By Diogo Albaneze Gomes Ribeiro[1]
- Introduction
On 05.17.2019, Resolution No. 5,845 of May 14, 2019 (“Resolution No. 5,845/19”) came into force, setting out the procedural rules for the use of self-composition and arbitration in disputes involving the National Land Transportation Agency (“ANTT”) and the entities it regulates.
The Resolution seeks to facilitate and strengthen the use of alternative dispute resolution mechanisms in contracts involving ANTT. To this end, Resolution No. 5,845/19 sought to set out not only the matters that may be submitted to self-composition and/or arbitration, but also the procedure for initiating them, including, among other aspects, the system for paying costs and choosing arbitrators, mediators and the Arbitration Chamber itself.
- Disposable property rights recognized by Resolution No. 5,845/19
Without prejudice to other matters to be assessed in each specific case, Resolution No. 5,845/19 established that the following disputes may be submitted to self-composition and/or arbitration.
- restoring the economic and financial balance of contracts;
- compensation arising from the termination or transfer of the Contract;
- contractual penalties and their calculation, as well as disputes arising from the enforcement of guarantees;
- the contract re-tendering process, in matters involving the calculation of compensation by the competent body or entity; and
- breach of contractual obligations by either party.
On the other hand, matters relating, for example, to the power to oversee the operation of the delegated service and to requests by the Concessionaire to terminate the contract were expressly excluded from the Dispute Resolution procedure (art. 3).
- The mediation process
Under Resolution No. 5,845/19, the mediation process, in addition to being optional, must be conducted by the Office of the Attorney General, under art. 32 of Law 13,140 of June 26, 2015 (art. 8).
The request to initiate mediation will be filed and sent to the Organizational Process Superintendence with jurisdiction over the disputed matter for its opinion on the admissibility of the request. After the request has been processed, the file will be sent to the Collegiate Board for a decision on the admissibility, convenience and timeliness of ANTT’s participation in the mediation.
Once ANTT’s participation has been decided, the Collegiate Board will appoint a civil servant as its representative in the mediation and define their negotiating powers. Any agreement entered into with ANTT will only become valid if approved by the Collegiate Board.
If no agreement is reached, the matter under discussion may be submitted to arbitration, and the parties may provide in the final mediation record for the execution of a submission agreement.
- The arbitration process
An interesting aspect of Resolution No. 5,845/19 is that it expressly allows ANTT to enter into a submission agreement even where the contract in dispute contains no arbitration clause.[2] In such cases, however, ANTT must first assess, in the specific case, the advantages and disadvantages of arbitration (regarding the time to resolve the dispute, the cost of the procedure and the nature of the issue in dispute). It is therefore a discretionary decision by ANTT.
In this respect, Resolution No. 5,845/19 merely codified (correctly, in our view) the case law understanding that the submission agreement need not be provided for in the tender notice and/or the contract:[3]
CIVIL PROCEDURE. SPECIAL APPEAL. TENDER. ARBITRATION. ADHERENCE TO THE TENDER NOTICE. FORUM SELECTION CLAUSE. SUBMISSION AGREEMENT. ECONOMIC AND FINANCIAL BALANCE OF THE CONTRACT. POSSIBILITY.
(…) 5. Both legal scholarship and case law have already indicated that there is no legal obstacle to the government providing for arbitration, notably mixed-capital companies, accepting as valid arbitration clauses set out in tender notices and contracts.
6. The fact that arbitration is not provided for in the tender notice or in the contract entered into between the parties does not invalidate a submission agreement signed later.
7. Providing for arbitration, instead of the courts of the administration’s seat (state jurisdiction), to resolve a given dispute does not undermine the content or rules of the tender.
8. The forum selection clause is not incompatible with arbitration, since their scope may differ, with the Judiciary needing to act, for example, to grant urgent measures, enforce the arbitral award, or institute arbitration when one of the parties does not accept it amicably.
9. The dispute between the parties — maintaining the economic and financial balance of the contract — is eminently patrimonial and disposable in nature, so much so that the parties could have resolved it directly, without the intervention of either state jurisdiction or arbitration.
10. Submitting the dispute to arbitration was a voluntary act of the concessionaire. In this context, its subsequent attempt to challenge that act borders on bad faith, in addition to being harmful to the public interest in having the dispute resolved more quickly.
