Jayme Petra de Mello Neto
Lawyer at Marcos Martins Advogados
We are now entering the third year of the Code of Civil Procedure, Law No. 13.105, of March 16, 2015, which came into force in March 2016, and we are still adapting to the universe of possibilities and transformations that this Code has introduced to us.
It is not just a law with a specific purpose. It doesn’t just regulate the judicial process, within the scope of the State’s Ordinary Jurisdiction. Initially, it is the legal support and framework for any and all civil proceedings, in other words, everything that excludes criminal justice. In fact, even for the latter, the Code also radiates principles of modernity and procedural constitutionalism, given the advanced age of the Code of Criminal Procedure.
And its application in forensic practice, in all courts, even specialized ones such as the Labor Court and the Electoral Court, for example, especially the application of its axiological vectors, has transformed the way in which conflict resolution is revealed today.
Conflict resolution, as a corollary of efficiency, is the central focus of current civil procedure. In the past, under the aegis of the 1939 Code or the 1973 Code, the focus was on the Dispute and the Administration of the Process. The focus was on a jurisdictional model that was strictly controlled and administered by the state. A monopolized, uniaxial justice system.
It so happens that the axis has split: if the Judiciary is still the repository of Justice, no less present and with greater breadth and incentive than the strict traditional litigiousness of the judicial process, extrajudicial forms of composition and conflict resolution are validated, based primarily on the ability of the parties to weigh up their interests based on the efficiency of the means chosen to resolve the conflict. Efficiency, it should be emphasized, does not only mean speed. It also involves a specialization on the part of the judge, sometimes with the adoption of mannerisms typical of certain economic sectors where conflicts arise, which are not usually present in the case of judges, but which are highly desirable to the parties given their activity, economic characteristics, nature of the business, regional culture and so many other factors that the coldness of the law and the traditional judicial process cannot achieve.
There are many new ways of resolving conflicts that are beginning to challenge the traditional jurist, who is used to thinking within the traditional procedural model. Arbitration has already been established, and Mediation,Fast Track Arbitration,Online Dispute Resolution, SpecializedDispute Resolution(Dispute and Adjudication Board – Clearing Houses) and so many other models that emerge on a daily basis continue to challenge.
Such is the importance of the new axis of conflict resolution that the Code itself has reflected the importance and technique of the derived axis in the traditional axis. In this way, in the course of the traditional judicial process, it gave prestige to procedural legal deals, in the iconic article 190. The Law understands that no one better than the parties themselves can regulate and enforce their rights, as long as they do not influence the rights and interests of third parties, as a rule.
This is how the generalized and principled structure proposed by the current Code of Civil Procedure, with its emphasis on procedural legal business, inspires and defeats other laws of procedure, giving them greater efficiency in resolving the conflicts it deals with.
For this moment, I am focusing on the influence of the Procedural Legal Business, as a generic category, on Judicial Recovery. Without going into theoretical discussions and merely pointing out a path of exposition, the premise of Law 11.101/2005 (Business Recovery and Bankruptcy Law) is the ability of the parties to negotiate means of recovery, with a view to preserving, as far as possible, the generation of wealth, social relevance, jobs and all the other legitimate interests that surround a company.
All the traditional litigation involved in collecting a credit in default, in the reorganization process, is relegated to incidents and heteronomous processes that do not hinder the progress of the business solution. And the zenith of the reorganization process is, without a doubt and in the most classic format, a legal transaction, conceived as an agreement of wills capable of creating, extinguishing and modifying rights. When the General Meeting of Creditors approves the Judicial Reorganization Plan, what has happened, in a material sense, is the acceptance of a proposal that has been policed. In other words, the formation of a contract.
And as a typical business law contract, its primary characteristic is Incompleteness. Factual, economic, financial and other situations mean that the provisions and intentions of the parties need to be revised in order to adapt them to a certain moment. The law, and not even case law, can understand the Judicial Reorganization Plan as a static contract, exhausted of normativity when it is approved. Rather, because its material object is a sequence of acts protracted over time and subject to external influences, it must be understood as an incomplete contract, interpreted by a mechanism of conjunction of the original will of the parties when it was signed with the factual circumstances at the time of the execution of the installment.
One of the ways to complete the execution of the Plan’s benefits is to allow procedural legal transactions to be entered into after approval by the General Meeting of Creditors and judicial ratification, without the need for the collective to be reconvened. In certain cases, given the capacity and intention of the parties after the plan has been ratified, the business conditions may have changed. But this scenario may be true for one or a few creditors. Not for the community.
In these cases, calling a new Meeting of Creditors is a contradiction in terms and a disservice to the efficiency with which contracts with a long execution period, such as the Judicial Reorganization Plan, are completed. Considering that the special conditions of incompleteness affect a specific creditor or a few creditors in isolation, there is no reason to demand the approval of the entire collective for specific changes.
We argue that, by applying the framework of the Procedural Legal Business, under the regulation of the Code of Civil Procedure, subsequent negotiations established between specific creditors and the reorganized company are valid and require collective consent.
However, for such procedural legal deals to be valid without collective consent, we believe that there are two insurmountable limits: a) the legality of the new agreements; and, b) the maintenance of par conditio creditorum.
There is no need to discuss legality, as it is enough to state that no agreement can contravene the law, applying the adage permittitur quod non prohibetur.
On the other hand, Par Conditio Creditorum, as a basic principle of the collective enforcement process and applicable to Judicial Reorganization, establishes a treatment limit that prohibits the parties from entering into a procedural legal agreement to the detriment of other creditors. The procedural legal deal in question cannot give the signing creditor a better deal to the detriment of the other creditors. If it does, it will be subject to annulment and, before that, control by the judge of the case, where the procedural legal business was proposed and accepted. There would even be room for other legal discussions here, such as the jurisdiction of the court that approves the procedural legal transaction entered into outside the reorganization process, but these are not the subject of this brief study.
Without statistical precision, we report that the law firm Marcos Martins Advogados, in the judicial reorganizations it is responsible for, has entered into a series of procedural legal transactions during the execution phase of the judicial reorganization plan. These deals have been seen as beneficial by the creditors not involved and by the courts themselves, considering them valid without the need to call a new General Meeting for each deal signed, perfecting the fairness of the credit in the face of the incompleteness of the contract signed in the judicial reorganization plan.
