Enforcement of Judgments 2020

Last Updated August 04, 2020

Brazil

Law and Practice

Authors



Eduardo Antônio Lucho Ferrão Advogados e Associados has a multidisciplinary team, with training in various fields of private and public law, with specialities in constitutional, administrative, tax, criminal, electoral, civil, business, banking, environmental, real estate, social security, port, digital and regulatory matters. The firm is responsible for conducting numerous cases before the Federal Supreme Court and the Superior Court of Justice, the highest courts of Brazilian Justice. The rendering of services goes beyond the judiciary, overflowing into the executive and legislative powers, including the councils, secretariats and agencies linked to them. It is also worth mentioning the office’s performance before the Federal Court of Auditors and the Federal District Court of Auditors.

There are different legal means of searching for debtors' assets.

The means of public access are the Electronic Property Registry System (SREI) and consultations with the commercial board. SREI offers online certificate services, electronic visualisation of the property registration and also allows the search for registered real estate through information of the Individual Taxpayer Registration Number (CPF) or the National Tax Registry Legal Entities (CNPJ). Consultations with commercial boards allow research on the legal entities of which the defendant is a partner.

On the other hand, the means of patrimonial research restricted to the Judiciary are the System of Judicial Restrictions for Motor Vehicles ("Renajud"), the Information System for the Judiciary ("Infojud") and Bacenjud.Renajud" consists of an electronic tool that links the Judiciary Branch and the National Traffic Department ("Denatran") and aims to ensure agile satisfaction with judicial orders for vehicle restrictions registered in the National Vehicle Registry Automotive ("Renavam"). Infojud guarantees magistrates information on the assets of the parties involved in the process based on data available at the Brazilian Federal Revenue Service.

Bacenjud

Bacenjud is an electronic system managed by the supervisory authority of the National Financial System (Central Bank of Brazil), which identifies and makes unavailable existing financial assets in the name of the executor, limiting the unavailability to the amount indicated in the execution.

In addition to the systems listed above, the Judiciary also has the possibility of issuing official letters to carry out necessary and sufficient consultations and constraints. Among the possibilities for consultation, we highlight the research with the Stock Exchange B3 S.A. for reports on the existence or not of securities registered in the name of the judgement debtor and under the custody of BM&F Bovespa and Cetip.

The Civil Procedure Code establishes two forms of decision by the first instance judge in the process:

  • Judgments: how the judge ends the cognitive phase of the common procedure or extinguishes the execution; and
  • Interlocutory decisions: all other decision pronouncements issued in the course of the procedure, used to resolve incidental issues, but which do not, as a rule, bring the process to a close (for example: decision on precautionary measures, decision on anticipation of protection, decision on the production of evidence, decision to amend the original, decision authorising the blocking of the debtor's assets).

In the 2nd Instance (Courts), magistrates manifest themselves through the following types of decisions:

  • Monocratic decisions: issued by a single judge - may have the nature of an interlocutory decision or judgment; and
  • Bench decision: collegiate decisions, issued by at least three judges - have the nature of a judgment.

The terminative judgment can be:

  • Terminative: extinguish the process without the judge having ruled on the merits of the discussion (for example, a judgment that closes the process because the plaintiff did not gather a proxy from their lawyer); and
  • Definitive: ends the dispute after the analysis of the merits (for example, a judgment obtained in a process that the defendant did not present a defence - by default).

This differentiation is important because, in the case of terminative judgment the plaintiff can propose new proceedings. However, in the event of a final judgment there is no possibility of a new demand being filed - there will be something deemed substantive res judicata.

Classifications

As for the judgments, the following classifications can be brought:

  • Declaratory: only declares right, they create the existence or absence of a legal relationship (for example: a judgment that recognises the right of a public servant to receive a certain remuneration that was being denied);
  • Constitutive: create, undo or modify a legal relationship (for example, a judgment that annuls a contract);
  • Judgment awarding: in addition to declaring the right to condemn the losing party to satisfy an obligation to the winning party (for example, a judgment that recognises the damage caused by the Defendant and condemns him to pay a certain amount of money;
  • Prohibitory Injunction: they bring a coercive command, so that the order expressed therein is immediately fulfilled, functioning as a court order that does not require an execution procedure for their satisfaction (for example, a judgment that determines the immediate stoppage of the demolition of houses);
  • Executives lato sensu: in addition to the conviction, they determine, in the decision itself, the promotion of executive acts with a view to guaranteeing the materialisation of the right or preventing injury to the right (for example, judgments handed down in eviction proceedings);
  • Ratification judgment: confirm a judicial or extrajudicial self-composition of the parties (for example, a judgment that confirm agreement in divorce proceedings);
  • Arbitration award: rendered within the scope of the arbitral award;
  • Foreigners: issued in international jurisdiction, having validity in the national territory after approval by the Superior Court of Justice; and
  • Criminal conviction: they result from the criminal court, when it sets a minimum amount to repair the damage caused to the victim, due to the offense committed.

