Posted in Brazil

BRAZILIAN SUPERIOR COURT ANALYZES LEGALITY OF CHECK-IN AND CHECK-OUT HOURS

By: Rafael Jordão BussiereFabio Perrone Campos Mello and Ana Beatriz Barbosa

Brazil’s Superior Court has validated a hospitality market practice in its decision regarding a civil class action filed by the national consumer and citizenship protection association − Associação Nacional de Defesa da Cidadania e do Consumidor (ANADEC) against a manager of a São Paulo hotel.

ANADEC filed the civil class action lawsuit in 2012, saying that the difference in hours between check-in (3:00 pm) and check-out (12:00 pm) should be deducted from the daily room rate. The plaintiff’s original claim was based on the understanding that it would be illegal to charge guests for an entire 24-hour stay if the room was only available for 21 hours, based on art. 23 § 4º of the National Tourism Law No. 11.771/08. In addition, the plaintiff claimed indemnification from the defendant for an amount equivalent to that which hotel guests had already paid (allegedly in excess) over the last five years.

The 27th Chamber of the São Paulo State appellate court originally granted the plaintiff’s request in part, determining that the hotel manager should be obliged to grant 4.16 percent of the daily rate or a discount of 1/24 of the daily rate per hour, between check-in and check-out, the amount to be deducted from the daily rate applied. But the court considered that the plaintiff lacked legitimacy to claim indemnification based on non-homogeneous rights; a requirement in such instances is evidence of damage by each consumer.

However, in hearing Special Appeal # 1,717,111, the Third Chamber of the Superior Court of Justice unanimously reverted that appellate court decision, reviewing the interpretation granted to the law.

The panel dismissed ANADEC’s requests on the following grounds: (i) acknowledgement that the supplier acted in good faith and in accordance to international and national market practice; (ii) the check-in time is more in the nature of information, letting the guest know that the room may not be available until a certain hour, rather than the initial term of the hospitality contract; and (iii) the contract is not limited to guest room availability, being a combination of hosting and hospitality services either included in the daily rate or on demand.

Posted in Brazil Tax

Brazil releases manual on Mutual Agreement Procedures

By Alex Jorge, Renato Lopes da Rocha, Randall Fox and James Dalley

Brazil has entered into 33 bilateral tax treaties, namely those with Argentina, Austria, Belgium, Canada, Chile, China, Czech Republic, Denmark, Ecuador, Finland, France, Hungary, India, Israel, Italy, Japan, Luxembourg, Mexico, Norway, the Netherlands, Peru, Philippines, Portugal, Russia, Slovakia, South Africa, South Korea, Spain, Sweden, Trinidad and Tobago, Turkey, Ukraine and Venezuela. Under those treaties, taxpayers may request a Mutual Agreement Procedure (MAP) if taxation that has occurred (or is likely to occur) that is not in accordance with the relevant treaty.

In addition to Brazil’s tax treaties, Brazil’s domestic tax law also provides for MAPs. In November, Brazil’s Internal Revenue Service published a manual on MAP setting out the process through which taxpayers can request assistance from the Revenue, including the contents of the MAP application and the possible outcomes resulting from a request for MAP assistance.

Read more here.

 

Posted in Brazil

BRAZILIAN SUPERIOR COURT DISTINGUISHES THE HOTEL MANAGER AND DEVELOPER’S RESPONSIBILITY

By: Rafael Jordão BussiereFabio Perrone Campos Mello and Ana Beatriz Barbosa

The Third Chamber of the Brazilian Superior Court decided that the hotel operator Blue Tree should not be a defendant in a lawsuit filed by a condominium-hotel unit buyer who claimed the right to cancel a transaction due to the temporary suspension of the construction works of a real estate project in São Carlos, São Paulo state.

The plaintiff filed a revocation and indemnification lawsuit requiring the termination of a commitment to purchase and sale, plus restitution of funds paid to the real estate developer and compensation for moral damages.

The joint liability claim presented by the plaintiff against both the hotel brand and the developer as defendants was based on these arguments: (i) the project branding was a strong motivation for the plaintiff to acquire the real estate, as it led to an expectation of the project’s success; (ii) interpretation of Articles 7, 18 and 30 of the Brazilian Consumer Defense Code, which establish that the service renderer or supplier that associates a trademark to a service or product should be liable for marketing expectation damages; and (iii) the good faith principle that rules contractual relationships.

The decision partially granted the plaintiff’s claim to terminate the commitment to purchase and sale, as well as ordering restitution of the entire amount of money paid by the plaintiff, plus interest, but denying the claim for moral damages and excluding Blue Tree as a defendant.

In view of the plaintiff’s appeal, the Seventh São Paulo Appellate Court had partially granted the plaintiff’s claim, acknowledging that Blue Tree had assumed joint liability towards the developer, considering that its brand was included in the enterprise’s marketing material, which stated that condominium management would be carried out by the hotel operator further to the completion of the works, but denying moral damages.

The appellate court decision was partially reversed on February 19, 2019 in the Superior Court’s Third Chamber, in the Special Appeal REsp 1.785.802 judgement, based on the report judge’s (Judge Ricardo Vilas Bôas Cuevas) vote; the unanimous decision held that the hotel operator’s main liability would be for post-opening services and that Blue Tree had no participation in the commercialization of the units.

In its opinion, the court considered that Blue Tree should not be a defendant in the lawsuit because (i) the hotel brand’s role was adequately publicized in the marketing material; (ii) the purchaser was an investor (the flat was to be included in a rental pool) and not the final consumer of Blue Tree services, so that the Consumer Defense Code does not apply; and (iii) as an investor, Blue Tree, as the hotel operator, was also frustrated in its business goals when construction was suspended.

