This country-specific Q&A provides an overview of the legal framework and key issues surrounding arbitration law in Ecuador.
This Q&A is part of the global guide to Arbitration.
For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/arbitration/
What legislation applies to arbitration? Are there any mandatory laws?
Arbitration in Ecuador is governed by the following legislation: a) The Constitution of Ecuador; b) International treaties and conventions to which Ecuador is a signatory party; c) The Law of Arbitration and Mediation, ( the “LAM” or the “Law”) in effect as of its publication in Official Gazette No. 145 dated September 4, 1997; and, c) Pursuant to Art. 37 of the LAM, for any matters not provided in the Law, the rules of the Civil Code, the Organic General Code of Procedures (which replaced the Civil Procedures Code), the Commerce Code, and other related laws shall apply on a supplemental basis, when arbitration is in law. However, when arbitration is in equity, the arbitration tribunal may decide to apply the above-mentioned supplemental rules.
Bilateral Investment Protection Treaties. Art. 422 of the Constitution, in effect since 2008, prohibits the entering into treaties or international conventions by which the State yields sovereign jurisdiction to international arbitration entities in contractual and commercial disputes between the State and private individuals or entities. Treaties and international instruments providing for the settlement of disputes between States and citizens in Latin-America by regional arbitration entities or by jurisdictional organizations designated by the signatory countries are exempt from this prohibition.
Based on the above mentioned constitutional provision, on July 6, 2009, Ecuador sent a written notice of denunciation of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) to the World Bank. However, Article 72 of the ICSID Convention states that denunciation does not affect the rights or obligations under the Convention of that State or of any of its constituent subdivisions or agencies or of any national of that State arising out of consent to the jurisdiction of the Centre given by one of them before such notice was received by the depositary.
In addition, in 2010, the Constitutional Court of Ecuador declared that some articles of certain bilateral investments protection treaties were unconstitutional because they contravened art. 422 of the Constitution. In May 2017, said treaties were denounced by the President of the Republic. The denunciation was aimed at promoting the renegotiation of those treaties and encouraging the choice arbitration regulations different from ICSID, as UNCITRAL’s rules, as well as other arbitration entities, in particular, Latin American ones.
Besides, Article 42 of the LAM permits international arbitration provisions in contracts entered with the State, with the prior approval of the Attorney General of the State, and the authorization of the maximum authority of the relevant State entity.
The final paragraph of Article 422 of the Constitution expressly sets out that, in the case of controversies concerning (public) foreign debt, the Ecuadorian State shall promote solutions by means of arbitration, considering the origin of the debt and subject to the principles of transparency, equity and international justice. The Constitutional principle clearly allows the State to agree on international arbitration in matters and agreements relating to public debt. It is possible to stipulate international arbitration under rules and courts other than ICSID.
Is the country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?
Yes, Ecuador is a signatory to the Convention on Recognition and Execution of Foreign Arbitral Awards, promoted by the United Nations; it was signed by the Ecuadorian government on December 17, 1958. The New York Convention was ratified by Ecuador and was published in Official Gazette 43 of December 29, 1961 for application on a reciprocity basis and when awards are derived from matters regarded by Ecuadorian law as commercial relationships.
What other arbitration-related treaties and conventions is the country a party to?
Ecuador is a party to several arbitration-related treaties and conventions:
- The Havana Convention of 1928. (International Private Law Code).
- Inter-American Convention on the Effects of Judgments and Arbitration Awards in Foreign Countries, promoted by the Inter-American Legal Committee and signed in Panama on January 30, 1975. The Convention was ratified by Ecuador, without making any exceptions (Official Gazette 506 of January 16, 1977).
- Inter-American Convention on Letters Rogatory, executed in Panama on January 30, 1975, and the Additional Protocol to the Inter-American Convention on Letters Rogatory, signed in Montevideo, Uruguay on May 8, 1979. The convention and protocol govern letters rogatory issued in civil or commercial proceedings and cases by the jurisdictional entities of one of the Member state signatories to the Convention and Protocol. The Convention and Additional Protocol were ratified by Ecuador as published in Official Gazettes 848 of July 17, 1975 and 235 of May 4, 1982.
- Inter-American Convention on the Extraterritorial Efficacy of Foreign Judgments and Arbitral Awards executed in Montevideo, Uruguay on May 8, 1979, ratified by the Ecuadorian government by way of Presidential Decree 853, published in Official Gazette 240 of May 11, 1982. The Convention concerns the recognition and enforcement of foreign judgments and arbitral awards.
