As we have discussed throughout previous articles, contract administration is a structuring factor for the success of engineering projects. The way contracts are managed, documented, and monitored directly impacts the progress and outcome of the project, the prevention of disputes, and the legal security of the parties involved.
In this context, the recent publication of the fourth edition of the Compêndio de Sentenças Arbitrais Públicas do CAM-CCBC offers a relevant opportunity to analyze, based on concrete cases, how contract administration can be decisive in arbitrations involving large construction projects.
The publication presents part of the collection organized by the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada (CAM-CCBC), gathering arbitral decisions made public either due to legal requirements or as a result of their judicialization — whether in enforcement actions or actions seeking to annul arbitral awards.
Below, we present a brief analysis of two of these decisions and highlight how they connect, in practice, with the topics we have explored regarding contract administration, particularly the need for the parties to maintain proper documentation throughout the project.
Practical Lessons: what are arbitrations telling us about contract management?
Let us take as a first example the case Efacec do Brasil Ltda. vs. Petrobras – UTE Arembepe, which concerns a contract for the construction of a thermoelectric plant in Camaçari/BA. The dispute involved issues such as delays in delivering the project, economic-financial balance of the contract, unforeseeable increases in input costs, risk allocation, impacts resulting from early demobilization of the project, among others.
The central point of the controversy was the attribution of responsibility for the delay and the consequent apportionment of contractual penalties: 65% attributed to Petrobras and 35% to Efacec, due to both omission and action that aggravated the outcome. Thus, the arbitral award recognized that both parties contributed to the contractual breach. The solution adopted by the tribunal underscores the importance of objective and continuous records documenting the actions (or omissions) of each party involved.
This award directly echoes what we have addressed in our articles on contract administration: a project is not limited to the contract that was signed, but to its dynamic, continuous, and documented management throughout execution.
Poorly documented claims, weak defenses
Another relevant example comes from a case also involving Efacec do Brasil Ltda., again related to the construction of a thermoelectric plant in Camaçari/BA — this time in a dispute with Energética Camaçari Muricy I S.A. arising from an EPC Contract under a lump-sum turn-key regime. The arbitral tribunal addressed issues such as the impact of delays, contractual imbalance, payments made to subcontractors, services performed outside the scope, and even allegations of moral damages.
The analysis of the partial award reveals a recurring pattern: parties that do not properly organize their records — or fail to connect what occurred to what was contractually planned — face greater difficulty in substantiating their claims. This may result in claims being dismissed, penalties, and challenges in obtaining financial recovery.
In many cases, disputes arise due to the absence of proper contract administration, which fails to monitor project progress with the necessary robustness.
From paper to practice: contractual maturity and dispute prevention
The publication of CAM-CCBC awards offers real and valuable lessons. This is not to suggest that disputes are entirely avoidable, but rather to recognize that many of them can be mitigated, reduced, or better managed if there is:
-
greater care in the initial contract drafting;
-
integration among teams from the pre-contractual phase onward;
-
proactive management of risks and changes; and
-
above all, a legal department that is present and strategic throughout the entire lifecycle of the contract.
When legal involvement begins only at the arbitration or litigation stage, it is already too late. The key lies in early action and in building a cohesive documentary narrative that allows the “story of the project” to be reconstructed with confidence.
Just as good engineers do not build without solid foundations, good projects do not survive without mature contract administration. The CAM-CCBC decisions make this clear: what is not documented cannot be proven. And what is not managed is lost.
If your company operates in the infrastructure or construction sector, it is worth asking: is your contract management prepared to support — and withstand — an arbitration or judicial proceeding?
