By Cesar Augusto Taborda Lima
Choose the governing law and the forum together, with the end of a dispute in mind: where the other party’s assets are and where a decision would be enforced. In arbitration, Brazilian law expressly lets the parties choose the applicable law, and the award travels under the New York Convention. Before Brazilian courts, the statutory rule is still the law of the place where the obligation was constituted, although the STJ, Brazil’s Superior Court of Justice, has upheld the parties’ choice; and a foreign forum clause displaces Brazilian courts only if the defendant invokes it in time.
Art. 9. To qualify and govern obligations, the law of the country in which they are constituted shall apply.
(…)
§ 2. An obligation arising from a contract is deemed to be constituted in the place where the offeror resides.
Decree-Law 4,657/1942 (LINDB, the Law of Introduction to the Norms of Brazilian Law), art. 9, caput and § 2 (free translation).
Choice of law before a Brazilian court
For contracts, the test points to the country where the offeror resides: if a foreign supplier e-mails an offer and a Brazilian company accepts it, the starting point is the law of the supplier’s country.
The provision says nothing about choice by the parties, and that silence has a history. The Introductory Law to the 1916 Civil Code applied the law of the place of contracting “unless otherwise stipulated” (art. 13); the 1942 statute dropped those words. Some scholars have since read the omission as rejecting party autonomy; others maintain that choice remains possible. In 2016 the STJ’s Third Panel, by a majority, applied New York law chosen in an international contract, including its limitation period, stating that “in international contracts, the choice of applicable law is admitted” (REsp 1.280.218/MG, free translation). It is a panel decision, not binding precedent.
The chosen law has limits: it has no effect in Brazil if it offends national sovereignty, public policy or good morals (LINDB, art. 17), and the party relying on it may have to prove its text and validity (LINDB, art. 14; Code of Civil Procedure, art. 376). Brazil has not ratified the 1994 Inter-American Convention on the Law Applicable to International Contracts, which recognizes party choice.
Sale of goods and the Vienna Convention
The UN Convention on Contracts for the International Sale of Goods (CISG) has been in force for Brazil since 1 April 2014 (Decree 8,327/2014). It applies, among other cases, to sales between parties whose places of business are in different Contracting States (art. 1), such as the United States, China, Germany and Argentina, and the parties may exclude it or vary its effects (art. 6). Parties preferring another regime should exclude it expressly: a bare reference to Brazilian law invites argument, because the CISG is part of Brazilian law.
Arbitration: express freedom and an award that travels
Brazil’s Arbitration Act (Law 9,307/1996) lets the parties freely choose the applicable rules of law, subject to good morals and public policy, and even opt for usages and customs and the rules of international trade (art. 2, §§ 1 and 2). The parties also set the procedure (art. 21), language included.
The seat determines the nationality of the award. An award made outside Brazil is foreign (art. 34, sole paragraph) and must be recognized by the STJ (art. 35), which may refuse only on the grounds the statute lists (arts. 38 and 39); Brazil applies the New York Convention (Decree 4,311/2002). An award made in Brazil has the effects of a court judgment and, if it orders performance, is directly enforceable (art. 31). Urgent relief before the arbitration begins may be sought in court, but it lapses unless the arbitration is requested within 30 days (art. 22-A).
The forum: when Brazilian courts hear a case and when they step aside
Under the Code of Civil Procedure (CPC, Law 13,105/2015), Brazilian courts have jurisdiction when the defendant is domiciled in Brazil, when the obligation is to be performed there, or when the claim arises from facts or acts that occurred there (art. 21); a foreign company with an agency, branch or establishment in Brazil counts as domiciled there. Claims over real property in Brazil belong exclusively to Brazilian courts (art. 23), and proceedings abroad do not stop a Brazilian court from hearing the same case (art. 24).
An exclusive foreign forum clause in an international contract displaces Brazilian jurisdiction (art. 25), but only if the defendant raises it in its answer. It cannot reach matters of exclusive jurisdiction and is subject to art. 63, §§ 1 to 4: it must be in writing, refer to a specific transaction, and may be declared ineffective if abusive. Since Law 14,879/2024, art. 63, § 1 also requires the chosen forum to be connected to the domicile or residence of a party or to the place of the obligation. Because art. 25 refers to that paragraph, on the letter of the law the requirement reaches foreign forum clauses too; parties choosing a neutral forum should expect that argument.
Consumers and employees have their own protective rules. Brazilian courts hear consumer claims when the consumer is domiciled or resident in Brazil (CPC, art. 22, II), and in a decision reported in July 2025 the STJ held that a foreign forum clause imposed on a consumer in a standard-form contract may be void where it hinders access to justice (REsp 2.210.341). Employees transferred to work abroad are entitled to Brazilian labor protection law where more favorable (Law 7,064/1982, art. 3, II).
Enforcement: the decision has to reach the assets
Unless a statute or treaty provides otherwise, a foreign judgment has effect in Brazil only after recognition by the STJ (Constitution, art. 105, I, i; CPC, art. 961), which checks requirements such as proper service and respect for public policy (CPC, art. 963); enforcement then proceeds in the federal courts (art. 965). Conversely, a Brazilian judgment against a party with assets only abroad depends on the law of the country where those assets sit; Brazil is not a party to the 2005 Hague Choice of Court Convention or the 2019 Hague Judgments Convention (HCCH status table). Arbitral awards, by contrast, rely on the New York Convention, in force across most of the world.
As I see it, the safest choice starts from a map of the assets. If the foreign company holds significant assets in Brazil, Brazilian courts or a Brazil-seated arbitration shorten the road; if the assets are abroad, an arbitration seated in a New York Convention country tends to produce the decision that travels most easily. Either way, law, forum and language must fit together.