Litigating without a strategy burns cash, leadership time, and energy the company needs to grow. The decision to sue — or to defend — should be treated as a business decision, not an automatic reaction to a conflict.
TL;DR
– Strategic litigation is a choice, not a fate: the same dispute can be pursued in the courts, in arbitration (Law 9.307/1996), in mediation (Law 13.140/2015), or settled before any complaint is even filed.
– Arbitration is faster and confidential, but more expensive; it makes sense for higher-value disputes with a pre-existing arbitration clause.
– Mediation resolves conflicts faster when both sides still have an interest in preserving a business or shareholder relationship.
– Corporate/shareholder disputes (“conflitos societários” — conflicts among partners or shareholders, such as exclusão de sócio — expulsion of a partner —, partial dissolution, or annulment of a corporate resolution) follow their own procedures and mechanics — and escalate quickly if not addressed early.
– Urgent interim relief under the New Civil Procedure Code (Novo Código de Processo Civil, Law 13.105/2015) — tutela antecipada (anticipatory relief) and tutela cautelar (protective/preservation relief) — can be obtained before the main lawsuit is filed when there is a risk of serious harm.
– Contingency management is both an accounting requirement (CPC 25, Brazil’s equivalent to IAS 37) and a strategic decision-making tool.
Updated on 06/18/2026. Provisions of the NCPC (New Civil Procedure Code) and the Arbitration Law are subject to updates through case law and arbitration chamber regulations. Check the date on this page before making a decision.
Table of contents
- Strategic litigation vs. reactive litigation: the difference that shapes the financial outcome
- The three paths: the courts, arbitration, and mediation
- Shareholder disputes: when the problem is inside the company
- Urgent interim relief: acting before the harm becomes irreversible
- Contingency management: provisioning isn’t losing, it’s governing
- Frequently asked questions
Strategic litigation vs. reactive litigation
Most companies get drawn into lawsuits reactively: they were billed, so they sued; they were sued, so they defended. Strategic litigation reverses that logic.
A technology company with roughly 80 employees was involved in a dispute with a distributor that had breached a regional exclusivity agreement. The instinctive reaction would have been to file a collection lawsuit right away. Instead, the work focused first on assessing four variables: the strength of the legal argument (the exclusivity clause was drafted without ambiguity, backed by supporting emails), the value at stake (R$ 2.3 million in diverted sales), the estimated timeline to resolution in each forum, and the cost of litigating versus the cost of not litigating. With that map in hand, the path chosen was an extrajudicial notice with a response deadline, followed by a mediation proposal. The case was closed in four months, without any court proceeding, with a settlement close to the amount estimated for litigation.
That process — building the analysis before taking action — is the core of strategic litigation. There are cases where a lawsuit is the right tool; there are cases where it’s the most expensive and slowest option of all.
Building the case before filing means documenting the facts, identifying available evidence, running scenarios for possible outcomes, and calculating the real value of the risk — for both the plaintiff and the defendant. Whoever does this work before filing a complaint is in a much stronger position to negotiate — and, if negotiation fails, to litigate.
The three paths: the courts, arbitration, and mediation
Choosing the forum isn’t just a technical matter. It’s strategic, and it affects cost, timeline, confidentiality, and the type of resolution the dispute can reach.
| Criterion | Courts (Poder Judiciário) | Arbitration (Law 9.307/1996) | Mediation (Law 13.140/2015) |
|---|---|---|---|
| Average timeline in commercial disputes | 5–10 years (first instance + appeals) | 12–24 months | 1–6 months |
| Direct cost | Low court fees; variable attorney fees | Chamber fees + arbitrators + attorneys (high total cost) | Mediator’s fees + attorneys |
| Confidentiality | Public proceeding (unless under seal) | Confidential by default | Confidential |
| Enforcement of the decision | Judicial enforcement title | Arbitral award with equal legal force (art. 31 of Law 9.307/1996) | A court-ratified settlement becomes an extrajudicial enforcement title |
| Specialized arbitrator/judge? | Depends on the court division and case assignment | Yes — arbitrators are chosen by the parties | Facilitating mediator; technical expertise optional |
| Preserves the business relationship? | Rarely | Rarely | Explicit goal when there’s a shared interest |
| When to choose it | Lower-value disputes; defendant has no assets abroad; no prior arbitration clause | Higher-value disputes (rule of thumb: above R$ 500,000); prior arbitration clause; confidentiality is essential | Conflict where preserving the relationship matters; urgency for resolution; shareholder disputes at an early stage |
Arbitration requires an arbitration clause (agreed before the dispute arises) or an arbitration agreement (entered into after the dispute arises). Without either one, there’s no way to compel the other party into arbitration. Law 9.307/1996 recognizes the autonomy of the arbitration clause — its validity is independent from the validity of the contract that contains it (art. 8). The main arbitration chambers in Brazil are CAM-CCBC (Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce), ARBITAC, and CAMARB; for international disputes, the ICC (International Chamber of Commerce) and the LCIA (London Court of International Arbitration).
