Litigation and enforcement in Brazil: overview

A Q&A guide to dispute resolution law in Brazil.

The country-specific Q&A gives a structured overview of the key practical issues concerning dispute resolution in this jurisdiction, including court procedures; fees and funding; interim remedies (including attachment orders); disclosure; expert evidence; appeals; class actions; enforcement; cross-border issues; the use of ADR; and any reform proposals.

To compare answers across multiple jurisdictions visit the Litigation and enforcement Country Q&A tool.

This Q&A is part of the global guide to dispute resolution. For a full list of jurisdictional Q&As visit www.practicallaw.com/dispute-guide.

Contents

Main dispute resolution methods

1. What are the main dispute resolution methods used in your jurisdiction to resolve large commercial disputes?

The most common method to solve large commercial disputes is litigation in state and federal courts. Litigation is governed by the principles set out in the Federal Constitution. The Civil Procedure Code (Federal Law n.º 13.105/2015), which entered into force in March 2015, also fosters mediation and amicable settlement as a means to solve disputes that are submitted to court litigation.

With regards to arbitration, it was originally uncertain whether the Arbitration Act (Federal Law n.º 9.307/1996) was constitutional. In 2001 the Brazilian Supreme Federal Tribunal (Supremo Tribunal Federal) held that the Arbitration Act was constitutional. Since then, this alternative dispute resolution method has been widely used in large commercial disputes involving a Brazilian party (see Question 30). The Federal Law amending the Brazilian Arbitration Act was finally enacted in May 2015 (Federal Law n.º 12.129/2015). The main amendments to the Brazilian Arbitration Act include the following:

  • Inclusion of an express provision authorising the Public Administration to resolve disputes related to disposable patrimonial rights through arbitration.

  • Inclusion of a specific provision dealing with provisional remedies and interim reliefs.

  • Express possibility of appointing arbitrators who are not part of the list of arbitrators of a certain arbitral chamber.

  • Implementation of the arbitral letter, which is an instrument of co-operation between arbitral tribunals and courts.

  • Possibility for arbitrators to issue partial awards.

More recently, several companies have decided to submit some of their large commercial disputes to mediation (see Question 30). Additionally, a Mediation Act has been recently enacted (Federal Law n.º 13.140/2015, which came into force in December 2015) and intends to encourage mediation regardless of the commencement of court litigation.

The new Brazilian system is co-operative, with features including aspects of both an adversarial and inquisitorial system.

The Civil Procedure Code includes several and important provisions on the powers of the court to control and manage litigation. For example, the judge can decide on the allocation of the burden of proof and request the production of evidence. For a claim to succeed, the burden of proof is on the claimant to prove all its arguments and the facts that give rise to its rights. The respondent has the burden of proving the existence of facts that prevent, extinguish or modify the claimant's rights (Article 373, Civil Procedure Code). Since the Brazilian system is based on the free evaluation of evidence by the judge (provided that it is motivated), the ordinary standard of proof tends towards "clear and convincing evidence", although there are no express rules in this regard.

 

Court litigation

Limitation periods

2. What limitation periods apply to bringing a claim and what triggers a limitation period?

The Civil Code and a number of federal laws provide for two types of limitation periods:

  • Automatic expiration (decadência).

  • Statute of limitations (prescrição).

Generally, automatic expiration affects the party's substantive rights, and a statute of limitations affects the party's procedural rights, although there is some controversy over their definition.

These limitation periods vary according to the subject matter of the claim, and can be up to a maximum of ten years (Article 205, Civil Code). These periods start running from the date that a claim becomes actionable. For example, if a party breaches a contract, these periods start running from the date of the breach, except for cases where the statute of limitations is postponed or suspended under Articles 197 to 204 of the Civil Code.

Specific events defined in the Civil Code can interrupt the limitation periods, such as certain written notices stating claims and the party's intention to pursue them, including the filing of the claim itself or letters sent before the claim is filed. The Arbitration Act was amended in 2015 to clarify the interruption of limitation periods whenever a party files a request for arbitration (Article 19, paragraph 2o).

 

Court structure

3. What is the structure of the court where large commercial disputes are usually brought? Are certain types of dispute allocated to particular divisions of this court?

Brazil is a federal system with parallel federal and state judiciaries. At first instance, cases are heard by the following:

  • The lower federal courts, which have jurisdiction over the following categories of cases:

    • cases in which the federal government has a relevant interest;

    • crimes involving federal property or services;

    • crimes involving international concerns; and

    • disputes concerning Indian rights.

  • The lower state courts, which deal with all other cases, including usually large commercial disputes, where the court is in charge of hearing all evidence and resolving the matter in dispute.

In some states there are specialised courts. In Rio de Janeiro, there are lower state courts that specialise in commercial matters, as well as federal lower state courts that specialise in intellectual property. In São Paulo, there are lower state courts that specialise in bankruptcy. Recently, these courts have also been granted jurisdiction over lawsuits related to arbitration.

