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Commercial Arbitration

Last verified on Monday 27th April 2020

Ecuador

Javier Robalino, Maria Borja, Esteban Baquero and David Toscano

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
    1. Yes, Ecuador is party to the 1958 United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards. Ecuador made a reservation for which the New York Convention only applies to arbitral awards on commercial matters; hence, civil, labour or other matters are not covered.

  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
    1. Ecuador is signatory of the main international instruments regarding arbitration, including: the 1928 Havana Convention on Private International Law, the 1975 Inter-American Convention on International Commercial Arbitration (Panama Convention); and the 1979 Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards. Ecuador is not signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, since in July 2009 the country denounced the Convention. The withdrawal became effective as of January 2010.

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
    1. The Arbitration and Mediation Law (AML), enacted in 1997 and codified in 2006, governs the arbitration proceedings seated in Ecuador. The same set of laws covers domestic and international arbitrations. The AML took some of the legal provisions of the UNCITRAL Model Law; however, it has several variations such as the conducting of the arbitral proceedings, the annulment grounds. 

  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
    1. Article 39 of the AML provides that only trade unions, chambers of commerce, and non-profit organisations can establish arbitration and mediation centres with prior approval of the Judiciary Council. Currently, several chambers of commerce provide international arbitration services and lists of foreign arbitrators to serve in such proceedings. The most relevant bodies in international arbitration, based on Ecuadorian jurisdiction, are the Arbitration and Mediation Centre of the Quito Chamber of Commerce, and the Arbitration and Mediation Centre of the Ecuadorian-American Chamber of Commerce; both based in Quito. The latter also acts as the National Section of the Inter-American Commercial Arbitration Commission in Ecuador.

      Arbitration and mediation centres have their own rules and, typically, provide for the arbitration centre to act as appointing authority.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
    1. As mentioned in question 4, article 39 of the AML provides that only trade unions, chambers of commerce and non-profit organisations can establish arbitration and mediation centres (arbitral institutions); hence, foreign arbitral providers cannot operate in Ecuador or oversee domestic proceedings. Additionally, the COGEP provides that all arbitral providers shall be registered and approved by the Judiciary Council (competent body for control and supervision of the Judicial Branch).

  6. 6.

    Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

    1. AML, as a general principle, prevents judicial interference in arbitration, except for cases of interim relief, annulment of awards and enforcement of awards. Hence, there is no specialist arbitration court. It is important to mention that currently, there is almost no caselaw regarding the enforcement of international awards.

      The General Organic Procedural Code (COGEP), enacted in May 2015, which became fully effective as of May 2016, provided that prior to enforcement, an award had to be recognised and homologated before Ecuadorian courts. The enactment of the Organic Law for the Productive Promotion, Investment Attraction, Employment Generation, Stability and Fiscal Equilibrium (Law for the Productive Promotion) in August 2018, amended the COGEP and theoretically eliminated any reference to a homologation proceeding prior to the enforcement of arbitral awards. There are different theories regarding whether the homologation procedure is still in force or whether the process for the enforcement of the award is able to proceed directly Consequently, even though the judiciary usually seems to support arbitration, there is uncertainty about the current enforcement proceeding and almost no case law on the matter.

    Agreement to arbitrate

  7. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
    1. The AML states that, among the requirements for validity of the arbitration agreement, the agreement must be in writing. However, a written document is not only one duly signed by the parties, but is also one “… resulting from an exchange of letters or other written communications evidencing the parties’ will to submit to arbitration.” Hence, the lawmaker’s intention was to record the parties’ unequivocal desire to resort to arbitration, no matter whether their consent is expressed in one act or in several simultaneous or consecutive acts. Furthermore, in the case of a compromise to arbitrate, Article 6 of the AML requires that it must be made “… in a document stating the name of the parties and an unequivocal definition of the legal transaction to which it refers”. Finally, when the dispute involves civil indemnities for felonies or unintentional tort, that is, for extra-contractual liability, “the arbitration agreement must refer to the facts with which the arbitration will deal.” In addition, if the arbitration agreement falls within the context of public contracting (which involves governmental institutions), the Constitution, the AML, the Organic Law for Public Procurement, and the Organic Law of the Attorney General’s Office set forth the following additional requirements for local and international arbitration:

      (a) the “favourable” opinion of the Attorney General's Office must have been issued previously; 

      (b) the highest authority of the institution must sign the arbitration agreement; and

      (c) the process shall be in law.

