Faculty Bibliography

This chapter examines the use of family ties in the application of antitrust law. Competition authorities in Argentina, Brazil, Indonesia, and Turkey have relied on family ties in the contexts of merger control and scrutiny of anticompetitive agreements. Authorities have converged in using family ties to define the boundaries of an enterprise in merger review. However, there is divergence in the use of family links either as evidence of bid rigging or, conversely, as a single entity defense to bid rigging. The greater relevance of family ties in antitrust enforcement in developing countries points to an unnoticed source of variation in comparative antitrust law, and shows the adaptability of their competition laws to local circumstances. Similarly to the treatment of legal persons linked by equity ties, antitrust law’s “veil peeking” – or disregard of legal separateness – of natural persons linked by family ties does not necessarily require a showing of fraud or abuse.

How do private law institutions of developing countries differ from those of developed countries? A common view is that the legal systems of the Global South are often outdated, failed transplants of Global North models, or plagued by enforcement challenges. This book project offers a different perspective by focusing on legal innovation and adaptation in the Global South. We examine how countries in the Global South have embraced legal doctrines and solutions that deviate from approaches that currently hold the status of orthodoxy in richer countries, and pursue distinct and potentially broader public policy objectives or reflect different values, in response to conditions that are commonplace in developing countries. Our analysis points to reasons why the legacy of colonialism, limited fiscal capacity, economic dependence on richer countries and macro-economic volatility may encourage lawmakers in poor countries to develop heterodox doctrines. We explore different manifestations of legal heterodoxy across various areas of private law in a range of countries in the Global South. Recognizing legal heterodoxies in the Global South enlarges our understanding of legal experiences and possibilities, and contributes to our understanding about the driving forces and direction of legal evolution around the world.

This chapter situates the Global South in current debates on comparative corporate governance, with a special focus on the “BICS” (Brazil, India, China, and South Africa). The BICS now boast higher levels of stock market capitalization as a percentage to GDP than the four largest Global North economies, and their firms are also increasingly integrated into Global North markets. However, traditional views on corporate governance in the Global South have either assimilated the South into Global North categories (such as legal families) or have had a narrow focus on failures in legal transplantation or in ensuring investor protection. New ways of thinking about the Global South are emerging, however. Those have identified institutional innovations and adaptations in corporate laws in the Global South that account for local realities, especially in incorporating concerns about stakeholder protections and inequality. Global South legal systems are also increasingly a prominent driver of corporate law and governance trends around the world. While in earlier decades Global South jurisdictions sought to mobilize the United Nations (UN) to regulate multinational corporations, more recently the UN has sought to mobilize corporations to mitigate regulatory gaps in the Global South. Concerns about regulatory gaps in the Global South with respect to human rights and environmental protection have helped inspire global trends in corporate governance such as the ESG movement and human rights due diligence, thus contributing to the resurgence of stakeholderist proposals and reforms in the Global North. Interestingly, the growing interest in stakeholder-oriented approaches in the Global North can also be interpreted as a form of “reverse convergence” in comparative corporate governance, with various institutions of the Global North coming to resemble their Global South counterparts.

Controlling shareholders have been directly involved in some of the largest and most consequential bribery scandals in the world over the course of the last decade. Nevertheless, the academic literature and the dominant international model of anticorruption law have neglected the dynamics and implications of controlling shareholder involvement in the payment of bribes. We argue that controlling shareholders, especially in family-controlled firms, may be uniquely positioned to lead corrupt schemes. We then analyze the incidence of this phenomenon in recent U.S. enforcement actions under the FCPA and in Brazilian enforcement actions under the Car Wash (Lava Jato) anticorruption operation. Controlled companies account for a minority of the FCPA cases, but for a large majority of the Brazilian cases. Controlling shareholders were implicated in a significant portion of actions against controlled companies in both contexts. We argue that the dominant international model, which is premised on organizational liability and incentives for compliance programs, is ill-suited to addressing cases of bribery led by controlling shareholders, and call for a distinct array of legal responses.

How do the corporate laws of Global South jurisdictions differ from their Global North counterparts? Prevailing stereotypes depict the corporate laws of developing countries as either antiquated or plagued by problems of enforcement and misfit despite formal convergence. This Article offers a different view by showing how Global South jurisdictions have pioneered heterodox stakeholder approaches in corporate law, such as the erosion of limited liability for purposes of stakeholder protection in Brazil and India, the adoption of mandatory corporate social responsibility in Indonesia and India, and a large-scale program of Black corporate ownership and empowerment in South Africa, among many others. By incorporating broader public policy and distribution objectives into corporate law, heterodox stakeholderism can be interpreted as an institutional adaptation—be it sensible or misguided—to a context of high inequality and externalities that remain unaddressed through other areas of law. As the rise of inequality and growing distrust of the state’s ability to tackle social and environmental concerns have brought the Global North closer to the Global South’s realities, the resurgent interest in stakeholderism in the developed world constitutes a surprising form of “reverse convergence” that merits greater attention. Finally, heterodox stakeholderism in the Global South also responds to critical, but heretofore neglected, distributional implications of corporate law rules, such as limited liability for environmental harm caused by corporate subsidiaries, which tend to enrich Global North companies and investors at the expense of Global South victims. These findings have implications for ongoing debates in corporate law, comparative law, law and development, and business and human rights.

