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UNDERSTAND LITIGATION IN BRAZIL
Sponsor:
American Chamber of Commerce for Brazil - AMCHAM International Affairs Department Brazil, 2013/2014
ACKNOWLEDGEMENTS The American Chamber of Commerce for Brazil, being the largest Amcham outside the United States is constantly serving its members by building bridges for Brazilian businesses worldwide. Our foreign investment attraction efforts have also been a key leading point for Amcham. The How to Series is part of this initiative. With the support of some of our corporate members we are putting together strategic information on the most various aspects of doing business in Brazil. As part of BRICS (Brazil, Russia, India, China and South Africa) and representing the 7th largest economy of the world, Brazil has clearly demonstrated its importance in the global market. The country’s business environment as well as foreign investment numbers, despite international crisis, continues very positive. Medium and high classes are increasing, which creates a solid internal market and contributes to maintain good results in the economy. The 2014 FIFA World Cup has been estimated in US$ 56.8 billions and the 2016 Olympics in US$ 19.3 billions in investments. These events have had an impact on direct investments in Brazil and in infrastructure projects needed to hold them in the country. It is now more than ever a strategic time for businesses opportunities in Brazil. We welcome you and hope that the information you are about to read serves you best.
Gabriel Rico - CEO, Amcham Brasil
of disputes, and consulting. We understand the importance of providing clients with information for a better understanding of the complex Brazilian Legal System, thereby facilitating decision making and business, including dispute settlement. In this respect, our partnership with Amcham provides an opportunity to clarify the legal aspects, opportunities and alternate methods under Brazilian Law for the
Roberto Teixeira, Founding Partner, Teixeira, Martins & Advogados
Cristiano Zanin Martins - Partner, Teixeira, Martins & Advogados
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CONTENT 01
GENERAL ASPECTS OF BRAZILIAN LAW
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02
STRUCTURE OF THE BRAZILIAN LEGAL SYSTEM
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03
METHODS OF DISPUTE RESOLUTION IN BRAZIL
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04
JUDICIARY
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05
ARBITRATION
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06
ADMINISTRATIVE PROCEEDINGS
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07
COMMON PRINCIPLES OF JUDICIAL AND ADMINISTRATIVE PROCEEDINGS
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08
FINAL REMARKS
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09
ABOUT OUR SPONSOR
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01. GENERAL ASPECTS OF BRAZILIAN LAW GENERAL ASPECTS OF BRAZILIAN LAW
Vested right; and
Brazilian Law embraces the concept of legality, according to which no one is allowed to do or to refrain from doing anything if not by virtue of law. In accordance with this basic principle, no one is excused from complying with the law for not being cognizant of it.
Res judicata.
The Brazilian Legal System, apart from the Statute and other legal rules, embraces as sources of Law: Custom, which is nothing more than a continued, consistent, public practice of acts incorporated into the everyday life of one society; Legal literature, characterized by opinions and legal work prepared by legal scholars; and
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Case law, which encompasses repeated judgments of the same effects rendered by the Courts. As a result of the aforementioned principle of legality, in order to grant legal safety to the relationships, the following emerge:
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The perfect legal act;
A perfect legal act is created according to the law in incorporated into the property of the party who has such right, cannot be changed either by a fact or by a subsequent law. Finally, res judicata is a procedural phenomenon in which a court ruling is unchangeable and indisputable and may no longer be contested by any appeal. The adoption of the principle of legality by Brazil means the adoption of the Roman-German system or the Civil Law system. Therefore, it is worth describing the main differences between the Roman-German or Civil Law and the Common Law systems. The Roman-German system, currently in force in Brazil, as previously mentioned, is characterized by the supremacy of the legislative process (Statute), and by attributing secondary value to the other sources of Law, i.e., statutory texts are prepared by proper legislative bodies and are used the predominant source of Law.
The system’s basic dogmas are consolidated in the Civil Code, interference in the relationship with Public Authorities. Legislation has sovereign power and must be interpreted and applied by the Judge regardless of previous interpretations and decisions rendered on other similar cases (there are exceptions, which will be addressed later). It is noteworthy that although the Statute is the primary source of Brazilian Law, it is virtually impossible for the legislator to provide all legal situations that may occur in society, mostly because of the speed in which commercial and interpersonal relations evolve, especially as a result of technological advancements. However, a Judge may not refrain from deciding on claims submitted in a lawsuit, even if there is no legal
Analogy consists of applying a law to a different event not similar to the event not provided for. General principles of law are the set of principles which although are not provided for by any Statute, convey the spirit and purpose of Law. Finally, equity is the act to be carried out by the Judge aiming for full justice, when no answer is found in any of the previous sources. In the Common Law system, a Judge’s decision takes into consideration a previous analysis of equal or similar cases from which premises are taken to reach a decision. This is known as “stare decisis”, which Common Law Courts tend to follow precedents. In light of this, in Common Law, in order to enforce the law, the Judge shall draw principles from previous decisions while in Civil Law the principles of the decision are drawn directly from Statutes and subsequently applied to the actual event, with due adjustments.
