Petrobras has won an arbitration that could influence other disputes involving giants such as Vale, Americanas and IRB Brasil. Will this be the beginning of a new legal era for publicly traded companies?
Um legal developments involving Petrobras has been generating tension in the financial market and raising alarms among other giants of the Brazilian stock exchange.
The arbitration decision unfavorable to minority shareholders could change the way large companies deal with similar disputes.
After all, what is at stake is not just the oil company case, but a possible new rule of conduct for corporate disputes.
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In practice, the result signals an important precedent, albeit informal, for arbitrations involving companies such as Vale, Americanas and IRB Brasil.
The backdrop to this dispute is the search for compensation by minority shareholders who claim financial losses resulting from misinformation or management scandals.
what is at stake?
The controversy revolves around a lawsuit filed by foreign funds that have a minority stake in Petrobras.
They asked for financial compensation for the drop in share value during Operation Lava Jato.
The argument was that the company failed to inform the market about internal irregularities, harming investors.
However, the Market Arbitration Chamber (CAM) ruled against the shareholders, stating that Petrobras, as a victim of the unlawful acts, cannot be held liable for indirect damages to the shareholders.
According to newspaper Valor Econômico, the arbitrators assessed that the payment of compensation would imply additional damage to the company's assets, creating a “circularity” problem.
This is because the payment of such amounts would fall on current shareholders, further penalizing the company and its market.
Furthermore, sources close to the case reported that some funds increased their positions in Petrobras shortly after the devaluation, indicating that they sought to take advantage of the adverse situation.
Implications for other companies
Although arbitrations do not create formal precedents as in ordinary courts, the CAM's decision may influence other ongoing cases.
Companies such as Vale, Americanas, IRB Brasil and BRF face similar situations, with shareholders asking for financial compensation related to episodes of share devaluation.
At Americanas, for example, minority shareholders opened arbitration after accounting fraud was revealed two years ago.
At IRB Brasil, the process is motivated by false statements that mega-investor Warren Buffett had invested in the company.
In the case of BRF, the Carne Fraca operation was the trigger for the fall in share value, while Vale faces repercussions from the Brumadinho tragedy.
According to experts interviewed by Valor Econômico, the ruling against minority shareholders in the Petrobras arbitration could act as a “brake on tidying up”, discouraging similar demands and generating greater legal certainty for companies.
What does the law say?
The legal basis for the decision is in the Corporations Law (Law 6.404/76), which determines that actions for compensation for losses suffered must be brought by the company itself against its administrators or controllers, and not by shareholders directly against the company.
As Celso Xavier, a lawyer specializing in corporate litigation, explained to Valor Econômico: “It is up to the company to seek direct compensation for its assets, but the shareholder can never seek compensation from the company itself.
This system is endorsed by the Judiciary and, apparently, is now followed by arbitration courts.”
According to Xavier, allowing shareholders to seek compensation for indirect damages would make the Brazilian capital market more unpredictable and susceptible to insecurities.
This argument weighed in on the Arbitration Chamber’s decision.
Impact on Petrobras and the market
Petrobras is currently facing four other similar arbitrations. In one of them, the case was dismissed due to the lack of legitimacy of the association representing the minority shareholders.
The state-owned company reinforced in a note that will vigorously defend its interests in all arbitration instances.
Furthermore, the oil company highlighted that the arbitrations are protected by confidentiality clauses, limiting the disclosure of details about the processes.
However, the statement stressed that “relevant facts will be timely reported to the market”.
This stance reflects the scenario of companies listed on B3's Novo Mercado, where arbitration is mandatory to resolve corporate disputes.
According to Valor Econômico, this requirement, although confidential, is seen as a tool to strengthen corporate governance and protect the interests of all shareholders.
A warning for the future
With the decision favorable to Petrobras, others publicly traded companies can breathe a sigh of relief, at least temporarily.
The understanding that minority shareholders cannot ask for direct compensation from the company could stabilize a legal scenario that, until now, seemed uncertain.
However, the issue may still generate debates in the legal field and bring new interpretations in the future.
What do you think of this decision? Will it really bring more stability to the market or could it discourage harmed shareholders from seeking justice? Leave your opinion in the comments!
This case-by-case decision only increases the conviction that Brazil is a country that does not provide guarantees of institutional stability, nor legal security for foreign investment in good faith. In order to foster our development, we will have to rely on investments of dubious origin. One of the implications of this is that we are becoming a pariah state that lives outside the law. This is very bad!!! Advice to parents who would like an ethical, decent and prosperous country for their children: “Make your children fluent in English and a second language (Spanish, French or German) and provide them with good professional training.” There will be no shortage of opportunities in serious countries!!!
In my opinion
In a publicly traded company, anyone who has shares is an anonymous partner and is part of the company. They would be suing themselves.
This action seems to me to be something typical of some speculators, without any commitment to the companies, but acting only as partners focused on individual profits.
They create a volatile, unpredictable mass, subject to rumors, within the company, destabilizing its decision-making and management direction.
Foreign investments are always welcome, but in the noble form of their meaning.
This decision must be widely used in matters of medical, police or service provider errors, with the victim not being able to take legal action expecting compensation from the hospital, state or construction company owner, and all responsibility falling on the bad employee who works more than he should, without adequate tools, legal legality, etc.
I thought it was fair, God bless Brazil and may it bring more investors with the heart of Christ, totally self-sacrificing…