Brazil government wins appeal in tax dispute with Vale

BRASILIA (Reuters) - Brazil's highest court overturned an injunction that had suspended collection of disputed tax claims from Vale SA (VALE5.SA), the world's largest iron-ore producer, the company said on Thursday, adding it would appeal the ruling.

The miner is fighting four tax bills issued by the federal tax authority, totaling 30.5 billion reals ($15.83 billion) on its earnings abroad. Vale said this is tantamount to double taxation as it paid taxes to foreign governments.

The Superior Court of Justice ruled in favor of the federal tax authority in its appeal against an injunction granted in March that suspended payment of the taxes by Vale. Vale says it will now appeal in order to reinstate that suspension.

"Vale remains confident in its arguments and will continue to pursue all appropriate legal actions until a final decision on the merits is reached," it said in a statement.

A statement on the court's website confirmed that the company still had the right to appeal the decision.

A Vale spokesperson said the company would not have to make an immediate payment should the tax authority request it, since it planned to appeal against the latest ruling.

The dispute over whether the taxes are due is waiting to be judged and is part of a run of appeals begun in the last decade, including one by the National Industry Confederation (CNI), against payment of tax on earnings on foreign operations.

Brazil's government is also seeking $3 billion in additional royalty payments from Vale, claiming the company has understated the value of its production. Switzerland's government is also pursuing the company for income tax arrears that Vale disputes.

Key Brazilian mining state Minas Gerais state is seeking an 1.2 billion reais (US$642.83 million) in additional tax from the company, saying Vale should have based its tax payments on the value of its output, not production costs.

($1 = 1.9265 Brazilian reals)

(Reporting by Peter Murphy; Editing by Jeb Blount, Gary Hill)

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Brazil shifts court for Chevron spill cases

By Leila Coimbra and Jeb Blount

RIO DE JANEIRO (Reuters) - A Brazilian judge moved two $11 billion civil cases against Chevron and drilling-rig operator Transocean related to an offshore drilling accident and spills to a different court in Rio de Janeiro, a decision that removes a crusading prosecutor from the cases.

The momentum is shifting in the legal battle stemming from a rupture in November at a well that Transocean was drilling in the Frade field, which Chevron operates.

The latest development, published in a court filing on Friday, comes on the heels of another decision in favor of the companies earlier this week from a separate court, in which a judge denied a request to bar the two companies from operating in Brazil.

Eduardo Santos de Oliveira, a federal prosecutor based in the interior of Rio de Janeiro state, filed two 20 billion reais ($11 billion) lawsuits against U.S. oil company Chevron and its contractor Transocean after a November spill of 2,400 to 3,000 barrels and a related March seep in the same field.

Friday's decision to move the two civil cases does not change the content of the charges, but it removes the cases from Oliveira's turf and hands them to another team of prosecutors.

The decision did not address the criminal charges that Oliveira also brought against the companies and 17 of their employees that could carry jail sentences up to 31 years.

Oliveira told Reuters he will appeal the decision.

"I remain convinced that they should be prosecuted here close to where the crimes occurred," he said.

Judge Tiago Pereira Macaciel said in a court filing released on Friday that "the magnitude of the environmental damage exceeds the area subject to the competency of Campos ... making it a regional damage."

Chevron Corp's head of media relations, Kurt Glaubitz, said Chevron Brasil Upstream Frade Ltd, its local subsidiary, was pleased with the court's decision.

Guy Cantwell, communications chief for Transocean, said by email that the company also questioned the validity of a second civil lawsuit, saying the charges lacked technical grounds.

Chevron owns 52 percent of the Frade field, Brazil's state-led oil company Petrobras owns 30 percent and a Japanese group led by Inpex Corp and Sojitz Corp owns 18 percent.

($1 = 1.8 reais)

(Reporting by Leila Coimbra; Writing by Reese Ewing; Editing by Carol Bishopric and Tim Dobbyn)

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