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Outline and explain the general structure of your country’s court system as it relates to the commercial appellate process.
Brazil’s court system is regulated by the Federal Constitution and civil procedure is specifically regulated by Federal Law No. 13,105/2015 (the Civil Procedure Code (CPC)). Commercial matters can be decided by both federal and state courts in Brazil. According to the Federal Constitution, federal courts have jurisdiction over cases listed in articles 108 and 109 (ie, mainly cases involving government entities), and state courts over cases not falling within the jurisdiction of other courts (ie, federal, labour, electoral or military courts).
In civil procedure, second-instance courts are represented by regional federal courts at federal level, and by state appellate courts at state level.
In addition, there are superior courts consisting of the Superior Court of Justice and the Federal Supreme Court. Both courts adjudicate cases already decided by regional federal courts or state appellate courts.
The main role of the Superior Court of Justice is to ensure uniform interpretation of federal law. In civil procedure, among the duties of the Superior Court of Justice is the judgment on special appeals filed against decisions that:
- violate or deny the effectiveness of federal law provisions;
- rule valid a local government act challenged in view of federal law; or
- confer upon a federal law an interpretation other than that given by another court.
The Federal Supreme Court is the highest-instance court in Brazil and a guardian of the Federal Constitution. In civil procedure, among the duties of the Federal Supreme Court is the judgment on extraordinary appeals filed against decisions that:
- violate a provision of the Federal Constitution;
- declare the unconstitutionality of a treaty or federal law; or
- rule valid a local government act or law challenged in view of the Federal Constitution or federal law.
State appellate courts usually have panels specialised in commercial issues. In other words, such courts are usually subdivided into groups of judges (chambers, panels and sections) with expertise to adjudicate upon cases involving civil liability and a variety of contractual issues.
Similarly, the Superior Court of Justice is composed of three sections with expertise in different areas. The Superior Court of Justice, second section, deals with private law matters in general, such as obligations between private entities, civil liability under private law, industrial property, trade, financial institutions and securities, among others.
At administrative level, in Brazil, there are several bodies responsible for regulating the market and reviewing administrative appeals on commercial matters, but those bodies do not have jurisdiction as per courts (ie, the Administrative Council for Economic Defence, the Consumer Protection Office, regulatory agencies, among others). The duties of such bodies are regulated by specific laws, according to the scope of their activities.
For foreign plaintiffs with no real estate in Brazil, a 20 per cent bond posting by the filing of the suit is needed, except in case of execution of executive titles (eg, checks, promissory notes).
Are there appellate courts that hear only civil matters?
In Brazil, there are no specific appellate courts to hear civil matters. However, state appellate courts and the Superior Court of Justice are usually divided into specific panels and sections specialised in civil and commercial matters, such as civil liability and contractual disputes.
Appeals from administrative tribunals
Are appeals from administrative tribunals handled in the same way as appeals from trial courts?
In Brazil, there are several bodies in charge of adjudicating upon administrative proceedings on civil and commercial matters; for example, the Administrative Council for Economic Defence, the Consumer Protection Office and regulatory agencies.
Law No. 9,784/1999 regulates administrative proceedings within the federal public administration, but there are sparse laws establishing specific rules on administrative proceedings for each body, without following any specific pattern. Although each body has its own structure and is governed by specific law, as a rule they all consist of panels. The judgment dynamics are also similar to that of the judiciary (ie, administrative cases are judged by a member of the panel and can be appealed to the full panel or a superior administrative instance). The party is assured the right to full defence and adversary proceedings in the administrative sphere.
The key difference between judicial and administrative proceedings is that decisions rendered in administrative cases do not become res judicata. Administrative decisions can be reviewed by the judiciary via a lawsuit brought by the interested party.
Representation before appellate courts
Is there a separate appellate bar or other requirement for attorneys to be admitted before appellate courts?
No. Pursuant to article 8 of the Brazilian Bar Association’s bylaws, upon fulfilment of certain requirements and qualifications, such as pursuit of Bachelor of Laws degree and admission to the bar, the professional is recognised as an attorney and authorised to practise law before all administrative and judicial court instances.