Is the law governing international arbitration based on the UNCITRAL Model Law? Are there significant differences between the two?
The LAM governs domestic and international arbitration and the provisions of the LAM are based on the UNCITRAL Model Law in part.
There is a noteworthy difference with the UNCITRAL Model Law, when one of the alternative requirements for international arbitration established in article 41 of the LAM states that the matter of the dispute must be in relation to an "international commercial transaction that can be subject of settlement and does not affect or causes damage to national interests or of the community”. Another important difference worth noting is that the Ecuadorian Organic General Code of Procedures stipulates certain different grounds or requirements for the enforcement of foreign arbitral awards from those provided in the UNCITRAL Model Law. With respect to domestic arbitration, the following relevant provisions of the UNCITRAL Model Law differ from the LAM: a) rules on interim or precautionary measures and preliminary orders as regulated by Chapter IV of the UNCITRAL Model Law; b) waiver of the right to object, as established in art. 4; c) submission of a substantive claim before court in a matter that is the subject of an arbitration agreement, as provided in Art. 8 of the UNCITRAL Model Law; d) court assistance in taking evidence, as regulated in Art. 27 of the UNCITRAL Model Law; e) decision making on questions of procedure by a presiding arbitrator, as mentioned in Art. 29 of the UNCITRAL Model Law; f) termination of the arbitration, as provided by Art. 32.2 (c) of the UNCITRAL Model Law; and, g) the grounds for challenging the independence and impartiality of arbitrators.
Are there any impending plans to reform the arbitration laws?
The majority of experts consider that some changes to the LAM are needed. To the best of our knowledge, however, there are no impeding plans for submitting a bill for debate and approval by the National Assembly (Legislative Branch).
What arbitral institutions (if any) exist? Have there been any amendments to their rules or are there any being considered?
The LAM provides that arbitration proceedings are administered when they are conducted subject to the Law and the rules of procedure issued by an arbitration center. The LAM also sets out that, in order to facilitate the application of the Law, chambers of production, associations, unions, and nonprofit foundations and institutions may organize arbitration centers that may operate upon their registration with the Ecuadorian Federation of Chambers of Commerce. Arbitration centers must also be registered with the National Council of the Judicature. Currently nationwide there are fifteen arbitration centers. The most prestigious are those created by the Quito and Guayaquil Chambers of Commerce, the Chamber of Construction of Quito, and the Ecuadorian-American Chamber of Commerce. At least the major arbitration centers are considering changes to their rules. Generally speaking, the projected changes to said rules are aimed at expediting the arbitration proceedings through fast track arbitration. Under such amendments to the arbitration rules, the parties would be allowed to include in the arbitration agreement provisions: i) shortening the term for the issuance of arbitral awards, ii) providing for a single-arbitrator panel (in particular, in the case of small claims arbitration), and iii) the power of the arbitration courts or of the presiding arbitrator to issue procedural rules in order to speed up the arbitration proceedings. The main arbitration centers are also studying possible rules about evidence taken by means of electronic devices (internet, skype, etc.). These amendments would save time and involve lower arbitration costs for the parties.
What are the validity requirements for an arbitration agreement?
An arbitration agreement or clause is required. Under the LAM, an arbitration agreement is a covenant in writing by which the parties decide to submit to arbitration any controversy or certain controversies that have arisen or that may arise between the parties in relation to a specific legal, contractual, or non-contractual relationship. In addition, arbitration agreements must basically state a) the manner in which arbitrators are selected, b) waiver to regular courts, c) rules governing the arbitration, d) unequivocal determination of the legal relationship to be subjected to arbitration, and, e) it is advisable to include provisions on whether the arbitration is in equity or in law, and on the confidentiality of the arbitration proceeding. Besides, in the case of arbitration agreements on civil indemnifications derived from offences or quasi-offences (non-contractual liabilities), the arbitration agreement must expressly make reference to the facts that the arbitration will concern.
International Arbitration. Arbitration proceedings are international when the parties so agree and provided any of the following requirements is met: a) At the time of entering into the arbitration agreement the parties are be domiciled in different States; b) When the place of compliance of a substantial part of the obligations or the site to which the matter of the dispute is more closely related is located outside the State where at least one of the parties is domiciled; or, c) When the matter of the dispute refers to an international commercial transaction that can be subject of settlement and does not affect or causes damage to the national interests or of the community. In international arbitration, the parties to an international arbitration agreement are free to set forth directly or through reference to an arbitration regulation, every matter concerning arbitration proceedings, including the appointment of arbitrators, the rules of procedure, the language, the applicable law and jurisdiction, the place of the arbitration, which may be located in Ecuador or in a foreign country
Are arbitration clauses considered separable from the main contract?
