how to understand litigation in brazil

8/10/2019 How to Understand Litigation in Brazil

1/32

LAW

Sponsor:

UNDERSTAND

LITIGATION

IN BRAZIL


2/32

American Chamber of Commerce for Brazil - AMCHAMInternational Affairs Department

Brazil, 2013/2014


3/32

The American Chamber of Commerce for Brazil, being the largest Amcham outside the United Statesis 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 countrys business environment as well as foreign investment numbers,

despite international crisis, continues very positive. Medium and high classes are increasing, which createsa 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

Teixeira, Martins & Advogados law rm provides personalized legal services to Brazilian and foreign

clients from a range of elds, and is renowned for its performance both in litigation, for the settlement

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

settlement of disputes, thus increasing the chances of a successful outcome in each specic situation.

ACKNOWLEDGEMENTS

Roberto Teixeira, Founding Partner, Teixeira,

Martins & Advogados

Cristiano Zanin Martins- Partner, Teixeira,

Martins & Advogados


4/32

LA

W


5/32

01 GENERAL ASPECTS OF BRAZILIAN LAW 06

02 STRUCTURE OF THE BRAZILIAN LEGAL SYSTEM 08

03 METHODS OF DISPUTE RESOLUTION IN BRAZIL 11

04 JUDICIARY 13

05 ARBITRATION 23

06 ADMINISTRATIVE PROCEEDINGS 25

07 COMMON PRINCIPLES OF JUDICIAL AND ADMINISTRATIVE

PROCEEDINGS 26

08 FINAL REMARKS 28

09 ABOUT OUR SPONSOR 29

CONTENT


6/32

6

LAW

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.

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

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:

The perfect legal act;

Vested right; and

Res judicata.

A perfect legal act is created according to the law in

force at the time of its practice. A vested right, denitely

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 other sources of Law, particulary doctrine and case law,

are intended to interpret the law and ll eventual legal gaps.

01.

GENERAL ASPECTS OF BRAZILIAN LAW


7/32

7

HOWT

OUNDERSTANDLITIGATIONINBRAZIL

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.

The systems basic dogmas are consolidated in the Civil Code,which regulates private relationships and also has signicant

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

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.

Analogy consists of applying a law to a different eventnot covered directly or specically by any law, but

which is 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 Judges 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.


8/32

8

LAW

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

Constitution is the set of rules that unies and confers legalvalidity to other rules organizing and structuring the

Brazilian Legal System based thereon.

In other words, the Federal Constitution is the unity of a

plurality of rules, reecting the basis for validation of all

rules of the regulatory system.

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.), guaranteesand 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

02.

STRUCTURE OF THE BRAZILIAN LEGAL SYSTEM


9/32

9

HOWT


9

HOWT


is a combination of State and Municipality. In Brazil the

Federal District is its national capital, Braslia.

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;

Ordinary Laws;

Delegated Laws;

Provisional Executive Acts;

Legislative Decrees; and

Resolutions.

Amendments to the Federal Constitution, as the

name itself indicates, are propositions to amend the

constitutional content.

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 ofSupplementary 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 regulationis 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 theLegislative Power to enact a law in a specic case.

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.).

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.


10/32

10

LAW

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.

Finally, a Resolution is a regulatory administrative

act enacted by higher authorities, except the Head of

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.

Thus, the Brazilian regulatory structure may be dened

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

Resolutions


11/32

11

HOWT

OUNDERSTANDLITIGATION

INBRAZIL

In Brazil there are five main methods to settle

disputes:

FACT FINDING NEUTRAL EVALUATION

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 outthe actual situation of each party, as well as possibilities for

settling the dispute, including suggested settlement topics.

The evaluation is condential. In some cases, retired Judges

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 alsoused as a pre-arbitral or pre-litigation procedure.

ARBITRATION

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

law principle. The nal decision is binding and just as

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 resolutionboard. 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

it to adapt each case to specic circumstances, according

to the parties convenience. In the event of disagreementregarding the decision rendered by the dispute resolution

03.

METHODS OF DISPUTE RESOLUTION IN BRAZIL


12/32

12

LA

W

board, the parties may resort to jurisdictional routes, that

is, mediation, arbitration or the Judiciary.

JUDICIARY

This is the common method used to settle disputes, in which

a dispute is settled by the Judiciary in lieu of the parties.

After the due process of law is observed, a nal decision is

rendered, which must be complied with by the parties.

ADMINISTRATIVE PROCEEDINGS

This guide also provides a short analysis on administrative

proceedings, which are a viable route for the settlement

of disputes involving Public Administration, be it on a

Federal, State or Municipal level.

