Bill of lading clauses are valid and accepted by Brazilian courts.
At first such a statement should not seem so relevant taking into consideration that when two parties establish a contractual relationship, the contractual provisions agreed therein should apply.
But considering Brazil as a cargo friendly jurisdiction and with a past history of sometimes disregarding some BL provisions in claims brought by cargo interests against ocean carriers, it is in fact interesting to highlight that in recent years the understanding from the courts have been changing. Changing for the better. Changing for what it is right if I may say.
Be it a limitation of liability clause, an arbitration clause or even a foreign jurisdiction clause, which is the one I would like to highlight here, those should all be applicable in Brazil.
In relation specifically to the foreign jurisdiction clause, it should be effective to if not prevent a judicial proceeding in Brazil, at least lead to a dismissal a certain lawsuit, if one is brought before a Brazilian Court.
The 2015 New Code of Civil Procedure brought a new provision (Section. 25) establishing that: No Brazilian judicial authority is responsible for processing and judging a lawsuit when there is a choice of exclusive foreign jurisdiction clause in the case of international contracts, if raised by the defendant in the defense.
Since then, Brazilian courts have slowly been changing an old understanding, that used to accept jurisdiction in Brazil and disregard the foreign jurisdiction clause established in Bills of Lading.
Nowadays, it is a standard understanding of the Brazilian courts, in all levels, to recognize the validity of the foreign jurisdiction clause in a bill of lading and dismiss a claim in Brazil.
This position acknowledges the autonomy of the contracting parties and a reputable judge in Brazil, who is an expert in maritime matters, normally emphasizes that the Brazilian Government should not babysit the parties that did not negotiate well their contracts or did not gave proper importance to the contractual clauses, meaning that such party cannot later challenge the validity of those clauses at court and seek the protection of the Brazilian judicial system to change what has been agreed.
Such understanding also applies to a subrogated cargo insurer as, in the words of the court Subrogation in the rights of the insured also means adhering to the terms of the contract which should have been observed by the insurer when contracting, given that the exercise of said right is conditioned to the terms agreed on by the insured. (…).”
Needless to say, such position represents a development to help bringing more legal certainty to cargo carriages and contractual relations that have any ties with Brazil.
Lucas Leite Marques, Partner at Kincaid Mendes Vianna Advogados – Brazil. LinkedIn: https://www.linkedin.com/in/lucas-leite-marques-07958512/
Email: lucas@kincaid.com.br
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