Appeals are heard by an appellate state or federal court, as applicable. On appeal, a panel of three judges of the federal and state court of appeals will perform a de novo review of the whole case, but will not be allowed to gather further evidence on its own. In São Paulo and in Rio de Janeiro, the state courts of appeals have panels dedicated to commercial matters.

Brazil's highest courts are the two superior federal courts. Brazil's highest court is the Supreme Federal Tribunal (Supremo Tribunal Federal) (STF), which since 1988 has become primarily a constitutional court. Immediately below the STF is the Superior Tribunal of Justice (Superior Tribunal de Justiça) (STJ), which is normally the ultimate arbiter for non-constitutional issues of federal law. The STF and the STJ do not have panels specialised in commercial matters.

The answers to the following questions relate to procedures that apply in the state and federal courts. In relation to appeals, see Question 20.

 

Rights of audience

4. Which types of lawyers have rights of audience to conduct cases in courts where large commercial disputes are usually brought? What requirements must they meet? Can foreign lawyers conduct cases in these courts?

Rights of audience/requirements

Any person that holds a bachelor of law degree and is registered with the Brazilian Bar Association is allowed to represent a client before a state or federal court, the courts of appeals, the Superior Tribunal of Justice (Superior Tribunal de Justiça) and the Supreme Federal Tribunal (Supremo Tribunal Federal) (see Question 3). The Brazilian Bar Association does not make any distinction between the lawyers' rights of audience or requirements.

The Civil Procedure Code allows a party that is registered with the Brazilian Bar Association to represent itself in court proceedings, without distinction between the rights of audience or requirements.

Foreign lawyers

Foreign lawyers can work in Brazil to issue opinions on matters involving foreign law, with the express authorisation of the Brazilian Bar Association (Provision n.º 91/2000 of the Federal Council of the Brazilian Bar Association). Foreign lawyers cannot conduct cases in Brazilian courts, even if assisted by Brazilian national lawyers or law firms. The only exception to this rule concerns Portuguese lawyers (Provision n.º 129/2008 for the Federal Council of the Brazilian Bar Association).

These professional restrictions are widely discussed, but it is unclear whether the Federal Council of the Brazilian Bar Association will review its policy.

 

Fees and funding

5. What legal fee structures can be used? Are fees fixed by law?

The Brazilian Bar Association allows lawyers to charge fees based on:

  • Hourly rates.

  • Contingency fees (that is, where the payment is dependent on whether the party is successful).

  • Task-based billing.

Although the Brazilian Bar Association provides a table of suggested legal fees, it is only intended as reference material for clients and lawyers.

On large commercial cases, the most common legal fee structure is hourly rates.

 
6. How is litigation usually funded? Can third parties fund it? Is insurance available for litigation costs?

Funding

The parties must bear their respective litigation costs, except for those parties that apply for legal aid (Article 82, Civil Procedure Code). There is no specific provision regarding third party funding, but it may be subject to ethical evaluation by the Brazilian Bar Association.

Insurance

Insurance companies can offer to cover the parties' litigation costs, but this must always be made directly through the relevant party in the case, as the courts do not ordinarily recognise insurers as being responsible for those costs.

 

Court proceedings

Confidentiality

7. Are court proceedings confidential or public? If public, are the proceedings or any information kept confidential in certain circumstances?

The default rule is that court proceedings must be public. The judge can order confidentiality (Article 189, Civil Procedure Code ):

  • Whenever the case involves a public interest of secrecy (for example, trade secrets and know-how under Article 206 of the IP Law).

  • In matters relating to marriage, divorce, parenthood and guardianship.

  • If the proceedings relate to information protected by the constitutional right to intimacy.

  • If the proceedings involve a confidential arbitration procedure.

In these cases, a third party will not have access to the case file unless it can successfully argue that the confidentiality does not apply to its request. The Arbitration Act has been amended to protect the confidentiality of arbitration proceedings whenever the arbitral decision is enforced through the courts (Article 22-C, Arbitration Act).

Pre-action conduct

8. Does the court impose any rules on the parties in relation to pre-action conduct? If yes, are there penalties for failing to comply?

Brazilian law does not contain, and the court does not impose, any rules on the parties in relation to pre-action conduct for large commercial cases. The Mediation Act, which was enacted in 2015, provides for out-of-court actions that the parties can pursue to solve their disputes.

Main stages

9. What are the main stages of typical court proceedings?

Starting proceedings

Judicial proceedings are deemed to start with the claimant filing a complaint with the court. The case is then assigned to a particular judge. The time limit for service of the summons is ten days (Article 240, Civil Procedure Code ). If the claimant fails to promote the service of the summons (by not providing the necessary materials to the judge), the limitation period continues to run (see Question 2). However, the limitation period will not continue to run if the delay was caused by the judicial system.