In this proceeding, the Public Authorities establish a

simplied structure for a private party to be heard and

submit ones claim to the Public Administration. This

proceeding often anticipates a satisfactory solution to the

case, thus avoiding access to the Judiciary.

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.


13/32

13

HOWT


INBRAZIL

The main method used to settle disputes in Brazil is the

Judiciary, by which the State resolves conicts of interest

involving private parties and/or Public Authorities.

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.

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.

The Legislative Power has the typical attribution to

legislate (the process by means of which the legal rules

are prepared) and carry out and account for the nancial,

budgetary, operational and proprietary inspection of the

Executive Power.

The Judiciary is responsible for applying the rule of law

and act as the guardian of the Federal Constitution and

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.

Therefore, it should be noted that the judiciarys activity

consists of imposing the validity of the legal system in a

coercive manner, whenever prompted to do so by the parties.

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 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).

See the chart with more details about the Brazilian

Judiciary Bodies:

04.

JUDICIARY


14/32

14

LA

W

BRAZILIAN JUDICIARY BODIES (section 92 of the Federal Constitution)

SpecialInstance

- 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 andresponsible 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.

- 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).

- 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).


15/32

15

HOWT


INBRAZIL


Appellate

Court

- 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 Courts decisions.

- 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.

- 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.


16/32

16

LA

W


Lower

Court

- 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.

- 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).

- State Military Judges: body with authority to judge members of Auxiliary Forces (e.g. Military

Police and Military Fire Brigade).


17/32

17

HOWT


INBRAZIL

LIMITS OF THE BRAZILIAN JUDICIARY

In respect to the sovereignty of other Countries, decisions

rendered by the Brazilian Judiciary must address disputes

within the Brazilian territory.

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.

Disputes arising from facts occurring in Brazil;

Disputes concerning real estate located in Brazil; and

When probate assets are located in Brazil.

MAIN LAWS REGULATING THE

BRAZILIAN LEGAL PROCEDURE

The Brazilian Procedural System is complex, with

ramications in various elds of law.

Among the main ones, the following may be mentioned:

Code of Civil Procedure Law no. 5,869, dated

January 11th 1973;

Code of Penal Procedure - Law-Decree no. 3,689

dated October 3rd 1941;

Consolidation of Labor Laws Law-Decree no.

5,452 dated May 1st 1943;

Consumer Code Law no. 8,078 dated September

11th 1990;

Collective Actions; and

Public-Interest Civil Action Law no. 7,347 datedJuly 24th 1985.

LEGAL PROCEEDINGS

In order to fulll its purpose of settling disputes by

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.

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

order to resolve a conict of interests arising between

the parties.

Such conicts may be either individual or collective.

Individual conicts are such in which the interests involved

in the procedure as well as its consequences arising from

the decisions rendered on the claim concern solely the

parties of the dispute.


18/32

18

LA

W

In collective conicts the interests and the consequences

of the procedure shall affect a certain group of persons,

i.e., its effects will legally affect an indenite number

of individuals.

As for individual conicts, lawsuits may be divided into

two major groups: cognizance procedure and enforcement

procedure1. Although there are differences and peculiarities

in various procedural law elds.

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. Brazilgenerally 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.

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 alsobe challenged by means of special or ordinary appeals,

usually brought to Superior Courts, with stricter and

more specic admissibility requirements.

When no further appeal may be led, the decision becomes

unappealable (res judicata), and an enforcement proceduremay be initiated if the obligation established in the legal

enforcement instrument is not voluntarily observed.

ATTACHMENT OF ASSETS

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 debtors 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;

Damages (indemnication);

Enforcement of debts;

1 . The Brazilian Procedural Laws still encompass the preventive process and special procedures which, by its specicities and less use, will not be treated in this work.


19/32

19

HOWT


INBRAZIL

Protection to ownership and/or possession rights(property); and

Corporate matters.

COLLECTIVE ACTIONS

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.

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 appropriateprocedural 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.

Even divisible labor rights, such as overtime pay andpremiums, 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.

It is an increasing source of legal dispute, since the actionof Labor Public Attorneys and Trade Unions - which have

the authority to bring this sort of action before Labor

Courts - is increasingly large and signicant.

The most common matters in these actions are unlawful

outsourcing, cheapening of production by defraudingLabor Laws, discrimination and psychological harassment

at work, child and adolescent labor, degrading and slave-

like labor, violation of occupational health and safety

rules and protection of handicapped workers.

However, any labor right that is collectively violated

may potentially justify a Public-Interest Civil Action or aCollective 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.

