On January 7, 2019, it became public the award of the arbitral proceeding between, on one hand, Libra Terminais S.A. and Libra Terminais Santos S.A.  (“Libra”), two concessionaires of cargo terminals T-35 and T-37 at the Port of Santos, the busiest in Brazil, and, on the other hand, CODESP (the state-owned operator the port of Santos) and the Federal Union, on the lease of such terminals. Libra was sentenced to pay at least R$2,8 Billion (circa US$750 M), mainly for unpaid port fees and dismissed Libra’s claim of over US$2 Billion for review of the lease fees and damages. The arbitral proceeding was managed by the CAM-CCBC (Arbitration Center of the Chamber of Commerce Brazil-Canada) and the arbitrators were Cristiano Zanetti, Lauro Gama and Rodrigo Fonseca (president). This is a very rumorous arbitration not only due to the amounts at stake, but also for the political implications.

Libra won the concession of T-35 in 1998. Since the beginning Libra has tried to reduce the fees, claiming that CODESP failed to implement the required port infrastructure. The dispute went to the judicial courts. In 2015, under Michel Temer’s presidency, the concession of both terminals was extended until 2035 and the parties decided to submit their respective claims to arbitration. A presidential decree was issued to regulate arbitral proceeding involving port concessions.

The extension of such leases was controversial as Libra was supposedly in default and his owner was one of the main President Temer’s donators during his political career. In 2018 the Federal Accounts Tribunal (TCU) annulled the extension of the term of the lease of terminals.

The outcome of this arbitration was very positive to the institute in Brazil, for several reason. First, the decision demonstrates that seasoned Brazilian arbitrators are able to deal quite well with complex and sensitive disputes involving the public administration. Moreover, it shows that there is no such thing as a bias favorable to the private party in arbitrations involving state entities, thereby setting a precedent for the government to submit more disputes to arbitral venues.