I COMMERCIAL OVERVIEW OF THE SHIPPING INDUSTRY

In 2019, Brazilian ports handled a total of 1.104 billion tonnes of cargo, which represents a 31.5 per cent increase over the course of the past nine years. The public port: private port ratio has remained at 1:2.

The shipping industry in Brazil has historically been very focused on port support and offshore support, rather than cabotage and marine navigation. Thus, the industry suffered greatly from the crisis in the oil and gas sector and the problems with Petrobrás. However, since the end of the second half of 2017 and early 2018, the industry has shown signs of improvement.

The growth potential of maritime transport in Brazil is vast, since the country has continental dimensions and has an additional 8,500km of coast and 21,000km of economically navigable waterways. Also, 80 per cent of the Brazilian population lives 200km from the coast and most of the industry is concentrated near the sea.

Cabotage and waterway shipping are the most logical modes of transport for Brazil, not only because of the dormant capacity in these areas, but also because of the increasing cost of road freight. In recent years, there has been a steady increase in the use of these respective modes of transport.

In 2019, there was a 14.5 per cent increase in cabotage of containerised cargo over that in 2018. This has grown 185 per cent since 2010, with the following annual increases: 3.92 per cent in 2018, 12 per cent in 2017, 2.48 per cent in 2016, 7.6 per cent in 2015, 5.54 per cent in 2014, 26.92 per cent in 2013, 27.44 per cent in 2012 and 8.45 per cent in 2011.

A Ministry of Transport study indicates that cabotage and waterway shipping is expected to reach 29 per cent of the Brazilian logistics matrix in 2025, from less than 12 per cent in the early 2010s, while road transport will reduce its share of participation to 33 per cent.

The Brazilian government aims to perform 205 interventions and projects on navigable waterways at a total cost of 15.8 billion reais by 2025. Also, multiple concessions have been made and are to be made. In February 2019, the Brazilian government signed contracts for the concession of terminals in the Port of Açu, in the state of Rio de Janeiro, and in the Port of Santarém, in the state of Pará, and 23 other concession auctions are to be realised, many of them in ports of the Northern Arch.

The Northern Arch is a denomination that encompasses northern states of Brazil, which are better located, nearer to the foreign markets and with great potential, the exploration of which has just begun. According to the Annual Bulletin of Transport Statistics issued by the Ministry of Infrastructure, the Northern Arch handled 31.9 per cent of the 113.8 million tonnes of corn and soy exported in 2019, which is a 491 per cent increase since 2010.

The boom is continuing amid improvements in the road, railroad and waterway shipping infrastructure in the states of the Northern Arch, which will make it even more attractive for producers in the central-west region of Brazil to opt for the Northern Arch as the route for exporting goods.

An incentive programme to be launched soon, nicknamed 'Federal Road of the Sea', will make it easier and cheaper to acquire vessels specifically for cabotage and will open cabotage to foreign vessels, with certain restrictions.

In terms of the waterway shipping infrastructure, improvements have been under discussion for some time. Since 2015, the government has been encouraging the construction of pushers and dredgers for the domestic transportation of corn and soybeans.

In 2016, the Brazilian Merchant Marine Fund (FMM) made available a credit of 3.45 billion reais for the building of 119 new vessels. Private companies used 68 per cent of this resource to construct pushers and dredgers, resulting in 81 new vessels.

In 2018, the FMM made available additional credit of 5 billion reais, the majority of which has also been used for the construction of pushers and dredgers.

Logistics is one of the major challenges for grain producers in Mato Grosso, given the distance to the main exportation ports in Brazil. Therefore, the alternative route via the north region, through the River Tapajós and the River Madeira, appears as a viable solution.

In 2017, the movement of cargo transported in waterways increased by 22 per cent, indicating a marked improvement in the logistics process for Brazilian commodities. This also demonstrates a change from the dependence on the Brazilian road transport system to an increase in waterway shipping for the transportation of Brazilian commodities.

