Recognition and Enforcement of Foreign Judgments and Arbitration Awards in Brazil
- Brazil
- 10/18/2007
- Azevedo Sette Advogados
Foreign Judgments
Foreign judgments may be recognized and enforced in Brazil, irrespective of the existence of reciprocity from the part of the country from which such judgment is originated or a specific international treaty or convention between the country of origin of the judgment and Brazil. In order to be enforceable in Brazil, however, a judicial award rendered in other country shall depend on confirmation by the Brazilian Judiciary.
Pursuant lo the Federal Constitution of 1988, Section 102, (h), the federal organ responsible for the analysis and decision as lo the confirmation of foreign judgments is the Superior Court of Justice (STJ). The matter is governed by the provisions of introductory Law lo the Civil Code, which contains private international law interpretation rules, by the Brazilian Code of Civil Procedure and by the Internal Statute of STJ.
In the proceeding of confirmation of a foreign judgment, STJ shall only verify whether the formal procedural requisites have been fully complied with, in all instances until final judgment.
For purposes of Brazilian Law, final judgment is the decision of a civil, commercial or criminal nature rendered by a judge or a court, abiding by the due process of law, and which is not subject to any further appeal.
Provided that these basic conditions have been fulfilled, STJ shall verify the compliance by the foreign judgment with the following requisites, in pursuance of Section 217 of the Internal Statute of STJ, ultimately based on the provisions of article 15 of Introductory Law to the Civil Code.
(a) the foreign decision shall be rendered by a competent judge.
STJ will not check the foreign judge’s jurisdiction on the matter; this could result in the determination of other judge in the same country, what would mean improper interference in the country’s sovereignty.
In fact, what shall be examined by STJ is whether the case, in view of Brazilian Law, falls within the exclusive jurisdiction of the Brazilian Courts. By way of example, confirmation of a judgment regarding a real property located in the Brazilian territory would not be admissible, since Section 12, paragraph 1, of the Introductory Law to the Civil Code, provides that “only the courts of Brazil” shall have jurisdiction over such matters.
(b) the parties must have been served proper notice of process.
Service of process is the act whereby a party is called to respond to a legal suit filed against it. It is fundamental to secure the right of full defense, and the summon or service of process shall have been made in accordance with the guidelines set forth by the laws of the place in which the judgment was rendered. If the defendant if domiciled in Brazil, service of process shall have been made by means of a rogatory letter, and shall follow the provisions of the Brazilian Code of Civil Procedure. This is a real concern that we always have to observe, otherwise there might be obstacles to the enforcement of the foreign judgment when needed.
(c) the judgment must be final, and in proper form for its execution at the place where it was rendered.
For the purposes of expediting enforcement proceedings it is advisable, insofar as possible, to produce evidence that the decision is final, by means of a certification by the relevant judge, stating that no further appeal is admissible in any degree of jurisdiction.
(d) the foreign judgment must be authenticated by the nearest Brazilian consulate and must be submitted to STJ with a sworn translation thereof.
The parties shall arrange for the notarization and legalization of the foreign judgment before a Brazilian Consulate abroad and for the respective sworn translation in Brazil for all legal means.
Furthermore, the foreign judgment will not be eligible for confirmation if it is contrary to national sovereignty, public policy or good custom, in accordance with article 17 of Introductory Law to the Civil Code. This is the only aspect concerning the essence of the foreign judgment, which is controlled by STJ.
Confirmation is obtained by means of a legal proceeding filed by the foreign plaintiff before STJ. STJ shall then issue an order directing notice of process to be served on defendant, who will be entitled to challenge the request of confirmation.
STJ shall only acknowledge challenges by defendant if the same are related to the authenticity of the documents produced by the plaintiff, the construction of the foreign judgment, or the pertinent compliance with the statutory requirements regarding confirmation or relative to the filing of the request, in accordance with Section 221 of the Internal Statute of STJ.
Once confirmation of the judgment is obtained, the foreign judgment may be enforced before the relevant Brazilian lower court, pursuant to Section 584, IV, of the Brazilian Civil Procedure Code.
It is important to stress that the payment of a debt stated in foreign currency may only be made in Brazilian currency, the amount being ascertained by applying the pertinent exchange rate prevailing on the actual date of payment. Nevertheless, the remittance of proceeds abroad shall depend upon the previous consent of the Central Bank of Brazil.
Foreign Arbitration Awards
Law n. 9.307/1996 states that individuals or entities with legal capacity may chose arbitration to settle disputes concerning eligible rights, which are those that can be object of a settlement by the parties. In addition, article 584 VI states that the arbitration awards are enforceable titles in Brazil.
Furthermore, Brazil has ratified the Geneva Protocol of 1923 on arbitration clauses and the United Nations Convention of New York of June 10, 1958 on the recognition and enforcement of foreign arbitration awards.
Pursuant to the Brazilian Arbitration Law (Law n. 9.307/1996), the ratification of foreign arbitration awards shall follow the same rules regarding the ratification of foreign judicial awards set forth on the Civil Procedures Code.
According to the Internal Rules of STJ the foreign arbitration award shall not be subject to retrial or re-examination of the merits of the original arbitration proceedings. However, in order to be ratified, the awards shall fulfill several requisites such as:
a) legal capacity;
b) arbitration agreement must be valid under the laws of the jurisdiction chosen by the parties or as the case may be under the laws of the jurisdiction where the award was rendered;
c) proper notice and full opportunity shall have been granted to the defendant;
d) the arbitration award must not have exceeded the terms of the arbitration agreement, or it shall be possible to divide the award so as to consider solely that portion within the limits of the arbitration agreement;
e) the commencement of the arbitration proceedings must have been in accordance with the arbitration agreement;
f) the arbitration award must be biding upon the parties and its effects must not have been invalidated or suspended by a court in the jurisdiction in which it was rendered;
g) under Brazilian law, the matter submitted for arbitration must be eligible for dispute resolution through arbitration;
h) the arbitration award must not offend Brazilian public policy, national sovereignty or good morals.
After its confirmation by STJ, the arbitration award becomes eligible for enforcement through the competent Brazilian court in the same way as if it was a Brazilian arbitration award.
