Challenging and Enforcing Arbitration Awards

Last verified on Sunday 21st February 2021

Challenging and Enforcing Arbitration Awards: Brazil

Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Sérgio Bermudes Advogados

Applicable requirements as to the form of arbitral awards

1. Must an award take any particular form?

Brazil

Awards must be in writing and clearly name and identify the parties. Federal Law No. 9,307/96) (the Brazilian Arbitration Law (BAL)) also stipulates that awards are to include (1) a report on the facts and on the issues in dispute, (2) the findings of fact and law on which the award is based, (3) an order by means of which the arbitrators resolve the issues submitted to them, setting a time limit of compliance, if appropriate, and (4) the date and place where the award was rendered.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Applicable procedural law for recourse against an award

2. Are there provisions governing modification, clarification or correction of an award? Are there provisions governing retractation or revision of an award? Under what circumstances may an award be retracted or revised (for fraud or other reasons)?

Brazil

Parties may file a request for the correction of an error or clarification of a contradiction, obscurity or omission within five days of the notification of an award (BAL, Article 30).

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

3. May an award be appealed to or set aside by the courts? What are the differences between appeals and applications to set aside awards?

Brazil

There is no provision in the Brazilian system for an appeal to the state courts against an arbitral award but an application to set aside may be presented in the circumstances listed in Article 32 of the BAL.

An application to set aside an arbitration award can also be filed as part of the defence against the enforcement of the award.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Applicable procedural law for setting aside of arbitral awards

4. Is there a time limit for applying for the setting aside of an arbitral award?

Brazil

In line with Article 33, Paragraph 1 of the BAL, the time limit for applying for the setting aside of an arbitral award is 90 days following receipt of the notice of the award or notice of a tribunal’s decision on the motion for clarification. This time limit also applies when an application to set aside is made in the form of a challenge to the enforcement of the award.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

5. What kind of arbitral decision can be set aside in your jurisdiction? Can courts set aside partial or interim awards?

Brazil

Both partial and final awards may be set aside.

Although there is no provision for the setting aside of interim orders, some legal scholars (albeit a minority) consider that such applications can be the subject of review by a court on an application for writ of mandamus if the order violates a clear and indisputable rightas the result of an illegal or abusive act of the panel.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

6. Which court has jurisdiction over an application for the setting aside of an arbitral award?

Brazil

The parties shall observe the forum-selection clause. In the absence of any such provision and in accordance with Article 46 of the Civil Procedure Code, jurisdiction will rest with the court of the place of domicile (or one of the domiciles) of the defendant, or, if the domicile is unknown, the place where the defendant is to be found or the domicile of the claimant. If the defendant does not have a domicile or fixed residence in Brazil, the application may be filed to the court of the domicile of the claimant. If the claimant also resides abroad, the application may be made to any court. If there are two or more defendants with different domiciles, the claimant may file before the court of any of the domiciles.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

7. What documentation is required when applying for the setting aside of an arbitral award?

Brazil

Applications to set aside follow the procedure of the Code of Civil Procedure known as ‘common-track’. Article 320 of the Code provides that ‘the Statement of Claim is to be accompanied by the documents that are indispensable for the filing of the action’, which is to be construed as the documents that allow the court to ascertain whether the pre-conditions to valid filing of the lawsuit have been satisfied.

It is not necessary to file the original version of the arbitral award or even a certified copy – a simple copy will suffice.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

8. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with the application for the setting aside of an arbitral award? If yes, in what form must the translation be?

Brazil

In accordance with Article 192 of the Civil Procedure Code ‘in all acts and terms of the proceedings the use of the Portuguese language is mandatory’. As such, ‘a document that is in a foreign language can only be filed on records when accompanied by a Portuguese language version that has been submitted via diplomatic channels or by the central authority or signed by a certified (sworn) translator’.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

9. What are the other practical requirements relating to the setting aside of an arbitral award? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

Brazil

The claimant must pay the court fee for commencement of the proceedings, which is calculated in accordance with the estimated amount at issue and the fee table of the respective court (each court centre has its own fee structure).