HOW TO UNDERSTAND LITIGATION IN BRAZIL
Thus, the Brazilian System (Civil Law) prioritizes legislation, having as the main source of Law the Statute, while other sources of Law play a secondary role in the regulatory power.
rule regulating an actual event (statutory gap), and so he must resort to the aforementioned secondary sources of Law, if required, as well as analogy, general principles of law and equity.
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The other sources of Law, particulary doctrine and case law,
02. STRUCTURE OF THE BRAZILIAN LEGAL SYSTEM As a consequence of the adoption of the Roman-German system by Brazil, in which Statutes prevail as a source of Law, it is relevant to provide background on the enactment of the Brazilian Federal Constitution, as well as the entire legislative process.
FEDERAL CONSTITUTION The Brazilian Federal Constitution was enacted in 1988 (CF88), being the essential and highest rule of the Democratic State Ruled by Law in Brazil, i.e., the Federal validity to other rules organizing and structuring the Brazilian Legal System based thereon. In other words, the Federal Constitution is the unity of a rules of the regulatory system.
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In terms of hierarchy, there is no higher rule than the Federal Constitution, which is on top of the Brazilian Legal System pyramid. In summary, the Brazilian Constitution establishes the political principles (Republican, Democratic State Ruled by Law, separation of Powers, Legality, etc.), guarantees and essential rights of every citizen. It also describes the organization of the Brazilian State.
Therefore, the adoption of the Roman-German system by Brazil arises from an express provision of the Federal Constitution, which is the use of the principle of legality.
FEDERAL, STATE AND MUNICIPAL STATUTES As previously mentioned, the Brazilian State organization is established by the Federal Constitution, which provides the Federative Republic of Brazil to be composed by the Federal Government, the States, the Federal District and the Municipalities. It is necessary to mention this organization, as there are Federal Statutes (in force in the entire Brazilian territory), State Statutes (in force only within the territory of the respective States), Federal District Statutes (in force only in the Federal District) and Municipal Statutes (in force only within the relevant Municipality). The Federal Constitution expressly provides for which matters may be ruled by Federal Statutes. Thus, the remaining matters, i.e. those not reserved for the Federal Statutes, are covered by State Statutes, and those not reserved for the State are covered by Municipal Statutes. A Federal District Statute may encompass matters of both State and Municipal Statutes, as the Federal District
is a combination of State and Municipality. In Brazil the Federal District is its national capital, BrasĂlia.
TYPES OF FEDERAL STATUTES Following this scenario, we will address how the Federal Statutes are enacted, given that the reserve of matters under Federal Jurisdictions is substantially important to the business community. The enactment of regulatory acts establishing rights or obligations is a typical function of the Legislative Power and an atypical function of the Executive Power (as shall be explained later) and is called legislative process. The legislative process encompasses the drafting of: Amendments to the Federal Constitution;
Supplementary Laws are those required for certain situations in which the Constitution itself expressly and unequivocally requires the enactment of such regulation. That is, the Federal Constitution has established that certain matters shall only be regulated by means of Supplementary Laws. If there is no constitutional requirement for regulation by a Supplementary Law, the matter must be regulated by an Ordinary Law. The only difference between these two types of regulation is required quorum for approval. A Supplementary Law requires a majority (half plus one of all the congress members) while an Ordinary Law requires a plurality (half plus one of the congress members in attendance). By means of Delegated Laws, the Head of the Executive Power exercises a temporary power arising from the
Delegated Laws;
It is an exceptional situation and not all matters are subject to regulation by a Delegated Law (e.g., matter reserved for Supplementary Laws, nationality, citizenship, individual rights, etc.).
Provisional Executive Acts; Legislative Decrees; and Resolutions. Amendments to the Federal Constitution, as the name itself indicates, are propositions to amend the constitutional content.
