CHANGES TO THE CHOICE OF FORUM WITH THE APPROVAL OF PL 1.803/2023

I. Objective of Bill 1.803/2023

Last week, the Senate approved Bill 1.803 of 2023 (“PL 1.803/20”), which amends the wording of article 63 of the Code of Civil Procedure (“CPC”).

II. Main changes introduced

Currently, art. 63 of the CPC allows the parties to freely choose the forum, as long as it is provided for in a written contract (§1).

With the approval of Bill 1.803/2023, the possibility of the parties choosing a forum will be restricted, requiring the chosen forum to be relevant to the domicile or residence of one of the parties, or to the place of performance of the obligation.

According to the rapporteur of Bill 1.803/2023, Senator Eduardo Gomes (PL-TO), this legislative change is intended to prevent the parties from choosing a body of the Judiciary that is supposedly more favorable to their demand, or that offers advantages, such as speed in processing.

III. Expected Impacts

Bill 1.803/20 establishes that if a lawsuit is filed in disagreement with the parameters defined above (binding to the place of domicile of the parties or the execution of the contract), this will be considered an abusive practice. In this case, the judge may, on his or her own initiative, transfer jurisdiction to another court.

IV. Next steps

With the approval of Bill 1.803/2023 by the Senate, the text was sent for presidential sanction. If sanctioned, the new rules will come into force with the publication of the text.

The enactment of Bill 1.803/2023 could have major repercussions for business contracts, as it limits the freedom to choose a neutral or more effective forum for resolving disputes.

The lawyers in the Litigation and Arbitration team are available to answer any questions you may have on the subject.