Brazil’s Supreme Court has ruled that funds from the Mariana disaster settlement cannot be used to pay foreign law firm fees. This ruling, issued by Justice Flávio Dino, stipulates that municipalities must exclusively utilize these funds for municipal assets. Municipalities have until Thursday to join the agreement or face concurrent legal actions, with 17 out of 49 eligible municipalities already participating.
On Tuesday, September 5, Supreme Court Justice Flávio Dino issued a ruling prohibiting the use of funds designated under the renegotiated Mariana disaster settlement for the payment of legal fees or expenses associated with law firms abroad. This ruling comes in the wake of the tragic dam collapse in Minas Gerais in November 2015, which resulted in 19 fatalities and significant environmental repercussions for Brazil.
The ruling clarifies that financial assets disbursed to municipalities as part of the settlement are strictly for municipal use, with no allowance for fees or charges to be deducted unless specifically authorized within the agreement. This decision was made in relation to the Constitutional Violation Claim (ADPF) 1178, initiated by the Brazilian Mining Institute (IBRAM).
The case scrutinizes the municipalities’ engagements in foreign litigation and mandates that municipalities opting to join the settlement must relinquish any concurrent legal actions. The Supreme Court’s approval of this agreement was granted at the conclusion of the previous year, inviting municipalities to participate.
Municipalities now have a deadline until this Thursday to join the settlement, which offers R$170 billion in compensation and reparations. Of this amount, R$132 billion consists of newly generated funds. Out of the 49 municipalities eligible for compensation, 17 have already confirmed their participation, and those that choose to accept the settlement are required to withdraw from other ongoing lawsuits.
The ruling by Supreme Court Justice Flávio Dino emphasizes the exclusive allocation of Mariana disaster settlement funds to municipal assets, prohibiting their usage for legal fees or international law firm expenses. Municipalities must decide on participation by the impending deadline, with a significant portion already confirming their involvement in the R$170 billion compensation package, necessitating the withdrawal from any other legal suits.
Original Source: valorinternational.globo.com
