sábado, 2 de fevereiro de 2013

Provisional seizure of assets in Brazil - Arbitration or litigation?

How can a foreign company seize assets belonging to a Brazilian debtor? The exchange of messages below may give you some hints. 


Dear 雄鹰, 

(Note: 雄鹰 [Xióng yīng] is my Chinese name, given to me by my teacher)

I am writing to send my appreciation to your valuable articles about in the Brazilian Law Blog.

Here is a quick question to see if you may offer an opinion. Recently my company ("Fist of the Dragon co.”) is considering to sign a Settlement Agreement to resolve a debt dispute with our customer in Brazil.

Since we still concern that the customer will breach the Settlement Agreement not to pay back the money, we are willing to apply to provisional seizure (that is, we ask the court to freeze the customer’s asset to secure our loan) in the beginning of the legal proceeding.

Base on the provisional seizure strategy, I may need your opinion to tell if a jurisdiction clause in the Settlement Agreement to have arbitration in the arbitration institute or litigation in the court can satisfy said strategy? 

It is highly appreciated if you may offer valuable opinion, and I am looking forward to your reply.


Bruce Lee


Dear  Mr. Lee, 

Thank you very much for your message. It is a great pleasure to know my writings are having a positive impact. 

Unfortunately, I do not see your strategy with good eyes.

The provisional seizure of money does not work that way in Brazil. Before any provisional seizure can be granted by the court, you must first show an executive title (such as a promissory note or check). Then the other party will have time to respond, and only after that the judge might grant seizure. 

If possible, I would ask for a bank guarantee for the settlement. 

It a bank guarantee is not possible, then I believe you should adopt a choice of jurisdiction clause, not an arbitration clause. The jurisdiction should be the city where the Brazilian Company has its main place of business.  (I’m going against my usual advice here, for I usually suggest arbitration. But your case is special)

Please note that, since I haven't had access to the case, this email cannot be considered as a legal opinion. 

I would be glad to help you in this matter. Please tell me how can I help you with this agreement. 

Also, may I post this message in my blog, without mentioning your name?

Warm regards, 


Dear Adler,

Thanks a lot for your prompt reply with valuable opinion. Your efficiency gives me good impression. And yes, you may post my question to your blog without mentioned my name and the company's nationality. 


Once again, I appreciate for your opinion.


Bruce Lee

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