Arbitration clauses are separable from the main contract. In this case, the arbitration agreement must be made in the form of a document, stating the name of the parties and the unequivocal determination of the legal transaction in question. Exchange of letters or any other written communication means is also accepted.
Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?
Even though there are no specific provisions about multi-party or multi-contract arbitration, the LAM allows the parties (i.e. two or more) in a legal relationship to agree on arbitration for the resolution of disputes between them. In the case of more than one contract, except for an extension of, or amendment to, the first one, between the same parties, a different arbitration tribunal should be appointed.
How is the law applicable to the substance determined?
The law applicable to the substance is the law governing the legal relationship between the parties. In domestic arbitrations, the contract between the parties and the subject of the dispute are governed by the local laws. If the arbitration is in law, the arbitrators shall decide the dispute in accordance with the universal principles of law, the jurisprudence, and the doctrine. If the arbitration is in equity, the arbitrators shall decide based on their true knowledge and belief, and the rules of sound judgment. In international arbitration, the parties to an international arbitration agreement are free to stipulate the applicable law and jurisdiction.
Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?
The LAM provides that only the controversies in which settlement is permitted can be subjected to arbitration. Consequently, disputes arising from labor relationships, tax matters, conflict of matters concerning minors, among others, cannot be subjected to arbitration.
Are there any restrictions in the appointment of arbitrators?
In case that the arbitration agreement provides for arbitration in law, the arbitrators must necessarily be attorneys. This requirement does not apply in the case of arbitration in equity. Individuals who have no legal capacity to appear by themselves in litigation are not permitted to act as arbitrators. The reasons for excuses of arbitrators are those provided for judges by the Organic General Code of Procedures. When arbitrators are aware that they do not have capacity, they must immediately notify the Arbitration Center and request that a replacement be appointed. In addition, the grounds for challenging arbitrators are the same as for judges stipulated in the Organic General Code of Procedures.
Are there any default requirements as to the selection of a tribunal?
The arbitration agreement must specify the rules for the appointment of arbitrators, including the number of arbitrators to form the arbitration tribunal. Arbitrators may be appointed by the parties from the list of arbitrators of the Arbitration Center or from out of that list. If there is no agreement between the parties on this matter, the Arbitration Center has the power to appoint the arbitrators by drawing. In this case, the arbitration tribunal will be formed by three principal arbitrators and one alternate arbitrator.
Can the local courts intervene in the selection of arbitrators? If so, how?
Local courts are not permitted to intervene in the selection of arbitrators.
Can the appointment of an arbitrator be challenged? What is the procedure for such challenge? Has there been an increase in number of challenges in your jurisdiction?
The grounds for challenging arbitrators are the same as for judges stipulated in the Organic General Code of Procedures. The challenge is resolved:
a) In case of a tribunal formed by more than one member, by the persons not included in the challenge claim. If the latter fail to reach an agreement, the challenge will be solved by the director of the center.
b) In the case all arbitrators are challenged, the director of the center will resolve the challenge.
c) In the case of a tribunal formed by a single person, the director of the center will resolve the challenge. The arbitrator’s replacement will be carried out in accordance with Article 16.
d) In the case of independent arbitration, the challenge is resolved by the members of the court who were not challenged.
e) In the case of a court formed by a single person or if all arbitrators are challenged, the challenge will be solved by the director of the arbitration center nearest to the plaintiff´s domicile.
The arbitrators appointed by agreement of the parties may only be challenged by reasons unknown at the time of their appointment or that appeared after such appointment. There is not a significant increase in number of challenges.
What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?
The LAM sets forth that, if because of death, justified excuse, or any case in which an arbitrator is definitively absent, the arbitrator will be replaced by the alternate arbitrator, who will become a principal arbitrator, and another alternate arbitrator will be appointed pursuant to the Law. Under the doctrine and principles of law, the tribunal is not able to continue with the proceedings if one of its members is permanently missing.
Are arbitrators immune from liability?
Arbitrators are not immune from liability. The Criminal Code establishes that if the arbitrators issue their award in violation of, or against, an express rule to the detriment of one of the parties, act against an express law by doing anything prohibited or failing to act as required when conducting the arbitration proceeding, or make decisions or issue a ruling in proceedings in which they acted as the defense attorneys of one of the parties, then they will be punished with prison time from three to five years. In addition, arbitrators may incur in civil liability and could be sued when violation of the law, as indicated above, causes damage to any of the parties.
