Letters of request & jurisdiction

The U.S District Court for the Southern District of New York, in BBC Chartering and Logistic GmBh & Co KG (BBC Chartering) et al. versus Usiminas Mecânica SA (Usiminas) et al., has ordered the issuance of a letter of request so as to summon Usiminas in Brazil. The Superior Court of Justice, for the execution of this letter, ruled on the construct of article 88 of the Civil Procedure Code. The whole chapter concerning this provision being modified in some relevant ways by the new Code, it seems interesting to revisit the SCJ’s ruling.

BBC Chartering filed a suit against Usiminas, in New York, for damages arising out of a shipping contract. Usiminas challenged the proceeding of summons in Brazil on the grounds that it did not have standing to be sued; and that the American court lacked jurisdiction. To Usiminas, the fact that the contract had been signed in Brazil and that its execution had also started here would mean the attraction of article 88, III, of the Civil Procedure Code. The SCJ found otherwise.

“The Brazilian judiciary authority has jurisdiction”, article 88, III, states, “when the action results from a fact which has occurred in or from an act which has been carried out in Brazil”. We have, therefore, a general guideline for tort and civil liabilities falling within the jurisdiction of Brazilian courts. That same structure was kept by article 21, III, of the new code; and since article 88 itself was interpreted as giving Brazilian courts a non exclusive jurisdiction, we may expect national courts to fully accord other executions of letters of request. That should happen even if the dispute brought before a foreign court is such that it could have been also filed in Brazil.

In fact, when it comes to being open to transnational litigation, article 24 of the new code is quite innovative in comparison with article 90 of the old code. It brings forth an exception – the existence of an international treaty thus providing – to the general proposition that lawsuits brought before foreign courts do not operate as lis alibi pendens in Brazil. Furthermore, under article 24, even if there exists an action pending in Brazilian courts, a dispute over the same facts may be brought before a foreign court, as long as one is dealing with article 21 cases, and not article 23 cases.

(Carta Rogatória nº 3.397, Ministro Relator Cesar Asfor Rocha, publicada em 14.11.2008 - in Portuguese here)