A judge in the 24th Federal Civil Court of São Paulo has issued an injunction blocking the proposed creation of a joint venture between the civilian part of Embraer (EMB, Sao Jose dos Campos) and Boeing (BOE, Chicago O'Hare) pending the inauguration of President-elect Jair Bolsonaro.

Local media reported that Judge Victorio Giuzio Neto said that in light of the new government taking power on January 1, including both the President and the Congress, it would be advisable to wait for the political situation to pan out rather than decide on the joint venture right now.

Boeing and Embraer had previously hoped to have the tie-up approved by the end of 2018.

The court also issued several remarks related to the proposed deal, in particular criticising the risk of transferring military secrets to the American manufacturer. Under the proposed set up, the military wing of Embraer would be excluded from the joint venture and a two-person board - with one representative from each of the companies - would supervise the distinction between the civilian and military operations.

The court said, however, that the measure was insufficient and suggested appointing a Brazilian state commission to guarantee that no military secrets are transferred to the US.

The proposed joint venture would be 80%-controlled by Boeing with the remainder of the shares controlled by Embraer.

The motion for an injunction was brought by four Congress representatives of the main opposition party Partido dos Trabalhadores (PT), which opposes the deal in principle.