There are no limitations on the length of the submissions and of the documentation filed by the parties. However, all documentation must be in Portuguese.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

10. What are the different steps of the proceedings?

Brazil

The proceedings begin with the pleadings stage, in which the claimants set out their request in a written statement of claim. The court then directs service of process on the respondent, directing the filing of a written defence. The filing of the defence is followed by the evidence production phase, which allows witnesses to be heard and, if the case may be, the production of expert evidence. The proceedings may then continue to the decision-making phase, when the judge issues the final order resolving the merits of the issue. The decision is subject to appeal.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

11. Do setting-aside proceedings have suspensive effect? May an arbitral award be recognised or enforced pending the setting-aside proceedings in your jurisdiction?

Brazil

As a general rule, applications to set aside do not have an automatic suspensive effect, but the parties may apply for urgent or interim relief to prevent the enforcement of a arbitration award pending a final ruling on a set-aside application.

Brazilian arbitral awards do not require recognition.

Regarding foreign awards, the mere existence of setting-aside proceedings in the country of origin is not an obstacle to its recognition in Brazil. However, an application for recognition may be denied if the arbitral award has been suspended or set aside in the country of origin. It is also possible to ask for a provisional measure pending recognition process.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

12. What are the grounds on which an arbitral award may be set aside?

Brazil

According to Article 32 of the BAL, the circumstances under which an arbitral award can be set aside are:

  • invalidity of the arbitration agreement;
  • issuance of the award by a person (or, by extension, a panel) that could not have sat as an arbitrator;
  • the award did not satisfy the mandatory procedural requisites;
  • the award extended beyond the limits established in the arbitration agreement;
  • corrupt practice by the panel;
  • the award was issued outside the time limit agreed by the parties or, in the absence of any agreement, later than the six-month limit stipulated in the BAL; and
  • failure to comply with the principles of adversarial proceedings, equal treatment of the parties, impartiality, unfettered decision-making or when there has been breach of public policy.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

13. What is the effect of the decision on the setting-aside application in your jurisdiction? What challenges are available?

Brazil

Unless the court finds that the arbitration agreement was null or that the limits of the agreement were not complied with, it will direct the arbitrator or the tribunal to issue a new award.

An order to set aside an arbitration award may be challenged on appeal to a second instance court, with review of issues of fact and law being possible. The second instance court decision, in turn, can be challenged before the Superior Court of Justice, on the grounds that the order breached federal law, or before the Federal Supreme Court, on the grounds that the order breached the Constitution.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

14. Will courts take into consideration decisions rendered in the same matter in other jurisdictions or give effect to them?

Brazil

Foreign awards that have been recognised by the Superior Court of Justice are legally equivalent to Brazilian orders and must be complied with by Brazilian courts in enforcement proceedings.

Foreign awards that have not yet been recognised may be relied on to support a party’s arguments in Brazilian proceedings but are not binding on the court.

Foreign arbitral awards that have been set aside in the country of origin will not normally be granted recognition in Brazil.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Applicable procedural law for recognition and enforcement of arbitral awards

15. What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

Brazil

The recognition of foreign arbitral awards in Brazil is governed by the Law of Introduction to the Civil Code (Decree Law No. 4,657/1942), the Federal Constitution and the Civil Procedure Code.

Additionally, the provisions of the BAL and the Internal Rules of the Superior Court of Justice must be observed, as well as the international treaties to which Brazil is a signatory.

In addition to the New York Convention, Brazil is a signatory to:

  • the 1975 Inter-American Convention on International Commercial Arbitration (the Panama Convention) (Decree No. 1.902/96);
  • the 1979 Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (the Montevideo Convention) (Decree No. 2.411/97); and
  • the 1992 Protocol for Cooperation and Jurisdictional Assistance in Civil, Commercial, Labour and Administrative Matters (Protocolo de Las Leñas) (Decree No. 2.067/96).

The enforcement of recognised foreign arbitral awards is governed by the BAL and the Civil Procedure Code.

Regarding domestic awards, there is no need for recognition, and the enforcement shall observe the provisions set forth in the Civil Procedure Code.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

16. Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?