A Provisional Executive Act is a constitutional permission for the Head of the Executive Power to enact a measure with force of law in order to meet urgent and relevant needs. It is an emergency regulatory measure which must be submitted for approval by the Legislative Power within 60 (sixty) days, which may be extended, for a similar period, only once, otherwise it shall lose its force and effectiveness.
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Ordinary Laws;
HOW TO UNDERSTAND LITIGATION IN BRAZIL
Supplementary Laws;
A Legislative Decree regulates matters within the exclusive competence of the National Congress (House of Representatives and Federal Senate), such as ratifying international acts, judging accounts submitted annually by the Head of the Executive Power, etc.
the Executive Power, providing for matters within the exclusive jurisdiction thereof. It must also be stated that international treaties signed by Brazil have law status and are incorporated into the domestic legal system, but are not above the Federal Constitution.
Finally, a Resolution is a regulatory administrative act enacted by higher authorities, except the Head of
in accordance with the pyramid below:
Brazilian Federal Constitution from 1988
Supplementary Laws
Ordinary Laws and International Treaties
Provisional Executive Acts and Delegated Laws
Legislatives Decrees
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Resolutions
03. METHODS OF DISPUTE RESOLUTION IN BRAZIL
A method that allows parties intending to negotiate or settle a dispute in Court to learn the likely outcome in advance. A technical, non-binding opinion provided by a third-party expert elected by the parties may be used as basis for direct negotiation between them, to the extent that it will point out the actual situation of each party, as well as possibilities for settling the dispute, including suggested settlement topics. are invited to occupy the place of such impartial third person and are referred to as Rental Judges.
MEDIATION It is a method to settle matters out of Court in which one or more mediators are elected, seeking to settle the dispute by means of an established negotiation procedure, as well as facilitating dialogue between the parties. The mediator must be impartial and must keep the procedure confidential. Mediation is often also used as a pre-arbitral or pre-litigation procedure.
Arbitration is the most common alternative method used to settle disputes. It consists of choosing one or more arbitrators to settle disputes involving available proprietary rights, i.e., a procedure that follows the due process of effective as a court judgment, subject to enforcement by the Judiciary, if applicable.
DISPUTE RESOLUTION BOARD It consists in the appointment of specialists, trusted by the parties, to monitor the performance of the agreement, assisting with topics that may lead to disputes and issuing opinions and decisions which may or may not be binding, according to the organized dispute resolution board. Thus, a disput resolution board essentially differs from traditional arbitration, since it is organized before a dispute arises, for the purpose of preventing it. The dispute resolution board is also based on the agreement executed by the parties, so its contractual nature allows to the parties’ convenience. In the event of disagreement regarding the decision rendered by the dispute resolution
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FACT FINDING NEUTRAL EVALUATION
ARBITRATION
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In Brazil there are five main methods to settle disputes:
board, the parties may resort to jurisdictional routes, that is, mediation, arbitration or the Judiciary.
of disputes involving Public Administration, be it on a Federal, State or Municipal level.
JUDICIARY
In this proceeding, the Public Authorities establish a
This is the common method used to settle disputes, in which a dispute is settled by the Judiciary in lieu of the parties.
submit one´s claim to the Public Administration. This proceeding often anticipates a satisfactory solution to the case, thus avoiding access to the Judiciary.
rendered, which must be complied with by the parties.
ADMINISTRATIVE PROCEEDINGS
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This guide also provides a short analysis on administrative proceedings, which are a viable route for the settlement
It is safe to say that the most common method to settle disputes in Brazil is through the Judiciary and, on a smaller scale, by Arbitration. Therefore, both methods will be analyzed further herein.
04. JUDICIARY
The Brazilian Federal Constitution has adopted the principle of tripartite division of powers by stating that the powers of the State are independent and harmonious among themselves, namely the Executive Power; the Legislative Power; and the Judiciary Power.
Therefore, it should be noted that the judiciary’s activity consists of imposing the validity of the legal system in a coercive manner, whenever prompted to do so by the parties.
The Executive Power is the constitutional body which main purpose is to act as the head of State and Government, which is headed by the President of the Republic, democratically elected through direct elections.
Thus, through the Judiciary, Judges render decisions by interpreting the applicable law in lieu of the will of the parties, applying the law to the actual event on an equal basis for everyone.
The Legislative Power has the typical attribution to legislate (the process by means of which the legal rules budgetary, operational and proprietary inspection of the Executive Power.
The Brazilian Judiciary consists of several bodies, which authority/attribution are previously determined by the Constitution. Its decisions might be reviewed on two judiciary instances and also, occasionally, by the Higher Courts (Supreme Federal Court and Superior Court of Justice).