II GENERAL OVERVIEW OF THE LEGISLATIVE FRAMEWORK

The Brazilian shipping industry is regulated by several scattered laws, creating a very complex regulatory spectrum. The lack of consolidation of maritime legislation results in a difficult harmonisation between laws. This has come about because of laws being published at different times under different regimes of government, dating from the time of Brazilian Empire.

The Brazilian Commercial Code, which currently regulates maritime trade, maritime contracts, maritime lien, general average and maritime insurance dates back to 1850, when Brazil was still an Empire. The Civil Code of 2002 revoked much of the Commercial Code. However, the chapters regulating maritime transport are still in force.

In addition to the Commercial Code, there are still several laws (ordinary laws and decrees), as well as international treaties and conventions in force. Among the main specific legislation on maritime transport are Law No. 9,432, Decree Law No. 116, the Civil Code of 2002 and the Law of Multimodal Transport (Law No. 9,611/1998).

Brazil has a regulatory framework in the shipping and port sector, with emphasis on the creation of a federal regulatory body, which introduced standards that are complemented by the provisions of the Brazilian Navy, forming a legal framework for the regulation of the shipping and port sector.

The regulations outlined by the Brazilian Navy relate to safety of navigation, safeguarding human life at sea and preventing sea pollution, as provided by Law No. 9,537/1997, Decree No. 2,596/1998 and Law No. 2,180/1954.

In this context, the Brazilian Navy Authority, by means of the Ports and Coasts Directory (DPC), issues Maritime Authority Norms (NORMAM).

All safety rules set by the Brazilian Navy Authority must be observed by Brazilian vessels and their crew or non-crew, even when in foreign waters (observing local regulations). In addition, foreign vessels operating under Brazilian jurisdiction waters shall comply with such rules. Otherwise, Law No. 2,180/1954 regulates the activities and jurisdiction of the Admiralty Court, which is the administrative body responsible for ruling on accidents and navigation incidents, in identifying the parties responsible and applying penalties.

The National Waterway Transportation Agency (ANTAQ), created by Law No. 10,233/2014 operates under the various modalities of maritime navigation, public ports, private terminals and the transportation of special and dangerous cargoes.

However, ANTAQ regulations must comply with the rules set by Brazilian Navy Authority regarding, inter alia, the safety of waterway navigation and the safeguarding of human life at sea.

One of the main statutes in terms of regulation of shipping activity in Brazil is Law No. 9,432/1997, which regulates waterway transportation, as provided in Article 178 of the Federal Constitution, and allows the opening of the national market to foreign vessels in coastal, inland, maritime and port support navigation. However, foreign vessels must be chartered by a Brazilian shipping company (BSC), which must be incorporated in Brazil and authorised by ANTAQ to operate in the shipping sector.

Therefore, foreign companies are not allowed to operate in Brazil in the above-mentioned types of navigation. However, ocean navigation is open to foreign shipping companies and foreign vessels, except for those transporting restricted cargo under Decree 666 or those exporting oil and its by-products.

Brazilian legislation gives preference to Brazilian-flagged vessels operating in Brazilian jurisdictional waters. However, it is possible for a BSC to charter a foreign vessel, but it is necessary to prove the inexistence or unavailability of a Brazilian vessel in the circumstances. In such situations, it is necessary to request authorisation from ANTAQ through a circularisation procedure, which is a consultation of the market on the availability of Brazilian-flagged vessels.

According to national legislation, a vessel may only fly the Brazilian flag if it is owned or chartered by a BSC. In the case of bareboat charter of a forewing vessel, it is necessary to request the suspension of the registration flag and register the vessel with the Brazilian Special Registry (REB). However, it is necessary to prove that the BSC has tonnage in construction in a shipyard in Brazil or an already existing Brazilian vessel. If these requirements are fulfilled, prior consultation of the national market is not necessary.