Legal discourse about business entities has displayed a logical fallacy regarding the consequences of corporate separateness. A fallacy of equivocation occurs when a term is used with one meaning in the premise and with another meaning in the conclusion. Legal personality undoubtedly provides a separate—in the sense of distinct—nexus for the imputation of legal rights and duties. This, however, does not mean that corporations are or should be treated as legally separate—in the sense of insulated—from shareholders in all contexts. Moreover, legal insulation between corporations and shareholders for some purposes (e.g., limited liability) does not necessarily entail insulation for other purposes (e.g., the application of a contractual or regulatory scheme). In effect, there is significant, if varying, permeability between the legal spheres of corporations and shareholders across different areas of law, including corporate law. Rather than a nonconductor that always isolates the legal spheres of the corporation and related parties, legal personality operates as a semi-permeable membrane. Nevertheless, the recurrent fallacy of complete corporate separateness has obscured and hampered the development of legal doctrine in several contexts.

How does corporate law treat legal entity boundaries in groups of companies? This is a critical question given that large corporations typically have hundreds of subsidiaries. Investigating the treatment of this question in key jurisdictions over time reveals a critical, but thus far overlooked, development in corporate law around the globe. Corporate law rules of internal governance increasingly overcome entity boundaries and apply on a pass-through basis, such as by allowing shareholders of a parent company to sue subsidiary directors, inspect subsidiary books and records, and approve major asset sales by subsidiaries. This phenomenon, which can be described as the rise of “entity transparency” in corporate law, reflects a gradual trend that has accelerated in the twenty-first century. Interestingly, there appears to be little direct correlation between a jurisdiction’s willingness to disregard entity boundaries to enforce shareholder rights, on the one hand, and to impose liability on shareholders for the benefit of creditors, on the other. The Article then offers an economic account for the distinct treatment of corporate separateness vis-à-vis shareholders and creditors, and explores the broader theoretical and normative ramifications of its analysis. The rise of entity transparency in corporate law underscores the importance of unbundling different dimensions of corporate separateness, challenges the view that overcoming entity boundaries between parent companies and subsidiaries invariably requires extraordinary circumstances, and has implications for a wide array of legal issues across various areas of law.

Apesar da crescente demanda por maior transparência no Poder Judiciário, uma disposição do Código de Processo Civil de 2015 trilhou em sentido inverso, afastando o princípio da publicidade nos processos judiciais que versam sobre arbitragem (art. 189, IV, do CPC). O objetivo do presente trabalho não é questionar o merecido sucesso da arbitragem no Brasil, nem tampouco a confidencialidade naquela esfera, mas tão apenas a transposição do sigilo para o âmbito judicial. Sustenta-se que o alargamento das hipóteses legais de segredo de justiça para abranger disputas que versam sobre arbitragem no art. 189, IV, do novo Código de Processo Civil constitui grave violação da garantia de publicidade processual, prevista no artigo 5º, LX, da Constituição brasileira, e ocasiona diversos efeitos deletérios à administração da justiça. Longe de privilegiar a arbitragem como modo de resolução de disputas, a inovação legislativa acaba por desincentivar o cumprimento voluntário de decisões arbitrais por meio de mecanismos reputacionais, potencialmente comprometendo a atratividade da via arbitral no longo prazo.

There is an ongoing debate about whether contract law has any role to play in addressing economic inequality 3 . On this view, contract law can at most be used to address imbalances of wealth or power between parties to specific transactions, but not to help parties who are disadvantaged relative to other members of the broader society 4 . In recent years there has been a resurgence of interest in heterodox approaches that allow bodies of law besides tax law to play a role in combatting inequality 5 . Several scholars have argued that contract law ought to be recruited into the battle 6 , resurrecting high-profile earlier debates among U.S. scholars 7 . However, so far, conversations about these heterodox approaches have focused on legal developments in North America and Western Europe. This is unfortunate because economic inequality is a pressing problem in other parts of the world, including in developing countries, some of which may be sites of important legal innovations. In fact, there is a great deal to be learned about contract law heterodoxy from the jurisprudence of developing countries. There are prominent examples of courts and legislatures in Brazil, Colombia and South Africa openly using their control over the legal effects of agreements between private actors to influence the distribution of wealth. Attention to those heterodox developments promises to enrich the debate about the role of contract law in addressing economic inequality around the world. We begin this essay by setting out the theoretical foundations of contract law orthodoxy and then discussing the possible objections. Next, we discuss examples of contract law heterodoxy drawn from our research on contract law in Brazil, Colombia, and South Africa. We conclude by discussing what these examples from the developing world might tell us about the viability of contract law heterodoxy in other countries, including more economically developed countries such as the United States or most members of the European Union.

