The Settlement of Disputes between the Public Administration and Private Companies by Arbitration under Brazilian Law

Abstract

The ability of state entities to submit to international arbitration remained the subject of hot debate for a long time under Brazilian law. Brazil’s resistance to arbitrability of disputes involving public administration was not very different from the resistance faced by other countries around the world. Brazil began to overcome traditional hostilities related to arbitration involving state entities in 2005, as a result of legislative reforms, which expressly authorized the use of arbitration in public-private partnerships (PPPs) and in concession contracts, as well as favorable decisions rendered by the Superior Court of Justice. In light of these developments, it can now be said that Brazilian law fully and finally recognizes the capacity of state entities to submit to arbitration. This recognition provides greater security to investors that contract with Brazil’s state entities, and ultimately contributes to the country’s economic growth.