On August 27, 2019, Law No. 13.86/19 was published, amending Decree-law No. 3.365/41 (the Brazilian statute on expropriation) to authorize the definition of amount due to owners in  expropriation of assets for projects through mediation and/or arbitration.

This new law provides that, first, the government shall present to the owner an offer of amount to be paid as indemnification due to the expropriation. The owner has 15 days to answer; silence will be considered as denial of the offer.

In case of denial of the offer, besides the option of a judicial lawsuit, the owner has the alternative of choosing also mediation or arbitration to discuss the expropriation reimbursement amount. In both cases, the owner must choose one of the agencies or specialized institutions previously registered in the government database. Mediation will follow the rules provided by the Mediation Law, whilst arbitration will follow the Arbitration Law It will also be applicable the specific regulations provided by the agencies and specialized institutions.

This Law has immediate effect, however, it will be effective only for expropriations initiated as August 27, 2019.

This is an important step to enable the use of arbitration in expropriation. Nowadays judicial lawsuits to discuss the amount of indemnification in expropriation cases usually take years to be decided, while arbitration could be much faster.

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