Page 2 Fall 2011
The International Law Quarterly
See “Dispute Resolution,” page 5
International Law Quarterly
is prepared and published by theInternational Law Section o The FloridaBar.
Nicolas Swerdlo, Miami
Richard C. Lorenzo, Miami
C. Ryan Reetz, Miami
Peter A. Quinter, Miami
Edward M. Mullins, Miami
Immediate Past Chair
Mark R. Weiner, Tampa
Alvin F. Lindsay, Miami
Angela Froelich, Tallahassee
Lynn M. Brady, Tallahassee
Elizabeth Ortega Media Contact, ECO Strategic Communications,firstname.lastname@example.org
Articles between 7 and 20 pages, double-spaced, involving the various disciplinesaecting international law may be submittedvia email in MS Word ormat
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or submissions and or any questions youmay have concerning the
DeADLIne FOR neXT IssueIs 5 DeCemBeR 2011
from previous page
er forms of dispute resolution. Practitionersshould expect to see a uniquely Brazilianform of dispute resolution involving prac-tice in multiple courts; different methodsof taking and presenting evidence; attemptsto use various kinds of dispute resolu-tion; and new forms of investment arbitra-tion through offshore entities, multilateralagreements and foreign investment laws.
Litigatio: Tr a Blid eyto Brazilia Cort at YorOw Pril
An honest Brazilian lawyer will tell youthat a “typical” domestic litigation can takeanywhere from seven to ten years to resolvedue to a backlog of cases and numerousopportunities to appeal. At the sound of this, many U.S. practitioners shake their heads in disbelief and write off the Brazil-ian court system. Despite the delays, theBrazilian court system remains a robust,active judiciary that can play an importantrole in international investment and disputeresolution. When managing internationalcases, it is therefore important for foreignlawyers to understand and work with theBrazilian courts.Many attorneys assume that the reputa-tion for delay applies to all areas of theBrazilian court system. But the ability toget injunctive relief still exists, and with theright strategy, a party can use the court tosecure injunctive relief (normally ex parte)quickly in aid of other litigation or arbitra-tion proceedings. In other words, partiescan take advantage of the relative speedof Brazilian courts in some matters whileminimizing the risk of delayed litigation inothers. A contemporary example illustratesthis point.The U.S. online game maker Zynga re-cently sued a Brazilian competitor, Vostu,for copyright infringement related to gamesVostu was making and promoting in Bra-zil.
While the jurisdictional facts and his-tory provide a broader understanding of
the case, in sum, Zynga faced a difcult
position from the standpoint of enforc-ing any future judgment. While Vostu’sgames reached the U.S. through the Inter-net, Vostu’s games resided on servers out-side the U.S. and competed with Zynga’sgames in the growing Brazilian market; any judgment against Vostu faced a long andarduous battle for recognition in Brazil. In
response, Zynga led a copyright infringe
-ment lawsuit in California and later soughta preliminary injunction in Brazil, askingthe Brazilian court to force Vostu to remove
its games or pay a hefty ne. The Braziliancourt of rst instance granted the request,forcing Vostu to le for an anti-suit injunc
-tion against Zynga in California, asking thecourt to stop Zynga’s Brazilian lawsuit.
After reviewing extensive legal brieng,
the Northern District of California deniedVostu’s request for an anti-suit injunction prohibiting Zynga from pursuing interimrelief in Brazil.
The court found the ac-
tions sufciently distinct and ruled that
Zynga had the right to pursue differentremedies in different countries. From thedocket report, it appears the Brazilian ac-tion is pending appeal, but the strategyremains noteworthy. Zynga has placed anenormous amount of pressure on Vostu in arelatively short period of time, obtaining aninjunction against Vostu that strikes at theheart of Vostu’s business. Although Vostuhas the ability to challenge that injunctionon appeal, Zynga has quickly and substan-tially increased its bargaining power in anynegotiations by using the Brazilian courtseffectively, despite the initial prospect of long delays.Brazilian courts can also show perhapssurprising sophistication when dealing
with high-prole cases that have attracted
media scrutiny. Brazilian courts follow aninquisitorial model where the judge plays astrong role in pushing the case toward deci-sion. When faced with tens of thousands of cases, this inquisitorial function can slowthe process; given the right kind of case,however, the judge can aggressively moveit to a conclusion. This can take partiesand their attorneys by surprise, a pointillustrated by the following example from
the wake of the 2008 nancial crisis.
Some Brazilian companies rely heav-ily on exports, selling large amounts of products to foreign countries, receivingrevenue in dollars but paying expenses inlocal currency—the Brazilian
. Some of these companies bought hedging contracts