      An arbitration agreement may only cover future disputes in a relation to a specific contract. In the case of non-contractual matters, the dispute has to exist already and the arbitration agreement must refer to the specific facts from which the dispute arose.

  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
    1. According to Ecuadorian law, it is possible to submit to arbitration only matters in which it is possible to reach a compromise.

      Article 190 of the Constitution imposes a parameter to define arbitrability of disputes in Ecuador. Hence, arbitration and alternative procedures for dispute resolution “… shall be applied pursuant to the law in such matters where, due to their nature, it is possible to compromise”. This precept is also included in Article 1 of the AML.

      The Ecuadorian Civil Code does not list matters that can be subject to a compromise, but does exclude those that cannot be: (i) criminal matters; (ii) marital status of persons; (iii) the right to receive alimonies; (iv) inexistent rights or rights of others; (v) agreements obtained through fraud or violence; and (vi) matters already resolved through a judgment passed with authority of res judicata of which the parties had no knowledge at the time of the compromise. It is also important to note that within labour matters, there are certain issues that cannot be compromised, specifically those related to labour rights. Moreover, regarding arbitration with the state, tax issues cannot be submitted to arbitration. 

      However, considering the principle of competence–competence, the tribunal decides if the dispute may or may not be arbitrated; thus, decides on its own competence and jurisdiction.

  9. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
    1. AML does not include any provisions regarding non-signatory parties, nor the procedure for its participation in arbitration. However, arbitral tribunals have had some favourable opinions to include third parties in an arbitration procedure when they have had a relevant participation in the performance of the contract where the dispute took place. Even the state has alleged during arbitral proceedings, the possibility of including non-signatory parties in certain cases. Local doctrine also recognises that a third party may be bound by an arbitration clause.

  10. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
    1. The AML does not contain any relevant provisions in this regard. However, article 16 of the COGEP, which may be considered applicable as a subsidiary law, includes four situations in which consolidation is possible: (i) when a judgment in one of the cases would produce res judicata; (ii) when the object in dispute is also under dispute in a previous case; (iii) when there are separate procedures with the same parties, object and actions; and (iv) if the matter under dispute would be divided if it would be solved in different proceedings. Theoretically, these rules could also be applied in arbitration procedures.

  11. 11.

    Groups of companies
    Is the "group of companies doctrine" recognised in your jurisdiction?

    1. No. The “group of companies” doctrine is not expressly recognised in Ecuador. Also, as previously mentioned, regarding domestic arbitration, it is not applicable since the arbitration agreement is only valid between the parties. In international arbitrations, related to commercial and investment disputes, the aforesaid doctrine has been recognised and applied by tribunals in which Ecuador (or a public entity) is a party, or in which a national corporation has been involved.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?
    1. The AML recognises the principle of separability of the arbitration clause in article 5 of the AML, which provides that the annulment of the contract does not affect the arbitration clause, which means that the arbitration clause is deemed an independent contract separate from the main contract. This provision is often incorporated in arbitration clauses.

  13. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
    1. The competence-competence principle is fully applicable in Ecuador and is consistently followed by local courts. Article 22 of the AML determines that the first thing an arbitral tribunal must do once it has been composed is determine its own jurisdiction.

  14. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
    1. Yes, it is fundamental to avoid non-effective clauses that do not satisfy the formal requirements (please see question 7).

  15. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
    1. Institutional international arbitration is more common than ad hoc international arbitration regarding commercial disputes. UNCITRAL Rules are commonly used in ad hoc proceedings, but also in some institutional arbitrations in which the state is a party.

  16. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
    1. Multi-party arbitration agreements must fulfil the same legal requirements as a bilateral agreement. See question 7.

    Commencing the arbitration

  17. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
    1. Arbitration commences with the submission of the claim before the director of the relevant arbitration centre. There is no prior request for arbitration or notice of arbitration contemplated in Ecuadorian legislation. The AML establishes a bifurcated process dividing jurisdiction from the merits (article 22). However, the parties can arrange their own proceeding in the arbitration agreement, stipulating the periods of time for the issuance of the award (ie, fast-track arbitration).

      In general terms, for ordinary actions, the statue of limitation period is 10 years, and for executive actions, the limitation period is five years. After the claim is served to the respondent, the respondent has 10 days to present the statement of reply.

