Brazil
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes. The order typically restrains a party from disposing of specified assets located in Brazil, until a final decision is issued on the merits of the underlying dispute. Whilst a judge can request that other jurisdictions execute the effect of a freezing order in relation to assets located outside of Brazil, cooperation depends on local law.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
Freezing orders may be accompanied by additional measures, such as the imposition of fines, the production of documents, search and seizure warrants or any supplementary injunctions deemed adequate, with a view to render the freezing orders as effective as possible. Usually, the Court will appoint a custodian, depositary or an administrator, whose role will be to ensure that the order is properly complied with.
3. Briefly what is the relevant legal test?
The applicant must demonstrate that there is a strong possibility that they will succeed on the merits of the underlying claim. In addition to this, the applicant must provide material evidence that irreparable harm is likely to be caused to them unless the order is granted.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant submits a request to the Court presenting both factual and legal reasons why the order should be granted, as well as all supporting documents available at the time. Where there is risk of irreparable harm, urgency or when previous knowledge of the freezing order by the respondent may render it ineffective, the order may be granted without notice. However, such cases are exceptional.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
It is within the Court’s discretion to decide whether the applicant must provide any form of security. In any case, the applicant is liable for damages caused to the respondent in the event that the freezing order is eventually revoked or found to be without merit.
6. Can it be sought against third parties?
The freezing order is always issued against the respondent and its assets. However, often such assets are in the possession of third parties. In these cases, either the Court or the applicant can notify the third parties of the freezing order. Third parties must comply with the order.
7. What assets are covered by a freezing (or equivalent) order?
In principle, all assets (tangible or intangible) both inside and outside the Brazilian jurisdiction.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
At any stage prior to a final decision on the merits of the underlying claim. After that, similar orders are available with a view to enforcing Judgments (arbitral or judicial).
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Yes. There is an exception relating to assets that are essential for the respondent’s subsistence. This exception applies to both individuals and companies, for example, where a freezing order is directed at an individual’s income or at a company’s inventory. However, whenever a company has to dispose of certain assets as part of its regular activities, previous judicial authorization may be necessary as a way of controlling and preventing the dissipation of assets. There is no exemption relating to reasonable legal expenses.
12. What happens after a freezing (or equivalent) order is granted?
If granted as a preliminary order, the applicant has to file an underlying claim within 15 or 30 days, depending on the nature of the order granted, otherwise the order will automatically dissipate. The respondent may oppose the application and/or challenge the order. Depending on the asset’s peculiarities, the order should also be registered with Official Registry offices or with other relevant entities and agencies.
13. Who pays the costs of the application for a freezing (or equivalent) order?
In the first instance, the applicant pays for the costs of the application. Eventually the losing party in the underlying litigation may be ordered to reimburse all costs.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
Third parties may oppose the freezing order and/or submit challenges to the Court of Appeals. For example, creditors can challenge the order if they wish to seize or adjudicate assets frozen in a different procedure, or who believe they have a pre-existing title or an earlier claim in relation to assets frozen. In general, a third party is not prevented from exercising any rights of set off arising prior to its official notification of the freezing order. Usually, a freezing order will be limited to local jurisdiction, unless the order is also approved and ratified by a foreign Court (by means of a letter rogatory).
15. What are the consequences of breach of a freezing (or equivalent) order?
Any contract or agreement executed in violation of a freezing order is deemed null or void as a matter of law. Any attempt to defraud a freezing order, including by third parties, will be financially sanctioned by the Court.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
A third party notified of the order has a duty of care and may be liable to both the Court and applicant in cases of non-compliance.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes. Enforcement of a freezing order abroad does not require a previous judicial authorization as a matter of Brazilian Law. However, the applicant customarily informs the Court of its intention to enforce the order, given that the Court can directly intervene on the matter and communicate directly with the foreign judicial authority, by means of a notification known as carta rogatória.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Yes, however foreign judgments are not automatically enforceable in Brazil. There is a ratification procedure in place which must be observed by the foreign applicant in order to be able to enforce the freezing order in Brazil.
Contacts
Daniela Zeitz Partner L.O. Baptista São Paulo, Brazil dz@baptista.com.br www.baptista.com.br/?lang=en Silvia Rodrigues Pachikoski Partner L.O. Baptista São Paulo, Brazil srp@baptista.com.br www.baptista.com.br/?lang=en José Victor Zakia Associate L.O. Baptista São Paulo, Brazil jvz@baptista.com.br www.baptista.com.br/?lang=en Julia Rossetto Associate L.O. Baptista São Paulo, Brazil jgr@baptista.com.br www.baptista.com.br/?lang=en
Explore by region
This guide was updated in June 2024. Eversheds Sutherland takes all reasonable care to ensure that the materials, information and documents, including but not limited to articles, newsletters, reports and blogs, including this guide ("Materials") on the Eversheds Sutherland website are accurate and complete. However, the Materials are provided for general information purposes only, not for the purpose of providing legal advice, and do not necessarily reflect the present law or regulations. The Materials should not be construed as legal advice on any matter. The Materials may not reflect the most current legal developments. The content and interpretation of the Materials and the law addressed in the Materials are subject to revision.
No representation or warranty, express or implied, is made as to the accuracy or completeness of the Materials and therefore the Materials should not be relied upon. Eversheds Sutherland disclaims all liability in respect of actions taken or not taken based on any or all of the contents of the Materials to the fullest extent permitted by law. The Materials are not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified Lawyer/Attorney on any specific legal matter.
Any views expressed through the Materials are the views of the individual author and may not reflect the views of Eversheds Sutherland or any other individual Lawyer/Attorney.
© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.
Share this page