Jurisdiction in Foreign Disputes

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Brazil is now among the top ten most financially powerful countries in the world. It is a member of numerous global institutions such as the World Trade Organization (WTO) and the Southern Common Market. Because Brazil has become such an important player in the global economy landscape, it’s no wonder other countries have begun trading there. If you are trading in Brazil and you’re from the United States, you should first understand how disputes would be handled with the jurisdiction of the dispute.

Brazil’s Jurisdiction Laws

Brazil is one of the few countries that does not give the parties a choice of jurisdiction when they are from two different countries. In the event of a dispute, there are three possible jurisdictions or decision-makers.

The first possible jurisdiction that could be applied is Brazil. This is a possibility if the dispute involves:

  • Real property that is located in Brazil: If a foreign agency has purchased land in Brazil and fallen into dispute about taxation or ownership of it, the case will be handled under Brazilian jurisdiction.
  • A probate concerning Brazilian property: Similarly, if the case surrounds a probate that deals with property on Brazilian turf, the rulings will be made under the laws and guidelines of Brazilian jurisdiction.
  • Bankruptcy for companies that are based in Brazil: If you’ve invested in a company and they have gone bankrupt, a lawsuit might arise. However, if that company was headquartered and domiciled in Brazil, the case will fall under Brazilian jurisdiction.
  • Disputes of labor based on Brazilian employment: Employment laws in Brazil are notoriously complex and unforgiving. If you’ve employed people in Brazil to work for your company and a dispute arises, the case will be settled under Brazilian jurisdiction.
  • The other party’s country of origin could also be the appropriate jurisdiction: When cases are to be handled in another country’s jurisdiction, they must first be sanctioned by Brazil’s High Court of Appeals. In this case, the Brazilian court is looking to make sure the rulings are legal under Brazil’s due process of law.
  • If the other party has signed a contract with the United Nations Convention of Contacts for the International Sale of Goods, that institution might have the final say.

Legal Representation Can Help for any Jurisdiction

If you are doing business in Brazil as a foreigner, it is important that you are aware of these potential outcomes. You might not have the choice to decide where your case will be handled and which governing body will make the final ruling. Disputes between foreign individuals or companies and Brazilian parties are sometimes more confusing because their jurisdiction is so unclear. If you’re not sure where jurisdiction would lie in the event of a dispute in your company, you should consider speaking with a Brazilian attorney about it. Being prepared by knowing the potential outcomes will make your company more successful and could minimize your losses should a dispute arise. This is especially true for investors in Brazilian property, since the jurisdiction will definitely fall in Brazil. You should know all aspects of Brazilian property law in this case.

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