Published in the “Jornal O Público”, economy section, Lisbon, Portugal, May 31, 1999.

Brazil’s legal system has its roots in Roman law, with strong influences from various European sources, such as Portuguese, French, German and Italian legislation. Some elements of US law can also be found in the areas of competition; securities; environment law; and taxation. Following the redemocratization of Brazil in 1986, a new constitution was enacted in 1988, dividing the judiciary into ordinary and specialized courts. As Brazil is a federation, the ordinary court system is established at the state and federal levels. The ordinary courts comprise civil and criminal benches and the specialized courts deal with labour, military and electoral cases. Appeals may be filed to the courts of second and third instances. At the top of the pyramid, there is the constitutional court, the Federal Supreme Tribunal. The Superior Tribunal of Justice is the court of last resort for non-constitutional matters. All last resort tribunals are based in Brazil’s capital, Brasília.

Following the adoption of the 1988 Constitution, Brazil became an increasingly litigious country. In 1998, the specialized labour courts alone tried 2.3 million suits. It is estimated that more than 4 million cases were filed in the Brazilian courts in 1997. In 1996 alone, The Superior Tribunal of Justice decide the staggering number of 32,000 thousand cases plus published opinions. In spite of such numbers of cases, the Brazilian judiciary has only approximately 10,000 first instance judges and 200,000 active lawyers for a population of 150 million people. Those judges are all civil servants subject to a public examination before qualification. Brazilian judges now benefit from continuing legal education programmes and enjoy a good reputation for independence and honesty. More sophisticated judges and courts tend to be found in the federal states that are more economically developed. At present, cases normally take from three to five years before conclusion. Discovery is extensive. Litigation is often expensive. The losing party will have to pay full court fees and legal costs of up to 10 to 20% of the value of the case.

In view of such pressures to the system, there are discussions under way for a reform of the Brazilian judiciary. One point that would do much to alleviate the current pressures on the high courts would be the adoption of the “stare decisis” doctrine, as current Brazilian law only accepts binding precedents in exceptional circumstances. However, the Brazilian Bar, only too aware of the dramatic limitations to the rule of law made under the military regime that was terminated in 1986, is against such a move, in spite of its obvious procedural advantages. Another reform that could simplify litigation would be the adoption of the concept of class action, as today groups of people who suffer the same injury must file individual suits for redress. Good public governance would do much to reduce the overload of the Brazilian courts, as the state and federal governments abuse the Judiciary in order to postpone the payment of their obligations. From the draft proposals available at the moment it appears certain that the judiciary will be subject to external control in the near future.

Foreign sentences are ratified in Brazil by the STF upon the fulfilment of five requirements, as follows:

the foreign court must have personal and matter jurisdiction;

there must have been a proper summons;

there must have been a final judgement;

the sentence must have undergone legalization and sworn translation; and

the sentence must have compliance with basic principles.

Ratification will be denied if Brazilian courts have exclusive jurisdiction on a matter, which occurs in cases of property located in Brazil and probate of assets in the country. Defendants resident in Brazil must be properly summoned by means of rogatory letters. An affidavit will have to be presented to the effect that no appeals are possible in the country in which the judgment was made. The decision must be legalized by the Brazilian consulate having jurisdiction over the area and translated by a sworn translator in Brazil. The judgement cannot violate Brazil’s national sovereignty, public order or morality.

Until very recently, for foreign arbitration awards to be enforced in Brazil, ratification by the local courts and ratification by the Federal Supreme Tribunal were necessary. This ensured that arbitration was avoided in the country. On December 27, 1995, Brazil ratified the Panama convention on arbitration, which eliminated the necessity of ratification of an award by the local courts in most cases. Furthermore, in accordance with new legislation on arbitration (Law 9307 of November 24, 1996), international awards are dependent on ratification by the Federal Supreme Tribunal only. Summons are allowed in accordance with the applicable international treaty or foreign law. In spite of these positive developments, arbitration remains used only rarely in Brazil, partly as a result of tradition; of ingrained habit; of the good reputation of the local courts; and of fear of the unknown.