5/31/2022
It is no longer news that arbitration and mediation are widely used and show success in the field of private contracts. The question that until recently existed was whether these methods would also have space in the scope of public contracts, such as concessions, public-private partnerships, infrastructure works etc.
Especially after the amendment of the Arbitration Law and the publication of the Mediation Law with the Public Administration, the use of extrajudicial methods of resolving conflicts with the Public Sector started to be regulated. Several examples are mentioned, such as specific rules for the States of Rio de Janeiro[1], São Paulo[2] and Rio Grande do Sul[3], in addition to the New Federal Bidding Law (Law No. 14.133/2021).
What can be seen is that the Public Administration increasingly seeks to avoid taking judicial action towards its conflicts and consolidate the use of arbitration and mediation. Players who act in the public sector must be prepared for this reality.
If, on one hand, the use of these methods in public contracts tend to accompany the path seen in the private sector, towards its success, on the other hand, litigation with the Public Administration brings important challenges, such as the duty of publicity, the choice of arbitrators, and the definition of the matter taken outside the judicial environment.
Optimism should not overshadow care in addressing these issues. Therefore, we recommend to our clients to always be very alert to the benefits and possible disadvantages of using alternative methods of conflict resolution with the Government – such as arbitration and mediation -, either to better prepared before participating in a bidding process, or to seek to negotiate the scope of the use of such methods.
Author: Felipe Lima Matthes
[1]Decree nº 46.245/2018.
[2]Decree nº 59.963/2020.
[3]Decree nº 55.551/2020 e Law nº 15.812/2022.
