Enforcement of Foreign Arbitral Awards in Central America and the Caribbean
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While geographically close, the Central American and Caribbean states are a collection of distinct common and civil law jurisdictions, their legal traditions heavily influenced by history. This article is an overview of the legal regimes and policies of those states on the enforceability of foreign arbitral awards. While any one of the 26 jurisdictions considered in this article will have its unique features, this article seeks to tease out commonalities across the region by grouping together the English and Spanish-speaking jurisdictions.
This article begins by taking a look at the backdrop to the different legal traditions in Central America and the Caribbean, it considers the international and national framework for the enforcement of arbitral awards and then considers some of the specific difficulties that have arisen in this context. It reveals that while some significant steps have been taken in key jurisdictions to modernise the framework for the enforcement of foreign arbitral awards, there are also areas in need of reform. With greater focus on arbitration in this region, it is hoped that further modernisation is only a matter of time.
Overview of legal traditions in Central America and the Caribbean
The legal fabric of Central America and the Caribbean is difficult to unpick without an understanding of a history of the region. Many of the Central American and Caribbean states were colonised by European powers in the sixteenth and seventeenth centuries; primarily by the English, Spanish, French and Dutch. Independence swept through the region in different waves, but for some jurisdictions this forms part of their relatively recent history and indeed some Caribbean jurisdictions still remain under the administration of Britain, France, the Netherlands and the United States.
The consequence of this shared history is that many of the Central American and Caribbean states draw upon European legal traditions and can be divided into common and civil law jurisdictions as follows:
- Common law
- Caribbean independent states, and former British colonies, of Antigua and Barbuda, Bahamas, Barbados, Dominica, Grenada, Guyana, Jamaica, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago;
- Belize, also a former British colony, which is geographically part of Central America but legally has closer association with the Caribbean;
- Anguilla, Bermuda, British Virgin Islands (BVI), Cayman Islands, Montserrat and Turks and Caicos which are British overseas territories; and
- US Virgin Islands, which is part of the United States.
- Civil law
- Central American states and former Spanish colonies of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama;
- Spanish-speaking Caribbean states of Cuba and the Dominican Republic, also former Spanish colonies;
- Dutch-speaking Suriname (a former Dutch colony) and the Netherlands Antillies (which is remains part of the Netherlands); and
- French-speaking Haiti and the French Antillies (which remains part of France).
This article focuses on those jurisdictions most heavily influenced by Spanish and English law: the Spanish-speaking civil law jurisdictions in one grouping (Central America, the Dominican Republic and Cuba) and the English-speaking common law jurisdictions in the other (Caribbean). The Dutch and French-speaking jurisdictions fall outside the scope of this article.
New York Convention
Cutting across this patchwork of legal tradition is the increasingly standardised approach to arbitration law. At the international level, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) is the bedrock of the modern enforcement regime for arbitral awards. Where an arbitral award has been issued in a New York Convention state, a party should be able to enforce that arbitral award in any contracting state under the favourable regime set out in article V of the New York Convention.
Under that regime a state court may only refuse recognition and enforcement of the award in limited circumstances; namely where a counterparty proves:
- the parties to the arbitration agreement were under some incapacity or the arbitration agreement is invalid;
- proper notice was not given of the appointment of the arbitrator or the arbitration proceedings or a party is unable to present its case;
- the award deals with issues not contemplated by the parties or within the terms of submission to the arbitration;
- there is a defect in the constitution of the tribunal; or
- the award has not yet become binding or has been set aside by a competent court.
Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:
- the subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
- the recognition or enforcement of the award would be contrary to the public policy of that country.
- The majority of Central American and Caribbean states are signatories to this important treaty. The exceptions are:
- the independent Caribbean states of Belize, Saint Christopher and Nevis, and Saint Lucia; and
- Anguilla, Montserrat, and Turks and Caicos, which are all British overseas territories and to which the United Kingdom has not extended the New York Convention.
Inter-American Convention on International Commercial Arbitration
In addition to the New York Convention, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama are signatories to the Inter-American Convention on International Commercial Arbitration of 1975 (the Panama Convention). The grounds on which recognition and enforcement of an arbitral award may be refused under the Panama Convention are essentially identical to article V of the New York Convention. If an award is made in a jurisdiction that is a contracting state to both the New York and Panama Conventions, and the enforcement action is sought in a jurisdiction that similarly is also a party to the New York and Panama Conventions, both treaties may be applicable. This often results in confusion by the enforcing court as to which treaty to applies.
