Win for Lula as Jail Sentence Suspended After Court Ruling

(Bloomberg) -- Brazil’s highest court on Thursday granted an injunction suspending former President Luiz Inacio Lula da Silva’s prison sentence for corruption and money-laundering, in an unexpected, minor victory for the ex-head of state.

The Supreme Court’s decision means that even if an appeals’ court upholds his conviction on Monday, the former president cannot be detained until the country’s top judges meet again to discuss his habeas corpus request on April 4.

"It’s a short-term boost," said Lucas de Aragao, a partner at the political consultancy Arko Advice. "It was an interesting move which was positive for the defense."

Once the country’s most popular leader, Lula is still the front-runner in opinion polls ahead of the October general election, despite facing a 12-year prison sentence. His ongoing legal travails continue to draw massive media attention, an indication of how the former union leader still dominates Brazilian politics and could shape this year’s election. But his criminal conviction means that he is highly likely to be barred from running for election, regardless of whether he’s jailed. He has repeatedly denied wrongdoing and insists charges are politically motivated.

"Gaining almost an extra fortnight was a good result [for the defense]," said Richard Black a political analyst from XP Investimentos. "Time is gold."

Investors are closely watching the outcome of the court decision, for Lula has pledged to reverse many of the current administration’s market-friendly policies and austerity measures. The more likely Lula’s imprisonment has become, the more financial markets have rallied in recent months.

Lula accepted his party’s nomination as its presidential candidate in January a day after an appeals court ruling upheld his conviction, and has vowed to battle to the end.

©2018 Bloomberg L.P.