BRAZIL Law and Practice Contributed by: Octaviano Duarte, Henrique Forssell and Marcelo Lucidi, Duarte Forssell Advogados
Therefore, there are multiple time limits for bringing fraud claims in Brazil. There are also fraud claims that are not subject to any limitation periods. According to the Brazilian Civil Code, if the specific law does not specify what statutory period is applicable to a certain case, the statutory limit for bringing a claim will be ten years. Specific limitation periods for bringing fraud claims based on different causes of action include the fol - lowing: • claims based on extracontractual civil liability – generally, three-year limitation period ( prescrição ); • fraud against creditors ( fraude contra credores ) – four-year limitation period ( decadência ); • revocatory actions – three-year limitation period ( decadência ) from the bankruptcy decree; • under the case law of the Superior Court of Jus - tice, piercing of the corporate veil is generally regarded as an incidental procedural mechanism that is not subject to a limitation period of its own, distinct from that governing the underlying claim; • claims by shareholders or entities against directors and officers – two-year decadência from the date of the general or special meeting that approved the directors’ and officers’ accounts; and • claims by government authorities based on the Anti-Corruption Law – five-year prescrição from the date on which the violation becomes known to the company or, in some cases, from the date on which the violation ceased. Unless otherwise provided in the relevant statute, as a rule the limitations period starts to run from the date on which the fraudulent transaction was effected (although in some cases the limitation period argu - ably starts from the date of the party’s knowledge of the fraudulent transaction, based on the actio nata doctrine). 1.5 Proprietary Claims Against Property Where a claimant seeks the recovery of property mis - appropriated or induced by fraud to transfer, a pro - prietary claim can be asserted based inter alia on the annulment of the underlying transaction.
If the property reclaimed is in the possession of a bankruptcy estate, a claimant may file a Request for Restitution ( Pedido de Restituição ) within the bank - ruptcy proceeding, thereby recovering the property with preference over other creditors. However, under Brazilian law, it is generally not pos - sible to establish a proprietary claim with precedence over unsecured creditors against property that rep - resents the converted proceeds of the original fraud. This limitation reflects legal principles aimed at pre - serving the integrity of insolvency proceedings and equitable distribution of assets among creditors. 1.6 Rules of Pre-Action Conduct In Brazil, there are no specific rules of pre-action con - duct that apply exclusively to fraud claims. However, certain general principles and procedural rules may be relevant when initiating legal proceedings involv - ing fraud allegations. These principles aim to ensure fairness, efficiency and the protection of the parties’ rights throughout the litigation process. Brazilian law imposes a duty of good faith on parties involved in legal proceedings. This includes a duty to act honestly, fairly and co-operatively throughout the litigation process. Parties are expected to disclose relevant information and evidence in a timely manner and to refrain from engaging in fraudulent or decep - tive conduct. Prior to initiating formal legal proceedings, parties may engage in pre-litigation investigation and informal dis - pute resolution efforts to gather information, assess the strength of their claims or defences, and explore potential avenues for settlement. 1.7 Prevention of Defendants Dissipating or Secreting Assets In Brazil, victims of fraud have access to some of the most sophisticated tools and legal recourse to pre - vent defendants from dissipating or secreting assets with the intention of avoiding the consequences of a judgment. Preliminary Injunction or Seizure Under Brazilian law, the claimant may petition the court for a preliminary injunction or seizure order
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