Challenging and Enforcing Arbitration Awards: Ecuador

1. Must an award take any particular form?

Ecuador

According to article 26 of the Arbitration and Mediation Law, for an award to be valid, it must be issued by majority and all the arbitrators must sign it. In the event of a dissenting opinion, it has to be appended to the award. Both the award and the dissenting opinion must contain the reasons for the decision.

According to article 27 of the Arbitration and Mediation Law, if one of the members of the tribunal refuses or is unfit to sign the award or any other decision, the secretary of the tribunal will certify the event and the other members will sign, with no effect on the validity of the award or decision.

2. Are there provisions governing modification, clarification or correction of an award? Are there provisions governing retractation or revision of an award? Under what circumstances may an award be retracted or revised (for fraud or other reasons)? What are the time limits?

Ecuador

The Arbitration and Mediation Law provides that any party may request the extension or clarification of an award. Such a request must be made within three days of the notification of the award. Within the same period, the arbitral tribunal may be able to correct any numerical, calculation or typographical errors. The arbitral tribunal must issue its decision within 10 days of the date of a request for extension or clarification of the award.

The Arbitration and Mediation Law does not provide the possibility to retract or revise an award once it has been issued.

3. May an award be appealed to or set aside by the courts? What are the differences between appeals and applications to set aside awards?

Ecuador

Under Ecuadorian law, there is no recourse of appeal of an award. However, there are five grounds on which a party could request the setting aside (ie, annulment) of an award:

• if the defendant has not been served with the statement of claim and the procedure ends in a default judgment. The defendant must prove that the lack of notification prevented him or her from presenting a defence;
• if one of the parties has not been notified of an order of the tribunal, and as a result the right of defence of that party has been impaired;
• if the tribunal did not decide on or declined to hear material evidence, despite the existence of facts that need to be justified;
• if the award refers to matters not submitted to arbitration or granted beyond what was claimed; and
• if the procedures for appointing the arbitral tribunal set forth either by law or contract were violated.

4. Is there a time limit for applying for the setting aside of an arbitral award?

Ecuador

Pursuant to article 31 of the Arbitration and Mediation Law, the setting aside of the award shall be filed within 10 days of the award becoming final, that is within three days of the date of issuance of the award or within three days of the date the arbitral tribunal decides on the extension or clarification of the award.

5. What kind of arbitral decision can be set aside in your jurisdiction? Can courts set aside partial or interim awards?

Ecuador

As per article 31 of the Arbitration and Mediation Law, only final awards are subject to an annulment procedure.

6. Which court has jurisdiction over an application for the setting aside of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

Ecuador

According to article 31 of the Arbitration and Mediation Law, the setting aside of an award is heard by the President of the Provincial Court of Appeal of the seat of the arbitration.

7. What documentation is required when applying for the setting aside of an arbitral award?

Ecuador

Since the request for annulment must be filed before the arbitral tribunal, which will then transmit the entire file of the arbitration (including the request for annulment) to the President of the Provincial Court of Appeal, the applicant is not required to file certified copies. Furthermore, article 13(2) of the Regulations to the Arbitration and Mediation Law provides that for the reception of the arbitration file in the Court, there is no need for the file to be numbered or any other additional requirement.

8. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with the application for the setting aside of an arbitral award? If yes, in what form must the translation be?

Ecuador

Article 200 of the General Code of Procedures provides that all documents written in a language other than Spanish must be translated by an official translator.

9. What are the other practical requirements relating to the setting aside of an arbitral award? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

Ecuador

There are none.

10. What are the different steps of the proceedings?

Ecuador

The annulment procedure is twofold: written and oral phase. The written phase encompasses the request for annulment and the statement of defence thereto. The oral phase consists of a hearing at which the parties deliver their oral arguments before the court. Immediately after, the judge will render his or her decision on the request.