Does contract law have any role to play in tackling economic inequality, one of the most pressing problems of our time? The orthodox answer to this question is no: Contract law should promote autonomy, efficiency, and/or justice in exchange, while distributive objectives should be dealt with exclusively through the fiscal system. While scholars have often debated the question of whether contract law should be reformed to address inequality, that question misses the reality that, at least in some contexts, it already does. This Article shows how courts in South Africa, Brazil, and Colombia—prominent developing countries from different legal traditions —have diverged from orthodoxy to embrace the task of using contract law to address inequality. The emergence of contract law heterodoxy in developing countries draws attention to the existing, if more limited, instances of heterodoxy in the contract laws of the United States and Europe and to the stakes of contract law more generally. This analysis highlights how mounting inequality may increase the appeal of contract law heterodoxy and suggests that the present reign of contract law orthodoxy is neither universal nor inevitable.

Apesar da importância das fusões e aquisições (M&A) no cenário jurídico nacional, o estudo da matéria esbarra na ausência de publicidade sobre as disputas sobre o tema no Brasil, usualmente decididas mediante arbitragem confidencial. Fusões e aquisições: pareceres contribui para o acervo de conhecimento no campo ao congregar pareceres jurídicos sobre a matéria emitidos por muitos dos mais renomados juristas nacionais, cujas teses foram vencedoras nas controvérsias em questão. A obra destina-se a estudantes e profissionais do direito interessados em fusões e aquisições, incluindo advogados de consultivo e contencioso, árbitros, juízes, professores e pesquisadores.

This empirical study updates and extends research published in 2014 on the use of arbitration clauses by publicly traded companies in Brazil to elucidate the current state and recent developments in the field of arbitration in Brazilian capital markets. In 2021, 234 publicly traded companies had arbitration clauses in their corporate charter, amounting to 61% of companies listed on B3. Even in the Traditional and Level 1 segments, where arbitration is not mandatory, 27% of the companies had arbitration clauses in their corporate charter, compared to only 15% in 2013. In addition, among the 41% listed companies with shareholder agreements, 77% opt for arbitration, compared to 70% in 2013. Although a significant proportion of companies have not yet adopted arbitration clauses, we observe a small increase in the adoption of arbitration by publicly traded companies between 2013 and 2021. In the last quarter of 2021, 18% of the companies comprising the Ibovespa index had no arbitration clause in their corporate charter. When arbitration not mandatory, the Câmara de Arbitragem do Mercado was selected by 76% of companies listed on Traditional and Level 1 segments, as well as by 61% of the total number of companies that have an arbitration clause in their shareholder agreements. Empirical study; capital market; publicly traded companies; arbitration clause; arbitration; corporate charter; shareholder agreement.

Corporate personality entails the separation between the legal spheres of the entity and its shareholders. This chapter highlights the critical economic role of what I call regulatory partitioning, which is the distinction between the entity and its members for purposes of the imputation of legal rights and duties. By enabling the corporation to operate as a “nexus for regulation,” regulatory partitioning produces significant benefits as well as costs. While regulatory partitioning is essential to the proper functioning of multi-member firms, it also supports legal arbitrage in tax and regulatory matters as a major driving force of incorporations around the world. The chapter also distinguishes between the frequently invoked notion of veil piercing as an exception to asset partitioning and a much more pervasive process I call veil peeking as an exception to regulatory partitioning.

Existem diferenças entre o direito privado dos países em desenvolvimento e o direito dos países desenvolvidos? A literatura frequentemente oferece uma das seguintes respostas: ou o direito dos países em desenvolvimento é antiquado e ineficiente, exigindo modernização, ou é perfeitamente adequado do ponto de vista formal, mas carece de efetividade. O presente artigo busca questionar essas visões ao apresentar como os tribunais da África do Sul e da Colômbia, assim como os brasileiros, têm buscado incorporar preocupações distributivas nas decisões em matéria de direito contratual – fenômeno que denominamos de “heterodoxia contratual”. O reconhecimento da heterodoxia contratual em países em desenvolvimento chama a atenção para as manifestações existentes, embora mais limitadas, do mesmo fenômeno em países desenvolvidos. Sugere-se que a desigualdade e a injustiça social persistentes minam as premissas que alicerçam a defesa do direito contratual ortodoxo, conduzindo a um renovado interesse pela heterodoxia contratual ao redor do mundo na atualidade.

Legal and economic scholarship views the provision of asset partitioning (the separation between the assets of the corporation and its shareholders) as the essential economic role of corporate personality. This Article contends that this view is incomplete. First, it identifies the provision of regulatory partitioning (the separation between the legal spheres of the corporation and its shareholders for purposes of the imputation of legal rights and duties) as another fundamental function of the corporate form. Second, it shows that regulatory partitioning is not absolute. In various areas of law and for different purposes, the law “peeks” behind the corporate veil to ascribe legal rights or duties of shareholders to the corporation.

