Nullity of State Contracts and Apps for Corruption: The Role of ‘Red Flags’ as a Tool for Their Evidentiary Effectiveness in Arbitration

Cuba Meneses E.G. · Revista Justicia y Derecho (2025) · DOI: 10.32457/rjyd.v8i1.2480

Resumen

This paper examines corruption in contracts between the State and private entities, especially in Public-Private Partnerships, and its impact on the validity of such contracts. It questions whether contracts tainted by corruption of public officials, benefiting a few to the detriment of society, can legally survive. It is investigated whether corruption can cause the nullity of these contracts and how this nullity can be achieved. It highlights the growing trend in international arbitration practice to use “red flags” or red flags as an indication of corruption, avoiding conclusive evidence. The focus is to evaluate whether this methodology is effective to declare contracts affected by corruption null and void. The paper is structured in three parts: first, it analyses the Peruvian legislation that considers corruption as a reason for contractual nullity; then, it delves into corruption as a cause of contractual nullity; and finally, it explores the use of “red flags” as a tool to declare nullity due to corruption in contracts. Emphasizing that, within the framework of the rule of law, the presumption of innocence should supersede baseless and speculative allegations against suppliers and contractors.

Instituciones: Universidad Científica del Sur