The Federal District Court of Brasilia has given a favourable news to Saipem by annulling the order of the Gobernador da União (CGU), which prohibited Saipem SA and its subsidiary Saipem do Brasil from contracting with the Brazilian public administration. This ban, which was imposed for a period of two years due to alleged irregularities in the awarding of a contract in 2011, has been reversed after an appeal by both companies.
Saipem makes important progress in its legal battle
The court decision means a respite for the company’s operations in Brazil, as the sanction affected only future contracts with public entities and not ongoing projects. The company had already taken important measures in its regulatory compliance models, which was acknowledged during the process. However, this annulment does not put an end to the legal battle, as, according to Brazilian law, the resolution must still go through an appeal phase .
[post_relacionado]The CGU initially imposed the ban in December 2022 after alleging that Saipem was involved in irregularities in the awarding of a contract related to the installation of a gas pipeline by the BM-S-11 Consortium in 2011. However, the Brasilia court found that the appeals filed by the defense were sufficiently robust to overturn the measure.
During the proceedings, both Saipem SA and Saipem do Brasil implemented a robust compliance model, which was positively assessed. This resulted in a reduction of the initially harsher penalty. The appeal to the court is just one stage in the legal strategy that the companies will continue to adopt to protect their interests.
Future prospects for the company in Brazil
Despite this legal setback, Saipem remains committed to the Brazilian market and will continue to operate under local and international regulations. The lifting of this ban is a positive step, but the legal process is far from over, forcing the company to remain vigilant during the next legal stages.
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Source: Saipem
Photo: shutterstock