Brazil

Yes. The 1958 New York Convention was incorporated into the Brazilian legal system by Decree No. 4.311 of 23 July 2002, without reservation.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Recognition proceedings

17. Is there a time limit for applying for the recognition and enforcement of an arbitral award?

Brazil

There is no time limit for applying for the recognition of a foreign arbitral award, but the application for enforcement of an award, whether domestic or foreign, is subject to Binding Precedent 150 of the Federal Supreme Court, according to which the statutory limitation period for applying for enforcement is of the same duration as the limitation period for the filing of the original lawsuit.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

18. Which court has jurisdiction over an application for recognition and enforcement of an arbitral award?

Brazil

Domestic awards

Recognition

Domestic awards are not subject to recognition by a judicial court (BAL, Article 18; Civil Procedure Code, Article 515, VII).

Enforcement

The parties shall observe the forum-selection clause. In the absence of any such provision and in accordance with Article 46 of the Civil Procedure Code, jurisdiction will rest with the court of the place of domicile (or one of the domiciles) of the defendant, or, if the domicile is unknown, the place where the defendant is to be found or the domicile of the claimant. If the defendant does not have a domicile or fixed residence in Brazil, the application may be filed to the court of the domicile of the claimant. If the claimant also resides abroad, the application may be made to any court. If there are two or more defendants with different domiciles, the claimant may file before the court of any of the domiciles.

Foreign awards

Recognition

Jurisdiction lies with the Superior Court of Justice (Federal Constitution, Article 105 I. i.; BAL, Article 35).

Enforcement

Jurisdiction lies with the first instance federal courts (Civil Procedure Code, Article 965; Federal Constitution, Article 109 X).

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

19. What are the requirements for the court to have jurisdiction over an application for recognition and enforcement and for the application to be admissible? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

Brazil

Domestic awards

Recognition

Domestic awards are not subject to recognition by a judicial court (BAL, Article 18; Civil Procedure Code, Article 515 VII).

Enforcement

The judgment creditor may opt to enforce the award via the competent court of the current domicile of the judgment debtor or the court of the location of the assets against which enforcement is to be levied, or the place where the order is to be complied with (Civil Procedure Code, Article 516, Sole Paragraph). Previous identification of assets is not necessary.

Foreign awards

Recognition

The admissibility of applications and the procedure for recognition are governed by Articles 216-C and 216-D of the Internal Rules of the Superior Court of Justice, in accordance with which the request must satisfy all the requisites set out in procedural law and be accompanied by the original, or a certified copy, of the order for which recognition is sought and other essential documents, duly translated into Portuguese by a certified or official translator and bearing the official stamp of the competent Brazilian consular authority, when applicable.

Brazilian law stipulates that an award for which recognition is sought must (1) have been issued by a competent authority, (2) contain evidence that service of process was effected on the parties and, if applicable, that the respondent was in default, and (3) be final and binding.

An applicant for recognition must also demonstrate legitimate interest in obtaining recognition of the effects of the foreign award in Brazil.

Enforcement

Within the federal court system, a creditor may seek enforcement by the court of the current domicile of the debtor, the court where the relevant assets are located or the place where the terms of order (positive or negative obligation) are to be complied with.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

20. Are the recognition proceedings in your jurisdiction adversarial or ex parte? What are the different steps of the proceedings?

Brazil

First, it is important to note that recognition proceedings are only necessary for foreign arbitral awards.

The proceedings are adversarial. Once the statement of claim has been filed, with the supporting documents, process will be served on the respondent, which has 15 days to file any challenge to the application.

The proceedings will be initiated by a written phase (statement of claim, statement of defence, rebuttal and rejoinder), after which the rapporteur justice, sitting alone, may issue an order, provided the request is consistent with the consolidated case law of the Special Court on the issue in hand. Otherwise, and if there is no consolidated case law on the matter, the request for recognition must be submitted to the full Special Court.

The full Special Court is made up of the 15 most senior justices of the Superior Court of Justice, who will decide the request for recognition by majority vote. Counsel for the parties are granted 15 minutes each to address the court prior to the decision.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

21. What documentation is required to obtain recognition?

Brazil

A request for recognition must be accompanied by the following documents (BAL, Article 37; Internal Rules of the Superior Court of Justice, Article 216-C):

  • the original arbitral award or a certified copy, validated by the Brazilian consulate and accompanied by an official translation;
  • the original of the arbitration agreement or a duly certified copy, with an official translation; and
  • other documents that are essential to demonstrate the fulfilment of the prerequisites for recognition.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

22. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition? If yes, in what form must the translation be?