A judgment that acknowledges the enforceability of the obligation to pay a sum certain cannot be enforced ex officio by the judge. In these cases, a new demand must be instituted, usually in the same records of the knowledge cognisance proceedings, so that the creditor party can collect the obligation. This procedure is called satisfaction of the judgment.

There is also the possibility that the execution of the judgment may be provisional, which will occur when the Judgment creditor proposes judgment with the judgment even when the appeal is pending without suspensive effect. In this case, the creditor's application will be filed in separate documents.

However, in both cases, the Judgment creditor must submit a petition to the judge claiming the payment of the debt. Only after the initiative of the creditor will the magistrate summon the judgement debtor to settle the debt.

Requesting Assets

If the defendant is summoned and does not pay the debt within 15 working days, the judge must order, also at the request of the Principal, the attachment of the debtor's assets sufficient to satisfy the debt (example: financial assets and vehicles). It may be required to block assets of the judgement debtor that are in possession or that have been fraudulently transferred to third parties. In addition, in the event that the search for the debtor's assets is fruitless, the claimant may request the judge, in an autonomous process, to declare the insolvency of the judgement debtor - this civil insolvency can also be claimed by the debtor themselves.

It must be noted that, if civil insolvency is recognised, the court that declared it becomes competent to judge all ongoing executions proposed against the debtor. However, the requirement of filing a request (satisfaction of the judgment) by the Judgment creditor is also verified in the judgments that recognise the obligation to pay a certain amount to the detriment of the Public Treasury. The Public Treasury is not required to pay what was claimed, but to challenge, if applicable.

Public Treasury

The debts of the Public Treasury are paid through court orders or Small Value Requests (RPV), which are the subject of specific administrative proceedings, and it is not possible to settle the obligation in the judicial process itself where the judgment was handed down, nor through the satisfaction of the judgment. In addition, when executing the judgment against the Public Treasury, it is not allowed to require the blocking of assets or any other constrictive measure to eventually guarantee the payment of the debt, since public assets are unaffordable. In turn, in proceedings that seek to satisfy an obligation to do, not to do, or to deliver something, the judge, when extending the judgment, will grant specific tutelage in the very command of the decision or, even, will determine measures that ensure, promptly, the achievement of the right by the equivalent practical result (Article 497 of the CPC - Civil Process Code).

Thus, normally, in the aforementioned proceedings, there is no need to establish satisfaction of the judgment, nor is it necessary to wait for the initiative of the creditor, because in the decision itself there are the necessary determinations for the satisfaction of the recognised right. That is, as soon as the judgment is final, the losing party will be in default. However, if the winning party intends to enforce the judgment still pending an appeal without suspensive effect, it must promote provisional satisfaction, in separate records.

Finally, in mandamental judgments, there is a particularity: in addition to the fact that the judgment enforcement phase is not necessary, it is not even necessary to promote provisional satisfaction, since, as stated, only the coercive command of the decision is sufficient to allow the immediate execution of the judgment - if there is no appeal with an active suspensive effect.

Although, generally, the execution of a judicial judgment is carried out in the same records as the knowledge proceedings, there is a need for specific legal costs to be collected for the judgment satisfaction phase. The amount of these expenses, however, is not uniform, and may vary depending on the place where the execution will be proposed, mainly in demands that are pending in the state courts.

For example, just to propose a judgment satisfaction in the city of São Paulo/SP, in 2020, the costs vary from BRL138.05 to BRL82,830 depending on the amount to be executed. The initial costs of fulfilling a judgment in Brasília/DF range from BRL58.58 to BRL197.04, also depending on the amount to be executed. The procedural expenses also change if many due diligences need to be carried out, or if the judgement debtor resides in a different city where the court of the case is located.

However, in case it is necessary to produce expert evidence in the context of the satisfaction of the judgment (or in the liquidation phase), the judgment creditor must bear the fees of the expert, as well as the technical assistant that they may appoint. These expenses, although initially borne by the judgment creditor, are subsequently reimbursed by the judgement debtor if the satisfaction of the judgment is deemed valid - with the exception of the remuneration of the technical assistant.

Processing Time

As for the time required to execute the judgment, it is often not possible to establish it precisely, especially because the time frame for processing the proceedings is usually linked to the complexity, amounts involved, litigation and solvency of the debtor. In this sense, if the debt is small, if there is no resistance on the part of the judgement debtor and if greater diligence is not necessary, the processing time will be quite fast; otherwise, the judgment may last for a few years. On this subject, it must be noted that the National Council of Justice annually produces a report on the productivity of the Brazilian Justice, the “Justice in Numbers” and, in its 2019 version, pointed out that the executions/judgments of the court State law lasts, on average, seven years and six months, whereas, in the Federal Court, the processing time of these cases is seven years and seven months.

However, there are some legally established deadlines for the judgement debtor to fulfil the obligation. In effect, in judgments recognising an obligation to pay a certain amount, the defendant, after being summoned by the judge, will have a period of 15 working days to pay the debt voluntarily. In the case of an obligation to provide maintenance, this period for voluntary payment will be three working days.