If separate jurisdictions exist for particular territorial subdivisions or subject matters, explain their main differences as to commercial appeals.
There are two main jurisdictions in civil claims: federal and state jurisdictions. Several criteria must be observed to define whether the case is to be filed before federal or state courts. The two main criteria are personal jurisdiction and subject-matter jurisdiction.
Articles 108 and 109 of the Federal Constitution establish that federal courts have jurisdiction over cases in which the federal government, federal agencies, foundations and federal public companies are plaintiffs or defendants.
Cases not falling within the jurisdiction of federal, labour, electoral or military courts must be heard by state courts. Ordinary commercial disputes between companies with branches in Brazil are usually filed before state courts.
After determining whether the case will take place before the federal or state court, another criterion to be observed is the territorial jurisdiction rule, under which cases must be heard and decided by the court of the place where the defendant is domiciled. The Civil Procedure Code, however, provides for exceptions to such rule, as per when parties define the relevant court by means of an express clause of forum conveniens or whenever the relevant court is not defined by the parties, then claims for enforcement of obligations must be filed before the court of the place where the obligation is to be satisfied, in actions in which such obligation is enforced.
Bringing an appeal
What are the deadlines for filing an appeal in a commercial matter?
Litigants have 15 business days to file an appeal (paragraph 5, article 1003 of the CPC).
What are the key steps a litigant must take to commence an appeal?
To commence an appeal, the appellant must file a written appeal against the lower court decision and pay applicable court fees. This appeal is filed before the lower court judge and once such appeal is filed, the lower court judge will notify the appellee of said appeal for it to file its counter arguments. Afterwards, the lower court judge will send the case records to the appellate court to rule the appeal.
How is the documentation for appeals prepared?
There are different ways to prepare the documentation for each possible appeal in Brazil.
For interlocutory appeals against non-final decisions from lower courts, the party must file the interlocutory appeal directly before the appellate court and the appellant is responsible for preparing the record with some required documents and for paying the applicable court fees (see question 12).
Against final lower court decisions, the losing parties may file written appeals on the same case records before the lower courts upon paying the applicable court fees. There is no mandatory documentation for this appeal (except from proof of payment of court fees).
For special appeals or extraordinary appeals against appellate court decisions, parties must file them before the appellate courts on the same records and the mandatory documentation will depend on the arguments raised in the special appeals or extraordinary appeals. If the party argues dissenting judgments from other appellate courts, it is necessary to prove the existence of these dissenting judgments.
Right of appeal
Discretion to grant permission to appeal
In commercial matters, may litigants appeal by right or is appellate review discretionary?
In Brazil, the defeated party can appeal by right the trial court decision to the appellate court. In some specific situations, appellate court decisions can be further appealed to the Superior Court of Justice and the Federal Supreme Court.
Judgments subject to appeal
Can litigants appeal any ruling from a trial court, or are they limited to appealing only final judgments?
In Brazil there are basically three types of decision:
- mere procedural decisions within a case;
- interlocutory decisions; and
- final decisions.
For each type of judicial decision, there may be one or more type of appeal applicable.
Mere procedural decisions within a case cannot be appealed.
Some interlocutory decisions may be subject to immediate interlocutory appeals (article 1.015 of the CPC) (see question 12). Other interlocutory decisions can only be appealed after a final decision (only if there remains an interest in the appeal against these interlocutory decisions).
Final decisions can be challenged by an appeal to the appellate court.
Appellate court decisions can be challenged by a special appeal to the Superior Court of Justice or an extraordinary appeal to the Federal Supreme Court.
Security and interlocutory matters
Security to appeal
In a typical commercial dispute, must a litigant post a bond or provide security to appeal a trial court decision?
As a rule, it is not necessary to post a bond or provide security in order to appeal. The only requirement is payment of court fees. Each court regulates the form of calculation of the court fees to be paid, but usually they amount to a percentage of the amount in controversy.
