Superior Court of Justice

357 Federal Law 5172/66.< www.planalto.gov.br/ccivil_03/leis/l5172.htm> accessed 06 August 2019.

358 ‘Art. 98.Os tratados e as convenções internacionais revogam ou modificam a legislação tributária interna, e serão observados pela que lhes sobrevenha’. Federal Law 5172/66, Article 98.

<http://www.planalto.gov.br/ccivil_03/leis/l5172.htm> accessed 06 August 2019.

359 See, for example, BRAZIL. Superior Tribunal de Justiça (Superior Court of Justice). REsp 1.161.467-RS. Appellant: Fazenda Nacional (Federal Union). Appellee: Copesul Companhia Petroquímica do Sul. Rapporteur: Justice Castro Meira. Brasilia, 17 May 2012; BRAZIL. Superior Tribunal de Justiça (Superior Court of Justice). REsp 1325709. Appellant: Companhia Vale do Rio Doce. Appellee: Fazenda Nacional (Federal Union). Rapporteur: Justice Napoleão Nunes Maia Filho.

Brasilia, 24 April 2014. <www.stj.jus.br > accessed 07 August 2019.

Human Rights and the Brazilian superior courts.³⁶⁰ Nonetheless, here this thesis explores the Brazil–Tyres case– a limited interaction between Brazil and the WTO so far–to understand its implications for fragmentation, and the approach the Supreme Court used in relation to the WTO ruling. ³⁶¹

In 2005, the European Communities requested WTO consultations with Brazil regarding a series of measures imposing: a) a ban on imports of retreaded tyres; b) fines on activities related to imports of retreaded tyres (such as importation, marketing, transportation, and storage); and c) restrictions on marketing imported retreaded tyres by state laws. It also questioned exemptions from the import ban and fines placed on retreaded tyres originating from MERCOSUR countries, which had been granted in compliance with a ruling from the MERCOSUR Arbitral Tribunal.

After fruitless consultations, the EC requested a Panel, which was established in January 2006. Following the Panel Report’s circulation, in June 2007, the EC appealed to the Appellate Body, who circulated its report in December of that same year. The DSB adopted both reports on December 17, 2007.

Among the main findings of the case, the Panel found the import ban and fines on activities related to the importation to be inconsistent with Article XI:1 of the GATT. Furthermore, it considered those measures to be provisionally justified as ‘necessary’ under the meaning of Article XX (b) of the GATT, but failing to fulfil the requirements of the chapeau of Article XX. Finally, the Panel did not find that the measures could be justified under Article XX (d) of the GATT.

The Appellate Body upheld the Panel’s findings that the measures could not be justified under Article XX of the GATT. However, even though it agreed with the Panel in relation to the provisional justification under Article XX (b), it reversed the Panel’s conclusions regarding Article XX’s chapeau.

The Appellate Body decided that the exemption given to goods originating in MERCOSUR countries amounted to the application of the import ban in a manner that constituted arbitrary or unjustifiable discrimination, and a disguised restriction on international trade, because the exemption for MERCOSUR goods bore no relation to the policy goal invoked by Brazil to justify the ban – the protection of health. By the same token, it also found that several Brazilian court injunctions authorising the importation of used tyres denatured the objectives of the import ban, causing it to be applied in a discriminatory manner as provided by the chapeau. Findings of the Panel under GATT Article XX (d) were not appealed.

In Brazil, after the entry into force of import bans on used tyres, several lower courts had passed injunctions authorizing the importation of those tyres in spite of the bans. These injunctions were generally based on constitutional principles related to freedom of enterprise and full employment. The WTO Appellate Body found, as seen above, that the numerous judicial injunctions authorizing such importation rendered the ban’s application discriminatory in accordance with the chapeau of GATT Article XX. In turn, the Brazilian government had also been concerned with the problems that these injunctions caused to its environmental and

360 See Garibaldi v. Brazil (23 September 2009, Inter-American Court of Human Rights, monitoring compliance pending) and BRAZIL. Superior Tribunal de Justiça (Superior Court of Justice). REsp 1.351.177/PR. Appellant: Ministério Público do Estado do Paraná. Appellee: Morival Favoreto.

Rapporteur: Ministro Sebastião Reis Júnior. Brasilia, 15 March 2016; Gomes Lund v. Brazil or

‘Guerrilha do Araguaia’ (24 November 2010, Inter-American Court of Human Rights, monitoring compliance pending) and ADPF 153/DF (Supreme Court, pending). All cases of the Inter-American Court of Human Rights can be found at <www.corteidh.or.cr/index.php/en>. Superior Court of Justice cases can be found at: <www.stj.jus.br>. Supreme Court cases are available at

<www.stf.jus.br> accessed 06 August 2019.

