Court Of Appeals Of São Paulo Confirms Validity Of Foreign Forum Selection Clause In Conflict Between Private Parties

In a decision published in the Official Gazette on February 8, 2019, the Court of Appeals of São Paulo (TJSP) dismissed Civil Appeal No. 0037723-25.2015.8.26.0100, which challenged the validity of a foreign forum selection clause. The clause at issue provides for a state or federal court of Salt Lake County, Utah, United States of America, to be the exclusive forum to resolve any dispute arising out of the agreement between the parties.

The Brazilian Code of Civil Procedure of 1973 had determined that a foreign forum selection clause would not prevent a Brazilian court from ruling in a dispute over an obligation to be fulfilled in Brazil. However, the New Brazilian Code of Civil Procedure of 2015 expressly set forth that the election of a foreign forum in an international agreement as the sole court to rule on a particular conflict excludes the jurisdiction of a Brazilian court. For the February 2019 case, TJSP ruled according to the 2015 code.

This new decision, therefore, favors party autonomy and the principle of pacta sunt servanda.

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