If the party is not able to pay the court fees, the law authorises the parties, whether individuals or legal entities, Brazilian or foreign, to apply for legal aid. In Brazil, legal aid does not immediately release the party from its obligation to pay procedural expenses and attorneys’ fees that may result from its defeat. In fact, if the party benefiting from legal aid is defeated, enforcement of such obligation will be stayed. If, however, within five years of res judicata certification, the opposite party shows that the condition of insufficient income no longer exists, such obligation becomes enforceable. On the other hand, after this five-year period, the obligation of the party granted legal aid is extinguished (paragraphs 2 and 3, article 98 of the CPC).
In addition, pursuant to paragraph 7, article 99 of the CPC, if the application for legal aid is made on appeal, the appellant shall be released from evidencing payment of the court fees; in this case, the reporting judge will review the respective application and, in case of denial, will set the time period for payment of such appeal fees.
Are there special provisions for interlocutory appeals?
Yes. Currently, as a general rule, interlocutory appeals are acceptable only against interlocutory decisions handed down in the events dealt with in article 1015 of the CPC; that is, interlocutory decisions on:
- interim relief;
- the merits of the case;
- rejection of the allegation concerning the existence of an arbitration agreement;
- incidental proceedings for piercing the corporate veil;
- rejection of an application for legal aid, or acceptance of a request for revocation of legal aid;
- disclosure or possession of documents or things;
- removal of co-party;
- rejection of a request for party joinder limitation;
- acceptance or non-acceptance of third-party intervention;
- granting, modification or revocation of staying effects to a motion to stay enforcement;
- reallocation of the burden of proof; and
- other cases expressly prescribed by law.
An interlocutory appeal may also be filed against interlocutory decisions rendered in the award calculation phase or judgment enforcement phase, in enforcement proceedings, or in probate proceedings (paragraph 1, article 1015 of the CPC).
Unlike appeals against final decisions, the litigant must file interlocutory appeals directly before the appellate court. For this reason, there are some special requirements regarding the documents that must be submitted with the interlocutory appeal. If the case records are not electronic and the appellate court has no access to them, the interlocutory appeal must be supported by copies of the following documents: statement of claim, answer, petition that resulted in the appealed decision, the appealed decision itself, the certificate of notification of the appealed decision or another official document evidencing timeliness of such interlocutory appeal, as well as the powers of attorney granted to the appellant’s and the appellee’s attorneys.
In addition, the appellant must file a pleading before the trial court with a copy of the interlocutory appeal, proof of its filing and a list of documents supporting the interlocutory appeal. This is very important because, if the case records are not electronic, non-fulfilment of this requirement will render the interlocutory appeal inadmissible (paragraph 2, article 1018 of the CPC).
Injunctions and stays
Are there special rules relating to injunctions or stays, whether entered in the trial court or on appeal?
A provisional relief may be based on urgency or evidence. The injunction based on evidence will be granted independently of urgency or damage risk if:
- the defendant is manifestly abusing its right of defence or seeking to cause unnecessary delay;
- the statements of fact may be evidenced by documents only, and a legal principle has been settled in a judgment on same subject-matter suits or in a binding precedent;
- it deals with a repossession claim grounded on proper documentary evidence of a deposit agreement, in which case an order to deliver the item held in custody will be issued, under penalty of fine; or
- the statement of claim is substantiated with sufficient documentary evidence of the facts supporting the plaintiff’s right, with respect to which the defendant does not present evidence beyond reasonable doubt. On other hand, the provisional relief based on urgency demands elements evidencing the likelihood of an asserted right and a risk of injury or risk to the ultimate outcome of the case.
Provisional reliefs based on urgency may be granted during all the phases of civil proceedings, including the appeal phase. Usually, such provisional reliefs are used in the appellate phase to obtain an urgent measure before a final decision is rendered in the appeal (temporary reversal of the trial court decision) or to provide the appeal with staying effects.
Scope and effect of appellate proceedings
Effect of filing an appeal
If a litigant files an appeal in a commercial dispute, does it stay enforcement of the trial court judgment?
Under the CPC, appeals as a rule have no staying effects. In other words, appeals usually do not stay the enforcement of an appealed decision, unless otherwise provided by law or court decision (article 995, main section of the CPC).
