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On December 23, 2016 the Brazilian Senate approved a bill for a new law to regulate public bidding procedure (the “Bill”). In Brazil contracts with state entities in principle shall be subject to such public bidding procedures, which include invitation for qualified interested parties to participate in the bid, as well as publication of draft agreements for the bidders’ comments before the bid.

The Public Bids Bill expressly authorizes arbitration on contracts involving state-owned entities, which is in line with the Brazilian Arbitration Act. Nonetheless, according to the Bill, the arbitration clause will have to be provided for in the draft of the agreement circulated to the bidders prior to the bid. This is a step back from the current case law of the Superior Court of Justice, which in the “Compagás” case” acknowledged that the public administration could insert arbitration clauses in contracts even if it was not contemplated in the draft published in the invitation to bid.

This restriction is quite controversial and might change in the House of Representatives. In certain instances, it might be of the public administration’s best interest to submit certain disputes to arbitration, even if the invitation to bid or  the original contract provided for judicial courts as the venue to resolver controversies.  A good example is the renewal and termination of certain public concession agreements, most of which have judicial venue clauses, but in relation to which the Federal Government has recently issued a provisional measure (MP 752), authorizing the resolution of some pendencies through arbitration.

The Bid will now be sent to the House of Representatives for review and voting, being expected to be approved during 2017.


Joaquim de Paiva Muniz is a partner and head of the arbitration team in Trench Rossi Watanabe. Joaquim has an LL.M. from the University of Chicago and is the chair of the Arbitration Commission of the Rio de Janeiro Bar (OAB/RJ) and coordinator of arbitration courses of the Rio de Janeiro Bar, including a lato sensu graduate course. Joaquim is an officer of the Brazilian Arbitration and Mediation Center, which is the largest of its kind in Rio de Janeiro, as well as an author of many books, including the Arbitration Law of Brazil: Practice and Procedure (Juris Publishing, 2nd Edition 2015) and Curso Básico de Direito Arbitral (Juruá, 4rd Edition 2017). Joaquim can be reached at


Luis Peretti is a senior associate in the arbitration and ADR practice group of Trench Rossi e Watanabe Advogados in cooperation with Baker & McKenzie. He assists Brazilian and foreign clients in domestic and International arbitration proceedings in connection with a wide range of legal areas, such as agribusiness, construction, infrastructure, intellectual property and corporate transactions. His practice areas include pre-arbitration consulting, as well as counseling in arbitration proceedings before the best-reputed arbitration institutions - Brazilian and foreign - and in lawsuits ancillary to arbitration proceedings. Luis Peretti became an associate in Trench Rossi e Watanabe Advogados in 2011. He practices in civil litigation since 2004 and has developed experience in domestic and international arbitrations involving commercial disputes as well as investment disputes conducted under the auspices of the ICSID. Luis Peretti can be reached at and + 55 11 3048 6800.