Mandatory Arbitration and the Public Administration - the Landscape of Peru

20 Pages Posted: 3 Jun 2020

See all articles by Lucas Pestana Macedo

Lucas Pestana Macedo

SciencesPo (LLM in Transnational Arbitration & Dispute Settlement) Sciences Po Law School

Date Written: April 16, 2020

Abstract

The present paper discusses mandatory arbitration with the public administration in Peru, as established by law since 1998 for procurement relations between the State and particulars. The essay starts with an anecdotal background of a Federal Supreme Court of Brazil's decision regarding the execution of criminal sentences. A parallel is established between the same practical problem of the tardiness of courts to issue final rulings, which served as one of the main arguments for the institution of said mandatory arbitration in Peru, in the context of privatizations in the ’90s. The paper presents several amendments to Peruvian law and issues like the Odebrecht scandal as symptoms of a problem that is the impossibility to create a “one-size-fits-all” solution given the wide scope of public procurement. The essay goes on to explain why mandatory arbitration is not suitable, from the party autonomy principle to practical problems such as costs, corruption, and denial of justice. Finally, in light of recent solutions already adopted in Latin America, the paper offers a proposal to be adopted by Peru, considering the regulatory space of public administration and suggesting that the option for arbitration should be a strategic and motivated choice made in a case-by-case cost-benefit analysis.

Keywords: Latin America, Arbitration, Mandatory, Public Administration, Public Procurement, Peru, Peruvian Law, Regulatory Space

JEL Classification: K40, K41

Suggested Citation

Pestana Macedo, Lucas, Mandatory Arbitration and the Public Administration - the Landscape of Peru (April 16, 2020). Available at SSRN: https://ssrn.com/abstract=3594941 or http://dx.doi.org/10.2139/ssrn.3594941

Lucas Pestana Macedo (Contact Author)

SciencesPo (LLM in Transnational Arbitration & Dispute Settlement) Sciences Po Law School ( email )

13 rue de l'université
Paris, 75007
France

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