The Bill (PL) No. 1,179/2020 seeks exceptional regulation by establishing the Emergency and Transitional Legal Regime for private law relationships (RJET) during the state of calamity, creating a period of exceptionality for the interpretation and application of several existing laws, aiming to preserve public health, economic, and financial stability in the face of the COVID-19 crisis.

The main subject addressed is the suspension of various deadlines between the effective date of the Law and October 30, 2020, including: (i) general deadlines for expiration and prescription, with specific exceptions; (ii) deadlines for consumer withdrawal in delivery cases; (iii) deadlines for adverse possession, among others.

However, other topics are also addressed in the Bill, involving consumer, competition, corporate, contractual, condominium, family, and succession issues. The team of experts at Oliveira Souza Advogados highlights some points of interest, especially in relation to Business Law:

Extension of legal deadlines for holding meetings and for the disclosure or filing of financial statements by those engaged in business activities, in the field of Corporate Law.

The Bill also provides for the possibility of declaring dividends and other earnings during the 2020 fiscal year by the Board of Directors or, if it does not exist, by the Management, regardless of statutory or contractual provisions.

Non-retroactivity of legal effects in contract enforcement during the pandemic period, regarding contractual matters provided for in the Brazilian Civil Code. However, damages and contractual default (among other provisions) that occurred prior to the declaration of the state of calamity on March 20, 2020, cannot be avoided on this basis.

Another relevant point is that any increase in inflation, exchange rate fluctuations, devaluation, or substitution of the monetary standard during the period established in the debated Bill cannot be solely considered as unforeseeable events warranting contract resolution due to excessive onerousness.

Suspension of the effectiveness of provisions related to infractions resulting from (i) supply of products/services below cost price and (ii) partial or total cessation of company activities in the competition sphere.

Finally, the Bill suspends the classification of associative contracts, consortia, and joint ventures as Concentration Acts. However, it will be possible to subsequently analyze the actual need for such agreements to combat or mitigate the effects of the pandemic, aiming to identify any abuses of rights that may incur appropriate sanctions.

As it is a Bill, many debates have taken place, and 89 Amendments have been presented, which have been duly analyzed, considering the urgency of the matters at hand.

Bill No. 1,179/2020, authored by Senator Antônio Anastasia (PSDB/MG), had its final text approved by the Senate Plenary on Friday, April 3, 2020, and is now heading for a vote in the Chamber of Deputies. If approved without changes, it will be sent for Presidential sanction.

We will continue to monitor this Bill – and other similar measures – in order to mitigate the deleterious effects of the pandemic on the national and international business and social landscape.

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