Comparative corporate governance has focused either on prevailing differences across legal systems or on spontaneous legal transplants of foreign institutions in response to global competition. This Essay argues that corporate law today is not only a product of the invisible hand of the market but also of the soft (and not-so-soft) hands of international organizations and standard setters. By tracing the emergence of international corporate law (ICL) since the Asian crisis of the late 1990s, it shows how the IMF, the OECD, the World Bank, and the United Nations, among several other international players, have helped shape legal reforms and corporate governance developments around the world. The observed influence of ICL ranges from the impulse for independent directors and the control of related-party transactions to the growth of ESG investment factors and human rights policies. The rise of ICL responds to interjurisdictional externalities and nationalist bias of domestic regimes that have been largely neglected by prevailing theories, which failed to predict and notice the strong push for international coordination and standard setting in the field. ICL has also gone beyond merely prescribing an Anglo-Saxon model of corporate governance to promote legal innovations that place the United States on the receiving end of international pressure. Legal implants from ICL, rather than legal transplants from a foreign jurisdiction, are an increasingly relevant force behind corporate governance change. While ICL has been influential, its efficacy and normative vision face challenges. The time has come to move beyond an exclusively comparative focus to also scrutinize the potential and limits of corporate lawmaking at the international level.

Part I provides a brief overview of the relationship between corporate law and nationalism and demonstrates their interaction in the historical experiences of several key jurisdictions. These vignettes are merely illustrative, but they indicate how deep the link between nationalism and corporate law can be. Part II summarizes the evidence on the economic effects of foreign corporate control, showing that it is ultimately inconclusive. Part III explains why corporate law can be an attractive instrument to accomplish nationalist objectives and explores the possible regulatory responses to this phenomenon. Part IV analyzes the implications of these findings for future developments in corporate lawmaking. Part V concludes by reflecting on the prospect of the bond between nationalism and corporate law.

Portuguese abstract: Trata-se de parecer jurídico que trata dos efeitos jurídicos e da racionalidade econômica das cláusulas de declarações e garantias, das qualificadoras de conhecimento e da previsão sobre os efeitos do conhecimento do adquirente para fins de indenização por violação contratual. Apresenta-se a distinção quanto à natureza jurídica e eficácia das declarações (representations), de um lado, e das garantias contratuais (warranties), de outro. A eficácia extracontratual das declarações, vinculada à higidez da declaração de vontade, contrapõe-se à eficácia contratual própria das garantias. Demonstra-se que as obrigações de garantia, constituindo tertium genus em relação às obrigações de meio e às obrigações de resultado, têm natureza objetiva, ensejando indenização “haja o que houver”, isto é, independentemente de má-fé ou culpa do declarante e da ocorrência de caso fortuito ou força maior. Já a aposição de qualificadora do conhecimento à declaração, por sua vez, impõe critério nitidamente subjetivo, obstando a caracterização de garantia contratual em sentido próprio e impondo ao adquirente o ônus de provar a efetiva ciência do vendedor quanto às infrações alegadas. A cláusula que busca desconsiderar o conhecimento do adquirente para fins indenizatórios (sandbagging) tem eficácia restrita a violações de verdadeiras garantias contratuais de natureza objetiva (warranties) cujo descumprimento conhecido seja suscitado antes do fechamento. Conclui-se pela inadmissibilidade do uso da cláusula de sandbagging como “carta na manga”. English abstract: This expert opinion examines the legal effects and the economic rationale of representations and warranties, knowledge qualifiers, and the contractual regulation of the effects of buyer’s knowledge for purposes of indemnification. We distinguish between the legal nature and effects of representations, on the one hand, and warranties, on the other. The extra-contractual effects of representations differs from the contractual effects of warranties. We show that warranty obligations (obrigações de garantia), qualified as a tertium genus vis-à-vis obligations of means and obligations of results, give rise to strict liability in all circumstances, irrespective of bad faith or fault of the obligee and of the occurrence of force majeure. The inclusion of a knowledge qualifier in the representation imposes a clearly subjective criterion, preventing the characterization of a contractual warranty and imposing on the buyer the burden of proving the seller’s actual knowledge with respect to the alleged breach. The effects of the clause seeking to disregard the buyer’s knowledge for indemnification purposes (sandbagging clause) are limited to known violations of strict contractual warranties raised prior to closing. We conclude that the use of sandbagging clauses as “an ace up one’s sleeve” is unlawful under Brazilian law.

By the end of the twentieth century, the then-dominant literature on “law and finance” assumed that concentrated ownership was a product of deficient legal systems that did not sufficiently protect outside investors. At the same time, commentators posited that the competitive pressures of economic globalization would push countries around the world to adopt an efficient regime of strong investor protection, which was thought to facilitate ownership dispersion. Nevertheless, at the dawn of the 2020s, ownership concentration not only persists, but appears to be on the rise among the world’s largest companies. This symposium essay in honor of Ronald Gilson explores what went wrong with the original predictions from two decades ago and the resulting lessons for corporate governance analysis. It shows that the focus on agency costs that dominated the earlier literature overlooked the fact that corporate governance structures are both (i) influenced by factors beyond tradeoffs in agency costs (such as non-pecuniary private benefits of control and nationalism), and (ii) affect social welfare in ways other than through their effects on investor protection. The essay then reflects on the emerging challenges to what I call the “modularity approach” to corporate law scholarship, and contemporary law-and-economic analysis more generally, which stipulates that each area of law should serve one key efficiency objective.

