Can the Rise of the Dollar Justify a Request for the Economic-Financial Rebalancing of a Public Service Concession Contract?
The economic-financial rebalancing of a contract is permissible when unforeseen events occurring after the contract's execution render its performance impossible as initially agreed. Such events must fall under extraordinary and extracontractual risks, as outlined in Article 124, II, (d) of Law No. 14,133/2021 and Article 65, II, (d) of Law No. 8,666:
- Force majeure or unforeseeable circumstances;
- Acts of public authority (e.g., creation, amendment, or abolition of taxes);
- Administrative acts;
- Unforeseeable events or foreseeable events with incalculable consequences.
Exchange rate fluctuations may fall under the last category.
As a general rule, fluctuations in foreign currency within the usual parameters of exchange rate variation do not justify economic-financial rebalancing. This is considered a risk assumed by the private party when entering into a contract with the Public Administration. Law No. 14,133/2021 reinforces this through Article 92, XV, which requires contracts to include clauses specifying “importation conditions and the date and exchange rate for conversion,” and Article 103, which outlines rules for contractual risk allocation.
However, exceptional circumstances exist where significant and abrupt changes in monetary policy and economic conditions excessively burden the contractor. In such cases, the Federal Court of Accounts (TCU) and the Superior Court of Justice (STJ) have recognized the possibility of economic-financial rebalancing under the Theory of Unforeseeability. Relevant examples include STJ precedent in RESP No. 1,433,434 and TCU’s Plenary Decision No. 1431/2017.
From the jurisprudence of these institutions, the application of the Theory of Unforeseeability requires analyzing three main criteria in each specific case:
👉 Does the exchange rate fluctuation exceed the normal scope of the floating exchange regime?
👉 Is the fluctuation, while predictable, accompanied by incalculable consequences—that is, those beyond the capacity of an average manager to foresee at the time of contracting?
👉 Did the currency fluctuation cause excessive burden in the specific contract, disrupting its economic-financial balance under legal provisions?
Between January and November 2024, the dollar's purchase rate increased by over 17%, as reported by the Central Bank Bulletin. This rise, depending on the type of public contract based on foreign budgets, may significantly and unpredictably impact contract costs, transcending ordinary risks. In such cases, requests for economic-financial rebalancing are warranted, provided that the contractor and their attorney demonstrate, in detail, the excessive burden impacting the operation.
It is also essential to note that under the new Public Procurement Law, Article 131, sole paragraph, any request for rebalancing must be made while the contract is still valid and before any extension through amendments. Article 131's main text clarifies that the termination of the contract does not prevent recognition of the imbalance; however, in such cases, the Administration must compensate the contractor through an indemnity agreement.
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