It is important to point out that this change of position is in line with CVM Instruction 602/2018, which regulates the public offer of distribution of condominium-hotel collective investment agreements, as well as the most recent CVM administrative judgments regarding the matter, in the sense that the hotel operator is not considered an offeror unless it acts in the securities’ distribution.

Posted in Tax

Panama has been removed from the European Union’s list of non-cooperative tax haven jurisdictions

This is a guest post from Fabrega Molino in Panama.

Panama has been removed from the European Union’s blacklist – its list of non-cooperative tax haven jurisdictions. The decision was made in Brussels by the EU’s finance ministers, who concluded that Panama has established regulations and filled requirements to address matters of fiscal transparency.

The EU screened 92 countries according to these indicators: fiscal transparency, good governance and real economic activity and the existence of a zero corporate tax rate.

Before removing Panama from the list, the European Union evaluated its progress in terms of transparency and tax cooperation, assessing such aspects as the adoption of the automatic exchange mechanism consistent with the objectives of the Common Reporting Standard, promoted by the Global Forum of the Organization for Economic Cooperation and Development (OECD); and adherence to the Convention on Mutual Administrative Assistance in Tax Matters and the Inclusive Framework of the Project on the Erosion of Taxable Bases and the Transfer of Benefits (BEPS).

Posted in Arbitration International Arbitration UNCITRAL

X CAI Costa Rica 2019: Developments and Challenges in International Arbitration

By: Marlon Meza

Originally posted on the Kluwer Arbitration Blog.

The X CAI Costa Rica held by the Costa Rican Chapter of the ICC and its Arbitration Commission, took place in San Jose, Costa Rica between February 24 and 27, 2019. Ten years have led to its consolidation as one of the most important ICC events in the region. This year’s intensive program included several academic panels and practical workshops, as well as a meeting of young arbitrators ICC-YAF. The event brought together more than 50 high-level speakers from the U.S. and other countries in Latin America and Europe.

Read more here.

Posted in Argentina Mexico Tax

Argentina: new double taxation treaties in force with United Arab Emirates and Mexico

By Augusto Mancinelli

The double tax treaty between Argentina and the United Arab Emirates is now in force, joining the recently signed DTT between Argentina and Mexico.

New DTT: Argentina – United Arab Emirates

The Argentina – UAE DTT is applicable to the income tax, presumed minimum income tax and personal assets tax collected by Argentina, and to the income tax and corporate tax collected by the United Arab Emirates.

This DTT is one of the most beneficial ones of all the DTTs signed by Argentina.

Read more here.

Posted in Energy Oil and Gas Venezuela

US government sanctions Petróleos de Venezuela, authorizes US persons to engage in certain limited transactions

By: Ignacio E. Sanchez and Melanie Garcia

The United States government has issued new sanctions in response to the growing unrest in Venezuela. On January 23, the United States recognized Juan Guaido as the new interim President of Venezuela. Nonetheless, Nicolas Maduro has refused to step down. US Secretary of State Mike Pompeo stated that the latest US sanctions related to Venezuela’s state producer of oil are meant to “preserve the core pillar of Venezuela’s national assets for the people and a democratically elected government.”

On January 28, 2019, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Petróleos de Venezuela S.A. (PdVSA) as a Specially Designated National (SDN). With this designation, US persons, including US entities, their foreign branches and US citizens or permanent residents located anywhere in the world, are now prohibited from engaging in any transactions with PdVSA or any entity owned 50 percent or more by PdVSA, unless otherwise authorized. This designation has wide-ranging impacts, as PdVSA owns or is part of joint ventures around the world, including several within the United States.

OFAC has sought to limit these potential wide-ranging impacts on US persons by concurrently issuing a series of General Licenses authorizing US persons to engage in certain transactions with PdVSA and/or certain of its 50 percent or more owned subsidiaries. These General Licenses, described further below, create a complex web of limited authorizations for US persons with various expiration dates.

Whether a General License authorizes a particular transaction is highly dependent on the specific facts and circumstances of that transaction. These summaries should not serve as a substitute for a review of the language and requirements of the actual General Licenses.

Read more here.

Posted in Arbitration

ICC update – Conduct of Arbitration

By: Ben Sanderson and Silvia Farre

On 1 January 2019, new updates to the Note to the Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration (the Note) became effective. According to the ICC Court President, Alexis Mourre, the updates, “reflect the Court’s continuous efforts … to provide more transparency in its practices, increase the efficiency of our arbitrations and offer an ever wide range of services to users“. The most significant updates are set out at the link below:

Read more here. 

 

Posted in chile Energy

CHILE: TDLC rejects request to eliminate restrictions on the integration in the electricity market

By: Felipe Bahamondez and Carolina Bawlitza

Chile’s Tribunal for the Defense of Free Competition (TDLC) rejected the plea of Celeo Redes Chile Limitada, which had requested that the government modify “the legal precepts necessary to introduce a greater degree of competition in the generation, distribution and electric transmission markets.” In particular, the requested regulatory amendment sought to:

• Eliminate the prohibition against companies that own or operate national transmission systems from participating in electricity generation or distribution activities and
• Eliminate the restriction against generating companies, distributors and non-price-fixing customers from participating individually in a maximum of 8 percent and, as a whole, up to 40 percent of the total investment value of the national transmission system.

The TDLC considered that, given the position adopted by the Ministry of Energy in the process, which “not only noted the proposal…. but also spoke openly in its favor,” the recommendation to the government is inofficious.

Given the above, the indicated restrictions shall remain in force as long as the National Congress of Chile does not approve a bill aimed at eliminating them.

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