The 4th Panel of the Superior Court of Justice (STJ), in a unanimous vote, upheld the special appeal filed by a debtor of a foreign extrajudicial enforcement order and determined that the Brazilian courts have jurisdiction to rule on the execution motions filed by the debtor.
In the case in question, a foreign enforcement action (formed in Panama) was filed in Brazil, but the first instance court dismissed the debtor’s objections to enforcement, as it considered that the credit represented by the instrument should be challenged in the country of origin.
In the second instance, the São Paulo Court of Justice limited Brazilian jurisdiction by authorizing the processing of the execution of the foreign title, but rejected the debtor’s opposition to the execution, on the grounds that the jurisdiction to assess the substantive issues involving the parties was exclusive to the Panamanian judicial authority.
The appellant argued that international jurisdiction is concurrent with Brazilian jurisdiction because, according to articles 21, I and II, of the Code of Civil Procedure, and 12, of the Law of Introduction to the Rules of Brazilian Law, actions in which the defendant is domiciled in Brazil or if the obligation is to be fulfilled in Brazil are subject to national jurisdiction, and he – the debtor – is resident in Brazil.
Furthermore, according to the appellant, the creditor who chooses to enforce a foreign instrument in Brazil must comply with the forms of defense guaranteed to the debtor under Brazilian law, such as the motion to stay enforcement, otherwise the party’s right of defense will be curtailed.
According to Justice Raul Araújo, rapporteur of the appeal, the Brazilian court has jurisdiction to prosecute and judge the enforcement action when the debtor is domiciled in Brazil, or if the obligation has to be fulfilled here.
Thus, if the creditor is allowed to file an action for the enforcement of a foreign extrajudicial instrument, the debtor must also be allowed to oppose the enforcement – even if the requirements for the enforceability of the instrument have to be assessed from the perspective of foreign legislation – so as not to transform the enforcement process into a mere expropriation of assets without due process of law.