The Brazilian Labour Ministry also issued a regulation regarding the operation of foreign vessels in Brazil. Normative Instruction 72 demands that a certain proportion of the crew must be Brazilian citizens. The proportion will depend on the amount of time the foreign vessel remains in Brazil and on its activity.

In relation to maritime labour, Brazil has not yet ratified the Maritime Labour Convention 2006 (MLC); the legal framework is currently NORMAM 13-2013, Normative Resolutions (NRs) Nos. 30 and 72 and International Labour Organization (ILO) Merchant Shipping (Minimum Standards) Convention, 1976 (No. 147).

Some of the main conventions ratified by Brazil are:

  1. the International Convention for the Unification of Certain Rules relating to Civil Jurisdiction in Matters of Collision 1952 (the Collision Convention);
  2. the International Convention for the Unification of Certain Rules relating to the Limitation of Liability of Owners of Sea-going Ships 1924 (Brussels);
  3. the International Convention on Maritime Liens and Mortgages 1993 (the Maritime Liens and Mortgages Convention);
  4. the International Convention for the Prevention of Pollution from Ships 1973 (as modified by the Protocol of 1978) (MARPOL (73/78)); and
  5. the International Convention on Salvage 1989 (the 1989 Salvage Convention).

III FORUM AND JURISDICTION

i Courts

The Brazilian Code of Civil Procedure lays down the jurisdiction of the state courts to resolve disputes between private entities, while the Brazilian federal courts only judge cases related to maritime law when there is involvement with a federal entity or a Navy ship.

The Brazilian courts shall have jurisdiction to hear cases when one of the following requirements is fulfilled, pursuant to Articles 21 and 22 of the Code of Civil Procedure:

  1. the defendant, whatever his or her nationality, is domiciled in Brazil;
  2. the obligation is to be performed in Brazil;
  3. the fact occurred or the act was performed in Brazil;
  4. consumer transaction casess if the consumer is domiciled or residing in Brazil; and
  5. if the parties, expressly or implicitly, submit to the Brazilian jurisdiction.

The Brazilian judicial system is organised on different levels. At the first instance, a single judge decides the claims. Subsequently, the courts of appeal act as second instance courts, where a group of judges will rule on the appeal. Judgments rendered by the second instance courts may be subject to subsequent appeal to the Superior Court of Justice (STJ) or the Supreme Federal Court (STF).

In addition to the judicial system, navigational facts and accidents are subject to administrative proceedings, since it is mandatory for the local Navy Authority to carry out an inquiry to determine the causes of incidents.

The inquiry is then sent to the Admiralty Court for review and judgment. The Admiralty Court is an administrative court (rather than a judicial one) subordinated to the Ministry of Defence, and has jurisdiction to issue penalties to the liable crew members or companies.

The Admiralty Court has no jurisdiction over liability and damages awards between private entities.

ii Arbitration and ADR

According to the International Chamber of Commerce rankings in 2017, Brazil was ranked fourth in the world in terms of number of parties involved in arbitration, behind the United States, Germany and France. The report states that 'the increase of parties from Brazil reported in 2016 was further confirmed in 2017, with a rise of the number of cases involving Brazilian parties from 36 in 2016 to 51 in 2017'.

In Brazil, Law No. 9,307/1996 regulates arbitration proceedings. Arbitration is very widespread in Brazil because of three essential points that guarantee the legal security of the institute:

  1. recognition of the negative effect of the arbitration clause, which results in the termination of the proceeding without judgment of merit, if the claim is brought to the judicial branch;
  2. recognition that the award is an executive title (i.e., not dependent on homologation by the judiciary system); and
  3. the possibility of submitting the other party to arbitration through execution.

In 2015, several changes were made to the Brazilian ADR system. The Arbitration Law has undergone several changes with the advent of Law No. 13,105/2015 (the Code of Civil Procedure), which allows the use of arbitration clauses in contracts signed between public and port authorities, as well as regulating matters related to emergency measures, among others. Law No. 13,140/2015 regulates mediation between private entities, laying down that the award must be homologated by the judiciary.