Notice to the defendant and defence

The defendant is given notice of the claim through a summons. This can be sent by registered mail, or delivered in person by a court officer, depending on the case and on the defendant (Article 246, Civil Procedure Code). If both means of summoning fail, the judge can order that the defendant be served through publication of the summons in the official press, followed by two publications in the local newspapers, if any.

Once the defendant is served and the evidence of the service of process is enclosed in the case file, the defendant's time limit to present its defence starts running. Ordinarily, that time limit is 15 days, but it will vary according to:

  • The defendant (for example, public attorneys).

  • The type of proceedings.

  • Whether there is more than one defendant and whether the defendants are represented by different lawyers.

The Civil Procedure Code provides that, after service of process, the court will hold a hearing to attempt an amicable solution, failing which the lawsuit will proceed.

Subsequent stages

In large commercial cases, ordinary proceedings can be divided into:

  • Pleadings. Based on the parties' pleadings, the judge will determine the issues in dispute between the parties, and order the production of evidence. This stage can last from four to eight months.

  • Evidence. The main methods of producing evidence are through court-appointed experts and oral hearings. This stage can last from six to 12 months.

  • Decision-making. After closing the evidential stage, the judge is expected to issue his final judgment, based on the parties' arguments and the evidence produced. This stage can last from one to six months.

The pleadings and decision-making stages follow fixed structures, but the evidence stage is adapted to each case.

 

Interim remedies

10. What actions can a party bring for a case to be dismissed before a full trial? On what grounds must such a claim be brought? What is the applicable procedure?

The defendant can raise preliminary issues in its defence or in an application for early dismissal of the case. This dismissal can be either without examining the merits of the case, or denying the claim on its merits. The Civil Procedure Code concentrates all the preliminary issues in the defendant's defence.

Dismissal without examining the merits of the case

A case can be dismissed if (Article 485, Civil Procedure Code):

  • The judge summarily rejects the complaint.

  • The parties' negligence causes the proceedings to stand still for over a year.

  • The claimant fails to take the necessary steps in the proceedings, abandoning it for more than 30 days.

  • The legal requirements to validly form and pursue the proceedings were not met.

  • The claim is barred from being brought, as there were previous proceedings on the same matter under, for example, estoppel, lis pendens or res judicata.

  • The claim lacks the legal conditions for an action (that is, it is not legally possible) or the claimants lack an interest in the proceedings or have no standing to bring a claim.

  • A binding arbitration agreement applies to the dispute (see Question 30).

  • The claimant withdraws the claim.

  • The claim originates from another person and is deemed to be legally non-transferrable.

  • The claimant and the defendant are the same person.

  • There is any other legal cause for dismissal.

Dismissal on the merits

The judge can give a judgment without holding a hearing or producing additional evidence in the case of either (Article 355, Civil Procedure Code):

  • A failure by the defendant to present the defence.

  • A matter that involves:

    • only questions of law; or

    • facts for which there is no need to produce further evidence in a hearing.

 
11. Can a defendant apply for an order for the claimant to provide security for its costs? If yes, on what grounds?

A claimant (either a Brazilian national or a foreign national) that resides outside of Brazil, or leaves Brazil while the claim is still pending, must generally either (Article 83, Civil Procedure Code):

  • Post in its claim a bond that is sufficient to meet the legal costs and lawyers' fees of the other party.

  • Have real estate in Brazil that secures the payment, usually between 10% and 20% of the amount in dispute.

In the absence of such a bond or real estate, either the defendant can apply for dismissal of the case, or the judge can dismiss the case without examining the merits (see Question 10).

 
12. What are the rules concerning interim injunctions granted before a full trial?

Availability and grounds

Parties can obtain interim injunctions at any time. A party seeking an interim injunction must demonstrate (Articles 300 and 497, Civil Procedure Code):

  • Irreparable harm if relief is not granted.

  • The likelihood of success on the merits.

Interim injunctions are usually required to preserve the status quo. The most common interim injunctions available are:

  • Restraining orders against individuals.

  • Suspensions of legal effect of certain acts.

  • Attachment orders to preserve assets.

Prior notice/same-day

Interim injunctions can be issued without prior notice and on the same day in urgent cases. This can be done where the matter is urgent and giving notice to the other party would cause harm.

Mandatory injunctions

Mandatory interim injunctions that require positive action by the other party can be issued without prior notice and on the same day in urgent cases. Mandatory interim injunctions tend to be more difficult to obtain, because they involve actions being taken that cannot be altered in the future.

Right to vary or discharge order and appeals

The respondent can apply to discharge or vary an interim order, regardless of whether the order was granted with or without notice.

The respondent can also file an interlocutory appeal against the interim order, within 15 days of receipt of notification of the order (Article 1.015, I, Civil Procedure Code). In some circumstances, failure to appeal against the interim order will result in the termination of the proceedings and in the confirmation of the order (Article 304, Civil Procedure Code).

 
13. What are the rules relating to interim attachment orders to preserve assets pending judgment or a final order (or equivalent)?