This rule, however, is less strict with respect to appeals against trial court judgments (judgment appeals). So, judgment appeals have staying effects (article 1012 of the CPC), and the law defines the events in which this will not occur, that is, where the trial court decision will produce effects soon after it is published. This is the case with trial court judgments that:
- recognise the partition or regulation of boundaries of lands;
- award support payments against the respective party;
- dismiss without prejudice or deny a judgment debtor’s motion;
- grant the request for arbitration;
- confirm, grant or revoke interim relief; and
- decree interdiction.
Where the appeal does not automatically stay enforcement of the trial court judgment, the litigant can apply for such staying effects (paragraph 3, article 1012 of the CPC) but must evidence that the appeal is likely to be granted, that it carries relevant grounds, and that there is a risk of serious or hardly reparably injury (paragraph 4, article 1012 of the CPC).
Interlocutory appeals have no staying effects. The reporting justice, however, can grant staying effects as long as the appellant evidences that the appeal is likely to be granted, and that there is a risk of serious or hardly reparable injury (article 995, sole paragraph of the CPC). In some cases, the staying effects may be granted upon the appealing party posting a bond equivalent to the value of the right at stake.
In some cases, an internal appeal can be filed against the reporting justice’s decision on the request for staying effects (article 1021 of the CPC).
Scope of appeal
On an appeal from a commercial dispute, may the first-level appellate court consider the facts and law anew, or is its power to review limited?
Appeals have a devolutive effect, which means that they devolve upon the appellate court the review of the matter decided by the trial court. Nonetheless, in commercial disputes the appellate court is not free to entertain all aspects of the case in which the appeal was filed. Such power to review is limited to matters expressly opposed by the appellant (article 1013 of the CPC). For example, if a litigant is defeated in its claims for property and moral damages, but files an appeal solely with respect to the claim for property damages, the appellate court is not allowed to grant moral damages.
If a party is dissatisfied with the outcome of the first-level appeal, is further appeal possible?
Against final decisions rendered by the appellate court, a litigant may file a special appeal to the Superior Court of Justice or an extraordinary appeal to the Federal Supreme Court.
The possibility of filing a special or extraordinary appeal cannot be interpreted as a three-tiered court system in Brazil. Strictly speaking, the Superior Court of Justice and the Federal Supreme Court cannot be deemed a third level of jurisdiction or merely as authorities in charge of reviewing the decisions of the other appellate courts. Both superior courts have a very specific scope of activities, with some restrictions on the matters that can be subject to their review.
The Federal Constitution states that special appeals can be filed before the Superior Court of Justice when the appealed decision:
- is contrary to a treaty or a federal law, or denies its effectiveness;
- rules valid a local government act challenged in light of a federal law; or
- confers upon a federal law an interpretation other than that given by another court (article 105, III of the Federal Constitution).
As a means of defining the scope of action and, consequently, reducing the volume of special appeals, the Superior Court of Justice itself sets guiding precedents dealing with matters that should or should not be reviewed through special appeals.
In this respect, the Superior Court of Justice has issued guiding precedents No. 7 and No. 211. According to precedent No. 7, a request for simple review of evidence does not allow filing of a special appeal. Furthermore, precedent No. 211 provides for pre-challenging requirements and states that ‘no special appeal may be filed against a matter that, despite filing of a motion for clarification of judgment, has not been heard by the court of origin’.
The Federal Constitution also establishes that extraordinary appeals may be filed when the decision:
- is contrary to a provision of the Federal Constitution;
- declares a treaty or a federal law unconstitutional;
- rules valid a law or act of a local government challenged in light of the Federal Constitution; or
- rules valid a local law challenged in light of a federal law (article 102, III, Federal Constitution).
It is important to mention that extraordinary appeals can only be filed in case of blatant violation of the Federal Constitution, which must be evidenced accordingly. In addition, the appellant must evidence that the constitutional matters discussed in extraordinary appeal are accorded as of general interest, so that the Federal Supreme Court can assess the admissibility of the appeal (paragraph 3, article 102 of the Federal Constitution).
Duration of appellate proceedings
How long do appeals typically take from application to appeal to a final decision?
The period depends on the complexity of the case, the kind of appeal and on the case overload at each appellate court, but a commercial dispute may take from six months to three years to be decided by the appellate court.
Submissions and evidence
What is the briefing and argument process like in a typical commercial appeal?