Mediation is a process facilitated by a neutral third party. Unlike arbitration, the mediator doesn’t decide the outcome — they facilitate the parties reaching their own agreement. Law 13.140/2015 regulates both extrajudicial and judicial mediation in Brazil. For international contracts, foreign judgments require ratification (homologação) by the Superior Court of Justice (Superior Tribunal de Justiça, STJ — Brazil’s highest court for non-constitutional matters) before they can be enforced in Brazil (STJ Resolution 9/2005; arts. 960–965 of the NCPC — Law 13.105/2015).
Shareholder disputes: when the problem is inside the company
Conflicts between partners or shareholders (sócios) are the ones that most often bring operations to a halt. Day-to-day decisions get stuck, investments stall, the team notices, and morale deteriorates. Legal mechanisms exist, but they follow a hierarchy: extrajudicial settlement first, then mediation, and only then the courts.
The most common disputes at startups and SMEs:
- Expulsion of a partner for cause (exclusão de sócio por justa causa): available when there is serious misconduct, a supervening incapacity, or a forced buyout of quotas due to a partner’s personal debt (Civil Code, arts. 1,030 and 1,085). Requires a simple majority of capital and prior formal notice.
- Partial dissolution (dissolução parcial): a mechanism that allows a dissenting partner to exit with a formal valuation of their stake (apuração de haveres) (Civil Code, art. 1,029; Law 13.105/2015, arts. 599–609). Critical point: the methodology used for that valuation — special balance sheet, projected cash flow, goodwill — has a major financial impact and is often the real subject of the dispute.
- Blocked resolutions: a minority partner holding veto rights under the articles of association or a shareholders’ agreement can block key decisions. In this scenario, the analysis should start with the shareholders’ agreement and assess whether the veto is lawful or an abuse of right (Civil Code, art. 187).
- Annulment of a shareholders’/partners’ meeting resolution: possible when there is a defect in the notice of the meeting, in the quorum, or a conflict of interest (Civil Code, art. 1,074 et seq.; for corporations (S.A.), Law 6,404/1976, arts. 115 and 286).
In any shareholder dispute, the first question is: does the shareholders’ agreement or the articles of association provide a mechanism for this scenario? Forced buy-sell clauses (shotgun, drag-along, tag-along) and exit clauses can resolve the impasse without litigation — but only if they were drafted precisely before the conflict arose.
Urgent interim relief: acting before the harm becomes irreversible
The NCPC (Law 13.105/2015) provides for two types of urgent provisional relief:
- Anticipatory relief (tutela antecipada) (art. 300): brings forward the very outcome sought at the end of the proceeding. Requires a likelihood that the right exists and a risk of harm or of jeopardizing the effectiveness of the final ruling. Examples: suspending an improper collection action, forcing the other party to keep performing an ongoing contract, halting unfair competition.
- Protective relief (tutela cautelar) (arts. 301 and following): preserves a factual situation until the case is decided. Examples: freezing (arresto) of a debtor’s assets, search and seizure of documents or equipment, preventive registration of a notice of protest.
Urgent relief can be requested even before the main lawsuit is filed (preliminary relief — art. 303 for anticipatory relief; art. 305 for protective relief). In that case, the plaintiff has a deadline to file the main claim afterward. This mechanism matters when harm could occur before the defendant is even served with process.
Evidence-based relief (tutela de evidência) (art. 311) is a distinct category: it doesn’t require urgency, but it does require that the right be evident — strong documentary evidence, or a legal position already settled by binding precedent. It can be granted without hearing the opposing party in specific cases set out by law.
