On May 17, 2018, the Federal Terrestrial Transport Agency of Brazil (ANTT) enacted Resolution 5,845/2019, whereby it detailed the procedure for mediations and arbitrations between ANTT and the private parties subject to its regulation, such as the concessionaires of terrestrial transport services.

The resolution authorizes both the execution of agreements with arbitration clauses and the inclusion of such clauses in existing contracts in which ANTT is a party. However, including arbitration clauses in already existing contracts shall be approved by ANTT’s board of officers and shall be justified, considering pros and cons such as estimated timeline for resolution of the conflict and cost and nature of the dispute. If there is pending judicial lawsuit, ANTT shall prepare an analysis of the likelihood of success thereof. These matters however cannot be resolved through arbitration: (i) issues that cannot be subject to settlement; (ii) the nature and ownership of public transportation services; (iii) ANTT inspection powers over transportation services; and (iv) the private party’s right to terminate a public transportation services agreement.

ANTT will have a list of pre-approved arbitration centers to manage arbitral proceedings. If the contract with the private party is silent on the applicable arbitration center, ANTT will present a list of three, among those in the pre-approved, and the private party will choose one of them.

The resolution states that the private party shall bear all the costs in the arbitration, including not only the court and arbitrators’ fees, but also fees from experts, if needed. If ANTT loses, the private party can claim reimbursement of such costs.

In principle, arbitrations with ANTT shall have 3 arbitrators. The seat shall be in the capital of Brazil, Brasília. The language shall be Portuguese and documents in other languages shall be translated. Brazilian Law shall apply, not being allowed judgement based on foreign law or equity.

On one hand, this resolution is positive to foster the use of arbitration in contracts subject to ANTT, such as railways and highway concessions. On the other hand, the content of the resolution itself is quite conservative and presents some provision extremely favorable to ANTT, such as the obligation for the private party to advance all costs and expenses.