On June 8, 2015, the President signed Decree No. 8.465/15 ("Decree"), regulating arbitration as a dispute resolution mechanism in relation to ports.

The Decree applies to concessions, leases and authorizations stipulated in Law No. 12.815/13("Law"). This Law regulates direct and indirect operation and management, by the Federal Government, of ports and port facilities, as well as the activities of port operators. The Decree amends §1 of article 62 of the Law, which contemplates arbitration as a dispute resolution mechanism for those agreements described in the Law.

The most relevant innovations introduced by the Decree include:

  • The possibility of arbitration to resolve disputes involving ports in Brazil, including: (i) breach of contract claims; (ii) issues relating to a balance between contractual obligations; (iii) disputes relating to failure to pay port-related taxes; and (iv) disputes in connection with obligations assumed by port operators and the National Agency for Water Transportation ("ANTAQ");
  • The arbitration must be governed by Brazilian law, take place in Brazil and be conducted in Portuguese;
  • The arbitration may be ad hoc or institutional. If the parties opt for institutional arbitration, the institution conducting it must: (i) be domiciled in Brazil; (ii) have been established for at least three years; (iii) be operating as an arbitral institution; and (iv) have recognized competence, expertise and experience in the administration of arbitration proceedings.

Finally, the Decree contemplates the possibility of arbitration to resolve disputes arising from contracts that do not specifically contemplate arbitration. In this case, the government is entitled to opt for arbitration and will base its decision on certain guidelines provided in the Decree. The Decree stipulates that arbitration is preferable in cases when the dispute involves a technical dispute and no legal analysis is required or when a delay in the final solution of the dispute may: (i) jeopardize the rendering of port services or the operation of the port; or (ii) prevent investments which the government considers to be priority.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.