361 Report of the Appellate Body, Brazil- Retreaded Tyres (2007) WT/DS/332/AB/R adopted 17 December 2007.

public health policies, and had resorted to the Supreme Court to bring a halt to them.

Intending to stop judicial decisions that violated Article 225 of the Brazilian Constitution, the President of Brazil filed a claim of non-compliance with a fundamental constitutional precept before the Supreme Court in September 2006. Several judicial decisions, he contended, contradicted acts from the Department of International Trade Operations and the International Trade Secretariat, resolutions from the National Council for the Environment and federal decrees which prohibited the importation of used tyres, including remoulded or retreaded ones, into the country. He added that these decisions caused great damage to the environment, violating fundamental constitutional precepts guaranteeing the rights to health and to an ecologically balanced environment. In his petition, the President also informed the Supreme Court about the Brazil-Tyres case pending at the WTO, and later on, the corresponding rulings.

Importantly, the Supreme Court was not asked to rule on whether Brazil should comply or not with the WTO DSB’s ruling. Actually, at the time that case was filed before the Brazilian Supreme Court, no WTO ruling existed yet. The Supreme Court was asked to decide on the constitutionality of the body of legislation passed to prevent the importation of used tyres into the country, and on whether judicial decisions authorizing the importation of used tyres violated constitutional precepts guaranteeing protection of the environment and of human health. Later on, during the course of the Brazilian judicial process, the Brazilian government notified the Panel and Appellate Body’s rulings to the Supreme Court. Therefore, at the time of adjudication, the WTO rulings were already known to the Court.

Even though it was aware of the WTO rulings, the Supreme Court made an independent analysis of the facts of the case in light of constitutional law and Brazil’s other international commitments in relation to environmental protection – especially, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, to which Brazil is a party. It did not look at the facts of the case as a matter of international trade relations.

Justice Cármen Lúcia, the rapporteur, explained that the case involved the protection, on one side, of fundamental precepts related to the right to health and to an ecologically balanced environment and, on the other, of sustainable economic development. This, she clarified, could justify the importation of used tyres to be recycled in Brazil inasmuch as they were used as inputs by domestic companies, thus generating direct and indirect jobs.³⁶²

Along these lines, the Supreme Court examined facts and evidence to decide whether importing used tyres into the country really threatened the environment and public health. In other words, it analysed whether that threat justified the prevalence of the Brazilian government’s measures over the need for economic development and job creation – values that lower courts’ judicial decisions preferred.

After a public audience to listen to government officers, experts, amici curiae (including manufacturers of retreaded or remoulded tyres that employed imported used tyres as inputs) and the Chief Prosecutor of Brazil, the Supreme Court concluded that the principles related to the protection of the environment and public health should prevail over the principles of freedom of enterprise and full employment.³⁶³ As mentioned

362 BRAZIL. Supremo Tribunal Federal (Supreme Court). ADPF 101. Petitioner: President of Brazil.

Rapporteur: Justice Cármen Lúcia. Brasilia, 24 June 2009, 41 <

http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=AC&docID=629955 > Accessed 06 August 2019.

363 BRAZIL. Supremo Tribunal Federal (Supreme Court). ADPF 101. Petitioner: President of Brazil.

Rapporteur: Justice Cármen Lúcia. Brasilia, 24 June 2009, 118 <

http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=AC&docID=629955 > Accessed 06 August 2019.

above, the Supreme Court had not been called to pass judgment on the effects of the WTO ruling.

Although there was no conflict between the WTO ruling and the claim made by the Brazilian government to the Supreme Court, a careful reading of the Justices’ opinions reveals that the Court does not feel bound by international courts’ rulings. Thus, whenever confronted with such decisions, the Court will evaluate them through the filter of constitutional law. Moreover, the choice of legal norms to solve this case hints at how the Court approaches rulings of international courts.

First, Justice Cármen Lúcia stated that the WTO ruling invited the national Judiciary, especially this Supreme Court, to examine and adjudicate the matter in relation to the actions, included normative ones, adopted to guarantee the effectiveness of constitutional principles. Special regard must be given to the problem of contradictory judicial decisions (…) in the light of Brazil’s international obligations, but mainly and due to the competence of this Supreme Court, in the light of the constitutional precepts in relation to public health and the protection of an ecologically balanced environment. ³⁶⁴

Although Justice Cármen Lúcia recognized the relevance of the WTO ruling to Brazil and the consequences of non-compliance, she placed a higher weight on the constitutional principles at stake. In a previous passage of her opinion, Justice Cármen Lúcia had affirmed that, depending on the decision reached by the Supreme Court, the WTO could deem the import ban unjustifiable.³⁶⁵ While she acknowledged the international ruling, Justice Cármen Lúcia affirmed the independence of the Supreme Court to make its own analysis of the facts and legal issues involved.