Availability and grounds

Attachment orders to preserve assets pending judgment are available, but can only be obtained if there is a:

  • Real risk of asset dissipation that would jeopardise any subsequent judgment.

  • Likelihood of success on the merits.

Prior notice/same-day

Interim injunctions can be issued without prior notice and on the same day in urgent cases.

Main proceedings

Any state or federal court can order attachment over property within any Brazilian state. Although interim measures in support of substantive proceedings pending in another country are available, there are only a few cases in which this kind of order has been granted.

Preferential right or lien

An attachment order imposes restrictions on transfers of the assets to which it relates. However, the order is considered to be procedural in nature, and not a preferential right or lien.

Damages as a result

The defendant can obtain damages if an attachment obtained by a claimant was applied for without proper grounds and damages were incurred as a result.

Security

The court can require a guarantee, although it is not mandatory to do so.

 
14. Are any other interim remedies commonly available and obtained?

There is no specific limitation on the nature of an interim remedy. Any final remedy (particularly if it is not irreversible) can be the subject of an interim order (see Question 15).

 

Final remedies

15. What remedies are available at the full trial stage? Are damages just compensatory or can they also be punitive?

Several remedies are available at the full trial stage, for example:

  • Damages.

  • Declaratory judgment.

  • Specific performance of a legal or contractual obligation.

  • Contract termination or review.

Punitive damages are not usually awarded, but can be awarded in limited circumstances by Brazilian courts, usually in connection with moral damages.

Brazilian law does not provide for a clear standard of proof regarding damages. As the Brazilian System relies on the free evaluation of the evidence by the judge (provided that it is reasoned), the standard of proof required tends towards the "clear and convincing evidence" standard.

 

Evidence

Disclosure

16. What documents must the parties disclose to the other parties and/or the court? Are there any detailed rules governing this procedure?

The Brazilian system does not provide for full disclosure, and the parties must ordinarily rely on their own evidence. However, a party can request the disclosure of documents on the following grounds (Article 399, Civil Procedure Code):

  • To detail, as completely as possible, an object or document to be exhibited as evidence.

  • To demonstrate the purpose of the envisaged evidence, setting out the facts that relate to that document or object.

  • To indicate the grounds for the belief that the object or document is in the possession of the other party.

The other party must be granted five days to respond (Article 398, Civil Procedure Code).

In its response, the party must disclose the document or expose the reasons why the document cannot be disclosed. The judge cannot accept a refusal to disclose the document in any of the following cases (Article 399, Civil Procedure Code):

  • The party has the legal duty to disclose it.

  • The document was mentioned in the proceedings by the party.

  • The document is common to both parties .

If the other party remains silent, the facts stated by the applicant are presumed to be true and correct. If a party refuses to comply with the exhibition order without an acceptable reason, a search and seizure order can be issued. A third party can also be summoned to produce the relevant object or document under certain circumstances.

 

Privileged documents

17. Are any documents privileged? If privilege is not recognised, are there any other rules allowing a party not to disclose a document?

Privileged documents

A party must refuse to disclose a document if (Article 404, Civil Procedure Code):

  • It relates to the party's private life.

  • Disclosure breaches a duty of honour or brings dishonour to the party, based on the principle against self-incrimination (nemo tenetur edere contra se).

  • Disclosure causes publicity for facts that are professionally confidential.

  • There are other justified reasons, which the court will consider under its discretion.

Documents written by in-house lawyers are usually considered to be confidential. In exceptional circumstances, Brazilian courts exclude privilege for information that is in possession of lawyers who are accused of involvement in criminal acts.

Mediation and conciliation are confidential in order to guarantee the effectiveness of attempts to settle the dispute between the parties. Therefore, statements made during mediation or conciliation cannot be used against the interest of the party that made them.

The without prejudice principle is not expressly provided in the Brazilian Civil Code and the Brazilian Civil Procedure Code. However, the Code of Ethics and Discipline of the Brazilian Bar Association provides that using information exchanged between lawyers as evidence in court is unethical behaviour (Articles 25 and 26).

Other non-disclosure situations

See above, Privileged documents.

A party cannot request the disclosure of a document that is available in public records.

 

Examination of witnesses

18. Do witnesses of fact give oral evidence or do they just submit written evidence? Is there a right to cross-examine witnesses of fact?

Oral evidence

Witnesses of fact must give oral evidence before the court (Article 453, Civil Procedure Code).

Right to cross-examine

The parties and the judge have the right to cross-examine witnesses of fact by asking questions directly to witnesses. The judge must reject all inappropriate questions asked by the parties (Article 459, Civil Procedure Code), including those that induce answers, are unrelated to the facts in question or repeat questions previously answered.

 

Third party experts

19. What are the rules in relation to third party experts?

Appointment procedure

The court appoints its own experts, but the parties can agree on the appointment of a specific expert to be retained by the court (Article 471, Civil Procedure Code). The parties are also allowed to retain their own experts, who can present their opinions in court if this is authorised by the judge.

