Motivation of awards in Peruvian public procurement

18/06/2018

Pursuant to Legislative Decree No. 1071, the Peruvian Arbitration Act, the award must be based on the law unless the parties make a different stipulation (Article 56). This means that the right to receive legal motives and the obligation to give them is an issue available to the parties in the civil sphere.

On the other hand, the State Procurement Law, No. 30225 - LCE (and amendments), in its Article 45.3 states that the arbitral tribunal, in resolving disputes, must apply in a preferential order the Political Constitution, the LCE and its regulations as well as regulations of public law and private law. This preference is of public order.

The Arbitration Law excludes from the causes of annulment of the award, in general, the reasons or legal motives that the arbitral tribunals make when justifying the awards they adopt (Article 62.2). However, it is very difficult for a judge, when reviewing an annulment remedy against an award in which public procurement matters are defined, does not explore the motivation adopted by the arbitral tribunal, in particular in the order of preference of the applied law, as this is public order.

As we know, one of the fundamental rights of the person is the right to contract. The Political Constitution recognizes it in its article 2.14, imposing the limit of a contract that is lawful, that does not contravene the laws or the public order. That is, if the parties can not agree is ignorance of the preferred order of application of normative sources, doing so would be an intolerable illegality that would justify, for many judges, the annulment of an arbitral award.

Thus, also article 45.9 of the LCE provides that the award can be annulled if the arbitration proceedings have not been adjusted to the provisions of the LCE itself or its regulations.

Is the standard of motivation equal or different in civil and commercial awards regarding awards that settle disputes in public contracts? I must answer that they are different. This does not mean that civil arbitral tribunals fail to give reasons when motivating their decisions. It means that the arbitral tribunals that resolve disputes with state parties in the framework of the LCE do so differently, in many ways, because they must apply the normative preference already noted.

This seems curious for any lawyer who knows and governs their professional work by the old criterion to resolve antinomies: the special law prevails over the general, in such a way that the LCE prevails, for example, on the Civil Code rules, if it is of a dispute in the context of a public procurement. It is curious because it must be methodically so, without the theoretical need of a legislative rule that affirms it.

But in Peru, the legislator has preferred to order it in the LCE, reinforcing the methodical approach, and sanctioning with nullity its ignorance.