some issues about agencies and distributorships in brazil, australia and new zealand fabiano...
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Some issues about Agencies and Distributorships in Brazil, Australia and New Zealand
Fabiano DeffentiAttorney at Law (New York)Legal Practitioner (Australia)Barrister and Solicitor (New Zealand)Advogado (OAB/RS)
Brazil – Background
•Civil law systemNo stare decisis and very different
civil procedure, administrative law, and tax rulesPractically no discovery/disclosure, little weight to oral evidence, not everyone is a witness
Lots of trips to the notaryExceedingly bureaucratic tax systemLegislation is vague and poorly drafted
Brazil – Background
•Civil law system (2)Academics’ (jurists) opinions
carry a lot of weightCourt cases take years and years
– lots of appeals, though it is changing
Brazil – Agencies, distributorships or agencies and distributorships?
•New Civil Code of 2002Book I: “Obligations in General”
Title V: “Contracts in General”Title VI: “The Various Types of Contract”•Chapter XII: “Agency and Distributorships”
Very poorly drafted – created a problem where there wasn’t one
Brazil – Agencies, distributorships or agencies and distributorships?
•New Civil Code of 2002 (2)View one – three different relationships:
Agency (Civil Code + Representatives Law)Distribution (Civil Code)Agency and distribution (Civil Code)
View two – two different relationships:Agency (Civil Code + Representatives Law)Distribution (Civil Code)
Brazil – Agencies, distributorships or agencies and distributorships?
•New Civil Code of 2002 (3)Courts and jurists agree that
“agency” relationships are governed by the Representatives LawRepresentatives Law offers protections similar to those in EU’s Commercial Agents Directive
Be very careful when drafting the agreements as parties cannot contract out of the applicable provisions!
Brazil – Agencies, distributorships or agencies and distributorships?
•Better view is that distributorships will exist where:Brazilian party acquires the goods
for re-saleTax issues may want you to reconsider this
Distributor is not exclusiveDistributor trades under a different
name
Brazil – Things to watch out for
• Very tough Labor Laws may apply depending on the level of control
• Consumer Defense Code is very toughCorporate veil not respectedStrict liability standard
• Customs are not trade-friendlySlow and bureaucraticTough fines apply on slightest
mistakes
Brazil – Things to watch out for
• Technology transfersContracts must be registered with
INPI or else there will be problems with royalties not being paid
• Trademark protectionFirst to file system appliesDifferent application for each classTaking at least 5 years to get
registrated
Brazil – Things to watch out for
• Domain name registration“.br” domain names must be
registered by Brazilian-registered companies or Brazilian residents
• Arbitration, choice of law and choice of forumArbitration is the surest way of getting
around the Brazilian legal system and actually choosing to have the matter litigated abroad
Australia
• Very similar to the UK system, but with a federal written constitutionNot a schedule like the Canadian
• Court system is very efficientDiscovery/disclosure is stricter than in the
U.S.Legal costs are awarded to the winnerForeign parties must give “security for
costs”Champerty and maintenance prevent
lawyers from charging on a percentage of proceeds’ basis
Australia
• ArbitrationInfamous Esso Australia Resources
Ltd v. Plowman decision: arbitrations are presumed to be public, unless the parties agree otherwise
Foreign arbitration awards from N.Y. Convention members can be enforced without the need for recognition directly at the local/county court level
Australia
• Choice of law and forumFlexible, but with some restrictions
See Akai Pty Ltd v. People’s Insurance Co Ltd and Golden Acres Ltd v. Queensland Estates Pty Ltd
• But see the English decision in Akai Pty Ltd v. People’s Insurance Co Ltd
Section 67 of the Trade Practices Act 1974
Australia
• Misleading and deceptive conductSection 52 of the Trade Practices Act
1974“(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).”
Australia
• Other deeming provisions (merchantability, fitness for purpose, etc) where goods under A$40,000
• TrademarksFirst to file systemSection 129 of the Trade Marks Act
1995 (Cth): careful when sending cease and desist letters
• No tort of unfair competition
New Zealand
• A single jurisdictionOpted out of being a part of the Australian
Commonwealth
• Protections similar to Australia under the Fair Trading Act 1986 and Consumer Guarantees Act 1993
• Trademarks: same problems as Australia with cease and desist letters
• Arbitration and choice of law: UNCITRAL model and confidentiality presumed
Fabiano [email protected]
Telefone: (51) 3022-5550Celular: (51) 8111-5550Skype name: Deffenti