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Commercial Arbitration

Last verified on Friday 17th April 2020

Venezuela

Maria Rachadell, Luis Ortiz-Alvarez and Fernando Sanquírico Pittevil

    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. Venezuela is a party to the New York Convention, which entered into force for Venezuela on 9 May 1995.

      The application of the New York Convention is only effective for awards rendered in the territory of another contracting State of the New York Convention (the reciprocity reservation), and for those awards that are considered commercial under Venezuelan law (the commercial reservation).

  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. Venezuela on 28 February 1985 ratified the InterAmerican Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards; and on 16 May 1985 ratified the InterAmerican Convention on International Commercial Arbitration.

      Venezuela has also ratified several Bilateral Investment Treaties which provides the recognition and enforcement of the awards rendered by the investment arbitral tribunals appointed under such treaties. A list of complete Bilateral Investment Treaties signed by Venezuela can be found in https://investmentpolicyhub.unctad.org/IIA/CountryBits/228.

  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. Venezuela enforced a Commercial Arbitration Act on 7 April 1998 in the Official Gazette No. 36.430. The Venezuelan Commercial Arbitration Act is based on the 1985 UNCITRAL Model Law on International Commercial Arbitration, but with minor modifications. There is also an Arbitration Proceeding (arbitramento) enshrined in the Procedural Civil Code, which confers a more active role to ordinary tribunals by administering the arbitration proceeding.

      In this sense, parties may choose between the Commercial Arbitration Act and the Procedural Civil Code to apply to their arbitral proceeding; nevertheless, the Commercial Arbitration Act has been of wide use as lex arbitri since its enforcement in 1998, relegating the Procedural Civil Code arbitration proceeding.

  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. There are two main arbitration centres in Venezuela: (i) the Arbitration Centre of the Caracas Chamber (CACC); and (ii) Business Center for Conciliation and Arbitration (CEDCA). Both arbitration centres may act as appointing authorities subject to specific terms and conditions set forth in the arbitration clause.

      On the academic part, there are two main arbitration bodies: (i) the Research and Studies Centre for the Dispute Resolutions of Monteavila University and; (ii) Venezuelan Arbitration Association. In this case, subject to their respective rules, these bodies may act as appointing authorities.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
    1. Foreign arbitral providers may operate in Venezuela upon fulfilment of all requirements in the Commercial Arbitration Act. In any case, existing Venezuelan arbitration bodies have agreed with foreign arbitral providers to administer arbitral proceedings under their arbitral rules (ie, CACC administers arbitrations under the InterAmerican Commission of Commercial Arbitration rules).

  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. Venezuela does not have a court or tribunal specialised in arbitration. Despite the aforesaid, Venezuelan courts have been supportive in the matter of arbitration in general (both national and international arbitration). Several courts’ decisions have encouraged the use and promotion of arbitration, giving to the arbitration institution a rank into the Venezuelan judiciary system (see, ie, decision of the Venezuelan Supreme Court - TSJ-SC 1.541/2008).

    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. According to the Commercial Arbitration Act, the general rule for an arbitration agreement to be valid, is that the agreement must be in writing, and cannot cover controversies where public order is involved.

      In case of an arbitration agreement involving the Republic, the General Attorney must issue a non-binding opinion regarding the validity of the arbitration agreement. On the other hand, the involvement of a state’s company in an arbitration agreement, must be previously approved by the Ministry that oversees the company.

      It is important to bear in mind that under the Venezuelan Commercial Arbitration Act the arbitration agreement may cover present and future disputes, without limitation and without fulfilling further prerequisites.

  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
    1. According to the Commercial Arbitration Act there are several types of disputes that cannot be arbitrable (objective arbitrability). These unarbitrable disputes are those where public order is involved; criminal cases, except where the quantification of the damages arising from the criminal case is disputed; attributions and powers of the State or any other public entity; or person’s state and capacity matters.