    Choice of law

  18. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
    1. The AML does not provide the arbitral tribunal with guidance as to which substantive law to apply to the merits of the dispute. But, if the applicable law is unclear in the arbitration agreement, the AML sets Ecuadorian law as the applicable law. If the parties fail to establish that the arbitration shall be in law, the arbitral tribunal must rule in equity.

    Appointing the tribunal

  19. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
    1. The parties are free to nominate the arbitrators in the arbitration agreement, but if the arbitration (domestic) is to be ruled in law, then the arbitrators must be lawyers.

  20. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
    1. Ecuadorian law does not hold a specific requirement as to the citizenship of arbitrators in international arbitrations seated in Ecuador. Several arbitration institutions, such as the Arbitration Centre of the Quito Chamber of Commerce, have non-nationals in the list of arbitrators. Depending on the nationality of the arbitrator, some immigration requirements (ie, visa application) may be applicable. Arbitration fees earned by foreign arbitrators for services rendered in connection with arbitrations seated in Ecuador are subject to two taxes: income tax and overseas remittance tax equivalent to 5 per cent (when applicable). If payments are made locally taxes will apply.

  21. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
    1. The AML allows the parties to directly appoint the arbitrators. Nevertheless, if the parties do not nominate arbitrators then the AML provides a mandatory proceeding and:

      • the parties can mediate to select the tribunal;
      • in the absence of full agreement on the mediation, the director of the arbitration centre administering the proceeding shall send the parties a list of arbitrators to designate by common agreement within a period of three days; and
      • if the parties fail to designate one or more arbitrators, the director of the arbitration centre shall appoint, acting as appointing authority, the tribunal through ballot (from the list of arbitrators provided by the centre).

      However, the AML allows the parties, by mutual agreement, to appoint arbitrators from outside the list submitted by the arbitration centre. In the case of independent arbitration, the parties shall appoint the arbitrators according to the procedure stated in the arbitration agreement. If the parties do not agree on the appointment of all the arbitrators, those appointed, once in office, shall appoint the missing ones.

      To avoid the mentioned mandatory proceeding, it is common that arbitration clauses incorporate a selection mechanism of the arbitrator or the tribunal/s.

      Courts do not play a role in the selection of the tribunal.

  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
    1. No, arbitrators are not afforded immunity.

  23. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
    1. Usually, arbitration institutions collect the arbitrator’s fees when the claim is submitted.

    Challenges to arbitrators

  24. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
    1. Article 21 of the AML states that the grounds on which judges may be challenged are also applied to arbitrators. Article 22 of the COGEP includes the following grounds to challenge a judge or arbitrator:

      • Being a party in the process.
      • Being the spouse or common law spouse of one of the parties or their attorney.
      • Being a relative up to the fourth degree of consanguinity or second degree of affinity of one of the parties, of its legal representative, agent, attorney or the judge that issued the resolution that is challenged through of the means of recourse.
      • To have known or issued a decision in another instance and in the same process, regarding the subject matter that is addressed or another related to it.
      • Delaying unjustifiably the dispatch of matters within its jurisdiction.
      • To have been a legal representative, agent, attorney, attorney-in-fact of any of the parties in the process currently submitted to him or intervened in it as mediator.
      • Having expressed opinion or advice regarding the process that comes to their knowledge.
      • If the judge, his or her spouse, common law spouse or any relative up to the fourth degree of consanguinity or second affinity has or has had a judicial process with any of the parties. When the process was initiated by one of the parties, it must have been before the instance in which the challenge is attempted.
      • Having received from any party rights, contributions, goods, values or services.
      • Having any obligations with any of the parties or their attorneys.
      • Having a close friendship or manifest enmity with any of the parties or their attorneys.
      • To have personal interest in the process because it is their business or their spouse’s, or their relatives within the fourth degree of consanguinity or second of affinity.

      The AML (article 21) foresees a specific procedure for challenging arbitrators, however, it does not involve courts. In the case of institutional arbitration, the director of the arbitration centre must resolve the challenge; in ad hoc arbitration, the request must be resolved by the other members of the tribunal or by the director of the closest arbitration centre to the domicile of the plaintiff, if there is only one arbitrator, or if all the arbitrators are being challenged.

      There are no specific rules or codes of conduct for arbitrators in the legislation. However, arbitration centres do follow IBA Guidelines on Conflicts of Interest in their internal rules of procedure.