The standing to le Collective Actions is determinedby law; no individual may le this type of claim alone.

Standing to sue is, usually, assigned to inspection or control

entities, as well as class and collective representation

entities (e.g. Public Attorneys, Public Defender Ofce,

Associations, Unions, Federations, etc.).

It should be noted that, in order to have access to the BrazilianJudiciary, either as a result of individual or collective


20/32

20

LA

W

disputes, there is no need to resort to administrative

proceedings rst, it is possible to go directly to Court.

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

Attorneys Ofce or other competent legal authorities

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) are qualied to bring

actions before the Brazilian Judiciary.

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 companysrepresentation, such as Articles of Association, Corporate

by-laws, Shareholders Meeting Minutes, General

Meeting Minutes, as the case may be.

Foreign Companies

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

company to the attorneys-at-law in Brazil and led

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

Certicate of Good Standing, as applicable.

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


21/32

21

HOWTOUNDERSTANDLITIGATION

INBRAZIL

the matter, the requirement to produce technical or expert

evidence, the amount of resources handled by the parties,

among others.

MODERNIZATION OF THE BRAZILIAN JUSTICE

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

delay to reach nal decisions by the Brazilian Judiciary.

However, many legislative reforms are being

implemented in order to simplify the procedures and

reach a quicker solution to the conicts of interest

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.

The benets of such method range from the elimination

of paper to not needing to attend to Courts and Court

Houses to le petitions or have access to records.

Higher Courts, Labor Courts, as well as certain Appellate andLower Courts of certain States, have already implemented

the method on a denitive basis, thereby expediting

procedures and facilitating the job of court workers.

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 Boards

main purpose is to control the administrative and

nancial action of the Judiciary and to oversee the

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.


22/32

22

LA

W

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 entirelymodernize the Judiciary.

Actions implemented by the National Justice Board have

produced positive effects, substantially improving the

operation of the Brazilian Legal System.


23/32

23


INBRAZIL

Arbitration is not new in Brazil. However Law no.

9,307/96, known as the Arbitration Act, has substantially

increased its methods of enforceability.

Arbitration is organized through an Agreement to

Arbitrate, which can be made by an arbitration clause oran arbitration commitment.

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.

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:

The full qualication of the parties;

The qualication of the arbitrators or specication

of the entity that shall appoint them;

The matter that will be subjected to arbitration,which shall only concern available rights; and

The place where the arbitral award will be rendered.

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.

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

within 5 (ve) days of the receipt thereof.

Notwithstanding the aforementioned, it is also possible

to le a claim before the Judiciary requesting the arbitral

award be declared void, in case its formal requirements

have not been duly complied with.

It is important to mention that the validity of the Arbitration Act

was acknowledged by the Supreme Federal Court in late 2001.

05.

ARBITRATION


24/32

24

LAW

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 So

Paulo Stock Exchange (BM&FBOVESPA).


25/32

25


INBRAZIL

In administrative proceedings, Public Authorities establish

a simplied structure for a claim to be submitted to Public

Administration, which may bring an early solution thus

avoiding litigations before the Judiciary.

There are certain protection and guarantees for the

individual ling administrative procedures. Some of these

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-at-

law, 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,

as it does not constitute res judicata and it is not protected

by unchangeability and other effects of a judgment.

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

the need to rst exhaust all administrative routes, a

private party may choose to bring the dispute against

Public Administration to Court. This is generally less

expeditious, but the legal safety of a nal decision on the

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.

06.

ADMINISTRATIVE PROCEEDINGS


26/32

26

LAW

07.COMMON PRINCIPLES OF JUDICIAL

AND ADMINISTRATIVE PROCEEDINGS

PRINCIPLE CONTENTS

The principle which seeks a fair proceeding, suitable to the needs for denition

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.

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.

A party is entitled to all the conditions to bring to the case all the elements

leading to the clarication of the truth, i.e., it shall be entitled to produce all

the evidence that may be required to explain the facts.

It means that equals should be treated equally and unequals must be treated

unequally to the extent of their inequalities.

Due Process of Law

Adversary Proceedings

Broad Defense

Equal Protection

Both legal and administrative proceedings are guided by

essential principles established directly or indirectly by

the Federal Constitution. Below are some of the main

principles:


27/32

27


INBRAZIL

PRINCIPLE CONTENTS

It means that no law can prevent any damage or threat to a right from beingheard by the Judiciary.

A Judge must conduct a case so as to provide the parties with the greatest

result with the minimum procedural effort.

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.

