MPOR Establishes Rules for Discussing Conflicts in Concession and Lease Contracts
Brazil’s Ministry of Ports and Airports (MPOR) published Ordinance No. 443/2024 (the “Ordinance”), which establishes guidelines, requirements and procedures for the admissibility of consensual settlement of relevant disputes and conflict prevention in concession and lease contracts.
The Ordinance states that disputes that meet the following requirements may be subject to a request for consensual settlement:
i. Presence of a high degree of complexity in the matters involved; and
ii. Advantageous for the government in a possible agreement, based on at least one of the following elements:
- Optimization of investment obligations;
- Regulatory modernization of the lease or concession instrument;
- Amendment of a contract to adhere to the sector's public policy;
- The presence of alternative scenarios, such as forfeiture and re-bidding, and their respective obstacles; or
- Adherence to TCU Ruling No. 1,593/2023-Plenary.
Such a request must be submitted to the MPOR containing (a) an indication of the subject matter of the dispute with a description of the materiality, risk and relevance; (b) a technical opinion; and (c) a legal opinion. If applicable, it will also be necessary to indicate the individuals, administrative bodies and entities involved, as well as any judicial, arbitration and administrative proceedings regarding the subject of the dispute.
Once decided that the request for a consensual settlement is admissible, the request will be forwarded to the Federal Court of Accounts (TCU). If the decision is that the request is not admissible, the interested party will receive a letter stating the reasons for the decision.
Once the consensual settlement procedure has been concluded in a favorable manner, the agreement will be signed upon (i) the waiver of all existing judicial, administrative and arbitration proceedings related to ongoing disputes and conflict prevention; and (ii) agreement to the automatic launch of forfeiture proceedings—with express waiver of the period referred to in Art. 38, Paragraph 3 of Law No. 8,987/1995—in the event of non-compliance with the terms of the new adjustment after the settlement.