      Further, when the dispute arises from goods or real state that are within Venezuelan territory, must only be adjudicated by national tribunals or by national arbitration (see ie, decisions TSJ-SPA 476/2003 and 6270/2005).

  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. According to the Venezuelan Arbitration Act, the arbitration clause only affects those parties who expressly manifested their consent to arbitrate in an arbitration clause (see, ie, decision TSJ-SPA 188/2006). Furthermost, in an arbitration matter, it was discussed the inclusion in the proceeding of a non-signatory of an arbitration clause, and the arbitral tribunal decided that non-signatories cannot be brought to the arbitration (see CEDCA Award file 062-11).

      Despite the aforementioned, some Venezuelan scholars accepts the arbitration clause’s extension to non-signatories under certain circumstances, such as (i) the existence of a master contract containing an arbitration agreement; (ii) the existence of multiple arbitration clauses; and (iii) linked or connected contracts, even though one of the contracts does not have an arbitration clause. (See J.O Rodner in El Arbitraje en Venezuela. Edited by CACC and CEDCA.)

  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. Consolidation of arbitral proceedings under one or more contracts is not enshrined in the Venezuelan Commercial Arbitration Act; however, Arbitration Rules of the main arbitration Centres (CACC and CEDCA) contain provisions regarding the proceedings’ consolidation.

      CACC Arbitration Rules in article 44 allows the Executive Committee to consolidate two or more proceedings before the issuance of the Terms of Reference considering (i) the parties’ agreement; (ii) that all claims are made under the same arbitration agreement; and (iii) in case of different arbitration agreements, the accumulation can be made when the same parties are in dispute and when such dispute arises from the same legal relationship.

      Under the CEDCA Arbitration Rules, article 13.4 determines that consolidation can only be made upon request of the parties, despite the ​existence of different arbitration agreements. Since no other requisite is enshrined in the CEDCA Arbitration Rules, if one of the parties requests the proceeding’s consolidation, the Arbitral Tribunal has the authority to decide on the consolidation on the grounds of article 12, which determines that in case of silence in the CEDCA Arbitration Rules, the Arbitral Tribunal may decide according to the spirit of such Rules.

  11. 11.

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

    1. The 'group of companies’ doctrine is understood in Venezuela as a group of companies with the same influence or control and economic orientation with their administration. Under Venezuelan law, there is no general regulation for groups of companies; however, there has been some regulation in special laws for very particular effects, in areas such as labour, tax, banking and stock market. Venezuelan case law has also recognised the doctrine in ruling TSJ-SC 903/2004. According to this decision, there is an obligation of an indivisible nature that arises from the mere existence of the economic group.

      ​​However, the group of companies doctrine itself is not a basis for piercing the corporate veil. In Venezuela, scholars have concluded that piercing the corporate veil is possible when there is fraud or abuse of law, when a specific rule of law provides so, or when there is no other possibility to avoid an unfair damage. This doctrine is recognised, among others, by the decision TSJ-SC 1852/2001, where the court held that the legal personality of companies cannot be used to fraudulently and illegally damage third parties, which is why the court accepts the piercing of the corporate veil doctrine.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?
    1. Yes. According to article 7 of the Venezuelan Commercial Arbitration Act, the arbitration agreement that forms part of a contract is considered as an independent agreement of the other provisions of the contract. It also states that the possible decision of the arbitral tribunal that the contract is null and void does not entail the nullity of the arbitration agreement (see ie. decision TSJ-SC 1541/2008).

  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. In Venezuela arbitral tribunals have the authority to decide on its own jurisdiction (competence-competence), including on the existence or validity of the arbitration agreement, according to articles 7 and 25 of the Commercial Arbitration Act (see ie, decision TSJ-SC 1067/2010).

  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. When drafting an arbitration clause in Venezuela, it is important to determine whether the arbitration is an institutional arbitration (determining its Arbitration Rules) or an ad hoc arbitration, the applicable law, language, and number of arbitrators. Yet, it is important to avoid the so-called optional clauses, where one party or the two of them have the right to choose between arbitration or the courts. This type of clauses has been declared as pathological clauses by Venezuelan courts (see ie, decision TSJ-SPA 98/2002).

