The city of Sao Paulo’s new contract with Formula 1 has been temporarily suspended by a judge in the wake of a public petition.
Formula 1’s previous deal to race at Interlagos expired after 2020 – though last year’s event never took place due to the Covid-19 pandemic.
There had been proposals for Formula 1 to move its Brazilian round to a new venue, supported by the President, for 2021.
But the planned circuit, set to be located in the Deodoro suburb of Rio de Janeiro, faced opposition owing to environmental concerns.
A new five-year contract was instead agreed for Formula 1 to remain at Sao Paulo from 2021 through 2025, with the event renamed in lieu of the city rather than the country.
The deal was made possible through the event securing a new promotor in the form of Brasil Motorsport, a company owned by the Abu Dhabi-backed Mubadala investment entity.
The previous contract, which had been agreed under Bernie Ecclestone’s stewardship of Formula 1, was not financially lucrative for the championship.
But the new contract has been suspended in order for the city judiciary to assess the use of the prefecture’s public funds as well as the levels of transparency involved in the deal, owing to the alleged absence of an invitation to tender.
Documents revealed by the court show that R$100,000,000 ($18.5m) of public funding will be used to subsidise the event across the course of the five-year contract.
Court documents explain that “the hiring of a private company without the opening of a bidding process, at the high value mentioned, in the midst of a global health crisis, constitutes a true aberration and will bring enormous losses to the treasury.”
Judge Emilio Migliano Neto has outlined that organisers have five days to submit the relevant documents for assessment.
“These facts reveal without a doubt that, at least in this summary cognitive phase, the principles of advertising and transparency are being violated explicitly,” he said.
“There is a need to suspend the execution of the contract in question, in order to assess whether there were effectively resources to cover expenses.”
This year’s renamed Sao Paulo Grand Prix is due to take place on the rescheduled date of November 7 as part of a triple header with Austin and Mexico City.