Role of experts

The court-appointed expert must provide independent opinions, and can be challenged by a party if he fails to fulfil this duty impartially or if his lacks the proper credentials. Party-appointed experts are not required to be legally independent, but this may affect the credibility of their opinions (Articles 466 and 467, Civil Procedure Code).

Right of reply

The parties ordinarily reply to an expert's opinions either by providing their own expert opinion or by commenting on them. The expert opinion should usually be in writing, however, any party can still request the presence of the expert at the hearing.

Fees

Each party pays the costs of its experts. The party that requested the expert opinion must pay the court expert fees initially. If both parties or the judge requested the expert opinion, the expenses will be divided (Article 95, Civil Procedure Code). In the final award, the losing party will be ordered to reimburse all paid expenses of the court expert.

 

Appeals

20. What are the rules concerning appeals of first instance judgments in large commercial disputes?

Which courts

At state level, appeals can be directed to the appropriate state court of appeal, and at federal level to the appropriate federal court of appeal. A panel of three judges will perform a de novo review of the whole case on appeal, either at state or federal level. In addition, it may be possible to directly challenge the decision of the appeal court, on specific grounds, directly to the Supreme Federal Tribunal (Supremo Tribunal Federal) and the Superior Tribunal of Justice (Superior Tribunal de Justiça) (see Question 3).

Grounds for appeal

There is no limitation on the grounds for appeal at the state and federal court of appeals. The party, however, cannot present any new claims at this stage of the proceedings.

Time limit

The time limit to file an appeal is 15 days after the publication of the first instance court's judgment.

 

Class actions

21. Are there any mechanisms available for collective redress or class actions?

The first statute dealing with class actions in Brazil, Federal Law n.º 7.347/1985, was enacted in 1985. This was later altered and revised in certain respects by the Brazilian Consumer Code (Federal Law n.º 8.078/1990).

The class action system does not generally relate to large commercial disputes, but to actions brought to protect the:

  • Environment.

  • Consumers.

  • Rights of artistic, aesthetic, historic, touristic and landscape value.

  • Diffuse (usually related to the environment and consumers) and collective rights.

  • Economic and urban orders against infringement.

Only a limited number of institutions are allowed to bring a class action on behalf of a group interest, such as:

  • Public attorneys.

  • The office of the attorney-general.

  • States, municipalities, and the federal district.

  • Specific non-governmental associations.

 

Costs

22. Does the unsuccessful party have to pay the successful party's costs and how does the court usually calculate any costs award? What factors does the court consider when awarding costs?

The losing party is usually ordered to reimburse the opposing party's expenses, court costs and attorney's fees (Article 85, Civil Procedure Code). When awarding attorney's fees, the judge will consider the:

  • Length of the proceedings.

  • Nature of the claim.

  • Level of professional care.

  • Place where the service was performed.

  • Work provided by the lawyers.

Attorney's fees will be fixed at between 10% and 20% of the total amount of the judgment, although they may be fixed at a lower rate in certain situations (for example, when the claim is dismissed). The Civil Procedure Code establishes a minimum amount of 10% of the total amount of the judgment, except for claims related to state entities.

When awarding costs, the judge will not consider any pre-trial offers to settle. The court of appeal must adjust the attorney's fees granted by a lower court in accordance with the outcome of the appeal (Article 85, paragraph 11, Civil Procedure Code).

 
23. Is interest awarded on costs? If yes, how is it calculated?

Interest is awarded on costs. It is usually calculated on the basis of 1% per month or of the Special System for Settlement and Custody (SELIC). SELIC is the central depository of securities issued by the National Treasury and the Brazilian Central Bank.

 

Enforcement of a local judgment

24. What are the procedures to enforce a local judgment in the local courts?

Local judgments are automatically enforceable before domestic courts, giving the interested party a right to begin the enforcement of the judgment as soon as the decision becomes definitive. The enforcement procedure is simple. Once the judgment becomes final and binding, and on request of the interested party, the court notifies the debtor to comply with the award, usually within a maximum period of 15 days. If the debtor fails to do so, the lower court state judge may seize assets or impose additional fines, among other measures, to secure the enforcement of the award.

 

Cross-border litigation

25. Do local courts respect the choice of governing law in a contract? If yes, are there any areas of law in your jurisdiction that apply to the contract despite the choice of law?

In general, parties are free to choose the governing law in a contract and local courts tend to respect these provisions, provided that they do not breach Brazilian sovereignty, public order or core principles of law. The provisions contained in Federal Decree n.º 4.657/1942 (Rules of the Civil Code) are guidelines to the limits imposed on the parties' freedom of choice in this area.

The parties can choose the governing law of arbitration (Article 11, Federal Law n.º 9.307/96).