The Judiciary is responsible for applying the rule of law and act as the guardian of the Federal Constitution and
See the chart with more details about the Brazilian Judiciary Bodies:
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involving private parties and/or Public Authorities.
other legal rules for the purpose of preserving the principle of legality. In other words, it is the power with the authority to settle disputes via jurisdictional activity, which consists of rendering decisions by applying the law to an actual event submitted thereto for consideration.
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The main method used to settle disputes in Brazil is the
BRAZILIAN JUDICIARY BODIES (section 92 of the Federal Constitution)
- Supreme Federal Court (STF): highest body of the Brazilian Judiciary, which main purpose is to act as the guardian of the Federal Constitution. - Superior Court of Justice (STJ): guardian of the Federal Laws below the Constitution and responsible for controlling the legality of legal decisions rendered by other courts (its decisions may be reviewed by the STF when involving violation to the Federal Constitution). - National Justice Board (CNJ): administrative body responsible for the guidelines and structure of the Brazilian Judiciary, as well as disciplinary aspects concerning Judges. Special Instance
- Superior Labor Court (TST): the highest body to judge matters concerning labor relationships (its decisions may be reviewed by the STF when involving violation to the Federal Constitution). - Superior Electoral Court (TSE): the highest body for judging matters concerning Electoral Law (its decisions may be reviewed by the STF and STJ when involving violations to the Federal Constitution or Federal Law respectively).
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- Superior Military Court (STM): the highest body for judging matters concerning Military Law (its decisions may be reviewed by the STF and STJ when involving violations to the Federal Constitution or Federal Law respectively).
BRAZILIAN JUDICIARY BODIES (section 92 of the Federal Constitution)
- Federal Regional Courts (TRF): bodies with authority to judge matters involving the interest of the Federal Government on an appellate level, being responsible for reviewing the Federal Lower Court decisions. - Appellate Courts of Justice (TJ): body with authority to judge matters involving disputes not affecting interests of the Federal Government and not concerning the Labor, Electoral or Military Court, on a Court of Appeals, being mainly responsible for reviewing the Lower Court´s decisions.
- Regional Electoral Courts (TRE): body with authority to settle disputes arising from Electoral Law, on a Court of Appeals, being responsible for reviewing the Lower Court decisions rendered by Electoral Judges. - Military Justice Courts (TJM): body with authority to settle disputes arising from Military Law, on a Court of Appeals, being responsible for reviewing the Lower Court decisions rendered by Military Judges.
HOW TO UNDERSTAND LITIGATION IN BRAZIL
- Regional Labor Courts (TRT): body with authority to settle disputes arising from labor relationships, on a Court of Appeals, responsible for reviewing the Lower Court decisions rendered by Labor Judges.
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Appellate Court
BRAZILIAN JUDICIARY BODIES (section 92 of the Federal Constitution)
- Judges: body with authority to judge matters involving disputes not affecting any interest of the Federal Government and not concerning the Labor, Electoral or Military Court, on a Lower Court.
- Federal Judges: bodies with jurisdiction to judge matters involving the interests of the Federal Government, on a Lower Court.
Lower Court
- Labor Judges: body with authority to settle disputes arising from labor relationships, on a Lower Court.
- Electoral Law: body with authority to settle disputes arising from Electoral Law, on a Lower Court.
- Federal Military Judges: body with authority to judge the military in the Armed Forces (Army, Navy and AirForce).
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- State Military Judges: body with authority to judge members of Auxiliary Forces (e.g. Military Police and Military Fire Brigade).
LIMITS OF THE BRAZILIAN JUDICIARY
Code of Penal Procedure - Law-Decree no. 3,689 dated October 3rd 1941;
In respect to the sovereignty of other Countries, decisions rendered by the Brazilian Judiciary must address disputes within the Brazilian territory.
Consolidation of Labor Laws – Law-Decree no. 5,452 dated May 1st 1943;
According to the Brazilian Law, civil disputes containing the following elements are deemed to have occured within Brazilian territory and therefore are subject to the decisions of the Brazilian Judiciary: A defendant who is domiciled in Brazil; An obligation that must be complied within Brazil.
Consumer Code – Law no. 8,078 dated September 11th 1990; Collective Actions; and Public-Interest Civil Action – Law no. 7,347 dated July 24th 1985.