  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. Although there are not official records to determine the use of ad hoc arbitration in Venezuela and its relationship with UNCITRAL Rules, it can be stated that institutional international arbitration is of wide use in Venezuela throughout CEDCA and CACC.

  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. The Venezuelan Commercial Arbitration Act does not specify particular regulations when there’s a multi-party arbitration; however, in institutional arbitration, the Rules CACC and CEDCA provides that in absence of determination in the arbitral agreement or in further instance, the designation will be made as the institutional rules so provides.

      As in other jurisdictions, when drafting multi-party arbitration agreements, is important to determine the number of arbitrators and the appointment proceeding, or to review the institutional arbitration rules to verify the appointment methods to understand the implications of all arbitration Rules. In any case, the will of the parties is the key when determining the appointment of arbitrators.

    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. In ad hoc arbitrations, arbitral proceedings are initiated with the claimant’s request of arbitrator’s appointment. On the other hand, in institutional arbitrations, the institution’s Arbitration Rules provides that arbitration is initiated with the request of arbitration which must comply with the Rules’ requirements (see CEDCA’s Arbitration Rules articles 18–19 and CACC’s Arbitration Rules articles 38–40).

      Regarding the statute of limitation in Venezuela, although there are specific and different periods of time, depending on the nature of the claim, the general rule provides that a 10-year period must lapse for the statute of limitations to apply (see Venezuelan Civil Code article 1977).

    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. In accordance with the principle of the free will of the parties, the substantive law of the dispute will be the expressly provided by the parties (see Private International Law article 29). In case of non-determination by the parties or unclearness determination, applicable law will be the one that is most related to the contract or obligation (see Private International Law article 30).

      In either case, the Venezuelan Commercial Arbitration Act directs the arbitral tribunal to take into consideration the provisions of the parties’ contract and also the lex mercatoria.

    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. Venezuelan Commercial Arbitration Act does not place limitation in respect of a party’s choice of arbitrators. However, the arbitral tribunal must be integrated by an uneven number of arbitrators, and in case of lack of parties’ determination, the arbitral tribunal will be integrated by three arbitrators.

      Despite the foregoing, once appointed the arbitrators, they must comply with the requisites of impartiality and independence, as provided in article 26 of the Venezuelan Constitution, and to comply with other regulations, depending on the arbitral institution’s rules; and in case of contravention of their duties, they may be subject to a challenge proceeding.

  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. The Venezuelan Commercial Arbitration Act does not impose any limitation as to the nationality of the arbitrators; in this regard, arbitrators’ lists of the Arbitration Centres counts among their arbitrators non-nationals and non-lawyers.

      However, it must be taken into consideration that the practice of law in Venezuela is subject to the regulations set forth in the Advocates Act, and therefore all lawyers’ practice must be in accordance with the Advocates Act.

      In any case, migratory conditions and requests of visas apply to certain immigrants to come into Venezuela. Citizens of States member of Mercosur are exempted of visas and other migratory permits to enter into Venezuela.

  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 appointment of arbitrators depends on the procedure determined by the parties in the arbitration agreement. However, if such determination is not sufficient, or there’s no determination at all, the appointment will be made according to the applicable Arbitration Rules, if the arbitration is institutional, or on the determination by the Commercial Arbitration Act if the arbitration is ad hoc.

      For the Commercial Arbitration Act and the CACC Arbitration Rules the method to appoint arbitrators is the party-appointed method, which is the most common method in arbitration (alike with ICC, ICSID, UNCITRAL); while the CEDCA Arbitration Rules enshrines the list method (similar, but with some differences, to ICDR).

      In all cases, if either party is reluctant to appoint its arbitrator, or if the two arbitrators cannot agree on the appointment of the third party, the arbitrator will be selected by the Executive Committee of the arbitration institution – in the case of institutional arbitration – or by the competent First Instance Court in case of ad hoc arbitration.