In addition, Justice Marco Aurélio denied admissibility to the government’s claim, but the Court’s majority admitted it.³⁶⁶ Had Marco Aurélio’s been the majority position, there would remain a great chance that lower court injunctions allowing the importation of used tyres would continue, at least for some time.

Second, the Court, as mentioned above, looked at the facts of the case from a constitutional perspective. This involved, on one hand, protecting the environment and the right to health, and on the other, the right to economic development and job creation. When referring to international commitments made by Brazil, despite various mentions of the Tyres ruling and the risks of non-compliance, the Supreme Court gave special consideration to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal. It did not apply WTO law, which is also part of the Brazilian legal system, to the case.

364 BRAZIL. Supremo Tribunal Federal (Supreme Court). ADPF 101. Petitioner: President of Brazil.

Rapporteur: Justice Cármen Lúcia. Brasilia, 24 June 2009, 69-70 <

http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=AC&docID=629955 > Accessed 06 August 2019: ‘Aquela decisão convida o Judiciário nacional, em especial, este Supremo Tribunal, a examinar e julgar a matéria no que concerne às providências, incluídas as normativas, adotadas no sentido de garantir a efetividade dos princípios constitucionais. Enfoque especial há de ser dado à questão das decisões judiciais contraditórias, realce àquelas listadas na peça inicial desta Arguição, mas que têm caráter meramente exemplificativo, à luz das obrigações internacionais do Brasil, mas, principalmente e em razão da competência deste Supremo Tribunal, dos preceitos constitucionais relativos à saúde pública e à proteção do meio ambiente ecologicamente equilibrado’. (emphasis added).

365 BRAZIL. Supremo Tribunal Federal (Supreme Court). ADPF 101. Petitioner: President of Brazil.

Rapporteur: Justice Cármen Lúcia. Brasilia, 24 June 2009, 66 <

http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=AC&docID=629955 > Accessed 06 August 2019.( emphasis added)

366 BRAZIL. Supremo Tribunal Federal (Supreme Court). ADPF 101. Petitioner: President of Brazil.

Rapporteur: Justice Cármen Lúcia. Brasilia, 24 June 2009, 197-99. <

http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=AC&docID=629955 > Accessed 06 August 2019.

Justice Cármen Lúcia, referring to the exemption given to retreaded tyres imported from MERCOSUR countries, stated that she saw no discrimination on the part of Brazil in its trade relations. In her view, the only exception to the import ban emerged from the need to comply with the MERCOSUR Tribunal’s ruling.³⁶⁷

This decision therefore indicates that the Brazilian Supreme Court approaches international courts’ rulings in an independent, albeit respectful, manner. The Court may apply different norms to the facts, and places the Brazilian Constitution above any other source.

It is therefore noteworthy to mention Justice Gilmar Mendes’ opinion.

After calling attention to the fact that the WTO ruling had dealt with the matter from the perspective of international trade relations, and so had the MERCOSUR ruling (determining that Brazil should allow the importation of retreaded tyres from MERCOSUR countries), he proceeded to comment on the effects of the latter. In this respect, he affirmed that the Brazilian Constitution is the interpretative filter for MERCOSUR decisions. The Constitution, therefore, was necessary to understand these rulings.³⁶⁸ The same reasoning, this thesis holds, applies to WTO rulings.

The Supreme Court’s approach in relation to the Tyres ruling brings an important insight to the problem of fragmentation as a result of incoherence, caused either by a conflict between international and constitutional norms, or by reason of different international commitments assumed by a country. In this case, rather than examining the facts through the lens of WTO Law, the Supreme Court chose to use not only constitutional law, but also the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal and other international norms related to the protection of the environment.

Although the WTO bodies also considered environmental matters, due to their limited mandate, they could only do it within the framework of WTO law. The Brazilian Court had a greater choice of laws to dispose of. Differently from the WTO Dispute Settlement Body, the Supreme Court’s legal framework was not related to international trade, but to the environment and public health as opposed to freedom of enterprise and full employment. This case, fortunately, achieved coherence between both the WTO and Supreme Court’s rulings.