Is the principle of competence-competence recognised? What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?
Yes, the principle of competence-competence is recognized in Ecuador. Under the provisions of the LAM, the arbitration tribunal must decide whether it has competence in the first hearing (Audiencia de Sustanciación) of the arbitral proceeding.
The LAM provides that the parties can waive in writing the arbitration agreement in which case any of them may file a claim with the competent local judicial court. It is understood, however, that such a waiver exists when any of the parties files a claim with a judicial court and the respondent does not file pleas or defenses about the existence of the arbitration agreement when answering the claim. In the event pleas or defenses are filed, the judicial court must notify the other party accordingly and require that the parties provide evidence of what they claim within the next three days. If the judicial court accepts the pleas or defenses concerning the existence of the arbitration agreement, it will have to dismiss the claim. Otherwise, the judicial court will resolve the claim under the general rules of litigation contained in the Organic General Code of Procedures.
How are arbitral proceedings commenced? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?
Arbitral proceedings begin with the claim filed with the director of the relevant arbitration center or, in the case of independent arbitration, with the independent arbitrator or arbitrators, by one of the parties to an arbitration agreement. The claim must contain: a) name of the arbitration center at which the claim is filed; b) names and address of the plaintiff and respondent; c) factual and legal grounds of the claim; d) subject, amount or fact matter of the claim; e) the determination of the amount of the claim; and, f) place where the respondent and plaintiff are to be served notice. Under the provisions of the LAM, the requirements for claims outlined in the Organic Code of Procedures must also be fulfilled. In addition, the claim must attach the evidence and include request of the production of evidence during the arbitral proceeding.
The arbitration court must resolve the dispute between the parties within 150 days from the filing date of the claim. This term may be extended for a like period by the arbitration court only when strictly necessary.
In addition, the tribunal in the arbitration hearing (audiencia de sustanciación) sets the term for the production of evidence, as requested by the plaintiff in the claim and by the respondent in the answer to the claim.
What happens when a respondent fails to participate in the arbitration? Can the local courts compel parties to arbitrate? Can they order third parties to participate in arbitration proceedings?
If after having been summoned a respondent does not answer the claim and not appear before the arbitration tribunal, the arbitration proceeding will continue without the respondent.
The arbitration tribunal has no power to order third parties to participate in the proceedings. During the evidence stage, however, the arbitration court can order witnesses to appear before the court to provide a deposition about the facts they know with regard to the dispute between the parties. Local courts cannot compel parties to arbitrate or order third parties to participate in the arbitration.
In what circumstances is it possible for a state or state entity to invoke state immunity in connection with the commencement of arbitration proceedings?
Article 190 of the Constitution of Ecuador states that Ecuador recognizes arbitration, mediation, and other alternate mechanisms for the resolution of disputes. Arbitration may be applied according to the law only in matters, including commercial matters, that may be subject of settlement. Sovereign powers of the State cannot be submitted to arbitration.
The Republic of Ecuador and Ecuadorian public entities can enter into arbitration agreements with private individual or entities and stipulate arbitration in law (not in equity), subject to the provisions of the Constitution of the Republic and the law so long as legal requirements are met. If they have not signed a valid and binding arbitral agreement on an matter that can be submitted to arbitration, the state or state entity would invoke sovereign immunity.
Domestic Arbitration. The State and State entities are permitted to stipulate arbitration in law, but not in equity. If the State or State entity wishes to enter into an arbitration agreement after a dispute arises, the prior favorable opinion of the Attorney General of Ecuador is required.
International Arbitration. For the State and State entities submit to international arbitration, the prior authorization of the maximum authority of the relevant State entity and the prior favorable opinion of the Attorney General of the State Office is needed.
The final paragraph of Article 422 of the Constitution expressly sets out that, in the case of disputes regarding (public) external debt, the Ecuadorian State must procure solutions by means of arbitration, taking the origin of the debt into account, and subject to the principles of transparency, equity, and international justice. Moreover, submission to international arbitration or to foreign law and foreign jurisdiction in lending transactions is possible under the provisions of the Code of Planning and Public Finances.
In what instances can third parties or non-signatories be bound by an arbitration agreement or award?
Third parties or non-signatories cannot be bound by an arbitration agreement or award.
What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?