As a rule, all petitions must be filed in writing. The appeal must contain factual arguments, legal provisions and arguments on evidence produced, showing the mistake alleged in the trial court decision.
Lawyers can also present oral arguments at the judgment session for a period of 15 minutes.
Are appeals limited to the evidentiary record that was before the trial court, or can new evidence be introduced on appeal?
As a rule, there is a restriction on the arguments raised on appeal as the parties cannot introduce evidence not reviewed by the trial court judge, unless this evidence was not available at the discovery phase.
Depending on the case, however, the appellate court may:
- set aside the trial court decision on the grounds of denial of defence opportunity if production of certain evidence has been rejected by the trial court; and
- determine on its own initiative, regardless of the appellant’s request, production of certain evidence if it holds that the records do not contain the required fact-finding elements.
(Special Appeal No. 783.202/RJ, reporting justice Arnaldo Esteves Lima; Internal Appeal in Interlocutory Appeal 1154432/MG, reporting justice Marco Aurélio Bellizze).
New evidence of wrongdoing
If litigants uncover new evidence of wrongdoing that they believe altered the outcome of a trial court judgment, can they introduce this evidence on appeal?
Yes. Litigants can introduce new allegations or evidence if they refer to supervening facts, or if they evidence that they were prevented from doing so for reasons of force majeure (article 1014 of the CPC).
New legal arguments
May parties raise new legal arguments on appeal?
The appeal must contain all factual arguments and legal provisions required to challenge the trial court decision. Accordingly, if the trial court decision raises additional arguments not previously addressed by the appellant, then it will be incumbent on the appellant to raise new legal arguments capable of evidencing the reasons for setting aside or vacating the decision.
Costs, settlement and funding
What are the rules regarding attorneys’ fees and costs on appeal?
There are mandatory court fees in order to file the appeal.
An appellate court’s decision will order the defeated party to reimburse the other party’s court costs and attorneys’ fees usually ranging from 10 per cent to 20 per cent of the award (article 85 of the CPC). On setting a value for attorneys’ fees, the judge must consider:
- the length of the proceedings;
- the nature of the claim;
- the level of professional care;
- the place where the service was performed; and
- the work provided by the lawyers.
The CPC also establishes that on appeal the appellate court must increase the attorneys’ fees previously set by the lower court judge taking into account the additional work involved in and the subject of the appeal, as the case may be.
Settlement of first instance judgment after appeal lodged
Can parties enter into a settlement agreement to vacate the trial court judgment after an appeal has been taken?
The CPC contains several provisions encouraging the parties to find a mutually acceptable solution in respect of their interests, fostering mediation and settlement as a means of resolving disputes submitted to the judiciary. Parties can enter into a settlement agreement after the trial court judgment.
Limits on settlement after commencement of appeal
Are there any limits on settlement once an appeal has been taken?
There are no limits on settlement until res judicata. The only requirements comprise the capacity of the parties and their legal representation, which are general conditions for the effectiveness of any contract or agreement. Non-disposable rights cannot be the subject of settlement. Examples of non-disposable rights (those the holder may not dispose of) include the right to vote and the right to live.
May third parties fund appeals?
There is no regulation on this matter in Brazil.
Disclosure of litigation funding
If litigation funding is permitted in an appeal, must funding sources be disclosed to the court or other parties to the litigation?
The only requirement to file appeals is payment of the court fees and the appeal is legally admissible regardless of whoever provided funds for payment by the party of the court fees. There is no necessity to disclose who funded the payment of the court fees.
Judgments, relief and non-parties
Must appellate courts in your country write decisions explaining their rulings? Can the courts designate the precedential effect of their decisions?
In Brazil, all court decisions must be duly reasoned and circumstantiated with proper assessment of issues of fact and of law. In fact, there is a legal provision (paragraph 1, article 489 of the CPC) stating that no court decision will be deemed circumstantiated if:
- it is limited to indicating, reproducing or paraphrasing a normative act, without explaining its relation to the case or subject matter being decided upon;
- it applies generic legal concepts, without explaining the reasons for their application to the case;
- it invokes reasons that could be used to justify any other decision;
- it fails to address all arguments invoked in the case, which in theory could weaken the conclusion adopted by the judge;
- it is limited to invoking earlier precedents or guiding precedents, neither identifying its conclusive grounds nor showing that the case at issue is aligned with those grounds; or
- it fails to follow guiding precedents, judicial precedents or earlier precedents invoked by the party, without showing that they are unrelated to the case at issue or that there has been a change in stand.
