(English) The Validity of Obligations stipulated in Foreign Currency

[:en]The Validity of Obligations stipulated in Foreign Currency

Laura de Almeida Machado – Lawyer at Chenut Oliveira Santiago Sociedade de Advogados.

A literal analysis of Brazilian legislation shows the existence of the prohibition of any kind of contractual obligations stipulated in foreign currency, as provided in Article 1 of Decree No. 23.501/33, reinforced by article 1 of Decree-Law No. 857/69 and maintained by Articles 1 of Law No.10.192/01 and Article 318 of the Brazilian Civil Code.

This prohibition is justified as a protection, valuation and defense of the national currency, and as a public policy rule, it should not be disregarded in private agreements under penalty of nullity.
However, the forbiddance in stipulating obligations in a foreign currency is not absolute and some exceptions exists, as found in the Article 2 of Decree No.857/69:

“Article 2: the provisions of the preceding article are not applied to:
I – contracts and securities relating to import or export markets,
II –funding agreements or collaterals related to export markets of domestically manufactured goods sold on credit abroad,
III – exchange, purchase and sale contracts in general,

IV – loans and any other obligations in which the creditor or debtor is a person resident and domiciled abroad, except for lease contracts of real estate located within the national territory,
V – contracts in which the purpose is the assignment, transfer, delegation, assumption or modification of the obligations referred to in the previous item , even if both contracting parties are resident or domiciled in the country .
§: The lease contracts of movable property in which payment is provided for in foreign currency are subject to a prior registration in the Central Bank of Brazil in order to confirm its validity.” (Own translation)

At this point, it is necessary to observe that in the cases provided for in the abovementioned article the amount to be paid must be converted into national currency on the date of payment.

In this scenario, doubt arises regarding the validity of any stipulation in foreign currency for obligations not covered in the abovementioned article, thus leading to questionings often taken to Brazilian courts.

With globalization and the consequential increase of international influence in Brazil, one can argue that there was a relativisation of the aforementioned articles by the national law, including the Supreme Court of Justice , that considers contracts in foreign currency valid, provided the payment be in national currency.

In this line of thought, the stipulation in foreign currency is legally possible and valid considering that after the due conversion, the payment is effected in national currency, so that the total sum due corresponds to a certain amount in foreign currency in which there is no type of restriction or refusal to the mandatory use of Brazilian currency.

Moreover, the fact of the legal transaction being considered void for having been entered into foreign currency could generate unjust enrichment for one of the parties. It would be perfectly possible a situation in which one of the parties takes advantage of the obligation and, subsequently, claims its nullity in an attempt to be relived from the payment of the consideration due.

Thus, the case law has reiterated in the sense to not withdraw liquidity, certainty and enforceability of the debt-claim by the reason that the payment is being stipulated in foreign currency, in which the conversion of the value stated is made in national currency for the calculation of the quantum due through simple preparation of arithmetic calculation is sufficient. In other words, the obligations are valid as long as the collection is made in the Brazilians currency: Real (R$).

Regarding use of foreign rates for calculation of interest due, we may observe that, since use of foreign currency as a parameter for the stipulation of the obligation is possible, at first glance, there would be no obstacle for the use of these rates for the calculation of interest, which should occur in accordance to the exact contract terms.

However, it is important to note that, except for contracts with financial institutions, the Brazilian jurisprudence considers that interest rates above 12 % (twelve percent) per year are abusive, and accordingly, in case foreign rates exceed this percentage, there will be a risk of reduction of the rate fixed in contract.

Therefore, we can conclude that today’s jurisprudence considers the obligations agreed upon in foreign currency valid, provided there is a conversion of values to the national currency on the payment date as well as the effective payment in Real. One should pay special attention to the update rates used, since, although the use of foreign rates is legally possible, there is the risk of such rates being regarded as abusive.

