The Limits Of National Jurisdiction In The New Brazilian Civil Procedure Code – Validity Of The Choice Of Exclusive Foreign Jurisdiction Clause In International Agreements

Law No. 13.105, of March 16, 2015, the new Brazilian Civil Procedure Code (Código de Processo Civil - CPC), which comes into full force and effect next year, on March 17, 2016, with immediate implementation to all cases (including outstanding processes), establishes the limits of Brazilian jurisdiction. The applicable provisions are outlined below.

As a general rule, the Brazilian judicial authority has jurisdiction to prosecute and judge lawsuits in which: (i) the defendant, regardless of his/her/its nationality, is domiciled in Brazil; (ii) the obligation must be fulfilled in Brazil; or (iii) the lawsuit is based on a fact occurred or an act performed in Brazil. Any legal entity that has a local agency, branch or subsidiary is deemed to be domiciled in Brazil (article 21 and sole paragraph of the CPC).

The Brazilian judicial authority has also jurisdiction to prosecute and judge lawsuits: (i) of alimony, when the creditor is domiciled or resident in Brazil or the defendant keeps links in Brazil, such as possession or ownership of goods, receipt of income or obtaining economic benefit in the country; (ii) those arising from consumer relations, when the consumer is domiciled or resident in Brazil; or (iii) whenever the parties expressly or tacitly submit to the Brazilian jurisdiction (article 22 of the CPC).

Furthermore, the Brazilian judicial authority has exclusive jurisdiction in the following cases: (i) to know lawsuits concerning real estate properties located in Brazil; (ii) in matters of hereditary succession, to proceed to the confirmation of private will and the probation and to the apportionment of assets located in Brazil, even if the plaintiff of the legacy is of foreign nationality or domiciled outside the national territory; and (iii) in divorce, legal separation of spouses or dissolution of stable union, to proceed to the sharing of assets located in Brazil, even if the holder is of foreign nationality or domiciled outside the national territory (article 23 of the CPC).

The lawsuit brought before a foreign court does not induce lis pendens and does not prevent the Brazilian judicial authority to dispose of the same cause and those related to it, except where the context requires otherwise as a result of bilateral agreements and international treaties in force in Brazil. The question pending before the Brazilian jurisdiction does not prevent the ratification of the foreign judicial sentence whenever such ratification is...