Advances in the enforcement of precautionary measures in the Mercosur

In December 1994 in Ouro Preto, Argentina, Brazil, Paraguay and Uruguay subscribed to a Protocol of Precautionary Measures (the "Protocol"). This provides that judicial measures ordered by the judicial authorities of any of those countries will be valid in the other signatory countries. Where there is not a similar agreement entered into between two or more countries, a rogatory letter has to be issued for a judicial decision to be enforced in another country, which is then considered by several administrative authorities in each of the involved countries before being finally accepted and enforced.

According to the Protocol, precautionary measures may be requested in ordinary, executory, special or extraordinary proceedings, whether of a civil, commercial or labor nature, and in criminal proceedings, regarding civil compensation. Precautionary measures requested in connection with alimony pendente lite, localization and restitution of minors and those requested by persons who have obtained the benefit of litigating at no cost in the requiring country have been expressly excluded. The admissibility of the precautionary measure and its corresponding bond or guarantee must be resolved by the judicial authorities of competent jurisdiction of the required country, which can refuse to enforce it when the precautionary measure is manifestly against public order.

Recently, Brazilian courts have implemented the Protocol for the first time and issued a temporary restraining order in connection with the assets of an Argentine entrepreneur who had resided and done business in Brazil.

The assets subject to the restraining order issued by the Brazilian judicial authorities are those necessary to cancel the fiscal debt generated in Brazil, which may not be sold or encumbered until the Brazilian taxes owed have been canceled. The decision was issued by the 2nd District of Fiscal Executions of Rio de Janeiro against the assets of the entrepreneur Bernardo Carlos Weinert, director-president of the company Transportadora Coral S.A., operating in Brazil. The company was irregularly liquidated and several existing fiscal debts were not duly canceled. The judge of relevant jurisdiction understood that the director of the company was responsible for the irregular winding-up and, therefore, for the fiscal debt. The action for enforcement was brought by the Brazilian Federal Union upon verifying that the entrepreneur had returned to Argentina, where he owned a well-known winery.

In order to immediately enforce the order in Argentine territory, the Brazilian judge decided to apply the Protocol.

There are already complaints by Argentine citizens who use the Protocol to collect debts in Brazil. But for a long period, the Brazilian Supreme Court did not accept them because the Protocol had not yet been incorporated to the Brazilian legal system, which was done by means of Presidential Decree No. 2,626 of 1998, that recognizes the validity of the instrument. In Argentina the Protocol was ratified by Law No. 24,579 of 1995.

The Protocol of Precautionary Measures is an integral part of the Asuncion Treaty, and therefore accession of a country to the Treaty implies accession, as a matter of law, to the Protocol. The use of the Protocol may undoubtedly constitute a great practical advance in the use of a more expeditious legal instrument than those currently prevailing in the Mercosur.