Action was against X, and then Musk shut down X's Brazilian office and left outstanding debts. The supreme court evaluates that X and Starlink have same ownership and therefore Starlink (which still has local representation) is being held responsible for X's delinquent debts.
I am not a lawyer so can't comment on legality of this but it's obvious that X's stance on free speech is incompatible with Brazil's legislation on hate speech. My opinion is that X never had any intention to observe Brazilian law, and ran out of options to delay and deflect.