All the legal decisions must always be substantiated, even if in a concise

manner, otherwise they may be rendered null and void.

The parties are entitled to seek review of legal decisions by means of appeals.

Irrefutability ofJurisdictional Control

Judicial Economy

Publicity

Substantiation of Legal

Decisions

Two-tiered Judicial

System

08


28/32

28

LAW

28

LAW

08.

FINAL REMARKSIn light of what was discussed, one can conclude that

Brazil has a reliable system to settle disputes involving

various elds of law.

The most commonly used method is the Judicial system

which features a robust structure and is undergoing

major changes to make it more expeditious and capable

of addressing complex topics.

Arbitration is another widely applied method in Brazil,

mostly for topics requiring specic knowledge of the

Judges in certain elds.


29/32

29

HOWT


INBRAZIL

09.

ABOUT OUR SPONSOR

Teixeira, Martins & Advogados law rm was founded

45 years ago and provides personal service both in

litigation and consulting (a full service law rm), guided

by excellence and expeditiousness and focusing on

pragmatic solutions, based on experience, condentiality

and ethical values. The rm provides services to

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

elds of Civil Law, Business Law, Corporate, Tax and

Labor Law, as well as specializing in Regulatory Law.

Teixeira, Martins & Advogados has a selected group

of specialized professionals who are responsive to the

clients expectations. The rm has ofces in So Paulo

and Braslia and maintains alliances with ofces all over

Brazil and abroad.

For further information, please contact:

Teixeira, Martins & Advogados

So Paulo Ofce

Rua Padre Joo Manuel, 755, 18 e 19 andar

So Paulo | SP - Brazil - CEP: 01411-001

Telephone: (55 11) 3060-3310

Fax: (55 11) 3061-2323

Braslia Ofce

SA US Quadra 1, Lote 1, 10 andar

Braslia | DF - Brasil - CEP: 70070-935

Telephone: (55 61) 3326-9905

E-mail: [email protected]

Website: www.teixeiramartins.com.br


30/32


31/32

BELO HORIZONTER d P i 220

PORTO ALEGREA D P d II 861 8 d


32/32

Rua da Paisagem, 22034000-000 Nova Lima, MGTel.: (55 31) 2126-9750 Fax: (55 31) [email protected] QI 5, Comrcio Local - Bloco C 1 andar - Lago Sul71615-530 Braslia, DFTel.: (55 61) 3704-8017 Fax: (55 61) [email protected] Dr. Jos Bonifcio Coutinho Nogueira, 150Edf. Galleria Plaza 7 andar, sala 701

13091-611 Campinas, SPTel./Fax: (55 19) 2104-1250 / [email protected] GRANDERua Hlio Yoshiaki Ikieziri, 34Ed. Evidence Prime Office Sala 206 Royal Park79100-000 Campo Grande, MSTel.: (55 67) 3211-0906

[email protected]

CURITIBARua Joo Marchesini, 139 Prado Velho80215-060 Curitiba, PRTel.: (55 41) [email protected]

GOINIAAvenida T-63, Qd. 145 Lt. 08/09Edf. New World, sala 105 Setor Bueno74230-100 Goinia, GOTel.: (62)3275-6010 Fax.: (62)[email protected]

JOINVILLERua Dr. Placido Gomes, 610

Edf. Dona Tereza Sala 202 Anita Garibaldi89202-050 Joinville, SCTel.: (55 47) [email protected]

Av. Dom Pedro II, 861 8 andarPrdio do CIEE90550-142 Porto A legre, RSTel.: (55 51) 2118-3700 Fax: (55 51) [email protected]

RECIFEAv. Eng. Antnio de Ges, 74251110-000 - Recife, PETel.: (55 81) 3205-1850Fax: (55 81) [email protected] PRETO

Avenida Wladimir Meirelles Ferreira, 1525Ufficio Commerciale San Paolo, salas 1 e 214021-630 R ibeiro Preto, SPTel.: (55 16) 2132-4599 Fax: (55 16) [email protected] Tancredo Neves, 1632Edf. Salvador Trade Center

Torre Norte, sala 1307 Caminho das rvores41820-020 Salvador, BATel.: (55 71) [email protected] PAULORua da Paz, 1431 Chcara Santo Antnio04713-001 So Paulo, SPTel.: (55 11) 4688-4102 Fax: (55 11) [email protected] Santos Dumont, 46 Santa Mnica38400-060 Uberlndia, MGTel.: (55 34) 2101-4100 Fax: (55 34) [email protected]

VISIT THE HOW TO WEBSITE:ww w.amcham.com.br/howto