  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
    1. Neither the Venezuelan Commercial Arbitration Act nor any other law grants immunity from suit for Arbitrators.

  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. Venezuelan Commercial Arbitration Act establishes that once the determination of expenses and fees has been decided by the Arbitral Tribunal, each party must deposit in a bank account administered by the President of the Arbitral Tribunal, within 10 days, its share for the costs of the arbitration (see article 20).

      In case that one of the parties does not pays its share of the arbitration costs, the other party may pay within 15 days, and if total payment is not made, the arbitral tribunal may declare the early conclusion of the arbitration.

      In institutional arbitration, the rules of the arbitration institutions provide that parties must deposit part of the fees at the beginning of the arbitration, with the consequence of suspending the procedure if such requirement is not met.

    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. According to the Venezuelan Commercial Arbitration Act, arbitrators may be challenged on the same grounds as ordinary judges, as established in the dispositions enshrined in the Procedural Civil Code.

      Arbitrator’s challenges in institutional arbitrations are dealt by the executive committees of the arbitration institutions according to their specific rules (see CEDCA Arbitration Rules article 26 and CACC Arbitration Rules article 55).

      On the other hand, in ad hoc arbitrations, once the challenge is presented before the arbitral tribunal, if the challenged arbitrator does not accept the challenge, and the other arbitrators does not reach an agreement, ordinary courts will decide on the arbitrator’s challenge (see article 37 of the Commercial Arbitration Act).

    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. According to the Commercial Arbitration Act, unless otherwise agreed by the parties, the arbitral tribunal may order the necessary interim measures respect to the object of the claim. In exercising these powers, the Arbitral Tribunal may request the assistance of the courts for the execution of such the interim measures (see article 26 and decision TJS-SPA 2.161/2001).

      Arbitral Tribunals have the power to grant all kinds of interim measures as requested by the parties, including before the initiation of the arbitral proceeding (see decision TSJ-SC 1067/2010). In this sense, although anti-suit injunctions are not common in Venezuelan jurisdiction, it would be possible to request an interim measure, before commencing an arbitration proceeding, preventing an opposing party the initiation of an arbitration proceeding in another forum or jurisdiction.

  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. Since arbitral tribunals are allowed to grant all kinds of interim reliefs upon request and fulfilment of all requirements of the applicable law, security for costs may be granted as interim measures, normally provided the requesting party demonstrate the insolvency of the other.

    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. In Venezuela there are no mandatory rules that governs the conduct of arbitration; in this sense, in institutional arbitrations procedural rules will be governed by the rules of the arbitration center the parties submitted to. In case of an ad hoc arbitration, if the parties have not stipulated their procedural rules, they are governed by the procedural rules established in the Commercial Arbitration Act.

  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
    1. Rules of arbitration centres usually provide that arbitration proceeding will continue notwithstanding respondents’ refusal or abstention to participate in the arbitration proceeding, provided that the administrative fees and the arbitrators' fees have been duly delivered by the claimant (see CEDCA Arbitration Rules article 13(2) and CACC Arbitration Rules article 49).

  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. Neither the Commercial Arbitration Act nor the Institutional Arbitration Rules of Venezuelan arbitration centres regulates the taking of evidence in arbitration proceedings. In this sense, the parties may determine the regulations regarding the taking of evidence in their arbitration proceeding, whether in the arbitration agreement or in a later stage, or in absence of parties’ determination, the Arbitral Tribunal may determine the proceedings regarding the taking of evidence.

      ​​In Venezuela, the IBA Rules on the Taking of Evidence in International Commercial Arbitration are generally known, and of common reference for both, parties and arbitrators, using them as a general guideline for the taking of evidence. However, since Venezuela is a civil law jurisdiction, it is possible that the Prague Rules may create an impact in Venezuelan forum.