Additionally, the Code of Civil Procedure has stimulated the use of ADR (conciliation and mediation) methods to resolve conflict, to reduce the number of claims in Brazilian courts. Thus, the general rule is that before presenting the defence, the party must be summoned to a prior conciliation or mediation hearing, where the parties will be informed of the risks of proceeding with judicial measures. At the hearing, qualified professionals, or the magistrate him or herself, will try to guide the parties to an amicable settlement of the claim.

iii Enforcement of foreign judgments and arbitral awards

As a rule, for a decision rendered by the judiciary of another country to be enforced in Brazil, it is necessary to undergo a process of recognition or ratification of the judgment with the STJ.

Generally, any interested party can request the homologation of a foreign decision through a foreign decision homologation action. However, there are some bilateral international treaties that exempt the filing of such action.

According to Provision 963 of the Code of Civil Procedure, for a foreign decision to be homologated, it is necessary that:

  1. it has been issued abroad by a competent authority;
  2. the parties have been summoned or were legally absent;
  3. it must be effective in the country in which it was issued; and
  4. it is accompanied by an official translation, unless otherwise provided for in the treaty.

In addition, to be homologated, the foreign judgment must be a final judgment from the country of origin. The STJ will not approve a foreign judgment award contrary to public order, national sovereignty or the dignity of the human person.

The STJ will not verify the merits of the case to grant the exequatur. Therefore, when the requirements are present, the arbitral award or judgment will be approved, and then sent to the federal court that detains jurisdiction over the domicile of the debtor, to proceed with the constriction of assets.

IV SHIPPING CONTRACTS

i Shipbuilding

Under the terms of Laws Nos. 2,180/1954 and 7,652/1988, shipbuilding contracts must be registered with the Maritime Registry and before the Admiralty Court, to allow the transfer of ownership of the vessel from the shipyard to the acquiring company.

The transfer of ownership of the vessel with the Admiralty Court is essential for it to have effects regarding third parties. The registration must be carried out within 15 days of the transfer of ownership, and may be the date of delivery of the vessel by the shipyard or other translative moment of the property.

To encourage the use of the Brazilian flag, the Brazilian government allows vessels built in shipyards in Brazil to join the Brazilian Special Regime, benefiting from some tax benefits; among these, the possibility of contracting insurance (H&M and P&I) abroad, the possibility of tax exemption for the construction, conservation, modernisation or repair of the vessel, and exclusion of freight revenues from contributions of the various tax programmes (including the Programme of Social Integration tax and the Contribution for Social Security Financing tax).

In terms of tax exemption, all operations in the shipyard, including the supply of parts, are considered as an export operation, and therefore benefit from the same tax exemptions.

ii Contracts of carriage

Brazil has a protectionist legislation with regard to maritime transport contracts. Thus, the country is not a signatory to the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924 (the Hague Rules), the Protocol to amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading 1968 (the Hague-Visby Rules), the UN Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules) or the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2009 (the Rotterdam Rules).

The bill of lading has been recognised as a contract of adhesion by the Brazilian courts. Thus, clauses that have not been freely agreed between the parties are invalid. In situations such as these, the judiciary has the power to annul a jurisdiction clause and other clauses that limit or establish exclusion of carrier liability.

Under Brazilian law, the carrier has an obligation of result, which commences with the cargo loading and only ceases with the delivery to the holder of the original bill of lading, under the same conditions in which it was received.

In the event of a cargo claim, the carrier may be held liable even without any fault. Thus, according to legal doctrine and jurisprudence, the carrier has strict liability. Therefore, the carrier has the burden to prove any exclusion of liability, only succeeding in dismissing its liability when it proves the victim's exclusive fault, exclusive fact of a third party, a fortuitous event, force majeure or an inherent fault in terms of the goods or the packing thereof.

iii Cargo claims

In addition to the comments made in Section IV.ii, pursuant to the law, in the event of any losses or damages during carriage, both the cargo owner and the insurer will have title to file a claim against the carrier. However, the insurer will have to be subrogated to the cargo owner's rights.

