When the then Vale do Rio Doce Company was privatized in 1997, opponents of the sale filed 69 popular actions questioning the process and requesting the reversal of the auction.
Since then, life went on: Vale changed its name and became a highly profitable company, with its market value jumping from R$ 3.3 billion to over R$ 260 billion.
But only now, 27 years later, is the judicial saga finally coming to an end—a (rare) piece of good news for the legal certainty of the country, but also the most dramatic illustration of the maddening slowness of the Judiciary.
At the end of August, the First Panel of the Superior Court of Justice decided to put an end to all processes, determining the obvious: privatization can no longer be reversed.
The popular actions were filed in different regions of Brazil by a myriad of agents: from left-wing politicians to Vale employees, from union members to independent lawyers.
However, the STJ determined that all actions should be judged by only one judge, since they dealt with the same subject.
In the first instance, at the 4th Court of Belém, Pará, the decision was quick. All actions were extinguished by applying the ‘theory of accomplished fact.’
This legal theory is used when the reversal of a process is almost impossible, since it has already become concrete and produced effects, making any harmful alteration to society.
At the appellate level, however, everything changed.
The 1st Region Federal Court annulled the judgement in 67 actions, but maintained the first instance decision for two cases. (The reason for the different judgments? No one understood).
In the 67 actions whose decision was annulled, the 1st Region Federal Court determined that a forensic analysis should be conducted to assess whether there was an undervaluation of Vale in the privatization process— which could have consequences for the consortium responsible for the valuation, composed of Rothschild, JP Morgan, Merrill Lynch, KPMG, Engevix, and Bradesco.
“At this moment, there was a discussion at Vale to try a ‘shot’ that would put an end to the process once and for all,” Vicente Coelho Araújo, the Pinheiro Neto partner defending the consortium, told the Brazil Journal.
Vale is represented by Siqueira Castro Advogados.
“Vale filed a constitutional complaint at the STJ, in which we entered as assistants, stating that when the ‘conflict of competence’ was judged back then, it was defined that all actions should have the same results. That is, it made no sense for one to be judged in one way and another differently.”
The lawyers also argued that one of the two actions on which the 1st Region Federal Court had confirmed the first instance decision had already become final, since the plaintiff — lawyer Mario Davi Prado — did not file an appeal.
“Our argument was that since all actions should be judged together and one of them had already become final, the same decision should be applied to all others,” said Vicente.
In a trial that lasted over a year, four ministers of the STJ’s First Panel voted in favor of accepting the complaint, four voted against, and one vote was undecided. Minister José Delgado voted to apply the same decision, but only to the 27 actions that had initially been the subject of the ‘conflict of competence’ — which ended up being the final decision.
(Of the 69 actions, 27 were filed in 1997, when the ‘conflict of competence’ decision was made, and the rest the following year, remaining outside the initial decision).
Subsequently, Vale filed a petition with the STF, which was also not accepted.
After all this back and forth, it was already 2018— 21 years after privatization.
At this point, the trial of the 68 actions that had not yet become final resumed its normal course, and Vale, the Union, and the valuation consortium filed clarifications of facts with the 1st Region Federal Court— which, once again, were not accepted.
The next attempt was to file a special appeal with the STJ.
“We had to file appeals for each of the 68 processes, running the risk of different judges issuing different decisions,” said Vicente. “It was when Minister Mauro Campbell saw the extent of the problem and tried to organize the mess.”
Campbell gathered all actions in his office and — using a new procedural institute, called the Incident of Assumption of Competence (IAC) — managed to judge all processes together.
The trial was postponed twice, but finally took place in August, with the STJ’s Second Panel finally putting an end to the story, and unanimously deciding that since one of the actions had finalized, the decision needed to be applied to all others.
Some of the authors of the actions still filed clarifications of this decision— including Mauro Davi Prado— but the chance of a change now is low, as the clarifications will be judged by the same Ministers who issued the decision.
Vicente says that the outcome is positive for the country, as it represents legal certainty.
But even the stones of Carajás know that the Brazilian Judiciary could be infinitely faster.
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