LEGAL PROCEEDINGS
Disputes arising from facts occurring in Brazil;
MAIN LAWS REGULATING THE BRAZILIAN LEGAL PROCEDURE
Despite the variety of issues which may be claimed through lawsuits or procedures per se, the essence of procedural law is one: a method or instrument to enforce the actual intention of substantive law rules in the parties.
The Brazilian Procedural System is complex, with
Among the main ones, the following may be mentioned: Code of Civil Procedure – Law no. 5,869, dated January 11th 1973;
in the procedure as well as its consequences arising from the decisions rendered on the claim concern solely the parties of the dispute.
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When probate assets are located in Brazil.
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Disputes concerning real estate located in Brazil; and
applying the Law to an actual event, the Judiciary uses legal proceedings, which may address several matters, such as civil, criminal, labor-related, tax-related, etc.
usually brought to Superior Courts, with stricter and of the procedure shall affect a certain group of persons, of individuals.
two major groups: cognizance procedure and enforcement procedure1. Although there are differences and peculiarities
unappealable (res judicata), and an enforcement procedure may be initiated if the obligation established in the legal enforcement instrument is not voluntarily observed.
ATTACHMENT OF ASSETS A cognizance procedure acknowledges a right claimed by one seeking to obtain a Legal Enforcement Instrument.
JUDICIARY LEVELS Any judgment may be challenged through an appeal to the appropriate Court (Appellate Court), provided that certain requirements imposed by procedural law are met. Brazil generally adopts the principle of double judiciary level, which provides citizens the right to have an administrative or legal procedure reassessed, usually by a higher judiciary level. It guarantees justice to citizens. In the event of an error in the court ruling, the case may be reviewed by a panel of Judges at a higher Judiciary level.
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In Civil Law matters, as a rule, an appeal has a suspensive effect, which bars the execution of the case, even if on a provisional basis. In Labor Law, an appeal has no suspensive effect, so its foreclosure may be initiated immediatly once the judgment is rendered. Judgments rendered by the Appellate Courts may also be challenged by means of special or ordinary appeals,
The Judiciary is the sole authority able to attach assets as payment of a debt. That is, the Judge has the power to: Remove assets from the debtor’s property; Order the debtor to deliver a certain asset.
MAIN DISPUTES BROUGHT BEFORE THE JUDICIARY Following the brief procedural scenario previously described, the main matters resulting in disputes brought before the Judiciary are those arising from: Contractual default;
Enforcement of debts;
Protection to ownership and/or possession rights (property); and
the authority to bring this sort of action before Labor
Corporate matters.
The most common matters in these actions are unlawful outsourcing, cheapening of production by defrauding Labor Laws, discrimination and psychological harassment at work, child and adolescent labor, degrading and slavelike labor, violation of occupational health and safety rules and protection of handicapped workers.
Collective Actions usually concern matters of Environmental Law, consumer rights, Labor Law, social security and others. In the realm of Labor Law, Public-Interest Civil Actions and Collective Actions are the appropriate procedural instruments for the defense of proprietary and/or nonpecuniary rights belonging to an indivisible collective group such as the employees of a certain factory, members of a certain trade union, employees subjected to improper work environment, etc.
However, any labor right that is collectively violated may potentially justify a Public-Interest Civil Action or a Collective Action. Since these actions protect rights belonging to all workers and may lead to severe judgments, such cases might be prevented by maintaining a good relationship with the trade union and negotiating conduct adjustment terms with the Labor Public Attorney, when necessary. In the event a collective procedure is unavoidable, the company shall have the right to adversary proceeding and broad defense and may produce any evidence it deems suitable to defend its interests.
Even divisible labor rights, such as overtime pay and premiums, may be heard collectively, provided they originated from the same factual circumstances. The Brazilian Procedural System allows the Labor Court to judge Public-Interest Civil Actions and Collective Actions discussing issues arising from labor relations.
Standing to sue is, usually, assigned to inspection or control entities, as well as class and collective representation
It is an increasing source of legal dispute, since the action of Labor Public Attorneys and Trade Unions - which have
It should be noted that, in order to have access to the Brazilian Judiciary, either as a result of individual or collective
Associations, Unions, Federations, etc.).
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On the other hand, disputes may arise from collective interests, in which case the law provides for so-called “Collective Actions” or “Collective Labor Disputes”.
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COLLECTIVE ACTIONS
disputes, there is no need to resort to administrative
Meeting Minutes, as the case may be.