Pursuant to Decree 116/1967 of the STF, the time bar is one year for cargo claims in the shipping industry. Likewise, the deadline is one year for multimodal transportation, according to Law No. 9,611.

However, as established in the Civil Code, the consignee only retains action against the carrier if a protest was duly lodged within 10 days of delivery, stating the damage that occurred.

iv Limitation of liability

Brazil has a protectionist legislation with regard to carriage of goods by sea. Thus, the country is not a signatory to the Hague, Hague-Visby, Hamburg or Rotterdam rules.

Likewise, Brazil has not yet ratified the Convention on Limitation of Liability for Maritime Claims 1976 (the LLMC Convention 1976). However, Brazil has ratified the International Convention for the Unification of Certain Rules Relating to the Limitation of the Liability of Owners of Sea-Going Vessels 1924, despite the jurisprudence not accepting its application.

The jurisprudence is not peaceful on the subject of limitation of liability of the maritime carrier. As a rule, in cases of extrajudicial liability, the rules of full liability are applied. However, in cases of contractual liability, there are several judgments that apply the Brazilian Civil Code provision that liability is limited to the value of the cargo, as stated in the bill of lading.

Otherwise, the discussion of limitation of liability is generally considered invalid on adhesion contracts, when such clauses are not freely negotiated by the parties.

In the meantime, there are some judgments that consider it possible to limit liability when there is no great discrepancy between the value of the damage and the indemnity limit. However, the parties must have equality in the relationship (economic and technical), and the clauses must have been freely negotiated between the parties, not contract in the form of adhesion.

V Remedies

i Ship arrest

Arrest is a cautionary measure to enable a future action of the principal claim. Thus, for the magistrate to analyse the arrest request, it is necessary for the Brazilian court to have jurisdiction to trial the main action. Brazilian jurisdiction will be present on the hypotheses foreseen in Section III.

Brazil has not yet ratified any of the Arrest Conventions, which makes it difficult to file arrest warrants to secure a principal suit filed in another jurisdiction. However, there are some judicial decisions in compliance with this practice, especially when it comes to preliminary measures prior to arbitration proceedings in another jurisdiction.

The legislation currently regulating ship arrest and maritime liens is the Commercial Code, the Brussels Convention for the Unification of the Maritime Privileged Credit Rules and the Civil Procedure Code.

The presence of the following basic legal requirements is necessary to file an arrest:

  1. the claimant must prove the prima facie evidence of debt or maritime lien; and
  2. periculum in mora, that without the arrest, the claimant may be in risk of suffering serious and irreparable damage or it will be difficult to enforce if a guarantee is not obtained through the arrest.

The Brazilian Civil Procedure Code states that the court may impose, at its discretion, a counter-security. Furthermore, if a claim is lodged by a foreign plaintiff, the court may request a security for the court costs and legal fees incurred by the defendant lawyer, corresponding to 10 to 20 per cent of the total claimed amount.

A letter of credit issued by a first-line bank headquartered in Brazil may be offered instead of a monetary deposit.

On this matter, Brazil has only ratified and signed the International Convention for the Unification of Certain Rules Relating to Maritime Liens and Mortgages 1926. However, the Brazilian Commercial Code lays down, in Articles 470 and 471, some privileged credits, which, under Brazilian law, are binding as maritime liens, following the vessel, notwithstanding any change of ownership or flag. Among others, the following credits are considered to have in rem effects in relation to a ship, making it possible for the arrest to be required irrespective of the debtor:

