ABSTRACT: Several long-term contracts contain hardship or equivalent clauses which foresee that, periodically, or in case that a change in the original economic circumstances causes an imbalance to the contractual obligations, the parties should renegotiate certain essential elements of the agreement, in order to adapt it to the new circumstances. However, the vast majority of these contracts do not establish which are the consequences of a failure of the negotiations between the parties. In light of the public interest involved in the performance of Public-Private Partnership contracts, it is worth considering whether an arbitrator could, upon request of the parties, and in case of failure of the parties' negotiations, adapt the contract to new economic circumstances. Some commentators and case law recognise the power of the arbitrators to adapt the contractual provisions, others simply deny it. However, these opinions and decisions somehow convert, since they all establish that arbitrators can adapt a contract when they are expressly authorised by the interested parties. The possibility of including such an express authorization in a contract must be evaluated in view of the applicable law. In Public-Private Partnership contracts, this requirement is even more relevant.
Revista Brasileira de Arbitragem