Foreign Companies
PUBLIC - INTEREST CIVIL ACTION Public Civil Action is regulated by Law No. 7,347 of July 24, 1985. Its purpose is to hinder or prevent environmental, consumer, public heritage, assets and rights of artistic, aesthetic, historical and tourist values from economic and urbanistic infractions. Its object may be pecuniary awards or penalties, or refraining from its obligation to or not to perform. Such action may solely be brought by the Public with jurisdiction to defend homogeneous, collective, individual and diffuse interests.
LEGAL REPRESENTATION It is noteworthy that, as a rule, only attorneys-at-law who are members of the Brazilian Bar Association, OAB (Ordem dos Advogados do Brasil actions before the Brazilian Judiciary.
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Brazilian Companies In order for a Brazilian company headquartered in Brazil to be party to a lawsuit in any Brazilian Court, such company must grant powers to an attorney-at-law who is an OAB member. The lawsuit shall include a power of attorney along with documents supporting the company’s representation, such as Articles of Association, Corporate by-laws, Shareholders’ Meeting Minutes, General
Companies not established in Brazil may go to court, provided they are duly represented. Likewise, observing the same aforementioned legal requirements, for a company headquartered abroad to be party to a lawsuit in any Brazilian Court, it must appoint an attorney-at-law who is an OAB member. A power of attorney shall be granted by the foreign with a Court, along with the document supporting the representation and the existence of the granting party, such as Articles of Association, Corporate by-laws, and
It should be noted that documents from foreign countries must be notarized and legalized by the nearest Brazilian consulate in order to be effective in Brazil. For documents coming from countries with which Brazil has agreements, the legalization may be waived. These documents must be translated by a sworn translator and registered with the Registry of Deeds and Documents in Brazil.
Limits and Deadlines Brazilian attorneys-at-law are not subject to any limitation and may represent the party in any judiciary instance or in any Court. The duration of the lawsuit may vary substantially, depending on various factors such as the complexity of
the matter, the requirement to produce technical or expert evidence, the amount of resources handled by the parties, among others.
of paper to not needing to attend to Courts and Court
MODERNIZATION OF THE BRAZILIAN JUSTICE
Higher Courts, Labor Courts, as well as certain Appellate and Lower Courts of certain States, have already implemented
brought to the Judiciary. Accordingly, a bill is currently under discussion at the National Congress to change in full the Code of Civil Procedure currently in force, precisely to simplify procedures and reduce the number of appeals, as well as the number of cases to which such appeals are applicable.
Electronic procedure Another action being taken by the Brazilian Judiciary to modernize and expedite the processing of legal proceedings is the implementation of the electronic procedure system. The system aims to eliminate the processing of cases in physical form (hard copy), so they may be processed electronically, i.e., digitally.
Upon the full implementation of electronic processing, legal cases will become more expeditious, which will greatly contribute to the achievement of legal protection.
NATIONAL JUSTICE BOARD For the purpose of optimizing the operation of the Brazilian Justice System, the National Justice Board was created by the Constitutional Amendment 45/2004, which added subdivision I-A in section 92 of the Federal Constitution. This constitutional provision included the National Justice Board as a Judiciary body made up of 15 members, Justices, Appellate Judges, Judges, Public Attorneys, Attorneys-at-law and citizens with reputable legal knowledge, for a term of 2 (two) years, with a second term permitted. The National Justice Board’s main purpose is to control the administrative and duties of Judges, as well as to hear cases related to administrative matters of the Judiciary (e.g., a complaint brought against any servant, including Judges of the Judiciary), among other duties.
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However, many legislative reforms are being implemented in order to simplify the procedures and
procedures and facilitating the job of court workers.
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As previously mentioned, the Judiciary is the most commonly used method of settling disputes in Brazil. The large number of lawsuits and the existence of several kinds of appeals, combined with other factors, often results in
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Since its creation, the National Justice Board has been developing projects to expedite the processing of lawsuits in a more transparent manner, stipulating goals for cases to be heard by Judges, Appellate Judges and Justices and implementing actions and partnerships to entirely modernize the Judiciary.
Actions implemented by the National Justice Board have produced positive effects, substantially improving the operation of the Brazilian Legal System.
05. ARBITRATION Arbitration is not new in Brazil. However Law no. 9,307/96, known as the “Arbitration Act�, has substantially increased its methods of enforceability.
The matter that will be subjected to arbitration, which shall only concern available rights; and The place where the arbitral award will be rendered.
