The full bench of the Superior Court of Justice recently refused the recognition and enforcement of two arbitral awards issued by an arbitral tribunal seated in New York under the International Chamber of Commerce Rules. This decision is historic and important for arbitration, as it is one of the rare cases in which the Superior Court of Justice failed to recognise a foreign arbitral award.
The Sao Paulo State Court was recently faced with a dispute between the contracting parties to a franchise agreement. While the judge rapporteur recognised that the Brazilian legal system provides for competence-competence as a general rule, given the circumstances of this case, he declared the arbitration clause in the relevant franchise agreement to be null.
The Superior Court of Justice recently issued an important decision that not only demonstrates the level of sophistication reached by the superior courts in relation to arbitration, but also the prestige that arbitration has achieved in the country as a dispute resolution method which has a jurisdictional characteristic. The decision is critical for the development of arbitration in Brazil, since it reinforces the state courts' position in favour of arbitration.
December 14 2016 is already being considered 'D-day' with regard to arbitration and corporate law, as before the Brazilian judiciary's court recess, two important precedents were set on the subject. Questions still exist regarding whether these precedents are conflicting and only time and the likely debates following these decisions will be able to resolve them. However, one thing is certain: the judiciary's final decisions in 2016 are likely to cause intense discussions in 2017.
The Superior Court of Justice recently ruled that an arbitration clause providing that disputes between the contracting parties must be settled by "arbitration or mediation" was valid. In addition, the court held that the arbitration clause would be valid even if inserted into an agreement that, despite the presence of the arbitration clause, also allowed certain situations to be resolved by the courts.
According to recent changes to the Civil Code, the perfection of a security interest over equipment (through equipment pledge agreements) must meet certain conditions which differ from those for security interests over other assets.
Pursuant to Article 66-B(3) of Law 4.728/65, security can take the form of security bonds, a chattel mortgage of unfungible and fungible movables or a fiduciary cession of rights over movables. However, the legal system also accepts the establishment of atypical fiduciary legal business activities as security, such as the fiduciary cession of rights.
Due to the absence of specific regulations, financial institutions should exercise a degree of caution when providing online financial and banking services in Brazil. Certain requirements must be complied with, and foreign banks must take care that they do not need to seek authorization from or registration with the Brazilian authorities.
The applicability of the Brazilian Consumer Defence Code to the financial sector remains controversial following the filing of a lawsuit by several banks and the issuance of a resolution that establishes the regulatory provisions applicable to transactions and services rendered between financial institutions and their clients.
Including: Central Bank of Brazil; Preventative and Protective Regulation; Other Risk Management Measures; The New Brazilian Payment System.
The Central Bank is the governmental department responsible for controlling and registering foreign investments, as well as the repatriation of capital and the remittance of profits abroad.
A new rule recently entered into force that governs the organisation, administration and operation of private equity investment funds (FIPs) in Brazil. The new rule introduces the possibility for a FIP to provide certain guarantees on approval of its equity interest holders at a duly convened quotaholders' meeting, and modifies the deadlines for approval by quotaholders at such meetings.
The significant development of Brazil's capital market in recent years and the country's improving economy have led to calls for regulatory improvement. In line with this aim, the Securities and Exchange Commission recently issued Opinion 37, which sets forth the primacy of substance over form in the accounting system and the significance of presenting a true and fair view.
After spending seven years pending before the National Congress, Law 11.638 has been issued. The law brings Brazilian accounting laws into line with International Financial Reporting Standards and regulates proceedings concerning the compulsory production and issue of financial statements by listed companies.
The Joint Committee of the Securities and Exchange Commission recently redefined understanding on matters concerning the public offering of banking credit certificates. The decision consolidates the new view that a banking credit certificate should be considered a security whenever certain conditions are met and determines the implementation of a future specific ruling to address this situation.
The Brazilian Securities and Exchange Commission has issued a normative ruling regulating the Investment Fund on Quotas of the Mandatory Fund for Unemployment Benefit. Established as part of the government's Growth Acceleration Programme, the investment fund was set up in order to invest money from the mandatory fund in projects relating to energy, transportation and the sanitation industry.
The government recently ratified the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents. The convention aims to remove the requirement of diplomatic or consular legalisation of foreign documents. The government's goal in ratifying the convention is clearly to reduce bureaucracy. For companies, this reduction will decrease the expenses associated with, among other things, validating foreign documents.
The Superior Court of Justice (STJ) recently invalidated a power of attorney that had been granted by two partners in favour of a former partner with the intent of transferring certain company assets as payment in kind for the former partner's quotas. The STJ found that such power of attorney could not be deemed valid, as it was not issued by the company's legal representative at the time of its issuance.
The Superior Court of Justice recently pierced the corporate veil and found that it was not possible to exclude the liability of one partner of a family company if there was no evidence in the case proceedings to prove who effectively acted as the company's manager. The decision could represent a dangerous precedent for family-owned companies, if each future case is not carefully analysed on its own merits.
The Civil Code expressly provides for the extrajudicial exclusion of a limited liability partner. However, before such exclusion can take place, companies must insert such a provision into their articles of association. Ultimately, the decision will depend on the other partners' subjective determination of what is deemed an act of undeniable severity that would jeopardise the continuity of the company.
Among the essential rights of partners in limited liability companies are the right to vote on company matters and the right to earn profits from the company's business activities. The distribution of profits other than in proportion to each partner's share of a company's capital is permitted only where all partners receive some portion of the profits and the company's articles of association expressly provide for such distribution.