Brazil

In accordance with Article 216-C of the Internal Rules of the Superior Court of Justice, the required documentation must be translated by an official or certified translator and, in certain cases, bear the stamp of the competent Brazilian consular authority.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

23. What are the other practical requirements relating to recognition and enforcement? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

Brazil

For both recognition and enforcement, the claimant will need to pay the court fee in accordance with the fee table of the court to which the application is made (each court centre has its own fee structure).

There are no limitations on the length of the submissions or of the documentation filed by the parties. All submissions and documents must be in Portuguese (the originals or translations thereof).

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

24. Do courts recognise and enforce partial or interim awards?

Brazil

Partial arbitral awards issued abroad can be recognised and enforced in Brazil provided they satisfy the requisites that apply to full awards.

Although foreign interim awards cannot be the subject of recognition, they may be enforced by means of a letter rogatory (Civil Procedure Code, Article 962).

No recognition is required for partial or interim domestic awards and both may be enforced by judicial court.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

25. What are the grounds on which an arbitral award may be refused recognition? Are the grounds applied by the courts different from those provided under Article V of the New York Convention?

Brazil

Both the New York Convention, to which Brazil is a signatory, and the BAL set out provisions regarding the circumstances in which recognition may be denied to foreign awards:

According to Article 38 of the BAL, a foreign arbitral award may be denied recognition only when the party challenging recognition demonstrates that:

  • the parties to the arbitral agreement lacked capacity;
  • the arbitration agreement was not valid in accordance with the law that governed its provisions or in accordance with the law of the place where the arbitration award was issued;
  • it was not notified of the appointment of the arbitrator or of the arbitration procedure, or that the principle of adverse proceedings has been breached in such a way as to render impossible the exercise of right to be heard in full;
  • the arbitral award was issued outside the limits of the arbitration agreement and it is not possible to separate the excess provision from that which was submitted to arbitration;
  • the arbitration was commenced in a manner that was not in line with the arbitration agreement or arbitration clause; or
  • the arbitral award is not yet binding on the parties because it has been set aside (annulled) or stayed by a court in the country in which it was issued.

Furthermore, Article 39 states that recognition may be denied if the Superior Court of Justice finds that (1) the object of the litigation is not legally capable of being resolved by arbitration or (2) the decision offends Brazilian public policy.

According to Article 34 of the BAL, the provisions set forth in international treaties effective in the internal legal system shall prevail over the BAL.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

26. What is the effect of a decision recognising an arbitral award in your jurisdiction?

Brazil

Domestic arbitral awards and foreign arbitral awards that have been recognised by the Superior Court of Justice are ‘enforceable judicial titles’ under Brazilian law and, hence, immediately enforceable.

A single justice ruling by the rapporteur granting recognition of a foreign award can be challenged by an appeal to the Special Court. The ruling of the Special Court may be challenged only by an appeal to the Federal Supreme Court in the event of a perceived violation of the Federal Constitution.

The same appeals are available to aggrieved third parties.

Neither of these appeals have automatic suspensive effect, although exceptionally the court might confer this effect following application by a party.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

27. What challenges are available against a decision refusing recognition in your jurisdiction?

Brazil

A single justice ruling by the rapporteur refusing recognition of a foreign award can be challenged by an appeal to the Special Court. The ruling of the Special Court may be challenged only by an appeal to the Federal Supreme Court in the event of a perceived violation of the Federal Constitution.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

28. What are the effects of annulment proceedings at the seat of the arbitration on recognition or enforcement proceedings in your jurisdiction?

Brazil

The Superior Court of Justice tends not to regard pending annulment proceedings in the country of origin as being a bar to recognition, in that the basis for recognition in Brazil is that the award is a final and binding (res judicata) order.

However, in accordance with the provisions of Article 38 of the BAL, recognition may be denied when the respondent to the application demonstrates that ‘the arbitral award is not yet binding on the parties, in that it has been set aside, or has been suspended by a court order in the country in which the award was issued’.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

29. If the courts adjourn the recognition or enforcement proceedings pending annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security?

Brazil

In relation to recognition of foreign arbitral awards, the mere existence of an application to set aside in the country of origin is not a bar to its recognition in Brazil. As such, the need for a court bond does not arise.

