The Metropolitan Municipality of Lima, Peru, filed suit in federal court in Washington DC to vacate two separate arbitration awards rendered against the city in international arbitration proceedings subject to the Federal Arbitration Act.

The city had contracted to build, improve, and maintain various highways in and around the city. To pay for this infrastructure, Lima agreed that the contractor would “receive revenues from existing and new toll booths.”

Apparently, the City of Lima forgot how much citizens of the area loathed tolls, and, according to the court, the local public officials “quickly truckled” (how apropos for a road project!) to the pressure. As a result, revenues promised to the contractor were not forthcoming, and the city did nothing about it.

The contractor initiated arbitration, and the city countered by arguing that the contractor had bribed its way into the contract. The city lost and was held in breach.