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Global | Publication | July 2017
In a briefing published in March 2016, we considered the impact of a judgment handed down by an Appeals Court in Brazil on those involved in secured lending transactions for offshore oil and gas assets and ships which are present, even on an occasional basis, in Brazil’s maritime economic zone.
The judgment, handed down by the Appeals Court in São Paulo on 3 February 2016, cast doubt on the validity of foreign law governed ship mortgages in Brazil. In the case commonly referred to as OSX3, the Court did not recognise the validity of a Liberian ship mortgage granted in favour of Nordic Trustee (Nordic) over the FPSO “OSX-3”, stating that it needed to do so only
Understandably, this decision led to a great deal of discussion among secured lenders to oil and gas assets and ships offshore Brazil, and as a result a number of these assets have now been reflagged to Panama, as the most obvious candidate among the existing signatories to the Bustamante Code. The decision has also led to The Bahamas electing to accede to relevant aspects of the Bustamante Code, which accession became effective at the end of February 2017.
In the time since our last briefing, and in the face of resistance from the plaintiff, BTG Pactual S/A – Cayman Branch (BTG), Nordic has filed a series of appeals for the subject matter of the case to be heard by the Superior Court of Justice (the final appeals court in this case), finally lodging an appeal (known as an “Agravo” appeal) with the Appeals Court in September 2016, applying for the Superior Court of Justice to determine whether it should decide on the issue of the validity of the mortgage in the OSX-3 case.
Also in September 2016, BTG, the original plaintiff in the OSX-3 case, assigned its claims and foreclosure action with respect to the FPSO “OSX-3” to OSX3 Cayman Limited (OSX3 Cayman), which led observers to anticipate a settlement and closure of the litigation.
Whilst this assignment resulted in the foreclosure action being suspended by the court (by reason of OSX3 Cayman’s failure to move the case forward), the Agravo appeal in relation to the validity of the Liberian mortgage has continued and, in the absence of a reply from BTG, the Appeals Court sent the appeal to the Superior Court of Justice at the end of March 2017.
The Superior Court of Justice is now considering whether to hear the appeal. Should the Superior Court of Justice decide to hear the appeal, and assuming Nordic decides to continue proceedings, it will probably take several years for the Superior Court of Justice to hand down a decision.
It is open to the Superior Court of Justice to suspend the original decision of the Appeals Court, but unless it does so or hands down a different decision, the existing Appeals Court decision continues to be relevant to secured lenders with offshore oil and gas assets operating in Brazilian waters, and will stand with persuasive effect and may be followed in similar cases brought before the Brazilian courts in the future.
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This newsletter will keep employers up to date on Canadian employment and labour developments and best practices.
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In this edition we provide a reminder of the main provisions and implications of the Terrorism (Protection of Premises) Act 2025 since its Royal Assent, and discuss the potential for a long-awaited strategic shift for infrastructure projects following the formation of the National Infrastructure and Service Transformation Authority. We also discuss the outcome and significance of an interesting court of appeal case considering boundary agreements and provide an update on recent tax events affecting the real estate sector.
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Te Board of Directors of Pemex approved the Guidelines for Mixed Development Schemes of the Public State Company, Petróleos Mexicanos (Agreement CA-025/2025, the “Guidelines”), published in the Federal Official Gazette (DOF) on April 29, 2025.
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