However, if these deadlines are not met, the time for the execution of the judgment will depend, in most cases, on the debtor's solvency, since the obligation will be more easily fulfilled, as a rule, if the debtor's assets are sufficient to settle over there.

Obligation to Pay

In judgments recognising the obligation to pay a certain amount to the detriment of the Public Treasury, the term for execution varies according to the amount of the debt. If the debt is classified by law as of small value, the obligation must be paid after the Small Value Requisition (RPV) is issued, by means of a bank deposit, within two months, counted from the delivery of the requisition.

If the debt is submitted to the system of precatory, the obligation will be paid exclusively in the chronological order of presentation, which must be made until July 1st of each financial year, and to the account of the credits provided for in a specific budget. The payment will be made until the end of the following year, after a decision determining the discharge, given by the respective President of the Court (Article 100 of the federal constitution).

Therefore, in theory, payment by court order may take up to two years to be made, counted from the presentation of the court order. However, if there is not enough budget forecast to pay the credits, the debt can only be paid when the Public Treasury allocates resources for this purpose in its budget allocation. Finally, in court orders or in those that recognise an obligation to do, not do, or deliver something, the losing party, in theory, must immediately comply with the court order or within any term defined in the judgment itself.

Other Information

If there is no spontaneous satisfaction by the losing party, it is not possible to establish precisely the time necessary for the execution of the judgment to be finalised. This is because the Judgment creditor will depend on the agility and effectiveness of the implementation of the specific tutelage determined by the judge. It is necessary to point out that the average time taken to process legal proceedings has registered efficiency gains year after year since the adoption of electronic processes (PJe) in Brazilian courts, due to the reduction in the time that the proceedings are stopped at a notary public awaiting some type task by the servants. The 2020 data, however, will certainly be impacted by the COVID-19 pandemic, which resulted in the suspension of procedure deadlines and face-to-face activities in forums and courts, in compliance with Resolutions 313/2020, 314/2020 and 318/2020 of the National Council of Justice - CNJ.

Again, the electronic processes were impacted to a lesser extent, since, in the states in which a lockdown was not decreed, the resumption of the course of the deadlines occurred before the physical processes, which were re-established only on 15 June 2020, after almost three months suspended (Resolution 322/20 of the National Council of Justice - CNJ).

Another impact of the pandemic on the processing of executive proceedings has been the issuance of decisions denying the execution of electronic attachment of cash values (online attachment) with banking institutions due to difficulties for the defendant to defend themselves, such as those resulting from limitation rules displacement imposed by government officials.

In judgments recognising an obligation to pay, after the term for the spontaneous fulfilment of the obligation by the judgement debtor, an attachment and assessment warrant will be issued, followed by acts of expropriation. In this case, the judge may, at the request of the judgment creditor, determine the search for property in public agencies, commercial boards, financial institutions, extrajudicial notaries, in addition to other establishments where it is possible to verify whether the defendant has assets subject to seizure.

It must be noted that the judgment creditor can also, even before promoting satisfaction of the judgment:

  • to carry out consultations with the commercial boards - to investigate whether there are legal entities of which the debtor is a partner;
  • to research the judgement debtor's financial situation in credit protection agencies; and
  • to search the debtor's assets at real estate registries.

As an illustration, the interested party can search with the credit protection agencies if the judgement debtor has debt with third parties, unpaid checks, protests, proceedings against him, as well as participation in bankruptcies. There is also the possibility that the judgment creditor may request, in real estate registries, the issuance of a “certificate of search for goods”, which informs if there are properties owned by the debtor in a given region.

All of these measures can be adopted without the need for a judicial decision and serve so that the Judgment creditor, for satisfaction of the judgment, already knows, in advance, what assets he will indicate to the attachment.

Debtor assets

Thus, if the debtor's assets are found, if these are not enforceable by legal provision (Article 833 of the CPC), the judge will issue an attachment order or, if it cannot be made directly by the magistrate, will determine an justice to do so, so that as many assets as are necessary are pledged and evaluated to satisfy the payment of the updated principal obligation, plus interest, costs and attorney fees. This constriction must obey a preferential order, which mainly takes into account the liquidity of the asset (Article 835 of the CPC).The attachment may fall on several assets of the judgement debtor, such as:

  • financial assets and other credits;
  • social shares or shares of the judgement debtor in simple company or entrepreneur;
  • commercial, industrial or agricultural establishments, as well as plantations or buildings under construction;
  • percentage of company billing of which the debtor is a partner;
  • vehicles and other movable property which is not subject to a non-seizure clause; and
  • fruits and income from movable or immovable property.

As for the judgments that have the object of doing, not doing, or delivering things, in addition to the aforementioned measures, the judge may adopt coercive measures, including being able to request the police force (for example, imposition of a fine for delay; possession or search and seizure, and removal of things).

Civil imprisonment is only foreseen in the event of non-compliance with the duty to provide maintenance. However, it is possible to arrest the judgement debtor if a court order is disobeyed, since in this case, the crime of disobedience will be found.