    Interim relief

  25. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    1. Article 9 of the AML gives tribunals wide powers to grant interim relief. In accordance to this provision, parties can include in the arbitral agreement a provision by which the tribunal can request the assistance of public officials (any type of public entity) to enforce interim relief, without the assistance of a court. If the possibility to request such assistance is not included in the arbitral agreement, the party who requires interim relief will have to file a request before a court to enforce the relief ordered by the tribunal. Local courts will lend their enforcement authority to an arbitral tribunal in such situation.   

      Under article 8 of the AML, when a party files a lawsuit in local courts with disregard to an arbitral agreement, the defendant must file an answer to the claim alleging that there is a binding arbitral agreement. Such an argument will have to be resolved by the court as a preliminary ground for dismissal during the preliminary hearing.

  26. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
    1. Yes, in the case of annulment action presented against arbitration awards, if one party requests to suspend the award enforcement.

    Procedure

  27. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

    1. Article 76(7)(k) of the Constitution of Ecuador provides that all persons are entitled “to be judged by an independent, impartial and competent judge …”. This rule represents one of the guarantees of the due process and is applicable to all judicial proceedings and alternative dispute resolution methods, such as arbitration. For this reason, article 19 of the AML compels the arbitrator to reveal any reasons that might disqualify him or her from performing his or her functions due to absence of such qualities.

      The parties to arbitration are compelled to act in good faith and abusive claimants are condemned in costs and attorneys’ fees. 

  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
    1. If the respondent fails to participate in arbitration, article 14 of the AML provides that the proceeding shall continue and that the tribunal shall assume that the respondent has alleged the denial of all the claims and facts. However, the respondent would not be able to submit evidence.

  29. 29.

    Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

    1. The types of evidence that are usually admitted are testimonies, documentary evidence, expert reports and inspections. Documentary evidence shall be submitted with the claim and with the answer to the claim. Furthermore, pursuant to article 23 of the AML, arbitral tribunals have the power to request from the parties and from third parties all the evidence they deem necessary. If a third party does not want to deliver the requested evidence, the tribunal may request the assistance of the judicial police in the application of the COGEP provisions.     

      The application of the IBA Rules on the Taking of Evidence in International Commercial Arbitration is growing; however, many arbitrators prefer to apply the COGEP since AML states that the COGEP is a subsidiary code.

      If the COGEP is applied, the rules for admission of evidence rely on the capacity of each evidence to be legal, relevant, useful and conductive.

      Regarding the question about the Prague Rules, since the IBA Rules on the Taking of Evidence in International Commercial Arbitration have recently been accepted by the parties and the Tribunals, we consider that in the foreseeable future it is unlikely that the Prague Rules will replace, or will be used as an alternative to, the IBA Rules. However, the parties may agree to apply the Prague Rules, and even the Tribunal could decide that they are applicable.

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
    1. Usually, tribunals will have enough powers to obtain or order the parties to produce documents or submit evidence. However, parties may seek relief from courts to obtain evidence as a preliminary procedure.

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
    1. The prevailing practice in international arbitration is using a “Redfern Schedule”, as provided in the IBA Rules on the Taking of Evidence in International Commercial Arbitration.

      In domestic arbitration, the prevailing practice is that the party who requests the production of a document must do it at the moment of submitting the claim or answering it, and the production shall follow the rules provided by the COGEP. Unlike the IBA Rules on the Taking of Evidence in International Commercial Arbitration, the COGEP does not permit the production of a category of documents. Nonetheless, using a “Redfern Schedule” is also a growing practice in domestic arbitration.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
    1. No. The AML provides a bifurcated proceeding in which there is a hearing on jurisdiction  (audiencia de sustanciación), a phase of evidence, and a hearing on the merits. The hearing on jurisdiction the Tribunal rules over its own jurisdiction as per the competence-competence principle. The hearing on the merits shall take place if the parties request it according to article 24 of AML.

  33. 33.

    Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

    1. Yes, article 35 of the AML states that hearings and procedural meetings may be conducted elsewhere, unless otherwise agreed by the parties.

    Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?
    1. Yes, as per article 26 of the AML, two-thirds of the tribunal can decide on the matter of the arbitration.

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
    1. If the award embodies a monetary obligation, post-award interest accrues until the sum is paid to the creditor. The award needs to establish the date when interest runs and in the enforcement proceedings the judge will make a liquidation of interests at the “legal rate determined by the Central Bank”, until payment is made. However, Ecuadorian legislation does not allow punitive damages or compound interest, thus domestic awards cannot grant such pleads.

