Publicado en nuestra Revista el 14 de Abril de 2004
Special Jurisdiction Appellate Court in the State of Paraná
ARBITRAL AWARD - BUSINESS CORPORATION WHERE THE GOVERNMENT IS A SHAREHOLDER - LEGAL ENTITY GOVERNED BY PRIVATE LAW - PIPED GAS COMPANY NOT A PUBLIC UTILITY, BUT A PRIVATE ENTERPRISE - NO UNAVAILABLE RIGHTS INVOLVED - ADMINISTRATIVE CONTRACT - ADMISSIBILITY OF ARBITRATION - AWARD NOT DEFECTIVE - APPEAL DISMISSED.
The activity carried out by the appellant, i.e. the exploration of piped gas services differs from the activity of a public utility. Actually, it fits the legal system governing private companies (Federal Constitution, Article 173, para 1, II). The mere fact that a commercial relationship started with a bidding competition is no obstacle for disputes between the parties to be resolved via arbitration. The resolution of disputes via arbitration is admissible in administrative contracts.
Record of Civil Appeal No. 247.646-0 / Curitiba / 3rd Public Finance Court duly examined, reported and discussed. Appellant: Companhia Paranaense de Gás - Compagás. Appellee: Carioca-Passarelli Consortium.
1. Appeal refers to a nullity declaratory action dismissed on grounds of lack of cause of action.
2. The appellant claims that the arbitral award should be declared null and void; that the arbitral award should be submitted to the appreciation of a State court of law; that the bidding process is binding; that the courts of Curitiba should be the courts of choice for the settlement of disputes; that the bidding documents does not provide for dispute resolution; that arbitration was provided neither in the bidding documents nor in the contract eventually awarded; that the arbitral clause should be declared null and void because the matter is not clearly stated; that one of the arbitrators failed to appear; that the award was made by two arbitrators only.
3. Appeal prepared and appreciated.
REPORT FOLLOWS.
4. The dispute concerns the nullity of the arbitral award. Compagás, the appellant, is entitled to explore piped gas services and hired the appellee via bidding process to provide services related to its distribution network. There was a dispute between the parties concerning economic and financial adjustments to the contract and the parties started arbitral proceedings to resolve said dispute.
5. Firstly, it is worth mentioning that "arbitration is adopted by mutual agreement of the parties to the contract who choose to rely on one or more arbitrators in order to avoid starting a lawsuit before a court of law to resolve their present or future conflicts of interest ". (Álvaro Villaça Azevedo, Arbitragem, Court Journal, RT 753:12).
6. As a result, the autonomy for the parties to act according to their own free will is of the essence in the legal relationship established by the same. Quoting Judge Sálvio de Figueiredo Teixeira "our powerful social reality demands that one goes beyond the individualistic model of the judicial solutions of the past" (Arbitragem no sistema jurídico brasileiro, Court Journal, RT 735:48).
7. Therefore, it is undisputable that arbitration proceedings are both legal and acceptable according to the Brazilian constitution.
8. Secondly, the appellant alleges that the arbitral award is null and void because the matter in question involves public interests and could not have been submitted to arbitration. The appellant is wrong. The appellant is a business corporation governed by private law of which the government is a shareholder, as provided in article 1, para. 2 of State Law No. 10,865 of 06 July 1994 (pages 137/139). It is therefore obvious that contracts entered by and between the appellant and the appellee are governed by private law and that there is absolutely nothing against conflicts arising therefrom being resolved via arbitration as provided in Brazilian law. Also, the activity developed by the appellant, i.e. the exploration of piped gas services and related activities, is not the same as the provision of public services, but an activity developed by a private company (Federal Constitution, article 173, para 1, II), because it involves governmental intervention in the economic scenario in the form of a monopoly as provided in article 177, item IV, of the Federal Constitution. Lastly, the fact that a bidding process took place is no impediment for the parties to resolve their disputes via arbitration.
9. Thirdly, the issue presented in the record does not involve unavailable rights, because the litigation between the parties arises from a situation of economic and financial unbalance in a services contract, and the appellant, in its capacity as a business corporation governed by private law where the government is a shareholder, is fully entitled to enter into transactions or resolve disputes via arbitration. The interest here is merely economic, with no involvement of any public interest whatsoever.
10. It is worth mentioning that arbitral awards are a much more expedite manner of coming to a settlement as compared to a judgment by a court of law. Therefore, it may be advantageous even for the appellant to resolve the dispute forthwith, instead of waiting for a legal judgment which may take years and would certainly imply delays in the schedule of works and in the implementation of the piped gas system both in Curitiba and in São José dos Pinhais.
