The Supreme Federal Court (STF) is slated to reconvene on March 18, 2026, to resume deliberations in two consequential cases that probe restrictions on the acquisition and use of rural property by Brazilian companies controlled by foreign capital.
The matters before the Court are Arguição de Descumprimento de Preceito Fundamental (ADPF) 342, filed by the Sociedade Rural Brasileira (SRB), and Ação Cível Originária (ACO) 2463, brought by the Federal Union and the National Institute for Colonization and Agrarian Reform (INCRA). ADPF 342 seeks a constitutional finding that paragraph 1 of Article 1 of Law No. 5.709/1971 (which treats Brazilian corporations controlled by foreigners as foreign legal persons for purposes of rural land acquisition) is not receivable under the 1988 Constitution, and it requests suspension of Attorney General’s Office Opinion AGU No. LA 01/2010. ACO 2463 seeks annulment of Opinion No. 461 12 E of the General Judicial Inspectorate of São Paulo, which exempted state notaries and registry officers from applying Law No. 5.709/1971 to Brazilian companies with majority foreign capital.
The dispute is legally intricate and has sown prolonged regulatory uncertainty across sectors reliant on rural land (e.g., agribusiness, energy, infrastructure, and others). An STF ruling will reverberate through compliance frameworks, contract validity, and the assessment of contingent liabilities for firms with foreign investment in rural holdings.
Procedural backdrop
Merits hearings began in a virtual session in February 2021. Then rapporteur Minister Marco Aurélio voted to dismiss ADPF 342 and to grant ACO 2463, effectively endorsing continued application of the restrictions in paragraph 1 of Article 1 of Law No. 5.709/1971 and affirming AGU Opinion No. LA 01/2010. After his vote, Minister Alexandre de Moraes requested further review and later issued a divergent opinion.
Minister Nunes Marques aligned with Marco Aurélio’s original position. Proceedings were suspended following a request for separate deliberation by Minister Gilmar Mendes, leaving the merits unresolved.
Following Marco Aurélio’s retirement, Minister André Mendonça was assigned rapporteurship of both cases.
Motion to remove from the docket
Despite the March 18 scheduling, SRB filed a petition on March 11, 2026, seeking removal of ADPF 342 from the docket. SRB argues the case should be deferred given the advanced stage of Bill (PL) 2.963/2019 in Congress, which seeks to regulate acquisition of rural land by foreigners and by Brazilian entities controlled by foreign capital.
The petition contends that a judicial decision at this juncture would be “inconvenient”, encroaching on an active legislative process and risking duplicative regulation and attendant legal uncertainty. The petition awaits a ruling by rapporteur Minister André Mendonça.
MPF recommendation
Parallel to the judicial and legislative developments, oversight bodies have intensified scrutiny. In January 2026 the Federal Public Prosecutor’s Office (MPF) issued Recommendation No. 30/2025 to the National Electric Energy Agency (ANEEL) and INCRA, citing indications of irregular land possession and use by renewable energy companies.
The MPF underscored that special purpose entities (SPEs) controlled by foreign capital are to be treated as foreign legal persons for purposes of Law No. 5.709/1971 and AGU Opinion LA 01/2010.
The MPF urged ANEEL to apply sanctions where legal requirements are unmet and recommended that INCRA inventory foreign or “equated” SPEs in the renewable sector, identify noncompliant actors, annul irregular contracts, and enforce the social function of property. The recommendation also proposed draft contractual clauses designed to protect communities (Indigenous peoples, quilombola and other traditional communities, and family farmers) in dealings with wind and solar developers.
Implications and outlook
The immediate trajectory of the STF’s deliberation hinges on Minister Mendonça’s decision on SRB’s removal request. Should the case remain on the docket, the Court will resume judgment on the merits; if removed, legislative developments may dictate the forum for resolution. In either scenario, the interpretive conflict surrounding Law No. 5.709/1971 persists as a central source of legal and commercial uncertainty, with tangible consequences for contract security and regulatory risk assessments for foreign backed enterprises operating in rural territories.
We will continue to track judicial, legislative and regulatory developments closely and provide targeted analysis to help clients navigate compliance, mitigate exposure and preserve legal certainty.
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