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LAW

Sponsor:
UNDERSTAND
LITIGATION
IN BRAZIL
American Chamber of Commerce for Brazil - AMCHAM
International Afairs Department
Brazil, 2013/2014
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 countrys 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
Teixeira, Martins & Advogados law frm provides personalized legal services to Brazilian and foreign
clients from a range of felds, 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 specifc situation.

American Chamber of Commerce for Brazil - AMCHAM
International Afairs Department
Brazil, 2013/2014
ACKNOWLEDGEMENTS
Roberto Teixeira, Founding Partner, Teixeira,
Martins & Advogados
Cristiano Zanin Martins - Partner, Teixeira,
Martins & Advogados
Rayes & Fagundes Advogados Associados is a full service law firm recognized for its expertise and
experience in representing and advising foreign companies and individuals in Brazil. Over the
years, we have learnt that it is important not only to provide specific legal support, but also to help
our clients understand the whole environment in which they will make their decisions. The idea
underlying this brochure is providing foreign investors and entrepreneurs with an overview of the
main legal aspects for establishing a company or simply doing business in Brazil. Our relationship
with Amcham is a long-standing one and comes from the great number of US companies and
individuals we have been advising since the firms inception.
Joo Paulo Fagundes, Founding Partner
Rayes & Fagundes Advogados Associados
ACKNOWLEDGMENTS
Gabriel Rico - CEO, Amcham Brasil
Lia Esposito Roston, Partner
Rayes & Fagundes Advogados Associados
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
th
BRICS (Brazil, Russia, India, China and South Africa) and representing the 6 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 creates a solid internal market and
contributes to maintain good results in the economy. The 2014 FIFA World Cup has been estimated
in USD 56.8 billions and the 2016 Olympics in USD 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.
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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
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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, defnitely
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 fll eventual legal gaps.
01.
GENERAL ASPECTS OF BRAZILIAN LAW
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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 signifcant
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 event
not covered directly or specifcally 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.
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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 unifes and confers legal
validity 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, refecting 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.), 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
02.
STRUCTURE OF THE BRAZILIAN LEGAL SYSTEM
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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 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
Legislative Power to enact a law in a specifc 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.
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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 defned
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
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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 out
the actual situation of each party, as well as possibilities for
settling the dispute, including suggested settlement topics.
The evaluation is confdential. 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 also
used 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 fnal 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 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
it to adapt each case to specifc circumstances, according
to the parties convenience. In the event of disagreement
regarding the decision rendered by the dispute resolution
03.
METHODS OF DISPUTE RESOLUTION IN BRAZIL
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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 fnal 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
simplifed 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.
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The main method used to settle disputes in Brazil is the
Judiciary, by which the State resolves conficts 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 fnancial,
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
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BRAZILIAN JUDICIARY BODIES (section 92 of the Federal Constitution)
Special
Instance
- 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.
- 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).
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BRAZILIAN JUDICIARY BODIES (section 92 of the Federal Constitution)
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.
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BRAZILIAN JUDICIARY BODIES (section 92 of the Federal Constitution)
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).
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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
ramifcations in various felds 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 dated
July 24th 1985.
LEGAL PROCEEDINGS
In order to fulfll 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 confict of interests arising between
the parties.
Such conficts may be either individual or collective.
Individual conficts 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.
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In collective conficts the interests and the consequences
of the procedure shall affect a certain group of persons,
i.e., its effects will legally affect an indefnite number
of individuals.
As for individual conficts, lawsuits may be divided into
two major groups: cognizance procedure and enforcement
procedure
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. Although there are differences and peculiarities
in various procedural law felds.
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.
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,
usually brought to Superior Courts, with stricter and
more specifc admissibility requirements.
When no further appeal may be fled, the decision becomes
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
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 (indemnifcation);

Enforcement of debts;
1 . The Brazilian Procedural Laws still encompass the preventive process and special procedures which, by its specifcities and less use, will not be treated in this work.
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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 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.
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.
It is an increasing source of legal dispute, since the action
of Labor Public Attorneys and Trade Unions - which have
the authority to bring this sort of action before Labor
Courts - is increasingly large and signifcant.
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 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 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.
The standing to fle Collective Actions is determined
by law; no individual may fle 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 Offce,
Associations, Unions, Federations, etc.).
It should be noted that, in order to have access to the Brazilian
Judiciary, either as a result of individual or collective
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disputes, there is no need to resort to administrative
proceedings frst, 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 Offce 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 qualifed 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 companys
representation, 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 fled
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
Certifcate 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
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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 fnal 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 conficts 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 benefts of such method range from the elimination
of paper to not needing to attend to Courts and Court
Houses to fle petitions or have access to records.
Higher Courts, Labor Courts, as well as certain Appellate and
Lower Courts of certain States, have already implemented
the method on a defnitive 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
fnancial 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.
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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.
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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 or
an 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 qualifcation of the parties;

The qualifcation of the arbitrators or specifcation


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 (fve) days of the receipt thereof.
Notwithstanding the aforementioned, it is also possible
to fle 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
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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 So
Paulo Stock Exchange (BM&FBOVESPA).
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In administrative proceedings, Public Authorities establish
a simplifed 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 fling 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 frst 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 fnal 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
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07.
COMMON PRINCIPLES OF JUDICIAL
AND ADMINISTRATIVE PROCEEDINGS
PRINCIPLE CONTENTS
The principle which seeks a fair proceeding, suitable to the needs for defnition
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 clarifcation 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:
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PRINCIPLE CONTENTS
It means that no law can prevent any damage or threat to a right from being
heard 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 of
Jurisdictional Control
Judicial Economy
Publicity
Substantiation of Legal
Decisions
Two-tiered Judicial
System
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08.
FINAL REMARKS
In light of what was discussed, one can conclude that
Brazil has a reliable system to settle disputes involving
various felds 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 specifc knowledge of the
Judges in certain felds.
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09.
ABOUT OUR SPONSOR
Teixeira, Martins & Advogados law frm was founded
45 years ago and provides personal service both in
litigation and consulting (a full service law frm), guided
by excellence and expeditiousness and focusing on
pragmatic solutions, based on experience, confdentiality
and ethical values. The frm 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
felds 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 frm has offces in So Paulo
and Braslia and maintains alliances with offces all over
Brazil and abroad.
For further information, please contact:
Teixeira, Martins & Advogados
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Rua Padre Joo Manuel, 755, 18 e 19 andar
So Paulo | SP - Brazil - CEP: 01411-001
Telephone: (55 11) 3060-3310
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