STF Rules Judicial Deposits Will Not Receive Expurgo Inflation Adjustments

Overview

• The Supreme Federal Court decided by a 7–2 vote that judicial deposits from the 1986–1991 economic plans must be updated only by the index provided in law at the time of deposit and not by so‑called expurgo inflacionário adjustments.
• Seven ministers in the majority stressed preserving the validity of the economic plans and legal certainty for relations formed when the deposits were made, which the court said outweighs retrospective inflation recovery.
• Relator Edson Fachin and Kassio Nunes Marques dissented, arguing that depositors are entitled to corrections that preserve the purchasing power of money kept unavailable during the period in question.
• The case began with a soft‑drinks company that deposited funds at Caixa to suspend a CSLL tax claim; Caixa, Banco do Brasil, Febraban and the Fazenda Nacional appealed after a 2017 STJ ruling had favored including expurgos.
• The ruling sets a binding precedent that will guide lower courts, likely reducing banks’ and the Treasury’s exposure in many pending cases while limiting extra inflation claims by depositors and changing potential payouts on long‑running tax disputes.