Decree No. 46.245 (“Decree”), published in the Official Gazette of the State of Rio de Janeiro on February 20, 2018, regulates the implementation of arbitration to resolve conflicts involving the State of Rio de Janeiro and entities of the Indirect State Public Administration, under the terms of Federal Law No. 9,307 / 1996.
The Decree limits the application of arbitration to disputes regarding waivable rights, specifically pecuniary disputes that do not concern primary public interests. Moreover, it establishes that Rio de Janeiro State Attorney’s Office (PGE-RJ) is the responsible entity to register the institutional arbitration bodies, being able to do so at any time, depending only on the interested arbitration center to apply for such registration. The institution of the arbitration procedure will be limited to the entities already registered before the PGE-RJ and the choice will be made by the company contracted by the state at the moment of its signature.
Public utility concession agreements, public-private partnerships, public-works concessions and any other contracts or adjustments of more than BRL20 million may be settled by arbitration. However, the parties may resort to arbitration to solve the dispute if all parties involved agree with such solution regardless a provision in the contract or the bidding terms.
As for the expenses, the Decree establishes that they must be advanced by the hired company, when acting as the claimant on the arbitration procedure, including the fees of arbitrators and experts and other costs involved in the procedure.
In its final provisions, the Decree clarifies that, in the case of contracts with resources provided by financing, donations extended by an official foreign cooperation agency or multilateral financing institution of which Brazil is a party, arbitration shall be guided by the rules of such entities.
Observations in this update about Brazilian law are by Tauil & Chequer Advogados. They are not intended to provide legal advice to any entity; any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.