SABESP, at the time of its adhesion to the BOVESPA New Market segment, which congregates the Brazilian companies which corporate governance practices are considered the best in Brazil, incorporated an Arbitration clause to its By-laws. Such clause establishes that “BOVESPA, the Company, the Controlling Shareholder, the Officers and the members of the Company’s Audit Committee” commit to settle all and any dispute or controversy related to the New Market Listing Regulations by means of arbitration of the Market Arbitration Chamber of the São Paulo Stock Exchange.

In force since February 06, 2006, the New Market Listing Regulations imposes to the companies listed in such segment writing adjustments to the clause related to arbitration, now treated as Arbitration Commitment Clause. The adjustments defined by BOVESPA will be incorporated to SABESP By-laws at the time of their next amendment.