Public procurement is the regulation of principles, rules and procedures applied to States in order to implement efficient processes when acquiring goods, services or works, and comply with its’ policy objectives.1 Each public procurement law shall be analysed in accordance with the terms of the particular State or international organization.
Several approaches have been made with regards to Public Procurement. Different topics are applicable to this concept, such as ADR,2 Corruption,3 Arbitration,4 and International Law.5 Given the globalization of contractual and non-contractual obligations, doctrine has developed a common approach in which it is publicly discussed whether States should or not develop global public procurement regulations so that contractors and other interested parties have a common framework despite the nuances of the State involved.
Public procurement has a few principles which illustrate the scope of its application. These set of rules have been explained in different instruments such as the General Agreement on Trades and Tariffs,6 the Revised Agreement on Government Procurement,7 the European Union Directive 2014/24/EU,8 the North American Free Trade Agreement (NAFTA),9 the Common Market for Eastern and Southern Africa (COMESA),10 the Asia-Pacific Economic Cooperation Forum (APEC)11 and the Organization for Economic Co-operation and Development (OECD).12 These Agreements have been a common framework in which States around the world may adjust their local public procurement rules.
In short, the principles are as it follows:
For example, the OECD has recommended its States Parties that “public procurement contracts should contain 'no corruption' warranties and measures should be implemented to verify the truthfulness of suppliers’ warranties that they have not and will not engage in corruption in connection with the contract."
In this case, there was a public procurement agreement between Africard Co Ltd and the State of Niger. Apparently, Africard Co Ltd did not comply with International Civil Aviation Organization Rules concerning the adoption of biometric transports. Therefore, the State of Niger decided to terminate the agreement. The arbitral tribunal ruled that in this case the State of Niger breached the principle of transparency by not submitting a formal written notice in which Africard Co Ltd may as well have been informed about the situation. Due to this lack of diligence, the State of Niger had to compensate Africard Co Ltd.
In this case, the Arbitral Tribunal analyses whether a control on an Investors’ assets by the Venezuelan government is a public procurement agreement, based upon the Canada-Venezuela BIT, and therefore, are an investment outside de the scope of the definition of Article I(f) of the BIT. It concludes that Venezuelan law regarding public procurement is not relevant for an arbitral tribunal to determine its jurisdiction.
Vannessa Ventures Ltd v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/04/6, Award, 16 January 2013, paras 155-161; B3 Croatian Courier Coöperatief U.A. v. Republic of Croatia, ICSID Case No. ARB/15/5, Award (Excerpts), 5 April 2019, para. 998.
Bovis, C., Liberalising Public Markets in America: The North American Free Trade Agreement (NAFTA) Government Procurement Code, 1993, p. 115.
Williams-Elegbe, S., Fighting Corruption in Public Procurement: A comparative analysis of Disqualification or Debarment Measures, 2012, 1-299.
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