In relation to the enforcement of the award, there is no statutory provision that requires the posting of a court bond in the event of a stay of the enforcement pending the outcome of an application to set aside the award. However, to protect the final efficacy of the enforcement proceedings, the claimant may request provisional attachment of the debtor’s assets corresponding to the amount sought or to have the court order the defendant to post security equivalent to the amount sought.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

30. Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an arbitral award is set aside after the decision recognising the award has been issued, what challenges are available?

Brazil

In accordance with the provisions of Article V(e) of the New York Convention and Article 38 VI of the BAL, a foreign arbitral award may be denied recognition if it is demonstrated that the award has been set aside or suspended by a court in the country in which it was rendered.

A request for recognition of an annulled foreign arbitral award has been submitted to the Superior Court of Justice and, in that case, the Court denied recognition, stating that ‘in Argentina the present arbitral award is null as the result of a res judicata court ruling issued in said country. The arbitral award is, therefore, null and void in Brazil and, as such, cannot be recognized’ (SEC 5782).

Brazilian courts have never tried a case in which the arbitral award was set aside after its recognition in Brazil.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Service

31. What is the procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction? If the extrajudicial and judicial documents are drafted in a language other than the official language of your jurisdiction, is it necessary to serve these documents with a translation?

Brazil

Judicial documents must always be presented in Portuguese and may be served by (1) post, (2) bailiff, (3) the court clerk or head of the court office, if the party being served personally attends that court office, (4) publication, and (5) by electronic means, as stipulated in law.

If the documents are drafted in a foreign language, they can only be filed on the records after translation into Portuguese by a certified translator.

Service of extrajudicial documents outside court proceedings is not provided for in Brazilian legislation and, therefore, is not subject to specific rules. However, the claimant must be able to prove that the documents were effectively received by the defendant.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

32. What is the procedure for service of extrajudicial and judicial documents to a defendant outside your jurisdiction? Is it necessary to serve these documents with a translation in the language of this jurisdiction?

Brazil

The service of extrajudicial and judicial documents to a defendant outside Brazilian jurisdiction is governed, primarily, by the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Hague Service Convention), which Brazil ratified in 2019 through Decree No. 9.734. Accordingly, if the foreign defendant is located in a state that has also ratified the Hague Service Convention, then service will observe the procedures provided for in that treaty.

However, if the defendant is located in a state that has not ratified the Hague Service Convention, or other bilateral or multilateral treaties governing service, then service will be effected by means of a letter rogatory, which will be submitted to the defendant’s state via diplomatic channels. The request must be presented in the language of the foreign state, with a Portuguese translation.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Identification of assets

33. Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?

Brazil

Some public registers may be useful to an award creditor seeking to identify its debtor’s assets prior to enforcement.

Ownership of real estate property, for example, may be identified through registration certificates issued by local registry services, on payment of a fee. Considering the plurality of registry services, however, the search result may be flawed.

Through commercial registries, creditors may identify any companies or partnerships that are linked to a debtor’s taxpayers’ register.

Certain databases may be consulted only with prior court authorisation.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

34. Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

Brazil

When a award debtor does not voluntarily satisfy a debt, the creditor may seek leave from the court in the enforcement proceedings to identify and locate the creditor’s assets. The systems that are most commonly used for this purpose are the System of Judicial Restrictions for Motor Vehicles (the RenaJud system), for the identification of vehicles owned by the debtor, and the Judicial Branch Asset Search System (the SisbaJud system), which enables online freezing of assets. In exceptional situations, judges may also order breach of tax secrecy.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Enforcement proceedings

35. What kinds of assets can be attached within your jurisdiction?

Brazil

Except for the assets listed in Article 833 of the Civil Procedure Code, all other assets, whether movable, immovable, tangible or intangible, may be attached within Brazilian jurisdiction.