Exceptionally, if the case justifies it, article 13(3) of the Regulations to the Arbitration and Mediation Law authorises the judge to adjourn the hearing for 10 days for its resolution. During this time, the parties are entitled to present post-hearing briefs.

11. May an arbitral award be recognised or enforced pending the setting- aside proceedings in your jurisdiction? Do setting aside proceedings have suspensive effect? If not, which court has jurisdiction over an application to stay the enforcement of the award pending the setting aside proceedings, and what are the different steps of the proceedings?

Ecuador

Ordinarily a setting-aside procedure does not have suspensive effect. Notwithstanding, an applicant has the right to request a suspension and, after posting a bond to compensate any harm as a result of the delay in the enforcement, the tribunal could grant the stay of enforcement of the award.

12. What are the grounds on which an arbitral award may be set aside?

Ecuador

Pursuant to article 31 of the Arbitration and Mediation Law, an award can be set aside on the following grounds:

• if the defendant has not been served and the procedure ends in a default judgment. The defendant must prove that the lack of notification prevented him or her from presenting a defence;
• if one of the parties has not been notified of an order of the tribunal and, as a consequence, the right of defence of that party has been impaired;
• if the tribunal did not decide on or declined to hear material evidence, despite the existence of facts that need to be justified;
• if the award refers to matters not submitted to arbitration or granted beyond what was claimed (extra petitum or ultra petitum award); and
• if the procedures for appointing the arbitral tribunal set forth either by law or contract were violated.

13. What is the effect of the decision on the setting-aside application in your jurisdiction? What challenges are available?

Ecuador

Depending on the alleged ground, the award can be annulled totally or partially. Furthermore, the Provincial Court of Appeal may revert the arbitral process before the annulment ground occurred. The only recourse available against an annulment decision is a constitutional injunction.

14. Will courts take into consideration decisions rendered in relation to the same arbitral award in other jurisdictions or give effect to them (eg, in recognition or enforcement proceedings)?

Ecuador

Although there is no case law reported, the President of the Provincial Court of Appeal is not bound to give effect to decisions rendered in other jurisdictions.

15. What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

Ecuador

On 21 August 2018, the rule of the General Code of Procedures that required the recognition of foreign awards was repealed and former article 42 of the Arbitration and Mediation Law re-entered into force. According to this article, international awards shall have the same effects and can be enforced in the same form as domestic awards; that is to say, without the need for recourse to a prior recognition process. A party seeking the enforcement of an award must file a request of enforcement directly to a judge of first instance for civil and commercial matters.

Ecuador is a party to the 1958 New York Convention and the 1975 Panama Convention for the recognition and enforcement of foreign arbitral awards.

Moreover, on 26 August 2021, the Regulations to the Arbitration and Mediation Law were published, which eliminated certain formalities during the enforcement of international awards (ie, the requirement of a certification that the award was final).

16. Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under article I(3) of the Convention?

Ecuador

Ecuador signed the New York Convention on 17 December 1958. The date of entry into force of the Convention was 3 January 1962.

Ecuador made both reservations allowed under article I(3) of the New York Convention, which means the Convention will apply only to awards made in the territory of another contracting state and when they relate to commercial matters in accordance with Ecuadorian law.

17. Is there a time limit for applying for the recognition and enforcement of an arbitral award?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation. The special procedure to enforce an arbitral award can be initiated within five years of the decision being final. After that point, an award would be considered only as an ordinary commercial document containing a credit subject to enforcement by ordinary procedure provided that the request is filed within five years.

18. Which court has jurisdiction over an application for recognition and enforcement of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

Ecuador

Neither foreign nor domestic awards need to obtain a prior recognition to be enforced. 

Pursuant to article 14 of the Regulations to the Arbitration and Mediation Law, a party seeking the enforcement of either a foreign or a domestic arbitral award must resort to a judge of first instance for civil and commercial matters from the place where the defendant resides or to the judge of where the assets that are the subject of enforcement are located.