However, there is no impediment for the arbitration clause to be agreed after the execution of the agreement (e.g., exchange of letters, emails, telegrams and faxes concerning the legal transaction, providing for arbitration for the settlement of any dispute). An arbitral commitment is the agreement through which the parties submit a dispute to arbitration, which may be settled in or out of court. In order for an arbitral commitment to be effective, the law in force requires:
In the absence of a stipulated deadline for delivery of the arbitral award, it should be rendered within 6 (six) months. There are no appeals against the arbitral award. The law only allows the parties to require the arbitrator to correct any material error or clarify any obscure points, inquires or discrepancies that may be contained in the arbitral award
Notwithstanding the aforementioned, it is also possible award be declared void, in case its formal requirements have not been duly complied with.
of the entity that shall appoint them;
It is important to mention that the validity of the Arbitration Act was acknowledged by the Supreme Federal Court in late 2001.
HOW TO UNDERSTAND LITIGATION IN BRAZIL
The arbitration clause may be included in an agreement, whereby the parties agree to use arbitration to settle any dispute at the time of the execution of the agreement.
Apart from these requirements, the Arbitration Act allows the parties to determine the place or places where the arbitration will be conducted (different from the place of the award, which is the venue of the arbitration), as well as the possibility of the dispute to be judged by equity, without the application of the legal rules governing the matter.
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Arbitration is organized through an Agreement to Arbitrate, which can be made by an arbitration clause or an arbitration commitment.
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However, not all disputes may be settled through arbitration. According to the Arbitration Act, only disputes involving an available proprietary right may be submitted to arbitration. The
use of arbitration has also become a mandatory requirement for companies with shares listed inthe New Market of the SĂŁo Paulo Stock Exchange (BM&FBOVESPA).
06. ADMINISTRATIVE PROCEEDINGS
There are certain protection and guarantees for the main guarantees are: impartiality of the Judges; publicity of the acts and decisions; right of access to documents involved in the proceedings; the right to submit questions, produce evidence as required and be defended by an attorney-atlaw, if deemed necessary (except in cases where the Law requires a technical defense by an attorney-at-law). The main advantage of an administrative proceeding compared to a judicial one is its simplicity. However, it should be noted that, as a result of the constitutional right to bring suit, the same matter decided on an administrative level may be disputed again in Court,
Thus, Administrative Proceedings are considered an alternate route which may be preparatory or merely optional for the settlement of a dispute on a parallel basis with Legal Proceedings. At any time and without private party may choose to bring the dispute against Public Administration to Court. This is generally less case is thereby guaranteed. Regarding Sports Justice, by determination of the Federal Constitution itself, there is an exception for access to Court. Thus, the Judiciary may only hear cases regarding discipline and sports competitions after all the applicable appeals in the last judiciary instances of sports justice are exhausted, such justice being private in nature, but administrative as regulated by the law.
HOW TO UNDERSTAND LITIGATION IN BRAZIL
Administration, which may bring an early solution thus avoiding litigations before the Judiciary.
as it does not constitute res judicata and it is not protected by unchangeability and other effects of a judgment.
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In administrative proceedings, Public Authorities establish
07. COMMON PRINCIPLES OF JUDICIAL AND ADMINISTRATIVE PROCEEDINGS Both legal and administrative proceedings are guided by essential principles established directly or indirectly by
PRINCIPLE Due Process of Law
the Federal Constitution. Below are some of the main principles:
CONTENTS
and achievement of the aggrieved rights. It results in double protection, operating both in a material scope of protection to the right of freedom and ownership and a formal scope by ensuring equal conditions between the parties.
Adversary Proceedings
Arising from the principle of the due process of law, it means that the adverse party must be given full knowledge of the contents of the case and all practiced acts, giving it the opportunity to challenge those that are unfavorable thereto.
Broad Defense
A party is entitled to all the conditions to bring to the case all the elements the evidence that may be required to explain the facts.
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Equal Protection
It means that equals should be treated equally and unequals must be treated unequally to the extent of their inequalities.
Irrefutability of Jurisdictional Control
It means that no law can prevent any damage or threat to a right from being heard by the Judiciary.
Judicial Economy
A Judge must conduct a case so as to provide the parties with the greatest result with the minimum procedural effort.
Publicity
As a rule, procedural acts are public. And even in case of secrecy of judicial proceedings, the parties and their attorneys are entitled to have access to the records and become aware of all the practiced acts.
Substantiation of Legal Decisions
All the legal decisions must always be substantiated, even if in a concise manner, otherwise they may be rendered null and void.
