BRAZIL Law and Practice Contributed by: Caio Ferreira Silva, Thiago Braga Junqueira, Vinícius Pimenta Seixas and Rodrigo Vieira, Pinheiro Neto Advogados
registration with the Brazilian Securities and Exchange Commission ( Comissão de Valores Mobiliários , or CVM) if the securities are offered to the public at large. Companies may also issue promissory notes and sell them to the public, although the market for promissory notes is still small compared to the market for local bonds (debentures). Brazil- ian companies may also issue bonds offshore, the transaction documents for which are gen- erally governed by foreign law. In such cases, certain registrations and disclosure obligations must be complied with in Brazil. Election of Governing Laws Parties to agreements entered into with Brazil- ian persons have limited freedom to choose the governing laws for their obligations. Decree Law No 4,657, of 4 September 1942, as amended (usually known as the “Law of Introduction to the Rules of Brazilian Law” ), lays out the framework for any type of private arrangements and, as a rule, defines that any agreement should be gov- erned by the laws of the place where the docu- ment is entered into. However, the parties may choose their governing laws for international agreements, with the following general caveats: • the choice of a foreign law depends on the existence of a link between the underlying transaction to be performed or the parties and the law chosen by such parties to govern their obligations; and • the governing law should not violate Brazilian national sovereignty, public policy and good morals or ethics. Any actions relating to real estate property located in Brazil and probate proceedings of a deceased person’s Brazilian estate are subject to the exclusive jurisdiction of Brazilian courts.
As a rule, local courts should recognise and apply the foreign law chosen by the parties based on the parameters set forth above. Brazil- ian laws, however, also provide that local courts will always have jurisdiction over cases where: • the defendant is domiciled in Brazil, regard- less of their nationality; • the obligation is to be performed in Brazil; or • the lawsuit arises from facts or acts per- formed in Brazil. Therefore, even if litigation is initiated abroad, this would not preclude Brazilian courts from judg- ing cases involving the matters or facts above, which means that local courts will always have concurrent jurisdiction to resolve those issues. Enforcement and Arbitration Any judgments rendered abroad may be enforced in Brazil without a re-examination of the matter if the final sentence or decision issued offshore is submitted to an exequatur process in the Superior Court of Justice ( Superior Tribunal de Justiça , or STJ), which may take up to 18 months to be granted. The confirmation of for- eign judgments by the STJ is subject to the fulfil- ment of certain requirements, including that the judgment is accompanied by a certified transla- tion into Portuguese, and that it is not manifestly against national sovereignty, public policy and good morals or ethics. After the exequatur is obtained, enforcement of the underlying ruling is made by Brazilian lower courts. An alternative to local courts is the arbitration procedure, which follows more flexible rules under which the parties have the freedom to choose the governing law for the relevant arbitral procedure conducted in Brazil. By selecting the arbitral tribunal in Brazil as the exclusive author- ity to resolve such matters, the parties avoid the
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