19. What are the requirements for the court to have jurisdiction over an application for recognition and enforcement and for the application to be admissible? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

Ecuador

Neither foreign nor domestic awards need to obtain a prior recognition to be enforced. The requirements for a court to have jurisdiction for the enforcement of arbitral awards (whether domestic or foreign) are that an applicant must file an enforcement petition, and must file it before the judge of first instance for civil and commercial matters in the place where the defendant resides or to the judge of the place where the assets that will be the subject of enforcement are located, or the arbitral award must deploy its effects.

Regarding admissibility requirements, there is a relative consensus that to enforce an award, it must put an end to the controversy and have the effect of res judicata under the law of the seat of the arbitration.

20. Are the recognition proceedings in your jurisdiction adversarial or ex parte? What are the different steps of the proceedings?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

21. What documentation is required to obtain recognition?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

22. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition? If yes, in what form must the translation be?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

23. What are the other practical requirements relating to recognition and enforcement? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

Ecuador

Article 15(2) of the Regulations to the Arbitration and Mediation requires only a certified copy of the award to initiate any enforcement proceeding.

24. Do courts recognise and enforce partial or interim awards?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

25. What are the grounds on which an arbitral award may be refused recognition? Are the grounds applied by the courts different from those provided under article V of the New York Convention?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

26. What is the effect of a decision recognising an arbitral award in your jurisdiction?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

27. What challenges are available against a decision refusing recognition in your jurisdiction?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

28. What are the effects of annulment proceedings at the seat of the arbitration on recognition or enforcement proceedings in your jurisdiction?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

Article 15(2) of the Regulations to the Arbitration and Mediation requires only a certified copy of the award to initiate any enforcement proceeding.

29. If the courts adjourn the recognition or enforcement proceedings pending annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

Only if an applicant, when filing its request for annulment, moves for the suspension of the enforcement of the award, may the enforcement of the award be suspended. For this to happen, the applicant will have to comply with the order issued by the tribunal as to the bond. The standard applied by tribunals for fixing a bond is, according to article 31 of the Arbitration and Mediation Law, ‘the potential harm that the delay in the enforcement of the award may cause to the award creditor’.

30. Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an arbitral award is set aside after the decision recognising the award has been issued, what challenges are available?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation.

As regards enforcement proceedings, article 15(3) of the Regulations to the Arbitration and Mediation Law provides that the debtor can object the enforcement of the award if he proves that it was annulled at the seat of the arbitration.

31. What is the procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction? If the extrajudicial and judicial documents are drafted in a language other than the official language of your jurisdiction, is it necessary to serve these documents with a translation?

Ecuador

There is no regulation for service of extrajudicial documents to a defendant in Ecuador. Conversely, service of judicial documents is regulated by the General Code of Procedures. In this case, the court will receive a petition and will issue an order containing the details of the request. This order and the documents attached thereto will be served to the defendant’s domicile on three separate days, unless the documents are received directly by the defendant, in which case the defendant will be deemed to be duly served.

Pursuant to article 200 of the General Code of Procedures, all documents written in a language other than Spanish within a judicial procedure in Ecuador must be translated by a certified translator.

32. What is the procedure for service of extrajudicial and judicial documents to a defendant outside your jurisdiction? Is it necessary to serve these documents with a translation in the language of this jurisdiction? Is your jurisdiction a party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Service Convention)? Is your jurisdiction a party to other treaties on the same subject matter?

Ecuador

Ecuadorian legislation does not provide for any specific regulation for service of extrajudicial documents to a defendant outside Ecuadorian jurisdiction.

Pursuant to articles 56 and 57 of the General Code of Procedures, service for Ecuadorian nationals outside Ecuador should be made by consular authorities.

Nonetheless, for non-Ecuadorian nationals and foreign corporations, article 70 of the General Code of Procedures provides that service shall be made in accordance with the provisions of the Inter-American Convention on Letters Rogatory and the Vienna Convention on Consular Relations.

33. Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction? Are there any databases or publicly available registers providing information on award debtors’ interests in other companies?

Ecuador

Yes, property registrars provide public information regarding immovable property ownership. The National Transit Agency also provides ownership information regarding vehicles. The Superintendency of Companies has a shareholders information database to which a creditor could resort. The National Intellectual Rights Service provides information on intangible property (ie, trademarks and industrial property rights). This information allows the enforcing party to determine a debtor’s sizable assets even before filing for recognition of the award.

34. Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

Ecuador

Article 365 of the General Code of Procedures provides that judges may request public registrars, or any other state entity, to provide information regarding a debtor’s assets.

35. What kinds of assets can be attached within your jurisdiction?

Ecuador

The assets that can be attached in Ecuador are movable and immovable; intangible property is reputed to be movable.

36. Are interim measures against assets available in your jurisdiction?

Ecuador

Ecuadorian law provides for specific rules concerning interim measures against assets, and it does not distinguish between assets owned by private parties and state entities. Nevertheless, article 46 of the Monetary and Financial Organic Code grants immunity from enforcement and encumbrance to deposits belonging to state entities made in accounts of the Central Bank of Ecuador. In general, a judge may grant interim measures when:

• the requesting party proves the existence of a credit; and
• the requesting party proves that:
  • the debtor’s assets are not enough to cover the credit;
  • the debtor could hide the assets or make the assets disappear; or
  • the debtor is trying to dispose of or sell the assets.

37. What is the procedure to apply interim measures against assets in your jurisdiction?

Ecuador

Interim measures may be requested from a court prior to filing a petition of enforcement. After the request for interim measures has been filed, the court will summon the applicant to a hearing in which it will decide – ex parte and inaudita parte – whether the creditor’s request complies with the conditions set forth in the General Code of Procedures. If the conditions are met, the court will grant the interim measures.

38. What is the procedure for interim measures against immovable property within your jurisdiction?

Ecuador

Regarding immovable property, a creditor may request a court to grant a prohibition on transfer, sale or encumbrance. If the prohibition is granted, a notification shall be made to the respective property registrar, who will take note of the court’s order. A debtor may suspend the interim measures after posting security.

39. What is the procedure for interim measures against movable property within your jurisdiction?

Ecuador

When interim measures are granted against movable property, the judge will order its seizure. Once property is seized, it will be delivered to a depositary, which has a duty of care and conservation of the asset until proper security is granted or until the end of the proceedings.

40. What is the procedure for interim measures against intangible property within your jurisdiction?

Ecuador

According to the nineteenth general provision of the Organic Code of the Social Economy of Knowledge (the Ecuadorian Intellectual Property Act), intangible property is reputed to be movable for the constitution of encumbrances. For its seizure and auction, the procedures prescribed in the General Code of Procedures shall be followed.

41. What is the procedure to attach assets in your jurisdiction?

Ecuador

After the filing of the execution petition, the judge grants the defendant the opportunity to pay or to relinquish assets of its property to cover the amount due. If the defendant does not comply with the order within five days, the applicant has the right to decide which assets will attach for this purpose. The assets will be auctioned, and the applicant will receive the collected amount. Attachment proceedings are adversarial by nature.

42. What is the procedure for enforcement measures against immovable property within your jurisdiction?

Ecuador

According to article 384 of the General Code of Procedures, the attachment of immovable property starts with the order of seizure of the property and its registration on the respective property registry.

43. What is the procedure for enforcement measures against movable property within your jurisdiction?

Ecuador

According to Article 381 of the General Code of Procedures, the attachment of movable property starts with the order of sequestration of specific assets and its subsequent placing under judicial deposit to be actioned. If the attached assets are subject to registration, the order of attachment will be registered in the respective public registry.

44. What is the procedure for enforcement measures against intangible property within your jurisdiction?

Ecuador

According to the nineteenth general provision of the Organic Code of the Social Economy of Knowledge (the Ecuadorian Intellectual Property Act), intangible property is reputed to be movable for the constitution of encumbrances. For its seizure and auction, the procedures prescribed in the General Code of Procedures shall be followed.