This essay, prepared for a volume on related-party transactions (RPTs), explores the economic, legal and policy challenges associated with RPTs in state-owned enterprises (SOEs). We show that RPTs in SOEs differ from RPTs in privately owned enterprises (POEs) in at least two ways. First, RPTs in SOEs may decrease social welfare not only when they cause harm to a given SOE by extracting wealth from minority (non-state) investors (the usual “tunneling” problem) but also when the state provides the SOE with benefits not available to POEs (“propping”). Second and more importantly, unlike the typical case with a POE, the state as controlling shareholder does not need to cause an SOE to engage in a “transaction” for it to extract private benefits from the firm to the detriment of minority investors. The state can also extract political private benefits by engaging in what we call “policy channeling” – using partial ownership of an SOE to achieve social or industrial policy objectives. As a means of carrying out these objectives, policy channeling may be preferred over regulation and taxation for a number of reasons: it may be a lower cost substitute for regulation in weak institutional environments, minority investors implicitly bear at least some of the cost of the policy’s implementation, and the SOE shields the policy from public participation and accountability. After mapping the nature of these problems in SOEs, we examine the potential of different legal strategies to address them, including those proposed by the OECD, World Bank, and stock exchange initiatives.

The business corporation, a central pillar of modern capitalism, is deemed to have a set of defining features that are universal across different jurisdictions and ever more widely available. However, a close exami- nation of legal developments in Brazil, one of the world’s largest economies, shows a surprisingly dif- ferent picture. In the past decades, Brazil has signifi- cantly watered down the canonical elements of the corporate form, including limited liability and capital lock-in. After describing this phenomenon, the Article analyzes it in view of efficiency and distributional considerations. It puts forward the possibility that the blurring of the corporate attributes may be an adap- tive response to a weak institutional environment, which, among other things, fails to protect minority investors and curb externalities through regulation. The Article concludes by examining how the erosion of the corporate attributes in Brazil subverts our con- ventional understanding about the evolution of corpo- rate law and the immutability of the corporate form.

Contract law has long been a favorite area of study among comparative law scholars. Economists have posited that contract institutions play a central role in economic development. Yet, in sharp contrast to the state-of-the-art in other fields (such as corporate law and bankruptcy law), the possible role of contract laws in shaping economic outcomes remains largely neglected. This essay explores the main reasons that might explain this status quo. These are: (i) the lack of meaningful variation in contract laws around the world, (ii) the triviality of contract law, (iii) the ample availability of choice of law, (iv) the U.S.-centric bias of the law-and-economics literature, (v) the lack of public data on contracting practices, and (vi) the boundaries of contract law. It concludes that, while important, these factors are ultimately insufficient to justify the scarcity of works on the economic consequences of contract law, which could be a fruitful area for future research.

Por muito tempo, o direito contratual foi a área de estudo favorita entre pesquisadores de direito comparado. Economistas têm assumido que instituições contratuais desempenham um papel central no desenvolvimento econômico. Ainda assim, em um afiado contraste com o estado-da-arte de outros campos (tais como direito empresarial e direito falimentar), o papel que leis contratuais podem exercer na modulação de resultados econômicos permanece amplamente negligenciado. Este ensaio explora as principais razões que podem explicar esse status quo. Elas são: (i) a falta de variação significativa nas leis contratuais ao redor do mundo; (ii) a trivialidade do direito contratual; (iii) a larga disponibilidade de escolha do direito; (iv) o viés centrado nos Estados Unidos da literatura da análise econômica do Direito; (v) a falta de dados públicos acerca de práticas contratuais, (vi) os limites do direito contratual. Conclui-se que, apesar de importantes, esses fatores são, em última análise, insuficientes para justificar a escassez de trabalhos sobre as consequências econômicas do direito contratual, o que poderia ser uma proveitosa área para pesquisas futuras.

This book provides a theoretical framework for the understanding of corporate (or company) law from both a functional and a comparative perspective and illustrates how corporate laws in core jurisdictions (namely, Brazil, the U.S., the UK, France, Germany, Italy, and Japan) conform to that framework. Corporations in all jurisdictions share the same key legal attributes: namely, legal personality, limited liability, delegated management, transferable shares, and investor ownership. Businesses using the corporate form give rise to three basic types of agency problems, namely those between: (1) managers and shareholders as a class; (2) controlling shareholders and minority shareholders; and (3) shareholders as a class and other corporate constituencies, such as corporate creditors and employees. After identifying the common set of legal strategies used to address these agency problems and discussing their interaction with enforcement institutions, the book illustrates how a number of core jurisdictions around the world deploy such strategies. In so doing, it highlights the many commonalities across jurisdictions and reflects on the reasons why they differ on specific issues. The analysis covers the basic governance structure of the corporation, including the powers of the board of directors and the shareholder meeting, both when management and when a dominant shareholder is in control. It then analyses the role of corporate law in shaping labor relationships, the protection of external stakeholders, the relationships with creditors, related-party transactions, fundamental corporate actions such as mergers and charter amendments, takeovers, and the regulation of capital markets.

