On September 4 2015 the Superior Court of Justice issued a decision which settled the longstanding debate regarding the applicable statute of limitations for container demurrage claims.

Background

Since the new Civil Code entered into force in 2003, the courts have struggled to agree on the applicable statute of limitations for container demurrage claims arising from unimodal transport.

While the new code expressly repealed the Commercial Code's one-year statute of limitations for filing demurrage actions, it failed to provide a replacement.

There was no dispute over the fact that the one-year statute of limitations set out in the Multimodal Transport Law (9611/98) applies to claims arising from multimodal transport. Instead, the question was whether this limitation period applies to demurrage complaints originating solely from maritime transport. If not, what is the applicable limitation period?

This legal uncertainty resulted in years of conflicting rulings from courts all over the country, including the Superior Court of Justice.

Decision

Due to the diverging decisions of the Third and Fourth Panels of the Superior Court of Justice, Special Appeal 1340041 was referred to the Second Panel (composed of the two aforementioned panels and responsible for decisions on private law matters) in order to harmonise the court's position on this subject.

The court failed to reach a unanimous decision. Four justices joined Justice Ricardo Villas Boas's majority opinion, which found that the statute of limitations for multimodal transport should not govern unimodal transport, as limitation periods cannot be applied by analogy under Brazilian law. Hence, limitation period rules must be strictly interpreted.

The majority held that where the rate of demurrage derives from a contractual provision with enough information to calculate the amount due, Section 206(5)(1) of the Civil Code applies. This section relates to previously agreed net debts and stipulates a five-year statute of limitations for such claims.

However, if no prior contractual provision establishes the amount and calculation of demurrage, the court ruled that the general 10-year statute of limitations applies, pursuant to Section 205 of the Civil Code.

In dissent, Justice Paulo Sanseverino argued that the one-year statute of limitations set out in the Multimodal Transport Law should apply. According to Sanseverino, the limitation period for multimodal claims and unimodal claims should be the same, as they address the same issue: demurrage. Two justices joined his opinion.

Outlook

Although the Superior Court of Justice's position has now been established, no specific law has been enacted. As such, once a law is enacted, the applicable limitation period for demurrage claims may change.

In this regard, there are two bills in Congress: Bill 1572/11 of the House of Representatives and Bill 487/13 of the Senate. Both bills propose a one-year statute of limitations for demurrage claims. Thus, the newly settled limitation period is likely to change in the future.

For further information on this topic please contact Godofredo Mendes Vianna or Fernanda Gueiros at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email (godofredo@kincaid.com.br or fernanda.gueiros@kincaid.com.br). The Kincaid | Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.

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