ANTT sets rules and procedures for mediation and arbitration

Resolution No. 5.845/2019 (“Resolution”), was approved by the National Land Transportation Agency (“ANTT”) and published in the Brazilian Official Gazette on May 14, 2019. The Resolution sets forth the rules for alternative dispute resolution procedures involving the Agency and entities subject to its regulatory authority, covering several issues that have been under debate in regard to arbitration involving public entities in Brazil.

Among other provisions, the Resolution:

i) defines what matters can be considered as “negotiable right ” in concession agreements under ANTT regulation and, therefore, subject to submission to arbitration. The following matters were defined as such:

  1. contract rebalancing;
  2. compensation for termination or transfer of contracts;
  3. contractual penalties and their calculation, as well as disputes in connection with the execution of guarantees;
  4. calculation of compensation due in cases of re-tendering; and
  5. disputes arising from breach of contract.

ii) defines the procedure for requesting and initiating a mediation procedure, which must be approved by ANTT’s board of officers and conducted by a member of the Federal Office of the Attorney General;

iii) allows ANTT to enter into an arbitration agreement, even when the contract under dispute does not contain an arbitration clause;

iv) provides that precautionary measures prior to the establishment of the arbitral tribunal may only be granted by the judicial courts and that any measures granted will cease to be in force in the event that the parties do not file for initiation of the arbitration within 30 days;

v) provides that the costs involved in the arbitration procedure will be paid by the private party until a final decision is delivered, following which such costs may be reimbursed, provided that the case is awarded in its favor. In the event of partial award, the reimbursement will be proportional. The reimbursement will be made in the form of judicial bond (precatório judicial);

vi) provides that the same rules regarding conflict of interest provided by Brazilian procedural law for judges shall be applicable to arbitrators;

vii) provides that the law of arbitration shall always follow Brazilian law and excludes application of foreign law and equity; and

vii) indicates which documents must be made available by ANTT on its website, in order to comply with the publicity/transparency requirements to which public entities are subject.

As with other legal provisions regulating the use of arbitration procedures with public entities, this resolution should be interpreted as an expression of deemed consent for the use of this dispute resolution method in disputes involving the Agency. It is expected that the Resolution will bring more legal certainty to arbitration involving public contracts regulated by the ANTT and contribute to the settling of several conflicts that have been arising in the Brazilian infrastructure industry.

Our Litigation & Arbitration and Infrastructure teams are available for any further information or clarification on this matter.