Peru regulatory update: public tender questioned

Lima, Peru: 1930s bank façade on Miró Quesada st. – photo by M.Torres

On 16 September 2021, the Third Chamber of the so-called “Court of Contracts” of the Peruvian State issued Resolution 02815-2021-TCE-S3.

The Resolution imposes sanctions on La Positiva Seguros y Reaseguros and Rímac Seguros y Reaseguros (members of the La Positiva Rímac Consortium), disabling them from participating in tenders to contract with the Peruvian State for four months. However, it is important to note that these sanctions do not affect the capacity of either La Positiva Seguros nor Rimac as insurance or reinsurance companies in the Peruvian market.

The Court determined that there were inaccuracies in the documentation submitted by the consortium to qualify for Public Tender 101-2016-SEDAPAL.

Following a review, SEDAPAL (Servicio de Agua Potable y Alcantarillado de Lima) allegedly found inconsistencies in the work certificates provided by La Positiva Seguros, specifically that one of their employees did not have the required five years’ experience. In this regard, La Positiva Seguros argues that it was simply an immaterial error on the dates specified in the work certificate.

The effects of the Resolution have been suspended in respect of La Positiva Seguros whilst an appeal they have lodged is considered.

Rímac did not participate in the sanctioning procedure since it was not duly notified. However, it has also been sanctioned as a member of the consortium. Rimac has filed a court injunction for not being notified correctly and are now awaiting a decision on this.

Sanctioning a consortium of reputable insurers for information that did not seek to obtain a benefit (even if it may have contained errors), and was seemingly compliant with the requirement of five years’ experience, represents a clear threat and risk for markets willing to participate in these type of tenders.

Punishing long-standing carriers for apparent technicalities may do more damage than good to the State tender process in Peru and its ability to find reputable insurance capacity.

Without a doubt, this story will continue to unfold. We will keep you informed.

Authors: Alex Guillamont, Head of Latin America and Caribbean; Marco Rivera, Partner; Lorena Avila and Noriko Hasegawa, Senior Associates at Kennedys.

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