Rafael Salomão Romano on the Lago Agrio Case in Brazil

It’s a pleasure to introduce a guest post by Letters Blogatory’s correspondent in Brazil, Rafael Salomão Romano. Rafael is a student at the Pontifical Catholic University of Rio de Janeiro. I previously noted a paper he wrote with his professor, Daniela Trejos Vargas, and others on the enforcement of American letters rogatory in Brazil.

I asked Rafael to fill us in a little on the procedure we should expect to see play out in Brazil now that the Lago Agrio plaintiffs have sought recognition of their judgment there and on the defenses available to Chevron. You should of course read Rafael’s post in full, but here is a summary of the main points of interest:

  • The action is one for recognition only, not enforcement. If the Brazilian court determines that the judgment is entitled to recognition, the plaintiffs will have to bring a second action to enforce it.
  • The Montevideo Convention has apparently never been applied by the Brazilian courts, and it is unlikely to play much of a role in the case, because Brazilian law’s requirements for recognition and enforcement of a judgment are substantially similar to the Convention’s requirements.
  • According to Rafael, one live issue is the Brazilian courts’ willingness or unwillingness to recognize the punitive portion of the judgment. He says that a puntive damage award—if the Ecuadorian judgment is construed as punitive—may violate Brazil’s ordre public.
  • Another live issue is similar to an issue we saw in Antonin’s post on the Canadian case: the possibility that the Lago Agrio plaintiffs have to succeed on a reverse veil-piercing theory to get at Chevron’s assets in Brazil, and the uncertainty about that theory under Brazilian law.
  • It seems clear from Rafael’s summary of the law that the court will not be receptive to a claim of intrinsic fraud, which was for the Ecuadoran courts to address. Extrinisic fraud is likely to be considered under the heading of ordre public.

Thanks to Rafael for his useful summary!

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