Should a decision fall within any such events, the defeated party can appeal, arguing that the decision is null and void.
Regarding the precedential effect of the decisions, as a rule in Brazil, court precedents are not binding to other cases, so other judges can freely render different decisions in other suits.
The CPC, however, states that the courts must standardise their judicial precedents and keep them stable, fair and consistent (article 926 of the CPC). In some specific situations, the CPC grants binding effects to decisions:
- from the Superior Court of Justice and the Federal Supreme Court, in extraordinary and special appeals on the same matter of law (article 1036 of the CPC);
- from appellate courts (ie, state and federal courts of appeals), in incidental proceedings for resolution of same subject-matter suits (articles 928 and 976 to 978 of the CPC); and
- from appellate courts (ie, state and federal courts of appeals), in incidental proceedings for assumption of jurisdiction (article 947 of the CPC).
Will the appellate courts in your country consider submissions from non-parties?
Pursuant to article 138 of the CPC, judges can petition for or allow the intervention of an individual or legal entity, specialised body or entity with adequate representative powers to act as amicus curiae.
Although the amicus curiae is not a party to the case, it has an interest in the litigation and can submit testimonies, opinions, documents, experiences, articles and briefs, among other submissions, allowing the court to decide the case with as much knowledge as possible as to the consequences and social repercussions of the relevant result.
What are the ordinary forms of relief that can be rendered by an appellate court in a civil dispute?
Under the CPC, a party can apply for proper relief either before the lawsuit is filed or incidentally (sole paragraph, article 294 of the CPC). Therefore, any kind of relief may be granted during civil proceedings, as well as on appeal. If supervening facts may potentially jeopardise the effectiveness of the lawsuit, a party may file an incidental motion for injunction. The CPC does not limit the several forms of relief that may be requested by the parties. In general, a party must evidence the likelihood of an asserted right and the risk of injury or harm to the outcome of the case.
Update and trends
Are there any current developments or emerging trends that should be noted?
In March 2016, the new CPC entered into force in Brazil. The new law brought about several changes in the legal system (some of them mentioned in the answers above). In this context, courts have been called upon to analyse and interpret the new provisions and rules set forth by this new CPC.
One of the biggest topics of discussion relates to the filing of interlocutory appeals. As mentioned in question 12, as a general rule, interlocutory appeals would be acceptable only against interlocutory decisions handed down in the events dealt with in article 1015 of the Civil Procedure Code. However, there is an open discussion regarding the possibility to file interlocutory appeals against non-final decisions that are not expressly referred to by article 1015 of the Civil Procedure Code.
For example, article 1015 of the Civil Procedure Code does not contemplate the possibility of filing interlocutory appeals against decisions that dismiss claims for lack of jurisdiction of the court. However, some Legal Scholars suggest an extensive interpretation of article 1015 of the Civil Procedure Code in order to allow the filing of interlocutory appeals against such decisions. Federal and State Appellate Courts have been issuing dissenting decisions related to this topic and the matter should be consolidated by the Superior Court of Justice.
The Fourth Panel of the Superior Court of Justice recently rendered a decision stating that: ‘Although not expressly established by article 1015 of the new CPC, an interlocutory decision related to the definition of jurisdiction continues to allow challenge by means of an interlocutory appeal, given an analogous or extensive interpretation of the rule contained in item III of article 1015 of the new CPC,’ (Special Appeal No. 1.679.909-RS, Reporting Judge Luis Felipe Salomão, judgment 14 November 2017). Nevertheless, this subject is still under debate at the Superior Court of Justice which has just selected two special appeals on the same matter of law to be decided with binding effects (Special Appeal No. 1.704.520 - MT and Special Appeal No. 1696396/MT - Subject 988 of the Superior Court of Justice).