Proposed satisfaction of the judgment by the Judgment creditor, the judgement debtor may submit, in the same case, a challenge, where the following allegations (Article 525, Sections 1 and 12 of the CPC) will be applicable:

  • absence or nullity of the summons if, in the knowledge phase, the process was processed in absentia;
  • illegitimacy of the judgement debtor;
  • unenforceability of the judicial title or obligation;
  • improper attachment or error in the valuation of the assets subject to constriction;
  • excessive execution or undue cumulation of executions;
  • absolute or relative incompetence of the judgment being exercised;
  • judicial title based on law or normative act considered unconstitutional by the Supreme Federal Court, or based on application or interpretation of law or normative act considered by the Supreme Federal Court to be incompatible with the Federal Constitution, in concentrated or diffuse constitutionality control; and
  • other modifying or extinct causes of the obligation supervening the judgment.

The presentation of the objection, generally, does not prevent the practice of executive acts, including expropriation. However, if the judgement debtor guarantees the judgment (with pledge, surety or deposit of the amount charged), demonstrates the plausibility of its grounds and the possibility of suffering serious damage, of difficult or uncertain repair, the judge may grant suspensive effect, which will suspend the aforementioned executive acts.

Some judgments, being merely declaratory, cannot be carried out. For example, the judgment that only recognises/declares the nullity of a contractual clause is not enforceable. In addition, as a rule, all judgments must define the extent of the obligation, enabling its immediate execution. However, as an exception, there are judgments that cannot be directly judgement debtor, as they are illiquid, which occurs in two hypotheses:

  • When it is not possible to specify, definitively, the amount due; and
  • When the judgment recognises that the calculation of the amount due depends on the production of evidence, the realisation of which takes time or is excessively expensive.

In such cases, prior to the execution of the judgment, it will be necessary to carry out a settlement (made by arbitration or by common procedure - article 509, items I and II, of the CPC), at which time the extension of the settlement will be declared. obligation that was recognised in the judgment.

However, there may also be an illicit judgment in universal proceedings (Article 324, Section 1, item I, of the CPC) that aim at recognising the obligation to deliver something, which will happen if the plaintiff cannot individualise the goods demanded in advance.

In the Brazilian legal system, there is not exactly a central register of all judgments, which allows a wide consultation. However, it is possible for any interested party, free of charge, to obtain a certificate called “Nothing Certified” in state and federal courts. This certificate lists all legal proceedings (criminal, civil or bankruptcy and judicial reorganisation) that are pending against a specific citizen or company in that jurisdiction.

In addition, in the event that the proceedings are actually filed on behalf of the citizen or the company, and unless the procedure does not proceed in secrecy, it will be possible for the interested party, having met some legal requirements, to have access to the records, which would allow them to discover, for example, if the object of that dispute can jeopardise any ongoing negotiation or render it insolvent.

In the scope of the judgment enforcement process, there are also procedure tools that can be used by the plaintiff in order to publicise their litigation with the judgement debtor.

Payment

In fact, in case the deadline for voluntary payment of the obligation is exceeded, the judgment creditor may take the final judicial judgment to protest, in the relevant extrajudicial registry, and it is necessary, for that, the presentation of the decision's content certificate. This measure allows, for example, financial institutions or people who are negotiating with the debtor to have access to the information of the debt in question.

If the debt is paid in full, it will be up to the defendant, upon proof of payment, to request the judge to cancel the protest. The magistrate, in turn, will issue an official letter to the extrajudicial registry office within a period of three days, counted from the application protocol (Article 517, Section 4, of the CPC). The judgment creditor also, in order to prevent possible fraud in the execution, can obtain a certificate that his satisfaction of the judgment was admitted by the judge, containing the identification of the parties and the amount charged, so that the document is registered in the real estate registry offices, vehicles or other assets subject to attachment, seizure or unavailability (Article 828 of CPC).

This measure has the purpose of anticipating the publicity to third parties regarding the existence of the satisfaction with the ongoing judgment, which would only occur with the registration of the attachment made on some property of the judgement debtor.

Cancellations

It must be noted that, in the event of a sufficient pledge to satisfy the debt, the Judgment creditor must provide, within ten days, the cancellation of the annotations on the assets not pledged. Finally, also at the request of the judgment creditor, the judge may determine the inclusion of the debtor's name in delinquent registries, and this registration will be immediately cancelled as soon as payment is made or the debt is guaranteed, as well as in the event that the execution is extinguished for any other reason.

In the context of civil litigation, the foreign judgment is considered to be a judicial enforcement order after approval by the Superior Court of Justice. Unless there is a special provision to the contrary provided for in the treaty, the ratification of a foreign decision will be required by action of the ratification of a foreign decision. A relevant exception to this rule is the legal provision that the foreign judgment of consensual divorce takes effect in Brazil, regardless of ratification by the Superior Court of Justice.

When necessary, ratification will obey the provisions of the treaties in force in Brazil and the Internal Regulations of the Superior Court of Justice. It is worth noting that the ratification procedure also applies to the foreign arbitral award, which will obey the provisions of the treaty and the law, applying, in the alternative, the provisions of the Civil Procedure Code.