Pursuant to Article 833 of the Civil Procedure Code, the following property cannot be subject to attachment:

  • non-transferrable assets;
  • clothes and personal items of the judgment debtor, unless they are of high value;
  • earnings;
  • movable property that is necessary or useful to the exercise of the debtor’s profession;
  • life insurance;
  • materials necessary for construction work that is under way, unless the construction itself is subject to attachment;
  • rural smallholdings, provided they are worked by the family;
  • public resources received by private institutions for mandatory investment in education, health and social work;
  • amounts deposited in a savings account up to the limit of 40 minimum salaries;
  • public funds received by a political party, in accordance with the law; and
  • credits arising out of the disposal of real estate units as part of a real estate development project.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

36. Are interim measures against assets available in your jurisdiction?

Brazil

The Civil Procedure Code was substantially modified in 2015. The updated Code provides for a range of interim measures designed to safeguard the rights of claimants and award creditors to obtain effective relief.

Article 301 of the Code grants judges very broad powers to grant conservatory interim relief, including various forms of provisional attachment or seizure of assets and the issue of a ‘protest’ against the transfer of immovable property. The ‘protest’ essentially leads to the registration of a charge on the Land Register, recording the award creditor’s claim.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

37. What is the procedure to apply interim measures against assets in your jurisdiction?

Brazil

To obtain an interim measure, the creditor must file a formal request to a judge, providing evidence of the likelihood of success of the his or her claims (fumus boni iuris) and the risk of serious loss or harm to the useful outcome of the lawsuit (periculum in mora).

The application may be heard ex parte or the court may direct service of notice on the other party, requiring them to answer the claimant’s application, before a decision is made.

The court may require the applicant for the interim conservatory measure to furnish a court bond or other form of guarantee to cover loss that may be caused to the party against whom the interim measure is being sought.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

38. What is the procedure for interim measures against immovable property within your jurisdiction?

Brazil

To obtain an interim measure against immovable property, the creditor must file a formal request to a judge, providing evidence of the likelihood of success of his or her claims (fumus boni iuris) and the risk of serious loss or harm to the useful outcome of the lawsuit (periculum in mora).

There are several interim measures that can be granted with regard to immovable property, including provisional attachment or the issue of a ‘protest’ and entry of the respective charge on the Land Registry, registering the award creditor’s claim.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

39. What is the procedure for interim measures against movable property within your jurisdiction?

Brazil

To obtain an interim measure against movable property, the creditor must file a formal request to a judge, providing evidence of the likelihood of success of his or her claims (fumus boni iuris) and the risk of serious loss or harm to the useful outcome of the lawsuit (periculum in mora).

If the interim measure involves provisional seizure of the asset, the property is to be entrusted to a court-appointed depositary or administrator, unless there is legal provision that determines otherwise.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

40. What is the procedure for interim measures against intangible property within your jurisdiction?

Brazil

To obtain an interim measure against intangible property, the creditor must file a formal request to a judge, providing evidence of the likelihood of success of his or her claims (fumus boni iuris) and the risk of serious loss or harm to the useful outcome of the lawsuit (periculum in mora).

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

41. What is the procedure to attach assets in your jurisdiction?

Brazil

Attachment of assets during the enforcement of an arbitral award, whether domestic or foreign, can be granted by a judge only if the debtor fails to make the required payment within the legally stipulated period. Pursuant to Article 523 of the Civil Procedure Code, notice is to be served on the debtor, requiring payment within 15 days.

If timely payment does not occur, the judge can grant an ex parte order for the attachment of as many assets as necessary to guarantee the enforcement of the debt.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

42. What is the procedure for enforcement measures against immovable property within your jurisdiction?

Brazil

Attachment of immovable property during the enforcement of an arbitral award, whether domestic or foreign, can be granted by a judge only if the debtor fails to make the required payment within the legally stipulated period. Pursuant to Article 523 of the Civil Procedure Code, notice is to be served on the debtor, requiring payment within 15 days.

If timely payment does not occur, the judge can grant an ex parte order for the attachment of as many assets as necessary to guarantee the enforcement of the debt.

Unless otherwise requested by the creditor, the attachment or seizure of assets is to follow the order of priority as set out in Article 835 of the Civil Procedure Code, in which immovable property is listed as Item V, after cash, bonds and vehicles, among other things.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

43. What is the procedure for enforcement measures against movable property within your jurisdiction?

Brazil

Attachment of movable property during the enforcement of an arbitral award, whether domestic or foreign, can be granted by a judge only if the debtor fails to make the required payment within the legally stipulated period. Pursuant to Article 523 of the Civil Procedure Code, notice is to be served on the debtor, requiring payment within 15 days.

