The Second Chamber of the Brazilian Superior Court of Justice (STJ), at the judgement session held on 27th June 2018, in respect of the divergence appeal in Special Appeal No. 1.280.825, determined that the 10-year statute of limitation applies to all claims issued by a creditor due to contractual breach, including compensation for losses and damages arising from such breach.
The dispute involved the application of statutes of limitation established by the Brazilian Civil Code in Articles 205 and 206, §3, V. As provided for in Article 205, a general ten-year term applies when the law does not assign a shorter term. On the other hand, Article 206, §3, V provides a three-year term for civil reparation claims.
In her decision, Justice Nancy Andrighi concluded that the term “civil reparation”, under the systematic interpretation of the Brazilian Civil Code, only covers the harmful consequences of unlawful acts or behaviour strictly considered, confirming the understanding that these scenarios apply exclusively to cases of non-contractual civil liability, in other words, situations which do not arise from contractual obligations.
In cases of contractual breach, in addition to the specific performance of the obligation, in cases of performance by the equivalent or termination of the legal contractual relationship, the creditor may also demand payment of losses and damages caused by the breach.
It is in this regard that the Justice states that this situation requires the same rules to be applied to all potential claims by creditor: “There does not seem to be any legal or logical sense to the affirmation whereby the creditor has a term to demand performance of the obligation and a different one to claim payment for losses and damages“.
In short, the difference in treatment was confirmed for the statute of limitation applied to cases of non-contractual civil liability (to which the three-year term applies) and that applied to contractual civil liability, i.e. losses and damages arising from contractual breach, to which the term of 10 (ten) years applies, equally to other claims put forward by creditor.