In this regard, attention must be paid to the discipline of Law No 9.307/1996, which provides for arbitration, and Decree No 4.311/2002, which promulgates the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, made in New York, in 10 June 1958.

Satisfaction of the foreign judgment will be carried out before the competent federal court, at the request of the interested party, in accordance with the rules established for satisfaction with a national decision.

For the foreign judgment to be carried out, it is necessary that the Superior Court of Justice proceeds with the ratification, which consists of an indispensable process for the judgment handed down abroad to take effect in Brazil. After being ratified, the foreign judgment will be carried out before the competent federal court, at the request of the party, according to the rules established for satisfaction of the national decisions.

In addition, the duly ratified foreign judgment may follow different satisfaction modalities, depending on the nature of the obligation:

  • definitive compliance with the judgment that recognises the obligation to pay a certain amount;
  • satisfaction of the judgment that recognises the obligation to provide maintenance;
  • satisfaction of the judgment that recognises the obligation to do or not to do;
  • satisfaction of the judgment that recognises the obligation to deliver something.

In the context of civil litigation, it is expressly forbidden to ratify a foreign judgment that deals with the hypothesis of exclusive jurisdiction of the Brazilian judicial authority.

In this sense, it is emphasised that it is the responsibility of the Brazilian judicial authority, to the exclusion of any other:

  • to hear about proceedings relating to properties located in Brazil;
  • in matters of hereditary succession, proceed with the confirmation of a private will and the inventory and sharing of assets located in Brazil, even if the author of the inheritance is of foreign nationality or has domicile outside the national territory; and
  • in divorce, legal separation or dissolution of a stable union, proceed to share assets located in Brazil, even if the holder is a foreign national or has a domicile outside the national territory.

In addition, the foreign judgment must present six essential requirements for approval:

  • be delivered by a competent authority;
  • be preceded by regular service, even if default is verified;
  • be effective in the country in which it was delivered;
  • not to offend the Brazilian res judicata;
  • be accompanied by an official translation, except as provided for in the treaty; and
  • does not contain a manifest offense to public order.

The Internal Rules of the Superior Court of Justice also prohibit the ratification of any foreign judgment that offends national sovereignty and the dignity of the human person.

Foreign Arbitral Awards

In the specific case of ratification of a foreign arbitral award, Law No 9.307/1996 determines that ratification for the recognition or enforcement of a foreign arbitral award may only be denied when the defendant demonstrates that:

  • the parties to the arbitration agreement were incapable;
  • the arbitration agreement was not valid under the law to which the parties submitted it, or, in the absence of any indication, by virtue of the law of the country where the arbitration award was made;
  • has not been notified of the appointment of the arbitration award or of the arbitration procedure, or the contradictory principle has been violated, making ample defense impossible;
  • the arbitration award was rendered outside the limits of the arbitration agreement, and it was not possible to separate the excess portion from that submitted to arbitration;
  • the institution of the arbitration is not in accordance with the arbitration commitment or arbitration clause; and
  • the arbitral award has not yet become mandatory for the parties, has been annulled, or has even been suspended by a judicial body in the country where the arbitral award is issued.

It is also noted that the ratification for the recognition or enforcement of the foreign arbitration award will be denied if the Superior Court of Justice finds that, under Brazilian law, the object of the dispute is not susceptible of being resolved by arbitration or the decision offends national public order.

Still dealing with the ratification proceedings of a foreign arbitral award, it is essential to prepare the initial petition with the original of the arbitral award or a duly certified copy, authenticated by the Brazilian consulate and accompanied by an official translation, and the original of the arbitration agreement or duly certified copy, accompanied by an official translation.

The ratification proceedings of the foreign judgment will obey the provisions of the treaties in force in Brazil and the Internal Rules of the Superior Court of Justice. The ratification of the foreign judgment will be proposed by the requesting party, and the initial petition must contain the requirements indicated in the procedural law, as well as:

  • it must have been handed down by a competent authority;
  • contain elements that prove that the parties were regularly cited or that the default was legally verified;
  • have become final.

In addition, the proceedings must be accompanied by the original or certified copy of the confirmed decision and other indispensable documents, duly translated by an official or sworn translator in Brazil and certified by the competent Brazilian consular authority, when applicable.

Foreign Awards

In the specific case of a ratification proceedings for a foreign arbitral award, it is essential to instruct the initial petition with:

  • the original of the arbitral award or a duly certified copy, authenticated by the Brazilian consulate and accompanied by an official translation;
  • the original of the arbitration agreement or duly certified copy, accompanied by an official translation.

In the event that the initial petition for the ratification proceedings does not fulfil the required requirements or presents defects or irregularities that make it difficult to judge the merits, the President of the Superior Court of Justice will sign a reasonable period for the Judgment creditor to amend or complete it. However, after the summons, if the petitioner or their attorney does not promote, within the specified period, an act or diligence determined in the course of the process, this will be filed by the president.