  1. taxes due to the State;
  2. salaries or payments due for services rendered aboard ship or for the benefit of the ship;
  3. expenses incurred in relation to the ship's costs and maintenance;
  4. expenses with depositaries, as well as storage costs relating to the ship's instruments;
  5. shortages on delivery of cargo and damage thereto;
  6. debts deriving from the contracts for construction and purchase of the ship;
  7. debts deriving from costs incurred in the repair of the ship and its installations and equipment;
  8. salvage indemnity claims;
  9. obligations assumed by the master while exercising the powers conferred upon him or her by law;
  10. claims for general average;
  11. claims for marine accidents;
  12. credits secured by marine mortgage; and
  13. state or private port operators' credits.

ii Court orders for sale of a vessel

Brazilian civil procedure rules authorise the sale of the vessel in a public auction when there is a pendente lite and the shipowner does not present a guarantee and is not conserving the asset (vessel). Therefore, to protect the interest of the plaintiff and to protect the environment of any oil pollution or other hazard, the court can perform a public auction to sell the vessel.

The judicial sale of the vessel follows the same general rules of real estate assets. Once the sale is duly performed, the judge will release an order of sale and the buyer will be able to register the vessel with the Admiralty Court, free from any impediment or debt.

The Brazilian Commercial Code provides that the legal sale of the vessel extinguishes any existing maritime credit or lien existing up to the date of the auction.

VI Regulation

i Safety

The Brazilian Navy Authority issues regulations regarding the safety of navigation, safeguarding human life at sea and the prevention of water pollution, the most notable of these being Law No. 9,537/1997, Decree No. 2,596/1998 and NORMAM 7.

All safety matters established by the Brazilian Navy Authority must be complied with by foreign and Brazilian vessels and their crew or non-crew, even when in foreign waters (observing local regulations). In this context, the Brazilian Navy Authority, issues NORMAMs (see Section II). Brazil has also ratified several international conventions on the subject (see Sections VI.iv and VI.v).

ii Port state control

Foreign-flagged vessels will be subject to port state control (PSC), in accordance with the international conventions ratified by the country and with the Maritime Authority Regulations for Operation of Foreign Vessels in Brazilian Jurisdictional Waters (NORMAM-04/DPC). PSC is performed by qualified and accredited marine inspectors, in accordance with NORMAM 04. In addition to the regulations concerning PSC, Brazil is a member of the Latin American Agreement on Port State Control of Vessels 1992 (the Viña del Mar MOU).

iii Registration and classification

The registration of vessels above 100 twenty-foot equivalent units is carried out by the Admiralty Court. Registration of lower-tonnage vessels is carried out by the Navy Authority. Law No. 7,652/1988 regulates the registration of maritime property.

The Admiralty Court is also responsible for registering encumbrances and mortgages on vessels with the REB, and deals with second registration of vessels, by suspending the registration flag and providing benefits to shipowners.

Under NORMAM 06, the DPC accredits classification companies to act on behalf of the Brazilian government in the regulation, control and certification of vessels.

In addition to duly appointed representatives of the Navy Authority, only specialised entities formally recognised through a recognition agreement may perform, on behalf of the Maritime Authority, audits, inspections, surveys and issuances of certificates and other documents provided for in international conventions and codes to which the country is a signatory or in the applicable national law, except in specific situations.

The recognition to act on behalf of the Navy Authority will be related to the performance of tests, measurements, calculations, surveys, inspections and audits in shipping companies, vessels and maritime structures, including their associated systems, equipment and facilities and issuance, renewal or endorsement certificates, reports, licences or any other relevant document provided for in international conventions and codes and other applicable national standards.

As a general rule, classifying companies have no liability on the vessels they have certified. Similarly, there is no form of regulation on liability to third parties. However, in a proven case of negligence or impropriety, it is possible that the judiciary will hold them accountable for liability.

iv Environmental regulation

The Brazilian legal framework on the environment incorporates several international marine pollution conventions, such as MARPOL (73/78), the International Convention on Civil Liability for Oil Pollution Damage 1969, replaced by 1992 Protocol (the CLC Convention) and the International Convention on Oil Pollution Preparedness, Response and Co-operation 1990 (the OPRC Convention). Otherwise, Brazil has extensive legislation on the subject, in addition to having a supervisory body in all the federative spheres. Thus, the environmental framework is quite complex, mainly due to the fact that the overlap of competence between environmental agencies is rarely verified.

