BRAZIL Law and Practice Contributed by: Renata Iezzi, Nicole René Gomes e Cunha and Marcela Correa, Basch & Rameh
2.6.10 Mandatory Notice Periods To terminate a lease, a lessor must give a lessee writ - ten notice in a manner that complies with the lease and local law. In most cases, the notice should give the lessee a cure period of not less than two business days. 2.6.11 Lessees’ Entitlement to Claim Immunity No commercial airlines or air taxi companies currently operating in Brazil are entitled to immunity. 2.6.12 Enforcement of Foreign Arbitral Decisions Brazil adopted the New York Convention through Decree No 4.311 of 23 July 2002. However, foreign arbitration awards must still be ratified – see 2.6.6 Domestic Courts’ Recognition of Foreign Judg- ments/Awards . 2.6.13 Other Relevant Issues Non-Brazilian plaintiffs seeking to enforce a lease in Brazil must file a bond in the court set by the judge, usually of between 10% and 20% of the cause of action’s value. This bond is intended to cover oppos - ing counsel’s fees should the plaintiff lose the action. Court filing fees equivalent to 1.5% of the action’s value are also due. The Cape Town Convention allows parties to waive bond requirements. 2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation Under Brazilian contractual law, the concepts of assignment and novation are recognised and habitual in aviation transactions involving aircraft on lease to Brazilian lessees. 2.7.2 Assignment/Novation of Leases Under Foreign Laws Both a New York law assignment assumption agree - ment and an English law novation would be valid and upheld (see 2.3.8 Requirements for Documents Con- cerning Registration ). 2.7.3 Enforceability of Lease Assignments/ Novations See 2.3.8 Requirements for Documents Concerning Registration .
• not conflicting with Brazilian sovereignty, public policy or morality; • apostilled or authenticated by the competent Brazilian Consulate and accompanied by a sworn translation into the Portuguese language; and • not covering any matter over which the Brazilian judiciary has exclusive jurisdiction. An urgent interlocutory decision given by a competent foreign court against a Brazilian entity would be rec - ognised and accepted by the Brazilian courts without re-trial or examination of the merits after ratification by a federal court with proper jurisdiction, provided these formal requirements are met (except for not being subject to appeal). 2.6.7 Judgments in Foreign Currencies Judgments can be rendered in foreign currency; how - ever, defendants are entitled to satisfy such judg - ments by effecting payments in Brazilian currency at the exchange rate effective on the payment date. The foreign plaintiff needs to withdraw the amount in Brazilian currency and request authorisation from the Central Bank to wire the funds in foreign currency. Due to currency fluctuations, it is possible for there to be a discrepancy between the amount awarded and the amount finally wired. 2.6.8 Limitations on Lessors’ Actions Following Termination Charging rent following the redelivery of an aircraft might be deemed unenforceable. Damages, however, should be enforceable. 2.6.9 Lessor’s Requirement to Pay Taxes/Fees No taxes are due in connection with lease enforce - ment, but there are court filing fees and bond require - ments; see 2.6.13 Other Relevant Issues . In addition, the need for many services might arise, with signifi - cant expenses. For example, a customs broker might be needed to obtain an export authorisation. Aircraft parking fees and ground maintenance costs during litigation would be for the account of the lessor from the date of repossession. The legal fees can be sig - nificant.
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