If timely payment does not occur, the judge can grant an ex parte order for the attachment of as many assets as necessary to guarantee the enforcement of the debt.

Unless otherwise requested by the creditor, the attachment or seizure of assets is to follow the order of priority as set out in Article 835 of the Civil Procedure Code, in which movable property is listed as Item VI, after cash, bonds, vehicles and real estate property, among other things.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

44. What is the procedure for enforcement measures against intangible property within your jurisdiction?

Brazil

Attachment of intangible property during the enforcement of an arbitral award, whether domestic or foreign, can be granted by a judge only if the debtor fails to make the required payment within the legally stipulated period. Pursuant to Article 523 of the Civil Procedure Code, notice is to be served on the debtor, requiring payment within 15 days.

If timely payment does not occur, the judge can grant an ex parte order for the attachment of as many assets as necessary to guarantee the enforcement of the debt.

Unless otherwise requested by the creditor, the attachment or seizure of assets is to follow the order of priority as set out in Article 835 of the Civil Procedure Code, which places intangible property last in the list.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

45. Is it possible in your jurisdiction to attach bank accounts opened in a branch or subsidiary of a foreign bank located in your jurisdiction or abroad? Is it possible in your jurisdiction to attach the bank accounts opened in a branch or subsidiary of a domestic bank located abroad?

Brazil

Court orders for the freezing or attachment of financial assets, deposited in financial institutions located in Brazil, can be implemented electronically through the SisbaJud system.

The attachment of financial assets located in foreign jurisdictions, however, requires not only the granting of a court order but also international legal cooperation, as provided for in Article 27 of the Civil Procedure Code. After the decision has been granted by the Brazilian judiciary authorising the attachment, it is necessary to obtain the issue of a letter rogatory to be sent to the courts of the place where the bank account is located. In certain cases regulated by international or bilateral treaties, cooperation of the other jurisdiction could be obtained in a more expedited way.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

Enforcement against foreign states

46. Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

Brazil

There are no rules in Brazilian jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states, which means that the general rules apply.

It is important to note, however, that in the absence of an express waiver, a foreign state has absolute immunity from enforcement. This is the predominant position of the Federal Supreme Court. It is also important to note that there is a minority-held view that enforcement is possible against the property of a foreign state when the assets in question have no bearing on the essential activities of the state’s diplomatic mission or consular representation in Brazil.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

47. May award creditors apply interim measures against assets owned by a sovereign state?

Brazil

In the absence of an express waiver, a foreign state has absolute immunity from enforcement and, therefore, a creditor cannot apply for an interim measure against the assets owned by a sovereign state. This is the predominant position of the Federal Supreme Court.

However, there is a minority-held view that enforcement is possible against the property of a foreign state when the assets in question have no bearing on the essential activities of the state’s diplomatic mission or consular representation in Brazil.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

48. What is the procedure for service of extrajudicial and judicial documents to a foreign state? Is it necessary to serve extrajudicial and judicial documents with a translation in the language of the foreign state?

Brazil

Service of extrajudicial and judicial documents to a foreign state must be effected by means of a letter rogatory, which will be submitted to the foreign state via diplomatic channels.

The request must be presented in the language of the foreign state, with a Portuguese translation thereof.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

49. Are assets belonging to a foreign state immune from enforcement in your jurisdiction? Are there exceptions to immunity?

Brazil

In the absence of an express waiver, a foreign state has absolute immunity from enforcement. This is the predominant position of the Federal Supreme Court.

However, there is a minority-held view that enforcement is possible against the property of a foreign state when the assets in question have no bearing on the essential activities of the state’s diplomatic mission or consular representation in Brazil.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

50. Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? What are the requirements of waiver?

Brazil

Yes, it is possible for a foreign state to waive immunity from enforcement. There are no specific rules on waiver, but it must be expressly made. Under Brazilian law, waivers are always subject to restrictive interpretation.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

51. Is it possible for a creditor of an award rendered against a foreign state to attach the assets held by an alter ego of the foreign state within your jurisdiction?

Brazil

There is no specific provision or precedent on this matter in Brazilian case law or legal theory.

Answer contributed by Marcio Vieira Souto Costa Ferreira, Antonia de Araujo Lima and Renata Auler Monteiro

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