The most relevant legislation in terms of the environmental framework are the following:

  1. the Brazilian Constitution of 1988, which assures the protection of the environment and establishes criminal and administrative liability in the event of pollution, in addition to the obligation to repair damage caused; and
  2. Complementary Law No. 140, which regulates the Brazilian Constitution regarding jurisdiction, power and cooperation between the Union, the states, the federal district and the municipalities in the administrative actions arising from:
    • Law No. 6,938/1981 (the National Environmental Policy);
    • Law No. 9,605/1998 (the Environmental Crime Law); and
    • Law No. 9,966/2000 (the Oil Law).

v Collisions, salvage and wrecks

Brazil has ratified several international conventions, including the International Regulations for Preventing Collisions at Sea 1972 (COLREGs), the Convention on Facilitation of International Maritime Traffic 1965 (the FAL Convention), the United Nations Convention on the Law of the Sea 1982 (UNCLOS), the Agreement to implement UNCLOS, the International Convention on Maritime Search and Rescue 1979 (the Search and Rescue Convention 1979), MARPOL (73/78) and the 1989 Salvage Convention.

In Brazil, all vessels are obliged to provide assistance and rescue for vessels in dangerous situations. The legislation in force in Brazil on the subject is Law No. 7,542, Decree No. 8.814 and NORMAM 10. If no provision is made otherwise between the parties, no compensation is due if the salvage operations do not obtain a beneficial result.

However, if the rescuer has carried out a salvage operation and prevented environmental damage but has not received a reward, the rescuer shall be entitled to special compensation to be paid by the owner of the ship, equivalent to his or her expenses.

The Navy Authority is responsible for authorising the removal of wrecks. However, it may have interventions and follow-up by environmental agencies.

vi Passengers' rights

In Brazil, the applicable regulations are the Civil Code, the Consumer Code and Law No. 11,771 (in relation to cruise ships).

The relationship between carrier and passenger is considered a consumer relationship, and, therefore, quite protectionist, and must comply with consumer legislation. Carriers shall ensure the safety and well-being of passengers during the entire journey.

vii Seafarers' rights

Brazil has not yet ratified the MLC. However, it has ratified several ILO conventions, among them Nos. 22, 92, 108, 134 and 185. The Brazilian judiciary understands that it is competent to adjudicate labour cases regarding foreign crew members when the vessel is abandoned in Brazilian jurisdictional waters or when the vessel is operating in Brazilian jurisdiction waters.

VII OUTLOOK

At the end of 2017, ANTAQ published NR 18/2017, which deals with the rights and duties of users, intermediary agents and companies operating in offshore support, port support, cabotage and ocean transport.

The Resolution also establishes administrative infractions to the actors involved in the shipping industry. The new rules will serve to balance the conflicting interests and punish practices of some service providers in the sector. The Resolution is a true regulatory framework for the industry.

A bill for the New Commercial Code, which will update Brazilian maritime legislation, is being processed at the National Congress. Much of the legislation currently in use dates back to the 1850 Commercial Code.

The Bill provides for changes relating to maritime transport contracts, limitation of liability, charter agreements and other matters pertaining to shipping. The legislative amendment will be fundamental for updating the existing framework, including by the incorporation of several proceedings and rules established in as yet unratified conventions. The legal project has been in progress since 2011, and it is necessary to wait for the entire legal process to be completed so that, if approved, it may become law.

Finally, the Code of Civil Procedure was amended in 2016 to provide for several simplifications in the judicial process, with the aim of reducing the number of claims in the judiciary system through the use of ADR methods.


Footnotes

1 Larry John Rabb Carvalho and Jeová Costa Lima Neto are senior partners at Promare | Rabb Carvalho Advogados Associados.