Article: Dutch Court Rules Petrobras Collective Investor Action May Proceed

By Kevin LaCroix on June 6, 2021

A court in the Netherlands has ruled that a collective investor action against Petrobras and related entities pending in the court can go forward, notwithstanding the arbitration clause in Petrobras’s articles of association. The defendants had sought to argue that because of the arbitration clause the foundation that was pursuing the Dutch action on behalf of investors had no standing to pursue the claims. The Dutch court’s May 26, 2021 ruling rejecting the defendants’ argument will now permit the action to go forward. A copy of Petrobras’s May 27, 2021 press release about the court’s ruling can be found here. A June 3, 2021 Law360 article about the Dutch court’s ruling can be found here.


The Dutch investor action relates to the massive corruption investigation – known in English as Operation Car Wash – that, among other things, resulted in the company’s agreement to pay $853.2 million to U.S. and Brazilian authorities. The corruption investigation was also the subject of a U.S. securities class action lawsuit filed on behalf of Petrobras investors who bought Petrobras securities in the U.S.  The U.S. securities class action lawsuit ultimately settled for $3 billion.

The action pending in the Dutch court was initiated in 2017 and is being pursued on behalf of investors who purchased Petrobras securities on the Brazilian stock exchange formerly known as Bovespa and now known Brazil Bolsa Balcão S.A. or B3, as well as on the Latibex Bolsa Madrid (Spain) and the Luxemburg Stock Exchange (Luxemburg). The claims are being pursued on the investors’ behalf by Stichting Petrobras Compensation Foundation (SPCF). The Foundation seeks a declaratory judgment that the defendants misled investors by concealing the bribery scheme, publishing misleading financial information and deceiving investors.

The defendants had sought to argue to the Dutch court that the claims could not be pursued in the Netherlands because the company’s articles of association includes a clause (article 58) that the company argued required the dispute to be subject to arbitration in Brazil rather than litigated in the Netherlands court.

The May 26, 2021 Judgment

In its May 26, 2021 Judgment, the District Court in Rotterdam rejected the defendants’ argument that the arbitration clause precluded the Netherlands action. An official English language version of the May 26 judgment is not yet available. However, a June 3, 2021 press release of the International Securities Association & Foundations Management Company, a group funding the litigation in the Netherlands,  summarizes the court’s rulings in the May 26 judgment.

In rejecting the defendants’ arguments that the arbitration clause barred the Netherlands action from going forward, the Dutch court noted that the defendants had made the exact opposite argument in arbitration proceedings in Brazil, in which they had argued that the clause did not compel arbitration of the investors’ claims. The court also noted that a broad interpretation of the arbitration clause would result in the investors being denied access to an “independent national court.” Since access to an independent court is a “fundamental right,” any provision that would cut off this court access should be “clear and unambiguous.”

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