11. Fourthly, the arbitral award is perfectly enforceable in cases of administrative contracts, especially in a situation like the one described herein where the dispute arises from adjustments in the economic and financial clauses of the contract entered by and between the parties. So, the parties are free to start arbitration proceedings to resolve the dispute. The interest involved is purely economic and concerns an essentially available right.
12. This can be verified in article 20 of Law No. 9,478 of 06 August 1997 which states the following in relation to the oil and gas industry: "The internal regulations of the National Oil Agency [ANP] shall dictate the proceedings of choice in the event of disputes among economic agents or between the latter and users or consumers, always giving preference to conciliation and arbitration." It is worth mentioning that the text of the law itself emphasizes the possibility of disputes in the oil and gas industry being resolved via arbitration.
13. According to Caio Tácito: "The adequacy of arbitral proceedings in disputes arising from administrative contracts has been examined under a new light since the passing of Law No. 8,987/95 governing concessions and permits for public works and services... Omissis ... As for concession agreements, where the federal model is normally adopted at state and municipal level, arbitration has been legally accepted to solve administrative disputes... Omissis ... The use of arbitral proceedings is even more adequate when it concerns the acts of governmental companies involved in the exploration of economic activities which are governed by the same legal system applicable to private enterprises according to article 173, para. one of the Brazilian Constitution enacted in 1988. Arbitration proceedings are always more expedite than regular court proceedings, which is an advantage in litigations that affect the dynamics of economic relations whenever the government determines that the public interest should prevail." (Arbitragem nos litígios administrativos. RDA, volume 210:113-115).
14. Similar decisions have been passed by our courts of law: "Merger. Property and claims of Empresas Organização Lage and the estate of Henrique Lage. Arbitration. Unappealability clause. Default interest. Indexation. 1 - Arbitration has always been widely accepted in our legal system, even in lawsuits against the financial system. Case law from the Supreme Court of Justice." (RTJ, 68:382). "Injunction. Passive party. Timeliness. Bidding process. Public interest unavailable. Arbitral court. Law-decree No. 2,300 and Law No. 8,666. Possibility. .... III - According to Article 54 of Law No. 8,666/93, administrative contracts are governed by their provisions and by public law supplemented by principles of the general contract theory and private law provisions, which emphasizes the possibility of adopting arbitration to resolve disputes arising from said contracts..." (TJDP - Judgment No. 115,813 of the Special Council - Rapporteur Nancy Andrighi, DJDF of 18 August 1999, p. 44).
15. Fifthly, provisions on arbitration do not necessarily have to be made in the bidding documents nor in the contract eventually entered by and between the parties. What matters here is that arbitration may be adopted in this specific case, because it does not involve unavailable rights. The failure to make said provisions in the bidding documents does not affect the rights of any third party because the dispute resolved via arbitration arises from economic and financial adjustments to the contract without any evident implication in terms of price increases. The dispute resulted from the fact that some details were unforeseen both in the bidding documents and in the contract itself, which is natural and predictable.
16. Sixthly, the nullity of the arbitral award should never be considered. It is worth mentioning that the appellant counted on the advice of Professor Luiz Alberto Blanchet as legal counsel to come to the settlement in question (pages 378/383) and clause two of the document prepared by the Professor himself mentions the arbitral award (page 379). Therefore, the appellant's allegation that the arbitration concerned technical matters only is totally inconsistent. Also, the final text makes explicit reference to the arbitral award in its clauses four and six.
17. Seventhly, the matter submitted to arbitration is clearly defined in a closed clause of the respective settlement, and reference is made to all controversies then existing between the parties which can be easily verified in the minutes of meetings and letters exchanged between the parties to the litigation. The matter is neither undefined, nor undetermined as alleged by the appellant. The appellant was fully informed of the matter submitted to arbitration and of the eventual award.
18. Eighthly, the allegation of nullity of the arbitral award has no factual or legal support on grounds that it was passed by two arbitrators only. The arbitrator nominated by the appellant failed to appear on his own free will, in spite of having been regularly notified. In his absence, the decision was made by majority vote pursuant to article 24, para. one of law No. 9,307/96. Therefore, once again, the arbitration proceedings are not defective and cannot be rendered null and void.
19. Lastly, the resolution passed by the appellant to declare the arbitral award null and void (page 38) in legally ineffective. The arbitral award is a bilateral commitment which demands the agreement of both parties to be rendered null and void by a court of justice. The public administration cannot render null decisions made under private law.
Therefore, the appeal cannot be granted.
The member judges of the 7th Civil Chamber of the Special Jurisdiction Appellate Court in the State of Paraná hereby reject the appeal by unanimous vote.
Judges: Miguel Pessoa, President with voting rights, and Eugênio Achille Grandinetti.
Curitiba, 11 February 2004.