Contingency management: provisioning isn’t losing, it’s governing
Every company with ongoing lawsuits or imminent risks has an obligation to assess and provision for contingencies under Technical Pronouncement CPC 25 (Brazil’s equivalent to IAS 37). The methodology:
| Risk classification | Criterion | Accounting obligation |
|---|---|---|
| Probable | More than 50% chance of loss | Mandatory provision on the balance sheet |
| Possible | Real chance, but not probable | Disclosure note, no provision |
| Remote | Low chance | Neither a provision nor a note |
Beyond the accounting requirement, mapping contingencies also serves management: investors in due diligence and buyers in M&A deals request a detailed list of pending lawsuits, provisioned amounts, and the classification methodology used. Poorly mapped or unprovisioned contingencies are among the issues that most often stall deal closings.
The risk analysis for each lawsuit should factor in: the amount at stake (principal, interest, attorney’s fees awarded to the losing party, and any potential penalty), the estimated probability of loss based on the legal theory and case law, and the expected timeline to resolution. This map also informs the decision on whether to settle: if the probable exposure is R$ 1.2 million and there’s a settlement offer of R$ 700,000, the math speaks louder than the instinct to “not give in.”
Frequently asked questions
When is it worth going to arbitration instead of the courts in a business dispute?
Arbitration is worthwhile when there is a pre-existing arbitration clause, the dispute involves a significant amount (as a practical benchmark: above R$ 500,000 to R$ 1 million, depending on the costs charged by the chosen chamber), and confidentiality matters to the company. Arbitration proceedings are faster than court litigation — generally 12 to 24 months — and allow the parties to choose arbitrators with specific technical expertise in the subject matter of the dispute. An arbitral award carries the same legal force as a court judgment and does not require ratification for enforcement in Brazil (Law 9.307/1996, art. 31). Cost is the main limiting factor: chamber fees, arbitrator fees, and specialized attorney fees can make this path economically unviable for lower-value disputes. Without an arbitration clause, arbitration depends on the other party’s agreement — the defendant may refuse. Evaluate the choice of forum before signing relevant contracts, not after a conflict arises.
This is general information and does not replace consulting a lawyer to assess your specific case.
What should be done when a partner is blocking essential company decisions?
The first step is to check whether the block is legally sound — that is, whether the partner holds a veto right set out in the articles of association or the shareholders’ agreement for that specific matter. If the veto is lawful, the way forward is negotiation: understanding the reason behind the block and building a solution that removes the objection. If there is no legal or contractual basis for the veto, the resolution can be adopted without the dissenting partner’s vote, and that partner may be held liable for abuse of right (Civil Code, art. 187). When the impasse is structural — the partner wants to leave, or wants the others to leave — mechanisms such as partial dissolution (Civil Code, art. 1,029) or expulsion for cause (art. 1,030) come into play. In any scenario, using mediation as a first step tends to be faster and less disruptive to operations than going straight to court. Document every attempt at resolution: this has evidentiary value and demonstrates good faith in the process.
This is general information and does not replace consulting a lawyer to assess your specific case.
How does the ratification of a foreign judgment work in Brazil for enforcing an international contract?
A foreign judgment — whether from a court or an arbitral tribunal — must be ratified (homologada) by the STJ (Superior Court of Justice) to have legal effect in Brazil (arts. 960 to 965 of the NCPC — Law 13.105/2015; STJ Resolution 9/2005). For foreign arbitral awards, Brazil is a signatory to the New York Convention (Decree 4.311/2002), which facilitates recognition among signatory countries based on a limited list of possible objections. The ratification process before the STJ requires: a sworn translation, a Hague Apostille or consular authentication of the documents, proof that the other party was properly served, and evidence that the judgment has become final and unappealable abroad. The STJ does not review the merits — it checks only formal requirements and whether the decision offends national sovereignty, public policy, or public morals. After ratification, enforcement takes place before the federal courts of first instance. Timelines at the STJ vary, but the ratification process typically takes 6 to 18 months, depending on complexity and whether the defendant contests it.
This is general information and does not replace consulting a lawyer to assess your specific case.
Are you facing a dispute that could affect your company’s strategy or continuity? Tell us what’s happening. Talk to a lawyer
Alessandra De Paula Souza — OAB/PR 31.133
Focused practice in strategic corporate litigation and arbitration.
This is general information and does not replace consulting a lawyer to assess your specific case.