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
    1. The arbitral tribunal or any of the parties, with the approval of the arbitral tribunal, may request assistance to the competent Court of First Instance for the taking of the necessary evidence, and the Tribunal will respond to this request within the scope of its competence and in accordance with the applicable rules in the Procedural Civil Code (see article 28 of the Commercial Arbitration Act).

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
    1. The determination of the validity of documents issued in Venezuela, whether private documents or documents issued by a competent authority is determined by the Venezuelan Civil Code (see articles 1355-1386). Despite the foregoing, Venezuelan law does not provide a procedure for the document production in international jurisdiction.

      Such procedure will depend on the determination of the parties or the arbitral tribunal (absence parties’ determination). In any case, it is customary in Venezuela to produce all documentation that supports the parties’ allegations with the presentation of the memorials in which the parties sustain their affirmations.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
    1. Neither the Commercial Arbitration Act nor the CACC Arbitration Rules contain a mandatory final hearing on the merits, on the contrary, according to said regulations it is the parties’ determination or the tribunal’s power to request a hearing whether on the merits or any other hearing considered necessary (see article 27 of the Commercial Arbitration Act and article 64 of the CACC Arbitration Rules). On the other hand, the CEDCA Arbitration Rules provides that the arbitral tribunal must hear the parties’ debate on the evidence and merits once reviewed all arguments and proofs provided by the parties (see article 364(5) of the CEDCA Arbitration Rules).

  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. In Venezuela is accepted the differentiation between the juridical seat of the arbitration and the physical place for the purposes of hearings and meetings. Hearings and procedural meetings, and even the witness’s hearings must be conducted in the place determined by the parties. However, the arbitral tribunal will be free to meet in any place it deems appropriate to deliberate, or the conduct any other hearing or procedural deliberation. (See article 9 of the Commercial Arbitration Act.)

    Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?
    1. Unless otherwise determined by the parties, the arbitral tribunal will decide by the majority of its members. (See article 29 of the Commercial Arbitration Act, article 71 of the CACC Arbitration Rules and article 40(1) of the CEDCA Arbitration Rules.)

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
    1. Arbitral Tribunals are allowed to grant all kinds of remedies or relief unless they are against public order (see article 6 of the Civil Code).

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
    1. Dissenting opinions are permitted as long as the arbitrator expresses in writing his views on the matter (see article 29 of the Commercial Arbitration Act, 71 of the CACC Arbitration Rules and 40(1) of the CEDCA Arbitration Rules).

      Since arbitration proceedings and its awards in Venezuela are confidential, it is uncertain if dissenting opinions are a common practice in Venezuela.

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
    1. For a valid and enforceable award, the arbitral tribunal must issue a written award, signed by the majority of its members, stating all the reasons upon which the award is based and addressing all the claims of the parties. The award must also express the date in which it was issued and the place of the arbitration. (See articles 29-30 of the Commercial Arbitration Act, article 72 of the CACC Arbitration Rules and 40 of the CEDCA Arbitration Rules).

  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. If the arbitration agreement does not indicate the time limits of the procedure, the Commercial Arbitration Act provides that it will be six months counted from the constitution of the arbitral tribunal. Rules of arbitration centres provide their own time frames (see article 39(1) of the CEDCA Arbitration Rules and 70 of the CACC Arbitration Rules).

      The arbitral award may be clarified, corrected and supplemented by the arbitral tribunal sua sponte or application submitted by one of the parties, within 15 business days of the issuance thereof (see article 32). For CACC Arbitration Rules, the clarification, correction or supplementation of the award must be requested within 15 continuous days (see article 74 of the CACC Arbitration Rules) while the CEDCA Arbitration Rules provides a 10-day period (see article 43(1)).

    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. The Commercial Arbitration Act provides that the costs of the arbitration shall be allocated by the arbitral tribunal in the award in which it can also decide to determine the proportion of the costs allocations if any (see article 20 of the Commercial Arbitration Act, article 72 of the CACC Arbitration Rules and 45(2) of the CEDCA Arbitration Rules).

