By Brazil Stock Guide – Petrobras (B3: PETR4; NYSE: PBR) said on Wednesday (Nov. 5) that it obtained a favorable ruling from Brazil’s Superior Court of Justice (STJ), which annulled a Rio de Janeiro appellate court decision that had imposed a R$2.9 billion penalty against the company in a long-running contractual dispute with Paragon Offshore Nederland B.V., a former drilling-rig supplier.
STJ Sides With Petrobras
According to Petrobras, the STJ accepted its appeal by majority vote, ruling that the decision by the Rio Court of Appeals (TJ-RJ) was invalid due to procedural irregularities in the composition of the judging panel. The 3rd Panel of the STJ ordered the case to be retried by the TJ-RJ. Petrobras said R$154 million of the disputed amount is already provisioned in its financial statements.
Dispute Over Offshore Rigs
The case stems from contracts signed more than a decade ago for the chartering of drilling rigs Leo Segerius and Roger Eason, which Paragon Offshore (successor to Noble Corporation) alleged were terminated early by Petrobras, reducing its compensation. The Rio court had previously ruled in favor of Paragon, but that decision has now been overturned by Brazil’s Superior Court of Justice, temporarily removing the risk of a multibillion-real payout.
Legal Context and Implications
The STJ — Brazil’s top court for civil and corporate matters, one level below the Supreme Federal Court (STF) — found that the TJ-RJ’s expanded panel had been improperly formed, in violation of the Civil Procedure Code’s quorum rules for non-unanimous rulings. The outcome represents a key procedural victory for Petrobras, which has been seeking to reduce large legal contingencies and ensure due process in complex international contract disputes.