45. Are there specific rules applicable to the attachment of assets held by banks? Is it possible to attach in your jurisdiction sums deposited in bank accounts opened in a branch or subsidiary of a foreign bank located in your jurisdiction or abroad? Is it possible to attach in your jurisdiction the bank accounts opened in a branch or subsidiary of a domestic bank located abroad?

Ecuador

As a matter of territorial jurisdiction, Ecuadorian judges can attach any bank accounts opened in Ecuador, either in a local bank or in a branch or subsidiary of a foreign bank duly authorised to operate in Ecuador. Ecuadorian judges cannot order the attachment of bank accounts located outside Ecuador.

46. Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

Ecuador

There are none.

47. What is the procedure for service of extrajudicial and judicial documents to a foreign state? Is it necessary to serve extrajudicial and judicial documents with a translation in the language of the foreign state?

Ecuador

Ecuadorian legislation does not provide for any specific regulation for the service of extrajudicial documents. According to Article 61 of the General Code of Procedure, judicial documents must be served to a foreign state through a diplomatic note issued by the Foreign Minister of Ecuador, which requires an official translation of the documents into the language of the foreign state.

48. May a foreign state invoke sovereign immunity (immunity from jurisdiction) to object to the recognition or enforcement of arbitral awards?

Ecuador

Recognition procedure is no longer required under Ecuadorian legislation. Nonetheless, as article 416(9) of the Ecuadorian Constitution recognises international law as a norm of conduct of the state, principles of customary international law governing the immunity of jurisdiction of sovereign states and their property should apply.

49. May award creditors apply interim measures against assets owned by a sovereign state?

Ecuador

They may, provided that the targeted asset is not protected by immunity. It will be for the courts to apply the law of sovereign immunity of states and their property as portrayed by customary international law and, consequently, to determine whether a particular asset owned by a foreign state is granted immunity from interim measures being applied.

50. Are assets belonging to a foreign state immune from enforcement in your jurisdiction? Are there exceptions to immunity?

Ecuador

Regarding deposits of foreign states made in accounts belonging to their central banks, under the principle of reciprocity, article 46 of the Monetary and Financial Organic Code grants absolute immunity from execution. In reference to assets other than the aforesaid, since article 416(9) of the Ecuadorian Constitution recognises international law as a norm of conduct of the state, principles of customary international law governing the immunity of jurisdiction of sovereign states and their property should apply. In this sense, it will be for the courts to apply the law of sovereign immunity of states and their property as portrayed by customary international law and, consequently, to determine whether a particular asset owned by a foreign state is granted immunity from execution.

51. Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? What are the requirements of waiver?

Ecuador

A state can expressly waive its immunity from enforcement provided that the requirements under customary international law have been fulfilled (ie, express consent by international agreement, by a declaration before the court, or by a written communication after a dispute between the parties has arisen, or if the state has allocated or earmarked property for the satisfaction of the claim that is the object of that proceeding, etc). Note that a waiver of immunity from jurisdiction neither entails nor implies a waiver of immunity from enforcement.

52. Is it possible for a creditor of an award rendered against a foreign state to attach the assets held by an alter ego of the foreign state within your jurisdiction?

Ecuador

It is possible provided that an authorisation to pierce the corporate veil is granted and the targeted assets are not covered by immunity.

Regarding the first point, above, a creditor of an award rendered against a foreign state seeking to attach the assets held by an alter ego of the foreign state must first obtain a judicial order authorising the piercing of the corporate veil of that alter ego. This is a special action that has to be filed before the National Court of Justice since it will involve a sovereign state as defendant.

On the second point, above, it will be for the courts to apply the law of sovereign immunity of states and their property as portrayed by customary international law and, consequently, to determine whether a particular asset owned by a foreign state is granted immunity from being covered by immunity.