Metropolitan Municipality of Lima v. Rutas De Lima S.A.C.

At a glance

Parties

Metropolitan Municipality of Lima (Peru), appellant, v. Rutas de Lima S.A.C., appellee

Case no.

D.C. Circuit No. 24-7053 (appeal from D.D.C. No. 1:20-cv-02155)

Forum and rules

Federal Arbitration Act (9 U.S.C. § 1 et seq.) and New York Convention; underlying arbitrations under the UNCITRAL Rules, seated in Washington, D.C.

Instrument

Concession Contract of January 2013 for urban roads in Lima

Court

U.S. Court of Appeals for the D.C. Circuit: Circuit Judge Walker, Senior Circuit Judges Edwards (opinion) and Ginsburg

Underlying award(s)

First Arbitration award (May 2020) and Second Arbitration award (December 2022), both in favour of Rutas de Lima

Sector

Toll roads; urban infrastructure concession

Outcome

The Court affirmed the District Court's judgment, which had refused to vacate and had confirmed both awards (24 June 2025).

The dispute

In January 2013 Lima and Rutas de Lima, whose majority shareholder was Odebrecht S.A., signed a Concession Contract under which Rutas would finance, build, improve and operate urban roads in exchange for toll revenue. Later agreements (the 2014 Bankability Addendum and the 2015 and 2016 Memoranda of Agreement) moved Lima's preliminary works to Rutas in exchange for toll increases. After protests and riots in January 2017, Lima suspended the New Chillón Toll Unit and resisted scheduled toll increases. Rutas won two UNCITRAL arbitrations. Lima then asked the U.S. District Court to vacate the awards. It argued that the contracts were procured through Odebrecht's bribery, so enforcing them would violate U.S. public policy. It also argued that Rutas's false discovery response left it unable to present its case in the first arbitration, and that the second tribunal refused to hear evidence. The District Court confirmed both awards, and Lima appealed.

Key holdings

1. Enforcing the awards does not violate U.S. public policy. The tribunals' findings that the evidence did not link Odebrecht's bribes to the Concession Contract, the Bankability Addendum or the 2015 and 2016 Memoranda of Agreement are amply supported by the record and receive significant weight. pp. 15–19
2. The Court did not decide whether public policy survives Hall Street as a non-statutory ground for vacatur under the FAA. Nor did it decide whether arbitral tribunals alone determine whether an underlying contract violates public policy. On this record neither question needed an answer. p. 16
3. Timing undermined the corruption case. The project was awarded to Rutas before the recall referendum was organised and before the meetings arranging the payments to Villarán's anti-recall campaign. The Concession Contract had no more favourable terms than the PSI Proposal. Lima's new evidence of 2010 payments to Flores's campaign was unreliable and inadequate to overturn the awards. pp. 17–19
4. Lima was not unable to present its case to the first tribunal (New York Convention art. V(1)(b)). It suffered no prejudice from the alleged withholding of the Meiggs Contracts: the second tribunal considered them and still found no quid pro quo. pp. 19–20
5. The second tribunal did not refuse to hear pertinent and material evidence (9 U.S.C. § 10(a)(3)). Lima's requests concerned the indictment itself, not its annexes, so there was no error. The District Court's finding on this point was not clearly erroneous. pp. 20–21

Procedural history

1. January 2013Lima and Rutas de Lima sign the Concession Contract.
2. May 2018Rutas de Lima commences the First Arbitration (UNCITRAL Rules, Washington, D.C.).
3. March 2019Rutas de Lima commences the Second Arbitration over the 2017 and 2018 toll rate increases.
4. May 2020First award in favour of Rutas: damages for failed toll collection at the Existing and New Chillón Toll Units.
5. December 2022Second award in favour of Rutas: lost-profit damages.
6. 12 March 2024The District Court for the District of Columbia denies Lima's petitions to vacate and confirms both awards.
7. 17 March 2025Appeal argued before the D.C. Circuit.
8. 24 June 2025The D.C. Circuit affirms the District Court's judgment in full.

Tribunal, counsel and experts

For the claimant

David G. Hille · Nicolle Kownacki · Blair E. Trahan · Renata Rogers de Castilho

For the respondent

David M. Lehn

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Keywords

• Odebrecht
• bribery
• corruption
• public policy
• vacatur
• confirmation
• New York Convention
• Article V(1)(b)
• Federal Arbitration Act
• manifest disregard
• Hall Street
• refusal to hear evidence
• discovery fraud
• quid pro quo
• toll roads
• concession contract
• UNCITRAL
• Vías Nuevas de Lima

Summary generated with AI from the published documents — refer to the award for the authoritative text.