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
    1. Yes, arbitrators are allowed to issue dissenting opinions to the award. The dissenting opinion shall determine the reasons and argumentations of the dissenting arbitrator. This is common practice.

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
    1. The AML states a few formal requirements for an award to be valid:

      • the award must be issued by majority vote;
      • all the arbitrators shall sign the award, even those with dissenting opinion;
      • dissenting opinions shall be attached to the award; and
      • the award and the dissenting opinion shall enclose a clear explanation of the deciding issue and the grounds or reasons for the decision.

      Moreover, arbitral awards must include all requirements of judicial rulings, set forth in article 95 of the COGEP.

  38. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
    1. The AML allows the parties to request the clarification of the award on specific matters and they also can request the tribunal to resolve points of claim not addressed in the award. In the first scenario the tribunal can interpret the award, and in the second the tribunal is empowered to extend the award. As per article 30 of the AML, the time limit for requesting clarification or for any request is of three days since the notification of the award to the party.  

      Additionally, in the same time limit, the tribunal can correct numeric or calculation mistakes.

    Costs and interest

  39. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

    1. Even though the director of the arbitration centre decides on the costs and expenses of the tribunal once the claim is submitted, and these are borne by the plaintiff, the arbitral tribunal is empowered to award these costs in the final award. Usually, attorney fees are granted if one of the parties litigated in bad faith or delayed the normal course of the proceedings.

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
    1. Yes, interest can be included on the principal claim until the sum is paid to the creditor. The award needs to establish the date from when the interests run and in the enforcement proceedings the judge will make a liquidation of interests at the “legal rate determined by the Central Bank”, which is the 8 per cent approximately. Ecuadorian legislation does not allow compound interest.

    Challenging awards

  41. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
    1. Awards cannot be appealed before courts, as expressly forbidden by article 30 of the AML, thus it is not possible to review the merits of the award.

  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
    1. The AML establishes a list of grounds for requesting the annulment of an award. The grounds to request annulment of an award are listed, expressly, in article 31 of the AML and includes the following procedural misdeeds:

      (i) failure to serve the claim to the defendant in a process heard and terminated ex parte, provided that it limits that party’s right of defence;

      (ii) failure to serve the court’s orders to the parties thus limiting or preventing their right of defence;

      (iii) failure to summon, notify or present evidence despite the existence of facts that must be justified;

      (iv) extra or ultra petita decision; and

      (v) illegal constitution of the arbitration panel.

      It should be noted that the grounds for annulment are always restrictive and only refer to procedural irregularities (in procedendo errors), and not to substantive irregularities or errors in judicando. According to the AML, a party has 10 days from the day that the award becomes firm to file, before the same arbitral tribunal, a claim for annulment of the arbitral award. Within three days, the arbitration panel must deliver the proceeding to the president of the provincial court in the respective jurisdiction, who must adopt a decision within 30 days. Regarding the annulment procedure, the National Court of Justice recently issued Resolution No. 08-2017 effective as of March 2017. This resolution provides that once the President of the Provincial Court receives the annulment claim he or she must verify whether the action was brought within the time limit.

      Additionally, whoever files an action for annulment may ask the tribunal to suspend the enforcement of the award by rendering a sufficient bond. Despite the apparent brevity of the procedure for an action for annulment, the time frame is hardly ever met.

  43. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
    1. In Ecuador, awards can only be challenged through an annulment action, which is a statutory right of the parties. Hence, even if the parties expressly waive their right to challenge the award, courts will admit the annulment claim.

    Enforcement in your jurisdiction

  44. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
    1. It is unlikely that an award that has been set aside by the courts in the seat of the arbitration could be enforced in Ecuador. In fact, we do not have knowledge of any case law. As previously mentioned, prior to 21 August 2018, article 104 of the COGEP provided that the competent judge shall analyse if the award was considered final according to the laws of the place where it was rendered.Therefore, prior to the aforementioned date, annulled foreign arbitral awards could not be recognised because they were not deem,ed as final.

      The Law for Productive Promotion, enacted on 21 August 2018, theoretically repealed the COGEP rules regarding the homologation as a previous requirement for the enforcement of the award. There are opposing theories on the matter. One thesis establishes that the homologation procedure has not been eliminated. However, there is case law that has already ruled that an homologation is not required prior to the enforcement of the award.

