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The adoption of alternative dispute resolution mechanisms has proven to be an effective strategy to ensure the successful execution of public contracts.
Countries like the United States, the United Kingdom, and Australia widely use dispute boards, achieving a significant reduction in the number of litigations that reach the courts, in addition to promoting faster conflict resolution. International experience shows that adopting these committees not only prevents disputes but also ensures the continuity of works without the interruptions typical of judicial processes, thus guaranteeing the delivery of projects within the scheduled time and budget.
In Brazil, Dispute Boards (DBs) emerge as an innovative and efficient solution, aligning the country with international best practices and demonstrating Brazil’s commitment not only to efficiency but also to the transparency and modernization of its public works. They have already been applied in some large-scale projects. Notable examples include the construction of São Paulo’s Yellow Line 4 subway, stadium renovations for the 2014 World Cup, and some highway projects.
With the advent of the new Brazilian law that sought to update public procurement processes (Law No. 14133/2021), which includes the possibility of using Dispute Boards as a form of conflict resolution, several public infrastructure projects have already been implementing Dispute Boards with notable success. Highways, railways, and urban projects have benefited from the use of this tool, resolving contract execution disputes effectively and ensuring the continuity and quality of the works.
In this regard, the ANTT (National Land Transport Agency — In Brazil), responsible for regulating the activities of federal railway and highway infrastructure exploration and the provision of land transport services in Brazil, has been one of the pioneering agencies in promoting and regulating DBs in Brazilian Public Administration. Accordingly, the ANTT approved Normative Resolution No. 6040/2024, which establishes clear guidelines for the implementation of DBs, intending not only to resolve potential conflicts between the agency and its regulated entities in highway and railway concession contracts but also to prevent possible disagreements.
The Dispute Board is a dispute resolution tool that appoints three (3) experts of recognized technical and professional competence related to the contract’s subject and the dispute, who have no conflicts of interest in the case. These experts must be capable of resolving disputes of a technical nature that involve rights with economic value that can be freely transacted by the parties, such as: a) the adequacy of works and services to regulatory compliance and/or contract agreements; b) the execution of the works and services themselves; c) the assessment of events that may impact the fulfillment of contractual obligations and the calculation of their financial impacts, among others.
Specifically, in ANTT’s resolution, the composition of the DB committee includes one member appointed by ANTT, one by the concessionaire, and a third member, who will serve as the president, mutually agreed upon by the other appointees.
It is worth noting that the Dispute Board can also address disputes related to facts connected to these issues, which may even favor the prevention of future litigation. However, it cannot rule on the validity of ANTT’s supervisory acts or regulations or strictly legal issues.
Moreover, unlike arbitral decisions, DB decisions are not final, meaning they can be changed before the Judiciary or an Arbitral Tribunal, in the case of contracts with an arbitration clause.
Thus, currently valid concession contracts can be amended through an addendum to include the option of Dispute Boards as an alternative for resolving future disputes. For existing disputes, there is no need for a contract addendum to implement a DB, as ANTT’s resolution allows for the creation of a Dispute Board through an independent instrument to be signed between the agency and the concessionaire.
Authors: Bárbara Fernandes and Luiz Felipe Fogo, Contracts Lawyers