The Brazilian Supreme Court ruled that municipalities cannot use funds from the Mariana disaster settlement for legal fees. Justice Flávio Dino emphasized that these funds are solely for municipal assets. Municipalities must also abandon ongoing lawsuits to join the R$170 billion agreement.
On Tuesday, Supreme Court Justice Flávio Dino ruled that funds from the renegotiated Mariana disaster settlement cannot be allocated for legal fees, charges, or foreign law firm expenses. The catastrophic dam collapse in Minas Gerais, which occurred in November 2015, tragically resulted in 19 fatalities and caused a severe environmental crisis in Brazil.
The ruling stipulates that any funds provided to participating municipalities under the settlement are strictly municipal assets. These funds are exempt from deductions, fees, or legal expenses unless specifically articulated in the agreement.
This decision was made in connection with Constitutional Violation Claim (ADPF) 1178, presented by the Brazilian Mining Institute (IBRAM). The case examines the municipalities’ entitlements regarding participation in foreign legal actions and requires them to forfeit ongoing lawsuits if they accept the settlement, which has already been ratified by the Supreme Court following an agreement established with key stakeholders, including the federal government and major corporations.
Municipalities are granted until Thursday to opt into the settlement, which entails R$170 billion in compensation and reparations, of which R$132 billion constitutes new financial resources. Out of 49 eligible municipalities, 17 have confirmed their participation, acknowledging the necessity to abandon any other ongoing litigation in exchange for the settlement funds.
In summary, the Supreme Court’s decision restricts the utilization of Mariana disaster settlement funds strictly to municipal assets, forbidding their use for legal expenses. This ruling further emphasizes the municipalities’ obligation to withdraw from other legal actions upon joining the settlement, which offers substantial compensation of R$170 billion. The swift participation of eligible municipalities is crucial in addressing the aftermath of the disaster.
Original Source: valorinternational.globo.com
