Brazil’s Supreme Court Prohibits Use of Mariana Settlement Funds for Legal Fees
Supreme Court Justice Flávio Dino ruled that funds from the Mariana disaster settlement cannot be used for foreign legal fees. This decision impacts municipalities’ obligations under the settlement agreement and clarifies conditions for participation. Municipalities must join by a deadline and withdraw any ongoing lawsuits in order to receive the allocated compensation.
On Tuesday, Supreme Court Justice Flávio Dino ruled that funds designated for municipalities under the Mariana disaster settlement may not be utilized for legal fees, charges, or expenses related to foreign law firms. The catastrophic dam collapse in Minas Gerais in November 2015 led to 19 fatalities and significant environmental damage in Brazil.
Justice Dino emphasized that any funds obtained by municipalities from the agreement “belong exclusively and entirely to municipal assets, without the imposition of fees, deductions, charges, legal expenses, etc., except for those expressly provided for or authorized in the agreement.” This ruling is part of Constitutional Violation Claim (ADPF) 1178, brought forth by the Brazilian Mining Institute (IBRAM).
The case assesses the obligations of municipalities involved in foreign litigation and clarifies their responsibilities upon joining the settlement formed with the federal government and various parties, including Samarco, BHP, and Vale. The Supreme Court previously approved this settlement at the end of last year.
Municipalities have until this Thursday to finalize their participation in the settlement, which allocates R$170 billion for compensation and reparations, with R$132 billion representing newly added funds. Out of 49 eligible municipalities, 17 have confirmed their participation. Those that choose to participate must also agree to withdraw any other extant lawsuits.
The ruling by Supreme Court Justice Flávio Dino ensures that Mariana disaster settlement funds are exclusively for municipal use, prohibiting their allocation for legal expenses. This decision clarifies the conditions for municipalities joining the settlement regarding their ongoing legal actions. With significant funds available, municipalities are urged to evaluate their participation by the specified deadline.
Original Source: valorinternational.globo.com