 
26. Do local courts respect the choice of jurisdiction in a contract? Do local courts claim jurisdiction over a dispute in some circumstances, despite the choice of jurisdiction?

Local courts have mandatory jurisdiction over the following disputes, regardless of a choice of jurisdiction in a contract (Article 23, Civil Procedure Code):

  • Disputes concerning real property located in Brazil.

  • Inventory of property transmitted through inheritance, if the assets that compose the inheritance are in Brazilian territory.

  • Disputes concerning assets located in Brazil on dissolution of matrimony.

Local courts will entertain joint jurisdiction in the following scenarios (Article 21, Civil Procedure Code):

  • The defendant is located in Brazil.

  • Obligations under the contract must be performed in Brazil.

  • The action arises from an act that occurred or which takes place in Brazil.

The national courts will also have jurisdiction in the following situations (Article 22, Civil Procedure Code):

  • In alimony disputes, when the beneficiary resides in Brazil and/or when the debtor has economical bonds with the country.

  • Disputes concerning consumer law whenever the consumer resides in Brazil.

  • Every time the parties expressly or implicitly choose to submit themselves to the Brazilian jurisdiction.

The Brazilian courts have no jurisdiction over disputes concerning international contracts when the parties have expressly chosen another exclusive foreign jurisdiction, provided that the defendant discloses this when filing its statement of defence (Article 25, Civil Procedure Code).

The filing of a claim before a foreign authority does not prevent a Brazilian court from holding a trial over the same dispute (Article 24, Civil Procedure Code). However, Brazilian courts usually respect the choice of jurisdiction in arbitral proceedings.

 
27. If a foreign party obtains permission from its local courts to serve proceedings on a party in your jurisdiction, what is the procedure to effect service in your jurisdiction? Is your jurisdiction party to any international agreements affecting this process?

The service of proceedings from a foreign party on a party in Brazil is effected by means of a rogatory letter or letter of request. The procedure is set out in the:

  • Inter-American Convention and Additional Protocol on Letters Rogatory.

  • Superior Court of Justice Resolution n.º 9.

  • Articles 36 to 41 of the Civil Procedure Code.

Under these instruments, the foreign party must send a formal request for service of process to the Brazilian Ministry of Justice, which forwards it to the Superior Tribunal of Justice (Superior Tribunal de Justiça) (STJ). The STJ will then serve proceedings, either by:

  • Registered mail.

  • Personal service by court officers.

The served party will then have 15 days to present any objection it may have regarding the validity of the service and of the rogatory letter (for example, it does not comply with the rules regarding Brazilian sovereignty or international public order). If the objections are deemed to be well-grounded, the STJ will return the rogatory letter to its original jurisdiction without compliance. Otherwise, the STJ will officially recognise the rogatory letter, granting the required exequatur, and return the letter to its original jurisdiction so that the original proceedings may continue.

 
28. What is the procedure to take evidence from a witness in your jurisdiction for use in proceedings in another jurisdiction? Is your jurisdiction party to an international convention on this issue?

The taking of evidence from a witness in Brazil for use in proceedings in another jurisdiction must be effected by means of a rogatory letter (see Question 27). Aside from the Inter-American Convention and Additional Protocol on Letters Rogatory, which provides the rules concerning rogatory letters, Brazil is also a contracting state to the Havana Convention on Private International Law (Bustamante Code). This Convention also provides for rules concerning the taking of evidence outside the original jurisdiction of the proceedings, between the contracting states, which include Brazil, the US and Mexico, among other American nations.

 

Enforcement of a foreign judgment

29. What are the procedures to enforce a foreign judgment in the local courts?

Foreign judgments are not automatically enforceable before local courts, and will only become enforceable after undergoing a procedure of confirmation (or homologation) of judgment, under which the Superior Tribunal of Justice (Superior Tribunal de Justiça) (STJ) must consider whether the judgment:

  • Is valid and was issued by a competent authority.

  • Conforms with the Brazilian national public order.

This procedure was further detailed by the Civil Procedure Code, which requires the STJ, apart from the two requirements above, to expressly address whether the foreign judgment (Article 963):

  • Was preceded by the defendant's regular service of process.

  • Is effective under the jurisdiction of the country where it was issued.

  • Is accompanied by its official translation into Portuguese.

  • Does not offend any res judicata already effective in Brazil.

A judgment that is considered to be contrary to Brazilian core legal principles will not be recognised and enforced in Brazil. However, there have been very few cases in which the STJ did not confirm a judgment, and over the last several years, the trend has been to enforce foreign judgments as they were given, with very few exceptions.

The procedure to enforce a foreign judgment is always the same, regardless of the country where the judgment was given. Brazil has not entered into any agreements concerning the reciprocal enforcement of judgments.

 

Alternative dispute resolution

30. What are the main alternative dispute resolution (ADR) methods used in your jurisdiction to settle large commercial disputes? Is ADR used more in certain industries? What proportion of large commercial disputes is settled through ADR?

