;
United States District Court for the Southern District of New York
Federal Nature of Suit Contract - Other[190]
Docket Number 1:17-cv-02668

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References
1) The Following abbreviations are used herein:
Honeywell = Honeywell International Inc. or Claimant. Following the commencement of this proceeding AdvanSix, Inc.,
succeeded to all applicable rights and liabilities of Honeywell International Inc.
Brasilfert = Brasilfert Comercio e Representacao, Ltda. or Respondent.
Article 27j or 27j= a provision of the Brazilian Sales Representative Law No. 4886/1965 providing for compensation to
terminated sales agents or representatives (“BSRL“).
Cl. Exp. Rep. = expert report of Professor Luiz Olavo Baptista (“Baptista“)
Resp. Exp. Rep. = expert report of Professor Gilberto Giusti (“Giusti“)
Hague Principles = Hague Principles on Choice of Law in International Commercial Contracts
STF = Brazilian Federal Supreme Court
STJ = Brazilian Superior Court of Justice
ICDR = International Centre for Dispute Resolution
Brazilian Arbitration Law = Brazilian Law No. 9,307, September 23, 1996, amended by Law No. 13,129 of 2015.
New York Convention = Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 U.N.T.S
38.
2) The transcripts of the hearings are referred to herein as Tr. 1 and Tr. 2, respectively.
3) Brasilfert Comercio Representacao Ltda. V. Honeywell Internacional, Inc., 8.19.2016. Summary Procedure No. 1024873-53.2014.8.26.0100
Brasilfert's Motion to the court to reconsider was rejected on October 7, 2016. Cl. Exh. 3.
4) See generally Tr. 1 at 88-112, Cl. Exh. 1.
5) Mr. Alves discussed the SRA with Aldir Correia, the then majority shareholder of Brasilfert, who testified that he understood its
provisions and approved them. Id. at 169, 183-186.
6) Resp. Post-Hearing Brief at 23.
7) Id. at 22, 23.
8) Id. at 23.
9) Cl. Post-Hearing Brief at 1.
10) Id. at 1.
11) Arbitration Law of Brazil (2d Ed.), Muniz & Brasilio, at 44, cl. Exh. 5, quoting Jacob Dolinger, “A evolução da ordem pública no directo
internactional proado” at fn. 34.
12) supra at ¶ 1.8 and fn. 3.
13) Contested Foreign Decision No. 10,643. Reporting Justice Mumberto Martins, judged on November 19, 2014; Cl. Esp. Rep.¶ 76.
14) Hague Principles, Art. 11. Cl. Exh. 4. The Hague Principles, however, permits an arbitral tribunal to take into account ordre public or
overriding mandatory law apart from the parties' chosen law. Id., Art 11 (5).
15) Id. Art. 2(4) – Freedom of Choice.
16) BOC Grp., Inc. Chevron Chemo. Co., LLC. 359 N.J. Super. 135 (App. Div. 2003).
17) See, e.g., Scott v. Palermo, 649 N.Y.S.2d 289, 290 (App. Div. 1996).
18) SEC n.646 – U.S. Reporting Justice Luiz Fux, 12, 11. 2006. General Electric Co., LTD v. Varig s/s Viacao Aerea Rie Grandense Ltda., Cl. Exh.
10.
19) “The determination of the nature of the public policy principle is not the matter per se but rather the specific content and its
relationship with the fundamental values of the Brazilian society in a given time and place…
To determine the nature of the public policy of the rule in Brazil [citing Art. 11 of the Hague Principles], the following elements must be
observed: (i) rule comprised of values that exceed the mere interest of the contracting parties, due to reasons of social, ethical,
economic or cultural nature; and (ii) rule that addresses non-negotiable legal relationships. Illustrious Brazilian jurists addressed this
important topic:

‘The problem to determine the categories when relating to the provisions of public policy included within the context of the
Private Law decreases: those where the objective of protecting the general interest is visibly predominant, and the
individual's subordinated to it.’ [Quoting MAXIMILIANO, Carlos Mermenêutica e aplicaçao do direito. 20 ed. Rio de Janeiro:
Forense, 2011, p. 177, item 253].
…
‘Public policy laws are those whose compliance is necessary to the general interest; are those that interest the most to the
collective than the private. Any provision to the contrary is null and void.’ [Quoting BARROS MONTEIRO, Washington de Cursō
de direito civil. 29 ed. São Paulo: Sariva, 990. V. 1, p. 10].

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All rights reserved, including rights for text and data mining, AI training, and similar technologies.
 “100. In Brazilian law, good faith is not just a rule of contractual interpretation, it is also a conduct imposed legally on the contracting
20)
parties. It is thus that the Brazilian Civil Code expressly determines that the parties act in good faith, which is considered a
fundamental principle that must be observed in the stages of negotiation and execution of contracts.
101. In accordance with the Civil Code, this universally recognized principle governs the entire law of obligations, determining not
only the respect for pacta sunt servanda, but also for the procedural fairness, which prohibits any unfair behaviour. In fact, the
principle assumed such importance in Brazilian law that any act contrary to good faith is considered illegal.
102. Breach of the duty of good faith appears when a contracting party seeks not to comply with certain obligations that were
assumed or changes behaviour after the execution of the contract: parties must not change their conduct.
103. Good faith and the rule that establishes that he contracts must be observed are, therefore, rules of international public order,
which are placed at a high level in Brazilian law. The parties, to a contract subject to such law must fulfill the obligations that they
assumed and must not change their position in disregard of the contract, especially after having benefited from it.
104. Decisions made by the parties in an arbitration agreement are also protected by these principles. Once they choose a specific
law to be applied in arbitration, and having the opportunity to analyse all the consequences related to it – including economic –
and having obtained an advantage from the contract during its execution, any decision that does not respect this provision
violates their duties of good faith and pacta sunt servanda.” Cl. Exp. Rep. at ¶s 100-104. Citations omitted.
21) RAO, Vicente. O Direito e a Vida dos Direitos (Law and the Life of Rights]. 7th edition. Sāo Paulo: Court Journal, 2013, page 447. Cl. Exp.
Rep, ¶ 36.

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