C)The Brazilian Judiciary Power and Jurisdiction over WTO-Related Matters

This sub-section presents an overview of the Brazilian Judiciary Power (1), centred on the aspects which improve understanding of distribution of jurisdiction over WTO-related matters among different courts (2). Hence, it does not provide an exhaustive account of the different courts and their jurisdiction. Rather, this section refers to those aspects relevant to adjudicating WTO-related matters. Finally, it provides an overview of the amount and types of litigation in WTO-related matters before Brazilian courts, setting the scene for the empirical investigation (3).

1) Overview of the Brazilian Judiciary Power and WTO-related matters

367 BRAZIL. Supremo Tribunal Federal (Supreme Court). ADPF 101. Petitioner: President of Brazil.

Rapporteur: Justice Cármen Lúcia. Brasilia, 24 June 2009, 98 <

http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=AC&docID=629955 > Accessed 06 August 2019.

368 BRAZIL. Supremo Tribunal Federal (Supreme Court). ADPF 101. Petitioner: President of Brazil.

Rapporteur: Justice Cármen Lúcia. Brasilia, 24 June 2009, 272-3 <

http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=AC&docID=629955 > Accessed 06 August 2019.

As a federal country, Brazil has both state and federal courts. The Brazilian Judiciary Power comprises the following bodies: the Supreme Court; the National Council of Justice; the Superior Court of Justice; the Superior Court of Labour; the Superior Electoral Court; the Superior Military Court; Federal Courts of Appeal and federal judges; Labour Courts of Appeal and labour judges; Electoral Courts of Appeal and electoral judges; Military Courts of Appeal and military judges; and finally, State and Federal District Courts of Appeal and judges. The Judiciary Power’s institutional framework is established in the third chapter of the Brazilian Constitution.

Except for state courts and those of the Federal District, which have residual jurisdiction, the Constitution enumerates fields of jurisdiction for all other bodies. Generally, whenever private persons sue state governments or agencies, state courts must handle the case. When they sue federal government or federal agencies, federal courts have jurisdiction. When private persons sue both state and federal bodies, the Federal Justice prevails.

Article 102 of the Constitution regulates the Supreme Court’s jurisdiction. As the last word on constitutional matters, it can rule on extraordinary appeals on constitutional matters filed against the decisions of State and Federal Courts of Appeal, and of the Superior Court of Justice.

Similarly, Article 105 of the Constitution regulates the Superior Court of Justice’s jurisdiction. It may examine appeals – known as ‘special appeals’ – against rulings of the Federal or State Courts of Appeals, or the Court of Appeals of the Federal District. These can be filed in three situations: first, if the appealed decision contradicts or denies effectiveness to an international treaty or a federal law; second, if it validates an act of the local government contested in relation to a federal law; and third, if it interprets a federal law in a manner divergent from another court’s interpretation. As such, the Superior Court of Justice may rule on special appeals filed against decisions of both State and Federal Courts of Appeal.

It also has the last word on interpreting federal law; such rulings may only be challenged on constitutional grounds before the Supreme Court.

Within the aforementioned contexts, the Supreme Court or the Superior Court of Justice may hear appeals of rulings from Federal or State Courts of Appeal. Depending on the grounds of appeal, such rulings can be the object of one single appeal, either to the Superior or the Supreme Court. However, they can also be simultaneously appealed to both Courts. Here, two appeals challenge the same ruling, one directed to the Supreme Court, and the other to the Superior Court of Justice. None of the superior courts, however, can examine factual matters, only legal ones.

Therefore, the Federal and State Courts of Appeal give the last word on facts and evidence.

Brazil has five Federal Courts of Appeals, each with jurisdiction over different Brazilian states. The First Region comprises the territories of the Federal District and of the states of Acre, Amapa, Amazonas, Bahia, Goias, Maranhao, Minas Gerais, Mato Grosso, Para, Piaui, Rondonia, Roraima and Tocantins. The Second Region covers the territories of Rio de Janeiro and Espirito Santo. Sao Paulo and Mato Grosso do Sul form the Third Region. The Fourth Region encompasses the states of Parana, Santa Catarina, and Rio Grande do Sul. The Fifth Region includes the states of Alagoas, Ceara, Paraiba, Pernambuco, Rio Grande do Norte, and Sergipe.

Each court encompasses various Judiciary Sections and Divisions, corresponding to the first instance of the Federal Justice. According to

Each court encompasses various Judiciary Sections and Divisions, corresponding to the first instance of the Federal Justice. According to