  45. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
    1. The Law for Productive Promotion amended article 42 of the AML that provides that arbitral awards shall have the same effects and shall be enforced in the same way as the domestic awards. Domestic awards are enforced in the same way as judicial decisions. This has been the spirit of AML since its enactment.

      As previously mentioned, there has been some doubts about the enforcement proceeding of foreign arbitral awards. The Law for Productive Promotion provides that article 42 of the LAM is enforce and it also intended to eliminate the homologation procedure from the COGEP; nevertheless, there are some theories that allege that the homologation procedure is still in force. In fact, we are aware of two cases — involving the same parties — before the Provincial Court of Justice with contradictory positions. One Tribunal of said Court ruled that an international award must be recognised prior to its enforcement, while another Tribunal of the same Court ruled that, as of 2018, the recognition of an international award is not required before seeking its enforcement. For these reasons, the case has been brought to the Constitutional Court of Ecuador to seek a final and binding ruling.

  46. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
    1. The AML does not provide specific rules that apply to the enforcement of an award against a state or a state entity.

      Furthermore, Ecuador is a signee of the Vienna Convention on Diplomatic Affairs; hence, foreign diplomats have immunity in criminal, civil and administrative jurisdiction. Immunity does not apply to claims related to commercial activities of the diplomat, performed in disregard of his or her official duties. Sovereign immunity is to be applied in accordance with sources of International Law.      

          

    Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
    1. Arbitrations can be confidential if the parties convey so in the arbitration agreement. Hence, article 34 of the AML states that only the parties and their counsel can obtain a copy of the arbitration file or any information related to the proceeding or the award.

  48. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
    1. As previously mentioned, arbitration can be confidential if the parties so agree. Furthermore, evidence produced and pleadings files are confidential and no one but the parties and their counsels can obtain access to this information. However, in the case of an annulment action, the arbitral tribunal must send the entire arbitration file to the Provincial Court (including evidence and pleadings). In that case, the whole file becomes public.

      Additionally, if a state entity is involved as a party in the arbitration, the procedure and all the evidence produced and pleadings filed are public.

  49. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
    1. Counsels and arbitrators are compelled to act under severe and high ethical standards contained in the Constitution, the AML and the Organic Code of the Judiciary. Also, arbitration centres do follow IBA Guidelines on Conflicts of Interest in their internal rules of procedure.

  50. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
    1. Usually the language used in proceedings held in Ecuador is Spanish. Furthermore, it is important to note that criminal actions have been raised against arbitrators for misconduct or prejudice in the arbitration proceedings.

  51. 51.

    Third-party funding
    Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

    1. There is no specific regulation under Ecuadorian law that regulates the question of judicial or arbitral litigation funding. Therefore, and in accordance with the principle of party autonomy, there is no prohibition on third-party funding. In fact, third-party funding has taken place under Ecuadorian jurisdiction in the well-known case of María Aguinda and others v Chevron (ex Texaco), where Burford Capital financed the claim against the oil company. However, third-party funding is not common in Ecuadorian arbitral practice.

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GAR know-how provides reliable cross-jurisdictional insight to help cement the building blocks of international practice. In this section, select experienced practitioners answer commonly asked questions for key jurisdictions so allowing readers to be better-placed to solve the challenges of their working days.

Questions

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  6. 6.

    Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?


  7. Agreement to arbitrate

  8. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  9. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  10. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  11. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  12. 11.

    Groups of companies
    Is the "group of companies doctrine" recognised in your jurisdiction?


  13. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  14. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
  15. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  16. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  17. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  18. Commencing the arbitration

  19. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  20. Choice of law

  21. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
  22. Appointing the tribunal

  23. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  24. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  25. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  26. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  27. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  28. Challenges to arbitrators

  29. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  30. Interim relief

  31. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?


  32. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  33. Procedure

  34. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?


  35. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  36. 29.

    Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?


  37. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  38. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  39. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  40. 33.

    Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?


  41. Award

  42. 34.Majority decisions
    Can the tribunal decide by majority?
  43. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  44. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  45. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  46. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  47. Costs and interest

  48. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?


  49. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  50. Challenging awards

  51. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  52. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  53. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  54. Enforcement in your jurisdiction

  55. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  56. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  57. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  58. Further considerations

  59. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  60. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  61. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  62. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
  63. 51.

    Third-party funding
    Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?