Once the initial petition is in order, the interested party will be summoned to, within 15 days, contest the request. However, the defence can only deal with the intelligence of the foreign decision and satisfaction of the legal requirements and the Internal Rules of the Superior Court of Justice.

Dispute and incapacitation

In the event that the defendant is revealed or incapacitated, a special trustee is guaranteed, who will be personally notified. If a dispute is presented, a reply and rejoinder will be accepted within five days. In this process, the Public Prosecutor's Office is guaranteed the view of the records for a period of fifteen days, being able to challenge the request.

If there is a challenge to the request for ratification of the judgment, the case will be distributed for judgment by the Special Court of the Superior Court of Justice, the rapporteur being responsible for the other acts related to the progress and instruction of the case. However, if there is no challenge, it is the responsibility of the President of the Superior Court of Justice to ratify the foreign judgment.

After being duly ratified, the foreign judgment will be carried out before the competent federal court, at the request of the party, according to the rules established for satisfaction of the national decisions.

Request for Satisfaction

It is also important to say that the request for satisfaction must be instructed with a certified copy of the ratification. In addition, the debtor will be summoned in the civil court to comply with the judgment or to be settled within 15 days.

Within the scope of the satisfaction process, the judgment may follow different compliance modalities, depending on the nature of the obligation:

  • definitive satisfaction of the judgment that recognises the obligation to pay a certain amount;
  • satisfaction of the judgment that recognises the obligation to provide maintenance;
  • satisfaction of the judgment that recognises the obligation to do or not to do;
  • satisfaction of the judgment that recognises the obligation to deliver something.

In any of these modalities, the defendant may plead reasons for defence, in order to challenge satisfaction of the judgment, as described in 3.6 Challenging Enforcement of Foreign Judgments.

After the judicial assessment of the reasons, some nullity in the fulfilment of the judgment or even an excess of the amount executed may be recognised. In addition, in the event that the defendant does not voluntarily enforce the judgment, the use of executive judicial acts, including those of expropriation, which are compulsory means of debt satisfaction, shall be used. It is reinforced, in fact, that the same procedure described in 2.2 Enforcement of Domestic Judgments.

According to the Resolution of the Superior Court of Justice No 2 of January 2020, the amount of court costs for the ratification of a foreign judgment is BRL194,12. There are, however, other costs that must be highlighted, such as attorney fees and the amount to be spent on the instruction of the process with original or certified copy of the confirmed decision and other indispensable documents, duly translated by an official or sworn translator in Brazil and certified by the competent Brazilian consular authority, when applicable. In addition, it must be borne in mind that the process of satisfaction the judgment, in the Federal Court of 1st degree, depending on its development, may also cause more costs with attorney fees and court costs.

For example, it is worth noting that the legal costs of civil proceedings in general by the Federal Court of the Federal District are 0.5% of the value of the case, with a minimum amount due of BRL5,32 and a maximum of BRL957,69. Thus, before proceeding to comply with the judgment, it is necessary to consult the updated table of costs of the Federal Court in which the application will be processed. The time required to obtain ratification of the foreign judgment and guarantee compliance with it is varied and depends essentially on the complexity of the demand and the litigation of the parties involved in the process.

According to data from the Ministry of Justice, the average approval processing time is two months in the event that the proceedings contains all the necessary procedural documents and there is no challenge. Although there is no official information on the duration of the approval process in other cases, in practice, the average processing time is three years. In addition, data from the National Council of Justice (“Justice in numbers 2019”) indicate that the average process time pending in the execution phase of the Federal Court is seven years and seven months.

In the process of ratifying a foreign judgment (which must be final), it is up to the defendant to present a defence based on the absence of legal requirements for ratification. In particular, it must be noted that, in the context of civil litigation, it is expressly forbidden to ratify a foreign judgment that deals with the exclusive jurisdiction of the Brazilian judicial authority.

In this sense, it is emphasised that it is the responsibility of the Brazilian judicial authority, to the exclusion of any other:

  • to hear proceedings related to properties located in Brazil;
  • in matters of hereditary succession, proceed with the confirmation of a private will and the inventory and sharing of assets located in Brazil, even if the author of the inheritance is of foreign nationality or has domicile outside the national territory; and
  • in divorce, legal separation or dissolution of a stable union, proceed to share assets located in Brazil, even if the holder is a foreign national or has a domicile outside the national territory.

In addition, the defence against the ratification of the foreign judgment can be based on the absence of any of the six essential requirements for ratification, namely:

  • be given by a competent authority;
  • be preceded by regular service, even if default is verified;
  • be effective in the country in which it was delivered;
  • not to offend the Brazilian res judicata;
  • be accompanied by an official translation, except as provided for in the treaty; and
  • does not contain a manifest offense to public order.

Scope of Satisfaction

Within the scope of satisfaction of the foreign judgment, the means of defence available to defend satisfaction of the national decision are applicable. In this sense, in the scope of the final satisfaction of the judgment that recognises the obligation to pay a certain amount, the challenge may be about:

  • lack or nullity of the summons if, in the knowledge phase, the process went by default;
  • illegitimacy of part;
  • unenforceability of the security or unenforceability of the obligation;
  • incorrect attachment or erroneous assessment;
  • excessive execution or undue accumulation of executions;
  • absolute or relative incompetence of the execution court; and
  • any modifying or extinct cause of the obligation, such as payment, novation, compensation, transaction or prescription, provided that they are supervening in the judgment.

