Bonds to be posted by foreign companies to litigate in Brazil

Under Article 835 of the Brazilian Civil Procedure Code, plaintiffs residing outside the country, as well as those who leave it during the processing of the case, are required to post a bond to make up for costs and attorney fees. Both foreigners and Brazilian nationals should give security in such cases, unless they prove they have real property in Brazil serving as collateral. Exceptions to that rule are counterclaims and the execution of judgments already passed in favor of the plaintiff. Article 83 of the New Civil Procedure Code sets out a similar rule, but it brings forth another exception: courts may not demand such bonds if international treaties ratified by Brazil so provide.

One may refer, in that department, to Article 4, of the Protocol of Las Leñas on Jurisdictional Cooperation and Assistance in Civil, Commercial, Labor and Administrative matters. In Julio César Cesano Pena vs Unibanco AIG Seguro SA, for instance, the Court of Appeals of the State of São Paulo overruled the trial court’s interlocutory order by which an undertaking was required of a Uruguayan national. Even more interestingly, in Hambürg Südamerikanisch Dampfschiffartsgesellchft KG vs Braga Comércio e Indústria Ltda, the sheer financial resources of the German company – the Court has taken into account no international statute – was found to be enough to prevent the application of Article 835 of the Civil Procedure Code. Now with the new Code, foreign companies may face a more formalistic approach to the matter, since exemptions are treaty-based only.

Agravo de Instrumento nº 994.09.344638-4 - Julio César Cesano Pena vs Unibanco AIG Seguro SA. - (TJ-SP , Relator: Octavio Helene, Data de Julgamento: 23/02/2010, 10ª Câmara de Direito Privado) – In Portuguese here.

Agravo de Instrumento nº 2160092-30.2014.8.26.0000 - Hambürg Südamerikanisch Dampfschiffartsgesellchft KG vs Braga Comércio e Indústria Ltda – TJ-SP, Relator: Cerqueira Leite, Data de Julgamento: 27/03/2015, 12ª Câmara de Direito Privado) – In Portuguese here.