The most commonly used ADR method to settle large commercial disputes is arbitration. Arbitration is more frequently used in the construction and infrastructure industries, but it has been increasingly used in all types of contractual disputes. The majority of large commercial disputes are settled through arbitration, although the use of mediation has significantly increased over the last few years, especially due to the recent enactment of a Mediation Act by the Brazilian Congress, which came into force in December 2015.

 
31. Does ADR form part of court procedures or does it only apply if the parties agree? Can courts compel the use of ADR?

ADR can form part of court procedures in the form of judicial conciliation and mediation, which can be suggested and encouraged by superior court and lower court judges. Under the Civil Procedure Code, in attempting the conciliation of the parties, after service of process, state judges must organise hearings and encourage the parties to enter into an agreement, which will then be confirmed through a final award. Under the new Mediation Act, mediation can be conducted both within a judicial process or outside the scope of state courts. Arbitration does not form part of Brazilian court procedures and only applies if the parties have expressly agreed on its use. Courts cannot compel the use of arbitration.

 
32. How is evidence given in ADR? Can documents produced or admissions made during (or for the purposes of) the ADR later be protected from disclosure by privilege? Is ADR confidential?

Confidentiality is not expressly set out in the Arbitration Act. However, confidentiality provisions are commonly included in arbitration and mediation agreements. The rules of the main ADR institutions in Brazil, for example, contain a duty of confidentiality that applies to both the parties and the arbitrators (see Question 34). However, the recent Mediation Act, which came into force in December 2015, expressly states that all information disclosed during mediation is confidential and cannot be revealed in arbitral or judicial disputes, unless the parties agree otherwise, especially when the disclosure of such information is necessary to ensure the fulfilment of the agreement reached through mediation.

The Civil Procedure Code reinforces the confidentiality of arbitration proceedings by extending it effects to judicial proceedings related to an arbitral award (Article 189). However, the Civil Procedure Code does not provide for confidentiality of judicial proceedings related to out-of-court mediation. In these circumstances, therefore, there is a risk that evidence produced in mediation be disclosed. In addition, judicial conciliation is not generally covered by confidentiality, and evidence produced during conciliation is not protected from disclosure.

 
33. How are costs dealt with in ADR?

The arbitral award decides on the responsibility of the parties for the costs and expenses of the arbitration proceedings (Article 27, Arbitration Act). The arbitral tribunal is free to decide on this matter, on the basis of the provisions of the arbitration agreement (if any) or the rules of the arbitration institution chosen by the parties.

In a similar way, in mediation the mediator is free to determine and allocate the costs, on the basis of applicable contractual provisions, or the rules of the ADR body elected by the parties to administer the mediation.

 
34. What are the main bodies that offer ADR services in your jurisdiction?

The main bodies that offer ADR services in Brazil are the:

All these institutions have rules that provide the parties with considerable freedom in choosing the:

  • Place and language of the proceedings.

  • Applicable law.

They do not require that the arbitrator or mediator be selected from their list of affiliated members.

For proceedings conducted before these institutions, the fees are calculated taking into account both the amount in dispute and the time spent by the arbitrators to hear the case.

Additional information is available on their websites (see above).

 

Proposals for reform

35. Are there any proposals for dispute resolution reform? If yes, when are they likely to come into force?

The Arbitration Act was recently amended through Federal Law n.º 13.129/2015, which came into force in July 2015. The most relevant modifications introduced by the law refer to:

  • The possibility of state entities participating in arbitral proceedings.

  • Appointment of arbitrators in multi-party procedures.

  • The possibility of an arbitral tribunal issuing partial arbitral awards.

  • The regime to be observed in the case of urgent/interim measures.

  • How the co-operation between arbitral tribunals and state courts must operate.

A Mediation Act came into force in December 2015 and covers mediation proceedings both before state courts or extra-judicially.

Additionally, Law n.º 13.105/2015, which established the Civil Procedure Code, came into force in March 2015. The Congress is also expected to begin discussions involving the amendment of the Brazilian class action system.

 

Online resources

Planalto, Presidência da República

W www.planalto.gov.br

Description. Official and up-to-date website maintained by the Brazilian Government.

Senado Federal

W www.senado.gov.br

Description. Official and up-to-date website maintained by the Brazilian Government.

Câmara dos Deputados

W www.camara.gov.br

Description. Official and up-to-date website maintained by the Brazilian Government.

Superior Tribunal of Justice (Superior Tribunal de Justiça)

W www.stj.jus.br

Description. Official and up-to-date website maintained by the Brazilian Government.

Supreme Federal Tribunal (Supremo Tribunal Federal)

W www.stf.jus.br

Description. Official and up-to-date website maintained by the Brazilian Government.

Tribunal of Justice of São Paulo (Tribunal de Justiça de São Paulo)

W www.tjsp.jus.br

Description. Official and up-to-date website maintained by the Brazilian Government.