Article 1 Any provision for payment in gold or in a certain kind of currency or by any means tending to deny or restrict, in its effects, the legal tender of thousand reais in paper shall be deemed null and void. (own translation)
Article 1 Contracts, securities and any documents as well as the enforceable obligations in Brazil, which stipulate payment in gold, foreign currency, or in any way restrict or refuse, in its effects, the legal tender of the cruzeiro shall be deemed null and void . (own translation)
Article 1 The provisions of payment of monetary obligations enforceable in the national territory shall be made in real, at its nominal value.
Single paragraph. , Under penalty of nullity, any stipulations in the following cases are forbidden:
I – payment expressed in, or bound to gold or foreign currency, except as provided in arts. 2 and 3 of Decree-Law No 857 of 11 September 1969, and the latter part of article. 6 of Law No 8880 of 27 May 1994;
II – adjustment or restatement expressed in, or in connection with monetary unit of calculation of any kind;
III – restatement or adjustment for rates of general, sectoral or prices which reflect the variation of production costs or inputs used, except as provided in the following article. (own translation)
Article 318. Conventions for payment in gold or foreign currency, as well as to compensate the difference between the its value and the national currency shall be deemed null and void, except as specified in special legislation. (own translation)
In this regard the following case law:
– STJ: REsp 804791 / MG – RECURSO ESPECIAL- 2005/0209775-0 – Relator(a) Ministra NANCY ANDRIGHI (1118) – Órgão Julgador T3 – TERCEIRA TURMA – Data do Julgamento: 03/09/2009 – Data da Publicação/Fonte – DJe 25/09/2009
– STJ: REsp 900680 / SP – RECURSO ESPECIAL 2006/0245791-4 – Relator(a) Ministro FERNANDO GONÇALVES (1107) – Órgão Julgador T4 – QUARTA TURMA – Data do Julgamento: 01/04/2008 – Data da Publicação/Fonte: DJe 14/04/2008
In this regard the following case law:
-TJSP – 9121750-40.2005.8.26.0000 Apelação – Relator(a): Paulo Roberto de Santana – Comarca: São Paulo – Órgão julgador: 23ª Câmara de Direito Privado – Data do julgamento: 29/08/2012 – Data de registro: 30/08/2012 – Outros números: 7048635400.
– TJSP – APL 9182714282007826 SP 9182714-28.2007.8.26.0000 – Relator(a): Araldo Telles – Julgamento: 18/01/2011 – Órgão Julgador: 15ª Câmara de Direito Privado – Publicação: 31/01/2011.
– STJ – RESP N° 209.295 – PB 1999/0028310-4 – Relator: Ministro Barros Monteiro – Julgamento: 07/05/2002.
– TJSP – Relator(a): Teresa Ramos Marques – 0085021-66.2008.8.26.0000 Agravo Regimental – Comarca: São Paulo – Órgão julgador: 10ª Câmara de Direito Público – Data do julgamento: 13/08/2012 – Data de registro: 15/08/2012 – Outros números: 8502166200882600005000.
– TJSP – 0001072-51.2002.8.26.0002 Apelação – Relator(a): Ricardo Negrão – Comarca: São Paulo – Órgão julgador: 19ª Câmara de Direito Privado – Data do julgamento: 06/08/2012 – Data de registro: 14/08/2012 – Outros números: 10725120028260002.
– STJ – 3ª T., REsp 402071, rel. Min. Carlos Alberto Menezes Direito, j. 29.11.02
– STJ – REsp 804.791/MG, Rel. Ministra NANCY ANDRIGHI, TERCEIRA TURMA, julgado em 03/09/2009, DJe 25/09/2009.
– STJ – AgRg no Ag 612.405/MG, Rel. Ministro JORGE SCARTEZZINI, QUARTA TURMA, julgado em 16/06/2005, DJ 22/08/2005, p. 287.
– STJ – REsp 598342 / MT – RECURSO ESPECIAL – 2003/0180271-4 – Ministro ALDIR PASSARINHO JUNIOR (1110) – T4 – QUARTA TURMA – Data do Julgamento: 18/02/2010 – Data da Publicação: DJe 15/03/2010.[:]