Brazil’s Supreme Court ruled that Mariana disaster settlement funds cannot be used for legal fees, impacting municipalities’ participation in foreign legal actions. Funds belong solely to municipal assets, and municipalities must withdraw ongoing lawsuits to receive compensation. The settlement totals R$170 billion, with a participation deadline approaching.
On Tuesday, Brazil’s Supreme Court Justice Flávio Dino ruled that funds from the Mariana disaster settlement cannot be used for legal fees, charges, or expenses related to foreign law firms. This ruling follows the dam collapse in Minas Gerais in November 2015, which caused 19 fatalities and significant environmental damage.
The court’s decision clarifies that funds received under the renegotiated settlement will only belong to municipal assets without any fees or legal deductions, unless explicitly stated in the agreement. This ruling was part of a Constitutional Violation Claim (ADPF) 1178 initiated by the Brazilian Mining Institute (IBRAM).
The case addresses municipalities’ actions in foreign courts and stipulates that they must discontinue other legal pursuits if they opt to join the settlement with the federal government, Minas Gerais, Espírito Santo, and the companies involved.
Municipalities have a deadline until Thursday to join the R$170 billion settlement, of which R$132 billion comprises new funds. Out of 49 eligible municipalities, only 17 have confirmed their participation so far, with a requirement to withdraw from any existing lawsuits if they sign the agreement.
The Supreme Court’s ruling emphasizes the exclusive ownership of settlement funds by municipalities, prohibiting their use for legal fees. This decision aims to streamline compensation for the Mariana disaster and ensures municipalities commit to the settlement agreement. The urgency for municipalities to join highlights the significant financial implications of the settlement.
Original Source: valorinternational.globo.com
