On June 5, 2024, Law No. 14,879/2024 was published in the Official Gazette of the Federal Government, amending Article 63 of Law No. 13,105/2015 (“Code of Civil Procedure”) to establish restrictions on the contracting of a forum selection clause responsible for resolving any disputes arising from a given legal transaction (“Law No. 14,879”).
In this regard, Law No. 14,879 amended the provisions of Article 63, §1, of the Code of Civil Procedure to stipulate that forum selection will only be effective when it is contained in a written instrument, expressly refers to a specific legal transaction and is relevant to the domicile or residence of one of the parties or the location of the obligation, with consumer agreements being an exception when favorable to the consumer.
Furthermore, Article 63, §5, of the Code of Civil Procedure, included by Law No. 14,879, stipulates that the filing of a lawsuit in a random court, understood as one that is not linked to the domicile or residence of the parties or to the legal transaction in question, constitutes an abusive practice justifying the declination of jurisdiction ex officio.
The new wording of §1 of Article 63 of the Code of Civil Procedure is not clear regarding the definition of the “location of the obligation,” which can be interpreted as authorization for the selection of the forum of the constitution and/or execution of the legal transaction. Nor is it clear what constitutes the required linkage “with the legal transaction in question” to justify filing a lawsuit in a particular forum, as required by §5 of Article 63 of the Code of Civil Procedure, as amended by Law No. 14,879.
In the Justification Instrument, attached to Bill No. 1,803/2023 (“Bill No. 1,803”), which originated the aforementioned Law No. 14,879, the following grounds were highlighted to justify the changes proposed by the said bill:
(i) although the Code of Civil Procedure authorizes forum selection, such choice cannot be arbitrary, under penalty of violating the principle of objective good faith, a general clause that guides the entire legal system;
(ii) although the rule is freedom of contract, the exercise of private autonomy has limits in the public interest;
(iii) thus, limiting the choice of forum aims to avoid harm to the society of a given territorial area due to the overburdening of courts that have no relevance to the dispute, considering that the planning and structuring of the Judiciary takes into account the population and local peculiarities; and
(iv) the requirement of relevance to the domicile of the parties or the location of the obligation aims to prevent the forum selection clause from serving as an instrument for the free choice of courts that perform better in the country, to the detriment of the jurisdiction in which they operate.
On May 8, 2024, the Constitution, Justice and Citizenship Committee (“CCJ”) issued Opinion (SF) No. 28/2024 (“Opinion”), approving Bill No. 1,803.
In the said Opinion, the CCJ noted that Bill No. 1,803 aims to curb the practice of “forum shopping” in the national territory, that is, the choice to file a particular lawsuit in a forum supposedly more favorable to the argument in question or offering greater advantages to the parties, such as faster or slower procedural progress, depending on the interests involved.
Law No. 14,879 came into effect on the date of its publication and does not provide for transitional law rules, so its provisions apply immediately to ongoing cases, as determined by Article 14 of the Code of Civil Procedure.
More information, as well as the full text of Law No. 14,879/2024, can be found on the Presidency of the Republic’s website (www.gov.br/planalto/pt-br).