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
    1. The arbitral law does not establish mandatory rates for interests; however, mandatory rates are established in the substantive law and depending on the currency of the obligation.

      In Venezuela, commercial legal interest rate is 12 per cent annual according to article 108 of the Commercial Code.

    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. Arbitration awards cannot be appealed according to Venezuelan Commercial Arbitration Act (see article 43 and decision TSJ-SPA 855/2006). In any case, the annulment of the arbitration award must be requested based on the grounds of the New York Convention and on the following grounds, according to article 44 of the Commercial Arbitration Act:

      • the party against whom it is invoked demonstrates that one of the parties was affected by a disability at the time of the arbitration agreement;
      • the party against whom the award is invoked has not been duly notified of the appointment of an arbitrator or of the arbitration proceedings that merit it, or has not been able for any reason to assert its rights;
      • the composition of the arbitral tribunal or the arbitral procedure has not been adjusted to the Law of Commercial Arbitration;
      • the award refers to a dispute not foreseen in the arbitration agreement, or contains decisions that exceed the agreement itself;
      • the party against whom the award is invoked demonstrates that the award is not yet binding for the parties or has been canceled or suspended previously, according to the agreement of the parties for the arbitration process; and
      • the court before which the nullity of the award is presented, verifies that according to the Law, the subject matter of the controversy is not susceptible to arbitration or that the matter on which it is based is contrary to public order.
  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
    1. The grounds upon which the award can be challenged are the grounds enshrined in article 44 of the Commercial Arbitration Act and in the New York Convention.

  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. Parties cannot exclude by agreement any right of verification of the award – annulment procedure– (see decision TSJ-SCC 726/2014).

    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. According the interpretation of article V of the New York Convention, courts may refuse the recognition and enforcement of awards set aside by the courts in the seat of arbitration.

      ​​To date, we have no knowledge of any awards set aside in the seat of arbitration in Venezuela.

  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. No major decisions have been issued regarding the enforcement of awards in Venezuela. In most cases, tribunals only review the formal requirements of the award to enforce it.

  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. Since all awards are enforceable in absence of any further recognition procedure, by virtue of the New York Convention and article 48 of the Commercial Arbitration Act, state immunity cannot be successfully raise to avoid the enforceability of the award.

      In any case, the enforceability of assets of foreign states in Venezuela, are subject to the verification that the assets are for commercial purposes, in which case the assets may be executed; on the contrary of the assets are for governmental purposes, the assets may not be executed.

      In case of Venezuelan assets, by virtue of decision TSJ-SC 1582/2008, Venezuela or any other state entity cannot be executed by arbitral awards or any other decision in its territory.

    Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
    1. As a general rule, arbitrators and arbitration centres must maintain the confidentiality of arbitral proceedings in all cases (see article 42 of the Commercial Arbitration Act, article 9 of the CACC Arbitration Rules and 42.3 of CEDCA Arbitration Rules).

  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 for the arbitral proceedings, evidence produced and pleadings are also confidential as determined in article 42 of the Commercial Arbitration Act, article 9 of the CACC Arbitration Rules and 42.3 of CEDCA Arbitration Rules.

  49. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
    1. Counsel are bound by the Code of Ethics of the Venezuelan Lawyer. In case of arbitrators, the CACC Arbitration Rules determine that arbitrators must comply with all ethical standards (see article 22) and for CEDCA arbitrators are bound by article 3.2 of its Arbitration Rules to the Ethical Code issued by the CEDCA.

  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. No.

  51. 51.

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

    1. In Venezuela there is no prohibition regarding third-party funding. Although third-party funding is growing to be very common in international arbitration, in national arbitrations this trend is unknown for local financial institutions.

      It is important to bear in mind, that according to Venezuelan legislation, lawyers cannot enter into agreements in which they get an economic interest in the outcome of the dispute (see article 1.482 of the Civil Code and 44 of the Code of Ethics of the Venezuelan Lawyer).

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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?