Two-tiered Judicial System
The parties are entitled to seek review of legal decisions by means of appeals.
HOW TO UNDERSTAND LITIGATION IN BRAZIL
CONTENTS
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PRINCIPLE
08. FINAL REMARKS In light of what was discussed, one can conclude that Brazil has a reliable system to settle disputes involving
major changes to make it more expeditious and capable of addressing complex topics. Arbitration is another widely applied method in Brazil,
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The most commonly used method is the Judicial system which features a robust structure and is undergoing
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For further information, please contact: E-mail: contact@teixeiramartins.com.br Website: www.teixeiramartins.com.br
HOW TO UNDERSTAND LITIGATION IN BRAZIL
Labor Law, as well as specializing in Regulatory Law. Teixeira, Martins & Advogados has a selected group of specialized professionals who are responsive to the
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Brazilian and foreign clients of all sizes. T&M works in the settlement of disputes and provides assistance to businesses of varying levels and complexity in a number of segments, with renowned performance in all
BELO HORIZONTE
Rua da Paisagem, 220 34000-000 – Nova Lima, MG Tel.: (55 31) 2126-9750 • Fax: (55 31) 2126-9772 amcham.belohorizonte@amchambrasil.com.br
BRASÍLIA
SHIS QI 5, Comércio Local - Bloco C 1º andar - Lago Sul 71615-530 – Brasília, DF Tel.: (55 61) 3704-8017 • Fax: (55 61) 3704-8037 amcham.brasilia@amchambrasil.com.br
CAMPINAS
Rua Dr. José Bonifácio Coutinho Nogueira, 150 Edf. Galleria Plaza – 7º andar, sala 701 13091-611 – Campinas, SP Tel./Fax: (55 19) 2104-1250 / 2104-1275 amcham.campinas@amchambrasil.com.br
CAMPO GRANDE
Rua Hélio Yoshiaki Ikieziri, 34 Ed. Evidence Prime Office – Sala 206 – Royal Park 79100-000 – Campo Grande, MS Tel.: (55 67) 3211-0906 amcham.campogrande@amchambrasil.com.br
CURITIBA
Rua João Marchesini, 139 – Prado Velho 80215-060 – Curitiba, PR Tel.: (55 41) 2104-9350 amcham.curitiba@amchambrasil.com.br
GOIÂNIA
Avenida T-63, Qd. 145 – Lt. 08/09 Edf. New World, sala 105 – Setor Bueno 74230-100 – Goiânia, GO Tel.: (62)3275-6010 • Fax.: (62)4006-1172 amcham.goiania@amchambrasil.com.br
JOINVILLE
Rua Dr. Placido Gomes, 610 Edf. Dona Tereza – Sala 202 – Anita Garibaldi 89202-050 – Joinville, SC Tel.: (55 47) 3028-1239 amcham.joinville@amchambrasil.com.br
PORTO ALEGRE
Av. Dom Pedro II, 861 – 8º andar Prédio do CIEE 90550-142 – Porto Alegre, RS Tel.: (55 51) 2118-3700 • Fax: (55 51) 2118-3738 amcham.portoalegre@amchambrasil.com.br
RECIFE
Av. Eng. Antônio de Góes, 742 51110-000 - Recife, PE Tel.: (55 81) 3205-1850 Fax: (55 81) 3205-1865 amcham.recife@amchambrasil.com.br
RIBEIRÃO PRETO
Avenida Wladimir Meirelles Ferreira, 1525 Ufficio Commerciale San Paolo, salas 1 e 2 14021-630 – Ribeirão Preto, SP Tel.: (55 16) 2132-4599 • Fax: (55 16) 2132-4563 amcham.ribeiraopreto@amchambrasil.com.br
SALVADOR
Avenida Tancredo Neves, 1632 Edf. Salvador Trade Center Torre Norte, sala 1307 – Caminho das Árvores 41820-020 – Salvador, BA Tel.: (55 71) 3480-3481 amcham.salvador@amchambrasil.com.br
SÃO PAULO
Rua da Paz, 1431 – Chácara Santo Antônio 04713-001 – São Paulo, SP Tel.: (55 11) 4688-4102 • Fax: (55 11) 5180-3777 ombudsman@amchambrasil.com.br
UBERLÂNDIA
Rua Santos Dumont, 46 – Santa Mônica 38400-060 – Uberlândia, MG Tel.: (55 34) 2101-4100 • Fax: (55 34) 2101-4107 amcham.uberlandia@amchambrasil.com.br
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