The means of defence of impugnation explained above applies, as appropriate, satisfaction of the judgment that recognises the obligation to do or not to do, as well as the satisfaction of the judgment that recognises the obligation to deliver something.

In the event of satisfaction of the judgment that recognises the obligation to pay maintenance, the defendant may justify the impossibility of making the payment.

In the Brazilian legal system, there is an express legal equivalence between the effects of the arbitration award to those of the award issued by organs of the Judiciary, according to Law No 9.307/96 (the "Arbitration Law"). Consistent with this, the Civil Procedure Code - CPC (Law No 13.105/2015) classifies arbitral awards as executive judicial titles, the fulfilment of which takes place in compliance with the same procedural rite established for judicial awards, called “satisfaction of the Judgment”, with the difference that, in this case, an autonomous enforcement process is set up, which will require a summons from the defendant.

The need to resort to the Judiciary for executive acts stems from the fact that, although the arbitration award is a judge of fact and of law, the legislation did not confer this power of coercion or empire power to impose compliance with the arbitration decision, with restrictions to the debtor's assets (such as the pledge) and the forced removal of their assets. Thus, if there is no voluntary compliance with the arbitral decision by the unsuccessful party, it will be up to the winning party to file proceedings to comply with the judgment before the competent civil court to hear the matter and receive the legal asset in dispute.

In this context, it appears that some issues have attracted greater attention from the Judiciary, such as, to illustrate, those related to the validity of the arbitration clause; the absence of a prior agreement for the operation of arbitration; the complexity of calculations for debt settlement; the possible conflict of jurisdiction between arbitral and state jurisdiction, such as that arising from the confession of a net debt, certain and enforceable, which fulfils the requirements of a judicial execution, established in a contract that also stipulates an arbitration clause; among others.

It must be noted that the referred procedure will only be necessary in the case of judgments qualified as condemnatory, that is, that impose on the loser the fulfilment of a certain instalment in favour of the right holder.

There will be variation in the type of compliance with the arbitral award according to the nature of the obligation recognised therein:

  • final compliance with the award that recognises the obligation to pay a certain amount;
  • satisfaction of the judgment that recognises the obligation to provide maintenance;
  • satisfaction of the judgment that recognises the obligation to do or not to do; and
  • satisfaction of the judgment that recognises the obligation to deliver something.

In the arbitration process, judgments of other types may also be issued, such as declaratory and constitutive, which are limited to defining the legal situation between the parties. In such cases, there is no need for further acts to satisfy the claim brought to the attention of the arbitration award, as they already carry within themselves the full load of effectiveness expected from the arbitration jurisdiction.

The arbitration award will be considered unenforceable when it is devoid of executive effectiveness, due to the lack of liquidity, certainty or enforceability, as is the case, for example, if the judgment of the request for clarification in the arbitral sphere, of a foreign arbitration award, is still pending and not ratified by the Superior Court of Justice, the debtor is not yet in arrears or the obligation is still not enforceable due to the lack of implementation of condition or term.

If the arbitral award needs to determine the exact amount of the judgment, a liquidation process must be instituted.

There is great doctrinal controversy regarding the competence to promote the liquidation, whether of the arbitration award or of the state judge, but respected voices have defended that, being up to the arbitration award to decide all the dispute, including the amount due (quantum debeatur), it is up to him to settle the judgment, even in a new arbitral proceeding, unless the parties themselves have removed this competence in the arbitration agreement.

For filing proceedings to comply with the arbitral award, under the terms of the Civil Procedure Code, the following requirements are required:

  • the arbitral award, which represents the judicial executive title that translates an obligation; and
  • the spontaneous default of the certain and net obligation fixed in the judgment and the enforceability of the security.

In view of these, the procedure for complying with an arbitration award will follow, in general, the same steps as previously described for complying with judicial decisions.

Thus, in the case of an obligation to pay a certain amount, the following process is initiated:

  • the winning party requires in court the beginning of satisfaction of the judgment, duly accompanied by an itemised and updated statement of the debt, debtor data and indication of assets subject to judicial constriction, whenever possible;
  • the summons of the defendant will be promoted, who must pay the debt within 15 days and, failing to do so, will be subject to the addition of a fine and attorney's fees of 10% each, as well as the attachment and assessment goods necessary to satisfy the debt;
  • after the period of 15 days has elapsed without voluntary payment, a period begins for the defendant to present a challenge (15 days);
  • if the grounds for the challenge are relevant and the continuation of the execution may cause damage to the judgement debtor that is difficult or uncertain to repair, the judge may assign a suspensive effect to the satisfaction of the judgment, provided that the judgment with sufficient attachment, security or deposit is guaranteed; and
  • in the end, if the challenge is rejected, the expropriation of the defendant's assets will occur and, if the plaintiff does not oppose, the judge will declare the obligation satisfied and extinguish the process.