11. Once the submission agreement is signed, it is the arbitral tribunal that must resolve the dispute.
12. Special appeal denied.
Another aspect introduced by Resolution No. 5,845/19 was a system for choosing arbitration chambers. On this point, it established that public service concession contracts and submission agreements signed by ANTT must expressly define one or more arbitration chambers from among those accredited, under § 5 of art. 31 of Law 13,448 of June 5, 2017.[4]
If the arbitration chamber has not been defined in advance, ANTT will nominate three chambers registered in accordance with the decree regulating §5 of art. 31 of Law 13,448/2017 (which establishes the general guidelines for the extension and re-tendering of partnership contracts in the highway, railway and airport sectors of the federal public administration), and the private party will choose one of the nominated chambers.
- Points of Resolution No. 5,845/19 open to challenge
One aspect that may give rise to challenges stems from the provision in art. 4 of Resolution No. 5,845/19, under which disputes may only be submitted to the rules described in the Resolution after a final decision by ANTT.
Under the sole paragraph of that provision, an administrative decision is considered final when no further appeal is available. In other words, the Resolution seeks to make the start of any arbitration conditional on a final administrative decision by ANTT.
Despite the many virtues of Resolution No. 5,845/19, this condition must be interpreted with caution, especially when the matter under discussion at the administrative level is not subject to an appeal with suspensive effect.
After all, considering the constitutional principle of free access to justice,[5] there seems to be no justification for preventing the interested party from initiating arbitration even while the administrative proceeding is pending.[6]
“(…) WRIT OF MANDAMUS. JUDICIAL DISCUSSION OF THE MATTER. WAIVER OF THE ADMINISTRATIVE ROUTE. VOLUNTARY APPEAL DENIED.
Under the principle of unity of jurisdiction, where the subject matter of the administrative discussion and that of the lawsuit coincide, both arising from the same substantive legal relationship, a defense in the administrative sphere becomes unnecessary, since it is subordinate to what is decided in the other, given the precedence of the merits ruled on in the judicial instance. There is a kind of tacit waiver of the administrative proceeding, since continuing the administrative debate is incompatible with the choice of a lawsuit (logical preclusion).”
Another aspect of the Resolution that deserves proper interpretation concerns the provision in art. 17 of Resolution No. 5,845/19. Under that provision, “Before the arbitral tribunal is constituted, interim or urgent measures may only be requested from the competent body of the Judiciary.”.
This requirement, in our view, does not reflect the evolution and most modern practice of arbitration (already applied by the main Arbitration Chambers, in fact) of establishing the figure of the “Provisional Arbitrator” or “Emergency Arbitrator”.[7]
The “Provisional Arbitrator” is a procedure under which, before the arbitration is instituted, a party may request interim or urgent measures from the Arbitration Chamber itself. This is a highly topical issue that is already being applied in practice (including in disputes relating to administrative contracts).
Thus, except for some aspects that will need to be properly interpreted in light of the legal system in force and the most up-to-date arbitration practices, it seems to us that Resolution No. 5,845/19 has the unequivocal virtue of facilitating and strengthening the use of alternative dispute resolution mechanisms in contracts involving ANTT.
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[1] Attorney, with a specialization and master’s degree in Administrative Law from PUC/SP.
[2] In addition, Resolution No. 5,845/19 expressly allowed contracts that do not contain an arbitration clause to be amended (art. 27).
[3] STJ – REsp 904813/PR, Justice NANCY ANDRIGHI, 3rd Panel, decided 10/20/2011, DJe 02/28/2012 – emphasis added.
[4] Art. 31. Disputes arising from contracts in the sectors covered by this Law, after a final decision by the competent authority, regarding disposable property rights, may be submitted to arbitration or other alternative dispute resolution mechanisms.
(…)
- 5 An act of the Executive Branch shall regulate the accreditation of arbitration chambers for the purposes of this Law.
[5] Art. 5, item XXXV, of the Federal Constitution: “the law shall not exclude from review by the Judiciary any injury or threat to a right;”.
[6] STJ – Ag 1394327, Justice HUMBERTO MARTINS, decided 04/26/2011 – Emphasis added.
[7] In this context, for example, the CIESP/FIESP Chamber of Conciliation, Mediation and Arbitration, through Resolution No. 4/2018, established the Request for a Provisional Arbitrator, as follows: “1.1. Before the arbitration is instituted under item 2.4 of the Rules, a party seeking interim or urgent measures may ask the President of the Chamber, through a Request for a Provisional Arbitrator (“Request”), to appoint a provisional arbitrator (“Provisional Arbitrator”), whose task will be to decide on the urgent measure, which will remain in force until the Arbitral Tribunal decides on the matter.”
