On May 15, 2019, the Special Court of the Superior Court of Justice ("STJ") resumed and concluded the judgment of the divergence appeal in Special Appeal No. 1,281,594/SP in order to clarify the statute of limitations period for claims for damages arising from contractual breaches. At the end of the trial, the Special Court decided by a majority decision that the exercise of compensation claims arising from contractual bonds must comply with the general rule set forth in article 205 of the Brazilian Civil Code— therefore, within a 10-year statute of limitations period.

The decision, which is pending issuance by Justice Felix Fischer, promises to abolish the long-standing divergence on the limitations period in cases involving contractual compensation: if it is three or 10 years.

The controversy derives from the deficient wording of article 206, paragraph 3, V, of the Civil Code, which establishes a period of three years for "the compensation claim for civil damages" without, however, clarifying whether its normative authority would be restricted to non-contractual liability or whether it would also apply in cases related to contractual liability.

Since 2006, the STJ has identified conflicting precedents about the extent and scope of this provision set forth in the Civil Code, which can be dissociated into three major temporal periods:

  • The commencement of the dissent: The STJ's first court decision on the subject was rendered by the Third Panel on June 1, 2008, which decided that the limitation period for contractual liability was three years .1 Later in 2008, the matter was submitted to the Second Section, the responsible body for unifying the understanding of all Panels that rule matters concerning private law, which had applied the general rule of 10 years.2 In 2009, the Fifth Panel diverged from this understanding and recognized a limitations period of three years for contractual compensatory claims.3
  • Settlement of the understanding: Between 2009 and the first half of 2016, the Superior Court of Justice rendered 22 court decisions on the subject, of which 20 recognized the applicability of the 10-year limitation term,4 and in the two cases in which the three-year term prevailed, there was no preliminary allegation regarding the statute of limitation, which prevented the ruling on the merits of both appeals.5
  • Recent dissent: On November 28, 2016, the Third Panel determined the implementation of the three-year term when the panel recognized the statutory period for claims for damages arising from a contractual termination.6 Against the referred case law, the interested party filed a divergence appeal, submitting the matter to the Special Court.

In 2018, when EREsp n° 1,281,594/SP was still pending judgment by the Special Court, the Second Section re-examined the matter and fixed the position that the claim for civil damages must observe the 10-year limitation term.7 When discussing the issue, the Second Section reached the following conclusions:

  • Literal interpretation: There is no correlation between contractual liability and the term "civil compensation"  since there is no mention of this term in the Civil Code referring to the hypotheses of contractual default, only to cases of non-contractual civil liability (e.g., article 932);
  • Systematic interpretation: The creditor must be subject to the same period of 10 years to exercise the three claims arising from an eventual contractual default, including compensation for damages, under penalty of having one limitation period in order to demand the compliance of the claim and another to seek for the payment of losses and damages due to the same default.
  • Non-discriminatory interpretation: The difference of the legal treatment between non-contractual and contractual liability is justified insofar as (i) the contractual liability assumes a prior and close relationship between the parties, which gives rise to a favorable occasion that can enable dispute settlements, and (ii) the institutes aim to protect distinct legal interests: non-contractual liability is associated with absolute rights and erga omnes duty to abstain from performing damages, while in the contractual scope, the autonomy of the parties prevails and all obligations are strictly agreed by means of transactions.

In this sense, the decision rendered by the Special Court on May 15, 2019—which granted the appeal under discussion to overturn the Third Panel’s understanding which, in 2016, had adopted the three-year term—seems to have confirmed the precedent of the Second Section to finally consolidate the understanding of the Upper Court regarding article 206, paragraph 3, V, of the Civil Code. Therefore, with the exception of cases where there is a different and specific limitation period, such as the collection of net debt resulting from a public or private instrument, all claims arising from contractual default must be subject to the 10-year term.

If you need further information about the decision of the STJ’s Special Court, please contact our Civil Litigation and Arbitration team.

1 STJ, REsp 822.914/RS, reporting Justice Humberto Gomes de Barros, 3rd Panel, ruled on 06.01.08.

2 STJ, REsp 1.033.241/RS, reporting Justice Aldir Passarinho Júnior, 2nd Panel, j. 01.22.08.

3 STJ, AgRg in the AG 1.085.156/RJ, reporting Justice Arnaldo Esteves Lima, 5th Panel, j. 03.03.09.

4 REsp 616.069/MA, reporting Justice João Otávio de Noronha, 4th Panel, j. 02.26.08; REsp 1.121.243/PR, reporting Justice Aldir Passarinho Júnior, 4th Panel, j. 08.25.09, REsp 1.222.423/SP, reporting Justice, 4th Panel, j. 09.15. 11, REsp 1.276.311/RS, reporting Justice Luis Felipe Salomão, 4th Panel, j. 09.20.11, REsp 1.150.711/MG, reporting Justice Luis Felipe Salomão, 4th Panel, 12.06.11, Ag no REsp 1.057.248/PR, reporting Justice Sidnei Beneti, 3rd Panel, j. 04.26.11 e Ag no AREsp 14.637/RS, reporting Justice Maria Isabel Gallotti, 4th Panel, j. 09.27.11. AgRg no Ag 1.401.863/PR, reporting Justice Antonio Carlos Ferreira, 4th Panel., j. 11.12.13; AgRg no AREsp 426.951/PR, reporting Justice Luis Felipe Salomão, 4th Panel, j. 12.03.13; REsp 1.326.445/PR, reporting Justice Nancy Andrighi, 3rd Panel, j. 02.04.14; REsp 1.159.317/SP, reporting Justice Ricardo Villas Bôas Cueva. 3rd Panel, j. 03.11.14; AgRg no AREsp 477.387/DF, reporting Justice Raul Araújo, 4th Panel, j. 10.21.14; EDcl no AgRg no REsp 1.436.833/RS, reporting Justice Sidnei Beneti, assigned reporting Justice Paulo de Tarso Sanseverino, 3rd Panel, j. 12.02.14; AgRg no REsp 1.485.344/SP, reporting Justice Marco Aurelio Bellizze. 3rd Panel, j. 02.05.15; AgRg no REsp 1.516.891/RS, reporting Justice Humberto Martins, 2nd Panel, j. 04.28.15; AgRg no Ag 1.327.784/ES, reporting Justice Maria Isabel Gallotti. 4th Panel, j. 08.27.13; AgRg no REsp 1.317.745/SP, reporting Justice Paulo de Tarso Sanseverino. 3rd Panel, j. 05.06.14; and AgRg no REsp 1.411.828/RJ, reporting Justice Nancy Andrighi, 3rd Panel, j. 08.07.14; AgRg no AREsp n° 783.719/SP, reporting Justice Maria Isabel Gallotti, 4th Panel, j. 03.10.16; and AgInt no REsp n° 1.112.357/SP, reporting Justice Sérgio Kukina, 1st Panel, j. 06.14.16.

5 REsp 1.346.289/PR, reporting Justice Sidnei Beneti, 3rd Panel, j. 12.11.12; and AgRg no AREsp. 54.771/PR, reporting Justice Antonio Carlos Ferreira, 4th Panel, j. 03.05.15.

6 REsp n° 1.281.594/SP, reporting Justice Marco Aurélio Bellizze, 3rd Panel, j. 11.28.16

7 EREsp n° 1.280.825/RJ, reporting Justice Nancy Andrighi, 2nd Panel, j. 06.27.18.