The LAM provides that arbitration courts may order interim or precautionary measures pursuant to the rules of the Organic General Code of Procedures or other applicable rules, to safeguard the subject-matter of the arbitral proceedings or to guarantee the results thereof. The arbitration court may require a guarantee or bond from the party requesting the measure in order to cover the cost of the measure and payment of damages to the counterparty should the award rule that the claim is groundless. The above-mentioned Code provides the following interim or precautionary measures: seizure or withholding of the thing subject of the litigation or the goods securing the credit, and the court may also: a) prohibit the transfer of ownership of goods or real property of the debtor when the party requesting the measure submits evidence of the debt and the debtor does not have other goods or property to secure the debt, and, b) issue an order preventing the debtor from leaving the country. The LAM establishes that if the arbitration agreement does not provide for precautionary measures, either party may request local courts to issue precautionary measures.
Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence?
The claimant’s claim and the respondent’s answer to the claim must attach the evidence or proof supporting their positions and include a request for the production of evidence during the proceedings. The LAM does not contain specific rules regarding means of evidence and, therefore, the provisions of the Organic General Code of Procedures and the regulations of the arbitration centers are applicable in this regard. Local judicial courts play no role in obtaining the evidence. All the evidence is ordered by and produced trough the arbitration tribunal.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings?
In addition to the legal rules regarding the capacity for acting as arbitrator and the reasons for challenging the appointment of arbitrators, the regulations and norms issued by the centers of arbitration contain Codes of Ethics, as well as conduct and ethical duties and obligations that the arbitrators must observe.
The following are some relevant ethical duties and obligations of arbitrators set forth in regulations of arbitration centers:
- To faithfully carry out duties while strictly observing the principles of confidentiality, discretion, absolute impartiality, and neutrality, as well as other duties stipulated in the Code of Ethics;
- To act with diligence and promptness while conducting the arbitration proceedings with agility; to issue resolutions required for this purpose, and to order the necessary proceedings for the prompt resolution thereof;
- To maintain the confidential nature of the meetings held during the arbitration proceedings as well as prior to the issuance of the award;
- To comply with and observe the Code of Ethics; and,
- To have no ex parte contact with the parties during the arbitration proceedings.
Any exclusion of arbitrators is resolved by the relevant Board of Directors of the arbitration center, at the arbitration center Director's request.
Attorneys must observe ethical rules as provided in local laws.
How are the costs of arbitration proceedings estimated and allocated?
This matter is also regulated by the arbitration centers by way of their internal regulations. The tariffs are approved by the boards of directors of the arbitration centers and published on their web page. Costs are estimated based on the claim amount and must be paid by the claimant at the beginning of the arbitration.
Can pre- and post-award interest be included on the principal claim and costs incurred?
The claim may include a petition for pre-award and post-award interest to compensate the claimant for damage from the date when the damage was caused up to the date of payment. The claim may also include a petition for the respondent to reimburse costs incurred in or derived from the arbitral proceedings.
What legal requirements are there for the recognition of an award?
We understand that your question refers to: a) the enforcement of domestic arbitral awards and b) the recognition and enforcement of international arbitral awards. Domestic arbitral awards are enforced by the provincial court of the jurisdiction where the award was issued. Either party may request the court to enforce the award by submitting a certified copy of the award granted by the director of the arbitration center. International arbitration awards have to be enforced according to the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, signed by the Ecuadorian Government on December 17, 1958. The convention was ratified for application on a reciprocity basis and when the dispute is deemed by Ecuadorian Law to involve a commercial relationship, and was published in Official Gazette 43, December 29, 1961. As of May 22, 2016, the following requirements for homologation and enforcement of foreign judgments and arbitral awards provided by the Organic General Code of Procedures went into effective and must be fulfilled: (a) judgments and arbitral awards must meet the required foreign formalities to be regarded as authentic in the State of origin; (b) judgments and arbitral awards must have the authority of res judicata, in accordance with the laws of the country where issued; they must attach required documentation, which must be duly legalized; (c) judgments and arbitral awards have to be translated into Spanish when not in that language; (d) judgments and arbitral awards must be substantiated by the relevant procedural pieces and certifications; it must be evidenced that the respondent was legally served notice and that the defense of the parties was warranted; (e) the petition must state the place for summoning the individual or entity against whom the judgment or arbitral award issued abroad is to be enforced in Ecuador. In addition to the requirements listed above, our courts would also examine whether the judgment or arbitral award contravenes any international treaty to which Ecuador is a party, the Constitution of the Republic, or Ecuadorian Public Law. The procedure of homologation must be followed at the Provincial Court of the domicile of the requesting party. The enforcement process is conducted before a first-instance court of the respondent’s domicile.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?
