In a decision published in the Official Gazette on February 8, 2019, the Court of Appeals of São Paulo (TJSP) dismissed Civil Appeal No. 0037723-25.2015.8.26.0100, which challenged the validity of a foreign forum selection clause. The clause at issue provides for a state or federal court of Salt Lake County, Utah, United States of America, to be the exclusive forum to resolve any dispute arising out of the agreement between the parties.

The Brazilian Code of Civil Procedure of 1973 had determined that a foreign forum selection clause would not prevent a Brazilian court from ruling in a dispute over an obligation to be fulfilled in Brazil. However, the New Brazilian Code of Civil Procedure of 2015 expressly set forth that the election of a foreign forum in an international agreement as the sole court to rule on a particular conflict excludes the jurisdiction of a Brazilian court. For the February 2019 case, TJSP ruled according to the 2015 code. 

This new decision, therefore, favors party autonomy and the principle of pacta sunt servanda.

Visit us at Tauil & Chequer

Founded in 2001, Tauil & Chequer Advogados is a full service law firm with approximately 90 lawyers and offices in Rio de Janeiro, São Paulo and Vitória. T&C represents local and international businesses on their domestic and cross-border activities and offers clients the full range of legal services including: corporate and M&A; debt and equity capital markets; banking and finance; employment and benefits; environmental; intellectual property; litigation and dispute resolution; restructuring, bankruptcy and insolvency; tax; and real estate. The firm has a particularly strong and longstanding presence in the energy, oil and gas and infrastructure industries as well as with pension and investment funds. In December 2009, T&C entered into an agreement to operate in association with Mayer Brown LLP and become "Tauil & Chequer Advogados in association with Mayer Brown LLP."

© Copyright 2019. Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.