This paper is the first chapter of the third edition of The Anatomy of Corporate Law: A Comparative and Functional Approach, by Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda Mariana Pargendler, Georg Ringe, and Edward Rock (Oxford University Press, 2017). This paper is the first chapter of the third edition of The Anatomy of Corporate Law: A Comparative and Functional Approach, by Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda Mariana Pargendler, Georg Ringe, and Edward Rock (Oxford University Press, 2017). The book as a whole provides a functional analysis of corporate (or company) law in Europe, the U.S., and Japan. Its organization reflects the structure of corporate law across all jurisdictions, while individual chapters explore the diversity of jurisdictional approaches to the common problems of corporate law. In its third edition, the book has been significantly revised and expanded. As the introductory chapter to the book, this paper introduces the book’s analytic framework, which focuses on the common structure of corporate law across different jurisdictions as a response to fundamentally similar legal and economic problems. It first details the economic importance of the corporate form’s hallmark features: legal personality, limited liability, transferable shares, delegated management, and investor ownership. The major agency problems that attend the corporate form and that, therefore, must be addressed, are identified. The chapter next considers the role of law and contract in structuring corporate affairs, including the function of mandatory and default rules, standard forms, and choice of law, as well the debate about the proper role of corporate law in promoting overall social welfare. While almost all legal systems retain the core features of the corporate form, individual jurisdictions have made distinct choices regarding many other aspects of their corporate laws. The forces shaping the development of corporate law, including evolving patterns of share ownership, are examined.

Despite predictions of their demise in the aftermath of the collapse of socialist economies in Eastern Europe, state-owned enterprises (SOEs) are very much alive in the global economy. The relevance of listed SOEs— firms subject to government ownership, but with a portion of their shares traded on public stock markets— has persisted and even increased around the world, as policymakers have encouraged the partial floating of SOE shares either as a first step toward, or as an alternative to, privatization. In this Article, we evaluate the governance challenges associated with mixed ownership of enterprise, and examine a variety of national approaches to the governance of listed SOEs, with a view to framing a robust policy discussion in many countries where SOE reform is a topic of major significance. We describe the evolution and current status of the institutional framework applicable to listed SOEs in eight different jurisdictions which reflect a variety of economic, legal, and political environments: France, the United States, Norway, Colombia, Brazil, Japan, Singapore, and China. We leverage the lessons from this comparative analysis by critiquing the policy prescriptions of international agencies such as the OECD and framing our own policy suggestions.

Resumo Este artigo busca oferecer uma nova interpretação de certas distinções clássicas entre o direito dos contratos romano-germânico e anglo-saxônico. Desta análise surge um padrão claro, mas até então negligenciado. O sistema de civil law impõe mais limitações ao conteúdo das obrigações contratuais, valorizando o papel da boa-fé como standard de conduta obrigatório e impondo um maior número de cláusulas de natureza cogente. O sistema de common law, em contrapartida, estabelece limitações mais contundentes aos remédios disponíveis em caso de inadimplemento contratual, invalidando cláusulas penais, qualificando a execução específica como remédio excepcional e concedendo mais generosamente um “novo começo” (fresh start) na insolvência. Não obstante, os diferentes papéis do Estado na fiscalização das cláusulas do contrato e na imposição de consequências jurídicas para o inadimplemento são, em larga medida, substitutos funcionais, o que torna os resultados concretamente obtidos em ambos os sistemas mais próximos do que se esperaria ao se examinar os diferentes institutos de forma isolada. , Abstract This article seeks to offer a novel interpretation of certain classical differences between the civil and the common law of contracts. This analysis reveals a clear, but so far neglected, pattern. The civil law imposes greater limitations on the scope of contractual obligations, by recognizing a stronger duty of good faith and imposing more mandatory terms. The common law system, by contrast, more forcefully constrains the remedies available for breach of contract, by invalidating penalty clauses, qualifying specific performance as an exceptional remedy, and more generously granting a “fresh start” in bankruptcy. Nevertheless, the different roles of the State in policing the terms of the contract and imposing remedies for non-performance are, to some extent, functional substitutes. This means that practical outcomes in both systems are closer than one would anticipate by focusing on individual rules and institutions in isolation.

