On Tuesday, the Brazilian Supreme Court ruled that funds from the Mariana disaster settlement cannot be used for legal fees for foreign law firms. This ruling clarifies that such funds belong entirely to municipal assets. Municipalities have a deadline to participate in the settlement, which includes R$170 billion in compensation.
Brazil’s Supreme Court, led by Justice Flávio Dino, has ruled that funds from the renegotiated Mariana disaster settlement cannot be utilized for legal fees or charges associated with foreign law firms. This decision follows the catastrophic dam collapse in Minas Gerais in November 2015, which tragically resulted in 19 fatalities and a significant environmental crisis for the nation.
The ruling emphasizes that funds received by municipalities participating in the settlement are strictly to be treated as municipal assets, free from any fees, deductions, or legal expenses unless explicitly authorized by the agreement. This decision stems from Constitutional Violation Claim (ADPF) 1178, submitted by the Brazilian Mining Institute (IBRAM).
This case addresses the obligations of municipalities involved in foreign legal actions and necessitates clarity on whether they must abandon ongoing lawsuits upon accepting the settlement, which was sanctioned by the Supreme Court at the end of the previous year. The settlement package includes R$170 billion in compensation, of which R$132 billion consists of new funds.
Municipalities have a deadline until this Thursday to participate in the settlement, with 17 of the 49 eligible municipalities already having confirmed their involvement. Municipalities opting to join the agreement are required to withdraw from any other concurrent legal actions.
The Supreme Court’s ruling explicitly protects municipal funds from being diverted to legal expenses related to foreign litigation. This clarification is crucial for municipalities engaging in the Mariana disaster settlement, emphasizing the exclusive nature of the allocated funds. As such, the decision facilitates a clearer path for municipalities wishing to receive substantial reparations while stipulating a necessary commitment to discontinue other legal pursuits.
Original Source: valorinternational.globo.com