As regards the judgments that seek the satisfaction of an obligation to do, not to do, or to deliver something, after provocation by the judge, the judge will adopt coercive measures aiming at the satisfaction of the law or other measures that ensure a practical result equivalent.

As for the obligation to provide maintenance, the procedure differs both in terms of the period for voluntary payment, which will be three working days, and in terms of the possibility of the defendant being subject to civil imprisonment, if the default is maintained or if it does not prove impossible of payment.

Currently, to distribute the process of satisfaction of the judgment in the Judicial District of the Federal District, as it was already shown, the initial court costs can reach the value of BRL197.04, to which other expenses with bailiffs, accountants, due diligence, letters, among others, which vary according to the particularities of the demand, must be added. Each Court has autonomy to establish its own cost table and, therefore, these values vary according to the state of the Federation. In São Paulo, as seen, filing the same proceedings for satisfaction of the judgment can reach costs in the maximum amount of BRL82,830.

If the proceedings are successful at the end, it will be up to the loser to reimburse the court costs, in addition to the payment of legal fees (between 10% and 20% of the judgment). In addition, if the debtor fails to promote voluntary payment within 15 days of service, a fine of 10% and legal fees of 10% on the amount of the debt may also be judgment.

In general, the duration of the executive phase depends on the complexity of the cause and the amounts involved, and it can be seen that small claims against the debtor are usually faster.

Duration of Proceedings

There are no official data restricted to the time taken to process arbitration award proceedings. However, due to its similarity with the judicial executive phase, a parallel can be made to obtain approximate indications in this regard.

Under these parameters, as previously mentioned, it appears from the publication “Justice in Numbers 2019”, released by the National Council of Justice - CNJ, that execution proceedings in first degree before the State Justice takes an average of seven years and six months to be definitively judged and filed, a time similar to that reached in the Federal Court, which is seven years and seven months.

As it was noted by the CNJ itself, it is important to keep in mind that these data, as they compose an average, suffer methodological limitations, resulting from the attempt to summarise in a single indicator very heterogeneous information, to attract the possibility of distortions. These, in turn, would be dissipated only through data from each process, and not in aggregate, something that officially does not yet exist.

The typical defence of the judgement debtor in the scope of the enforcement of the judgment is the impugnation, whose matters legally established in the Code of Civil Procedure allow him to convey allegations related to:

  • procedural defects that meet requirements for the execution and validity of executive acts, such as lack or nullity of the summons in the arbitral proceedings; illegitimacy of the party; unenforceability of the title or unenforceability of the obligation; incorrect attachment or erroneous assessment; over-execution; absolute or relative incompetence of the judgment of execution; and
  • any modifying or extinguishing cause of the obligation (payment, novation, compensation, transaction or prescription, as long as supervening the arbitration award).

Even though the judge of law does not have the possibility of reviewing his merit in the scope of satisfaction with the arbitral award, due to the immutability resulting from the res judicata incident since its delivery, it will be up to him to control the unfathomable guarantees of the process arbitration, provided it is provoked to do so.

Matters of Public Order

Thus, an additional hypothesis that can be challenged in the context of a challenge is related to matters of public order that may result in the decree of nullity of the arbitral award, such as those arising from:

  • nullity of the arbitration agreement;
  • it was issued by someone who could not be an arbitration award;
  • absence of mandatory requirements;
  • extrapolation of the limits of the arbitration agreement;
  • it was handed down due to malfeasance, concussion or passive corruption;
  • it was delivered out of time; or
  • in violation of the principles established in the Arbitration Law.

These matters may also give rise to an own annulment proceeding before the Judiciary, in which case it must comply with the 90 day period of receipt of the notification of the arbitration award (partial or final) or the decision of the clarification request.

There is, yet, another atypical form of resistance by the judgement debtor, represented by the exception of pre-execution, which is applicable whenever there is a compromise in the effectiveness or executability of the title due to public order issues, which can be analysed officially and at any time by the magistrate.

Eduardo Antônio Lucho Ferrão Advogados e Associados

SHIS QL 14 Conjunto 5 Casa
17 - Lago Sul
Brasilia/DF
CEP: 71.640-055
Brazil

+61 2102 7898

+61 2102 7889

escritorio@eduardoferrao.adv.br www.eduardoferrao.adv.br
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Eduardo Antônio Lucho Ferrão Advogados e Associados has a multidisciplinary team, with training in various fields of private and public law, with specialities in constitutional, administrative, tax, criminal, electoral, civil, business, banking, environmental, real estate, social security, port, digital and regulatory matters. The firm is responsible for conducting numerous cases before the Federal Supreme Court and the Superior Court of Justice, the highest courts of Brazilian Justice. The rendering of services goes beyond the judiciary, overflowing into the executive and legislative powers, including the councils, secretariats and agencies linked to them. It is also worth mentioning the office’s performance before the Federal Court of Auditors and the Federal District Court of Auditors.

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