Arbitration awards are unappealable; however, a party may submit a request for clarification when the award is not clear or for amplification when the arbitral award does not resolve on all the topics in dispute. The request for clarification or amplification may be filed by either party within three days from the date that the award is served. The arbitrators have a term of ten days to resolve on the request.
Can arbitration proceedings and awards be appealed or challenged in local courts? What are the grounds and procedure?
Arbitral awards cannot be appealed. Either party may, however, file action to annul the arbitration award in the following events: a) When a claim was not legally served and the litigation was carried out and completed in default, and such absence of the service of notice prevented the respondent from filing pleas and defenses and from exercising his or her rights. In that case, the respondent must have filed a complaint with the arbitration court regarding such omission at the time that the arbitral proceeding was in process; or, b) Court decisions were not served on any of the parties and such circumstances prevented or limited the party’s right to defend him or herself; or, c) If no call was made for the initial hearing (Audiencia de Sustanciación) or if the call was not notified, or if after the call, the evidence requested by the parties or ordered ex officio by the arbitration court was not produced despite the existence of facts to be justified; or, d) The award refers to matters not subject to arbitration (extra petita) or grants more than what is being claimed (ultra petita); and, e) When the procedures established by the Law or by the parties for the appointment of arbitrators or formation of the arbitration tribunal were breached.
The legal action for annulment may be filed for the resolution of the president of the provincial court within a term of ten days from the date the award became final. Within three days from the filing date of the annulment action the arbitration tribunal must send the arbitration file to the president of the court. According to the Law, the president of the provincial court shall resolve within a term of thirty days.
Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?
There is not a specific rule on this topic. As stated above, only action to annul the award is permitted. In our opinion, this is a public order provision and an arbitration clause in another written agreement between the parties to waive the right to take such action would not be valid. Under Ecuadorian law, the Ecuadorian State and State entities are not permitted to waive their rights and, therefore, they cannot include a provision waiving their rights in an arbitration agreement.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
In my opinion, the State or a state entity may successfully raise the above-mentioned defence, a) the arbitration agreement was not validly executed between the parties and in particular, in the case of international arbitration, when no authorization from the Attorney General of the State or the maximum authority of the relevant state entity has been secured; or, b) because the matter of the arbitration cannot be the subject of settlement or it affects the state sovereign rights.
To what extent might a third party challenge the recognition of an award?
Third parties cannot challenge the recognition of an award.
Have there been any significant developments with regard to third party funding recently?
No, third party funding remains undeveloped in Ecuador.
Is emergency arbitrator relief available? Is this frequently used?
The LAM does not contain emergency arbitration relief.
Are there arbitral laws or arbitration institutional rules providing for simplified or expedited procedures for claims under a certain value? Are they often used?
There are no rules in Ecuador providing for simplified or expedited procedures for claims below a certain value. As mentioned in our answer to question number 4, Legal Framework, we have been informed that some arbitration centers are working on simplifying or expediting procedures for claims for a certain value, by shortening the term for the issuance of the award or by providing for the appointment of a sole arbitrator for certain arbitral proceedings.
Have measures been taken by arbitral institutions to promote transparency in arbitration?
Yes, the LAM and the regulations issued by the different arbitration centers promote transparency in arbitration. The LAM and the regulations issued by the arbitration centers establish that arbitrators have to reveal to the director of the arbitration center any cause of legal incapacity that could prevent the arbitrator from exercising his or her duties.
Is diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) actively promoted? If so, how?
Although there are no legal or regulatory rules, the diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) is actively promoted in my country. Arbitrators of different age and gender form part of the list of arbitration of the Ecuadorian arbitration centers.
Have there been any developments regarding mediation?
Yes, there are improvements in mediation. The use of mediation as an alternate dispute resolution mechanism is rapidly growing. One of the most important arbitration and mediation centers informed that they see an increase of 250% in the number of mediations compared to last year, 2016. The Constitution and laws promote mediation as a dispute resolution method even for disputes involving the State and state entities.
Have there been any recent court decisions considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?
There are no court decisions in Ecuador considering the setting aside of awards that have been issued or enforced in another jurisdiction. To the best of our knowledge, there are no decisions in other counties considering the setting aside of an award that has been issued or enforced in Ecuador.