Chamber of Commerce Brazil-Canada (Câmara de Comércio Brasil-Canadá)

W www.ccbc.org.br

Description. Official and up-to-date website maintained by the arbitral institution itself.

Arbitration Center for the American Chamber in São Paulo (AMCHAM)

W www.amcham.com.br

Description. Official and up-to-date website maintained by the arbitral institution itself.

Chamber of Mediation and Arbitration of São Paulo (Câmara de Mediação e Arbitragem de São Paulo) (CIESP)

W www.camaradearbitragemsp.com.br

Description. Official and up-to-date website maintained by the arbitral institution itself.

Chamber of Conciliation and Arbitration FGV (Câmara FGV de Conciliação e Arbitragem (Fundação Getúlio Vargas))

W www.fgv.br/camara

Description. Official and up-to-date website maintained by the Brazilian Government.



Contributor profiles

Rogério Carmona Bianco

Lilla, Huck, Otranto, Camargo Advogados

T +55 11 3038 1019
F +55 11 3038 1108
E rogerio.bianco@lhm.com.br
W www.lhm.com.br

Professional qualifications. Brazil, 1997

Areas of practice. Arbitration; litigation.

Non-professional qualifications. LLM With Honors, Northwestern University School of Law, Chicago, 2009; Post-Graduation on Valuation, Fundação Instituto de Administração, 2011

Languages. Portuguese (native), English (fluent), French (good understanding and basic conversation ability), Italian (good understanding and basic conversation ability), Spanish (good understanding)

Professional associations/memberships. International Council for Commercial Arbitration (ICCA); Brazilian Arbitration Committee (CBAR); São Paulo Attorneys' Association (AASP).

Publications

  • The Foreign Judgment: Review of the Brazilian Model, 2007.
  • ICSID: An Empirical Research on the Voting Behaviour of Arbitrators, 2009.
  • Litigation & Dispute Resolution: Brazil as seat for arbitration: why not?, 2011.
  • Arbitration In Complex Financial Instruments And Guarantees In Brazil, 2011.
  • The Fifa World Cup, the Olympics and arbitration in Brazil, 2012.
  • The Future of Court-Assisted Reorganization in Regulated Sectors of the Brazilian Economy, 2013.

Fábio Peixinho Gomes Corrêa

Lilla, Huck, Otranto, Camargo Advogados

T +55 11 3038 1019
F +55 11 3038 1108
E fabio.peixinho@lhm.com.br
W www.lhm.com.br

Professional qualifications. Brazil, 2000

Areas of practice. Arbitration; litigation.

Non-professional qualifications. Master's Degree in Civil Procedure, USP, 2004; Doctorate's Degree in Civil Procedure, USP, 2008; LLM in American Legal Studies, Regent University, 2008; Post Doctorate Candidate in International Civil Procedure, Lisbon University, 2016

Languages. Portuguese (native), English (fluent), Italian (working knowledge), French (working knowledge), Spanish (working knowledge)

Professional associations/memberships. International Council for Commercial Arbitration (ICCA), Brazilian Arbitration Committee (CBAR), Brazilian Institute of Procedural Law (IBDP) and São Paulo Attorneys' Association (AASP).

Publications

  • Objeto Litigioso no Processo Civil, 2008.
  • The presentation of evidence in international commercial arbitration: bridging gaps between evidentiary rules and free evaluation of evidence, 2008.
  • Arbitration In Complex Financial Instruments And Guarantees In Brazil, 2011
  • Governança Judicial, 2012.
  • Limites Objetivos da Demanda na Arbitragem, Revista Brasileira de Arbitragem, n. 40, São Paulo, 2013, p. 54 a 71.
  • Negócios jurídicos processuais: uma nova fronteira?, in Revista do Advogado n. 126, O Novo Código de Processo Civil, April 2015, p. 76/82.
  • As Tutelas Provisórias e o Advogado, in Repercussões do Novo CPC – Advocacia, Coord. José Rogério Cruz e Tucci, São Paulo: Ed. Jus Podium, 2015.
  • O requisito da "dependencia do julgamento" no novo regime da coisa julgada (www.migalhas.com.br/dePeso/16,MI222158,41046-O+requisito+da+dependencia+do+julgamento+no+novo+regime+da+cois).
  • Novo Código de Processo Civil Anotado, arts. 904-909, AASP/OAB-PR, 2015 (www.aasp.org.br/novo_cpc/conhecimento.html).

Monica Naomi Murayama

Lilla, Huck, Otranto, Camargo Advogados

T +55 11 3038 1019
F +55 11 3038 1108
E monica.murayama@lhm.com.br
W www.lhm.com.br

Professional qualifications. Brazil, 2014

Areas of practice. Arbitration; litigation.

Non-professional qualifications. Graduated in Law, USP, 2014

Languages. Portuguese (native), English (fluent), French (fluent)

Professional associations/memberships. São Paulo Attorneys' Association (AASP).


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