No imaginário jurídico e popular, os Estados Unidos aparecem como o lócus privilegiado das indenizações milionárias a serem pagas por grandes empresas pelos abusos cometidos contra consumidores. Não é de surpreender que, em um período marcado pela americanização do Direito textlessU+2013textgreater no qual a hegemonia econômica se traduz em imperialismo jurídico textlessU+2013textgreater, a experiência norte-americana em matéria de responsabilidade civil passe a exercer verdadeiro fascínio e influência sobre outras culturas jurídicas. É nesse contexto que os punitive damages vêm servindo de inspiração, de forma expressa ou velada, às decisões dos tribunais brasileiros que pretendem conferir caráter punitivo à responsabilidade civil por dano moral - função esta estranha à moderna civilística de origem romano-germânica. Em janeiro de 2014, uma pesquisa jurisprudencial pela expressão "punitive damages" no sítio eletrônico do Tribunal de Justiça de São Paulo apontava para mais de mil acórdãos. [Da inrodução]

As diferenças no estilo entre os modelos contratuais oriundos de sistemas romano-germânicos e de common law são bem conhecidas. Tradicionalmente, os instrumentos contratuais anglo-saxônicos são mais extensos, minuciosos e individualizados do que aqueles provenientes de países de tradição romanista. As razões para essas discrepâncias não são, porém, suficientemente compreendidas na literatura. O presente trabalho busca examinar como o papel proeminente dos tipos contratuais na tradição romanista e a sua menor relevância no common law repercute nos padrões de modelagem contratual observados na prática negocial. Do ponto de vista descritivo, a origem anglo-saxônica de expressiva parcela de contratos atípicos – como os contratos terminados em “-ing” (leasing, franchising, engineering, entre outros) – sugere a existência de fatores associados à tradição jurídica. Do ponto de vista normativo, verifica-se um tradeoff entre a redução dos custos de transação proporcionada pela padronização dos tipos contratuais, de um lado, e os desincentivos criados à inovação nas formas contratuais, de outro. Por fim, conclui-se por suscitar reflexão sobre o futuro das técnicas de redação contratual em tempos de globalização e sobre os possíveis papéis do Estado na indução da inovação contratual na tradição romano-germânica.

Proliferam hoje instituições de pesquisa e trabalhos acadêmicos em direito que — diferentemente do método jurídico tradicional, mas à semelhança das demais ciências sociais — objetivam investigar os efeitos das normas jurídicas sobre a realidade econômica e social. No presente artigo sustentamos que, no Brasil, a adoção de novas metodologias na produção jurídica liga-se à transformação no modo de aplicação do direito, que vem crescentemente consagrando a utilização de argumentos consequencialistas em juízo. Examinamos, então, os três vetores de caráter ideológico (o triunfo do progressismo), organizacional (a centralidade do Poder Judiciário no arranjo político) e técnico-jurídico (o reconhecimento da força normativa dos princípios) que forjaram tal transformação no contexto brasileiro. Daí decorre que a aplicação do direito cada vez mais exija não apenas a averiguação de fatos pretéritos para determinar a incidência do suporte fático de regras, mas também juízos probabilísticos sobre fatos futuros a fim de concretizar os fins jurídicos consubstanciados em princípios — propiciando, assim, o surgimento de um potencial novo campo de pesquisa para os juristas. Todavia, a persistência de uma incerteza radical sobre o funcionamento do mundo — inclusive sobre as consequências de diferentes normas jurídicas — inviabiliza o consequencialismo extremado como técnica de decisão sobre a organização social. Em razão da inabilidade das ciências sociais em ditar o funcionamento do sistema jurídico, subsistirá o papel do jurista como formulador de doutrina como não ciência. Today, a growing number of research institutions and academic works in law seek to investigate the effects of legal rules on social and economic reality, a goal that differs from that of traditional doctrinal scholarship but is similar to the aspirations of other social scientists. In this Article, we argue that, in Brazil, the adoption of new methodologies in legal scholarship relates to a transformation in the mode of legal interpretation towards greater acceptance of the use of consequentialist arguments in court. As a result, judicial interpretation increasingly requires not only the verification of past facts that are abstractly described in legal rules, but also probabilistic judgments about future facts in order to carry out the legal objectives embodied in legal principles. Nevertheless, the persistence of radical uncertainty about the workings of the world — including the factual consequences of legal rules — thwarts the use of extreme consequentialist reasoning as a decision method for social organization. In view of social sciences’ inability to dictate how the legal system is to operate, the role of legal scholars as authors of doctrine as non-science will subsist.

Brazil is a main exemplar of contemporary pursuit of state capitalism by a Western economy. Major state-owned enterprises (SOEs) have survived the prior wave of privatizations, but they are by no means the only avenue for state influence over corporate governance in Brazil. As scholars have recently highlighted, the state increasingly acts as a minority, rather than majority, investor in Brazil as elsewhere. The particular variety of state capitalism prevailing in Brazil today reflects a combination of governmental control of traditional SOEs with the conspicuous exercise of shareholder activism by state-controlled institutional investors (SCIIs).

The relationship between comparative law and the field of economics is increasingly important, but controversial. In the legal origins literature, economists have drawn from comparative law scholarship to suggest that common law systems may be more conducive to financial and economic development than civil law systems. Yet comparativists have been skeptical of the use of legal families to explain economic outcomes. After reviewing the discussion of legal families in the disciplines of comparative law, on the one hand, and economics, on the other, we conclude that a more nuanced approach is advisable. At the same time, we urge comparativists to engage in this debate more actively.

