Brazilian Supreme Court caps limits on container demurrage fees at 5 years

In a general repercussion trial on October 28th, the 2nd Section of the Brazilian supreme court stated that according to Article 206, Paragraph 5, Item I of the 2002 Civil Code, the intention to collect amounts related to the expense of container over-stays should expire in five years, as previously established in a unimodal shipping transport contract.

Container over-stays, or ‘demurrage’, refers to the indemnity paid by the shipper (owner of the cargo) to the sea carrier. when loading and unloading operations exceed the contractual period for the return of the containers.

The decision was unanimous and was based on a lawsuit by Pluscargo Brasil, represented by lawyer Alexandre González, which held that the statute of limitations must be for five years and not just one year for collection or demurrage cases in a maritime transport contract (unimodal) supported by an agreement for the return of the containers.

All of the pending lawsuits in Brazil on this subject have been suspended since last year due to the allocation proposal presented by Minister Ricardo Villas Bôas Cueva.

In cases in which there is no previous stipulation in the transport contract, the general rule of a 10-year statute of limitations applies, pursuant to article 205 of the Civil Code.

According to González, the court will affect all future decisions in the country that involve the issue. “It is important to form this understanding which will once and for all provide the long-awaited legal security for future cases that address this discussion.”.

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