BRAZIL Trends and Developments Contributed by: Marcelo Lucidi, Henrique Forssell and Octaviano Duarte, Duarte Forssell Advogados
eign insolvency estate. The case illustrates how Bra - zil’s cross-border insolvency framework can serve as an ancillary tool in complex multinational fraud and asset-recovery matters. What alternatives to recognition are there? Although recognition increasingly appears to be a viable choice, foreign creditors and liquidators also have access to the Brazilian jurisdiction by a number of alternative methods, such as the following. Enforcement of foreign judgments Foreign creditors can enforce their judgments obtained outside Brazil through the Brazilian judicial system. The process typically involves filing a petition for rec - ognition of the foreign order with the Superior Court of Justice. Under the standards adopted by Brazilian International Law, in the absence of a specific treaty, the recognition and enforcement of a foreign inter - locutory decision (such as a freezing injunction) is based on the principle of reciprocity, which states that favours, benefits or penalties that are granted by one state to the citizens or legal entities of another should be returned in kind. After recognition, the creditor is entitled to file an enforcement proceeding with the Brazilian courts. Filing enforcement proceedings directly in Brazil The legal framework in Brazil provides mechanisms to facilitate cross-border enforcement and ensures that foreign creditors have avenues to pursue their claims effectively. Enforcement in Brazil typically involves obtaining attachment orders issued by Bra - zilian courts. These orders are commonly sought in enforcement proceedings and can be obtained against a debtor’s free assets. However, attachment orders against third parties are only granted in specific cases, such as when fraud occurs or when the legal requirements of the disregard doctrine (piercing of the corporate veil) are met.
Obtaining recognition of freezing orders Historically, the Brazilian courts did not grant “exequa - tur” to letters rogatory involving “measures of com - pulsion”, which would include freezing injunctions. However, since 2015, the Code of Civil Procedure expressly states that “the enforcement… of a foreign interlocutory decision granting urgent measures shall be made by means of a letter rogatory”. The Code of Civil Procedure further provides that “[t]he judgment regarding the urgency of the relief falls exclusively to the judicial authority that rendered the foreign deci - sion”. In fact, the Superior Court of Justice has recent - ly recognised a worldwide freezing order originating from a British Virgin Islands court in a civil matter. Obtaining disclosure of information from third parties The same standards for a Brazilian party to obtain disclosure apply to a foreign party. In the Brazilian legal system, parties have an independent right to obtain evidence regardless of a previous legal pro - ceeding. Such right can be initiated through a stan - dalone proceeding known as the Early Production of Evidence (Article 381 of the Civil Procedure Code). The breach of fiscal (tax) and banking secrecy of a debtor is a legal measure that can be applied under certain circumstances, typically in the context of legal proceedings involving debt collection, enforcement of judgments or investigation of financial crimes, when there is suspicion of dissipation of assets. In Brazil, judges have access to electronic systems whereby they can instantly obtain the tax returns of a debtor and order financial institutions to provide any relevant bank statements.
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