O artigo examina os contornos e fundamentos da business judgment rule como fator limitador da responsabilidade civil dos administradores. Delineia-se, primeiramente, as características do instituto no direito norte-americano para, então, examinar-se a sua recepção pelo direito brasileiro à luz da Lei das S.A. e dos precedentes da Comissão de Valores Mobiliários. Por fim, apontam-se parâmetros para a aplicação do art. 159, § 6.º, da Lei das S.A.

Conventional wisdom holds that economic analysis of law is either embryonic or nonexistent outside of the United States generally, and in civil law jurisdictions in particular. Existing explanations for the assumed lack of interest in the application of economic reasoning to legal problems range from the different structure of legal education and academia outside of the United States to the peculiar characteristics of civilian legal systems. This Article challenges this view by documenting and explaining the growing use of economic reasoning by Brazilian courts. We suggest that the rise of economic reasoning in Brazilian legal practice is driven not by a supply push from scholars, but by a demand pull due to ideological, political, and legal factors, leading to greater judicial empowerment in the formulation of public policy. Given the ever greater role of courts in policy making, the application of legal principles and rules increasingly calls for a theory of human behavior (such as that provided by economics) to help foresee the likely aggregate consequences of different interpretations of the law. Consistent with the traditional role of civilian legal scholarship of providing guidance for the application of law by courts, the further development of law and economics in Brazil (as well as in other civil law jurisdictions) is therefore likely to be mostly driven by judicial demand.

Corporate governance has become a central concern of our time. For a variety of problems — from corruption and economic development to systemic risk and rising inequality — corporate governance reform has surfaced as a favored policy response. This Article explores the origins and scrutinizes the implications of this extraordinary focus on corporate governance as a solution to a constellation of economic and social ills.

Este estudo empírico atualiza e amplia investigação publicada em 2014 sobre a extensão do recurso a cláusulas arbitrais por companhias abertas no Brasil, revelando o estado atual e a evolução recente da arbitragem no mercado de capitais brasileiro. Verificou-se que, em 2021, 234 companhias abertas tinham cláusulas arbitrais em seus estatutos, representando 61% das empresas listadas na B3. Até mesmo nos segmentos Tradicional e no Nível 1, nos quais a arbitragem não é obrigatória, a via arbitral é adotada por 27% dos estatutos sociais, comparativamente a apenas 15% em 2013. Além disso, 41% das companhias listadas têm acordo de acionistas e, dentre estas, 77% optam pela arbitragem, ao passo que em 2013 esse percentual era de 70%. Comparando os dados de 2013 e 2021, observa-se um pequeno aumento na adoção da arbitragem pelas companhias abertas, embora ainda subsista número significativo de companhias que não aderiram à via arbitral. Entre os papéis que compunham o índice Ibovespa no último trimestre de 2021, 18% não estavam submetidos à solução arbitral no estatuto social. Assim como em 2013, a Câmara de Arbitragem do Mercado (CAM) foi a instituição preferida nos casos em que a via arbitral é opcional, sendo adotada em 2021 por 76% das companhias listadas Tradicional e Nível 1 que optaram pela arbitragem e de 61% do total de companhias que têm cláusula arbitral em seus acordos de acionistas.

Despite deep differences in their political systems, legal regimes, and economic structures, countries such as Brazil, Russia, India, and China share a recent history of rapid economic growth and capital market expansion. This chapter for the forthcoming Oxford Handbook of Corporate Law and Governance (Jeffrey N. Gordon & Wolf-Georg Ringe eds.) explores the degree and direction of transformation in emerging markets’ corporate governance in the last decades. Part I surveys the interaction between the ownership structures prevailing in emerging markets and the underlying institutional environment. Part II examines the driving forces of change by comparing the relative roles played by legislatures, regulators, courts, and alternative institutional arrangements in corporate governance reform. Part III then evaluates the degree of convergence and persistence in corporate governance in emerging markets by underscoring the need to consider the particular contextual significance of different practices.

The nineteenth century saw the standardization and rapid spread of the modern business corporation around the world. Yet those early corporations differed from their contemporary counterparts in important ways. Most obviously, they commonly deviated from the one-share-one-vote rule that is customary today, instead adopting restricted voting schemes that favored small over large shareholders. In recent years, both legal scholars and economists have sought to explain these schemes as a rough form of investor protection, shielding small shareholders from exploitation by controlling shareholders in an era when investor protection law was weak.

Business corporations in the nineteenth century often imposed limits on the voting rights of large shareholders. Economic historians have generally interpreted these voting restrictions as a contractual mechanism designed to protect small shareholders in a legal environment that afforded insufficient investor protection. This dominant account, however, fails to explain the variation in the incidence of voting restrictions across different industries and firm ownership structures, as well as their eventual disappearance from corporate charters over time. In this Article, we advance an alternative interpretation for these early voting schemes as efforts at consumer protection employed primarily by firms that were local service monopolies and collectively owned by their principal customers, none of whom wished the firm to come under the exclusive control of their competitors or of profit-maximising investors. We explore and test this proposition by analysing data on shareholder voting rights in the nineteenth century in Brazil, England, and France.