This potential conflict between treaties may be resolved by application of the principles lex posterior derogat priori (a later law repeals an earlier law) and lex specialis (law governing a specific subject matter overrides a law that only governs general matters). However, more recently enacted domestic arbitration law in the region clarifies matters specifying that the most favourable enforcement regime should apply (see Panama’s Arbitration Law No. 131 of 2013).
Cuba is the only jurisdiction in the region that is not signatory to the Panama Convention because its membership to the Inter-American system was suspended in 1962. However, as it is a party to the New York Convention, this enforcement regime can be directly invoked in the Cuban courts instead.
Investment treaty arbitration framework and enforcement
The favourable arbitration framework is enhanced by the implementation of policies for the protection of foreign investments in the region, which typically provide for recourse against a state in international arbitration. A discussion of various bilaterial investment treaties in the region is outside the scope of this article. In terms of multilateral investment treaties, the region boasts the ambitious US Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) which promotes trade between the US, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. More may be expected. In 2013 the US entered into a Trade and Investment Framework Agreement with CARICOM (a group dominated by the English-speaking Caribbean countries with Suriname), which includes bilateral trade and investment arrangements as one of its objectives. Cuba is also a jurisdiction to watch given its recent economic reforms.
When it comes to the enforcement of investment treaty awards all states in the region are parties to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), save for Antigua and Barbuda, Belize, Cuba, Dominica and the Dominican Republic.
Consequently, save for where it is necessary to give effect to the ICSID Convention in national legislation and this was not done, an ICSID arbitral award may be widely enforced in the region under the favourable terms of the ICSID Convention; namely as if it were a final judgment of a court in that state. Enforcement under the New York Convention or the Panama Convention may also be a possibility for investment treaty awards, depending on jurisdiction.
Critical to the domestic enforcement regime in an enforcement-friendly jurisdiction is the ability of a party to rely on the New York Convention in national law.
Central America, the Dominican Republic and Cuba
The Central American states, the Dominican Republic and Cuba have ‘monist’ legal regimes. This means that international treaties signed by the state are directly applicable in national law. More than that, all these states have adopted either the 1985 or the 2006 UNCITRAL Model Law on Commercial Arbitration (the UNCITRAL Model Law), both of which mirror the limited grounds on which recognition and enforcement of arbitral awards may be refused under the New York Convention. (Although only the Dominican Republic, Costa Rica, Honduras and Nicaragua have notified the UNCITRAL Secretariat that their national arbitration legislation complies with the Model Law.)
Recent high-profile modernisation of arbitration legislation in Spanish-speaking Central America and the Caribbean based on the 2006 UNCITRAL Model Law includes:
- Costa Rica – Arbitration Law No. 8937 of 2011, which applies only to international commercial arbitration;
- Cuba – in 2007 Cuba introduced Law No. 250 establishing the Cuban Court of International Commercial Arbitration, an autonomous non-governmental entity, which forms part of the Cuban Chamber of Commerce. In 2009, Cuba also modernised its arbitration rules (Resolution No. 15 on Rules of Proceedings), which mirror several provisions of the 2006 UNCITRAL Model Law. In 2006, Cuba also amended Law No. 241 on Administrative, Civil and Labour Proceedings providing for the expedited enforcement of domestic and international arbitral awards;
- Panama – Arbitration Law No. 131 of 2013 incorporates the 2006 UNCITRAL Model Law. It provides for the enforcement of foreign arbitral awards in Panama in accordance with the New York Convention, the Panama Convention or any other applicable international treaty; and
- the Dominican Republic – Commercial Arbitration Law No. 489 of 2008.
National arbitration legislation of the remaining Spanish-speaking states aligns more closely with the 1985 UNCITRAL Model Law. This also mirrors the New York Convention, save that it includes an additional procedural requirement that an enforcement application is supported by the original, or a copy of, the arbitration agreement. Given the limited nature of this additional procedural requirement, the enforcement regimes do not differ significantly under the 2006 and 1985 UNCITRAL Model Laws.
National legislation in Central America based on the 1985 UNCITRAL Model Law includes:
- Guatemala – Arbitration Law No. 67 of 1995;
- Nicaragua – Law on Mediation and Arbitration of 2005;
- El Salvador – Mediation, Conciliation and Arbitration Law of 2009; and
- Honduras – Conciliation and Arbitration Law No. 161 of 2000.
The position of national arbitration legislation in the English law-influenced Caribbean is more complicated. Unlike the civil law tradition, these states have a ‘dualist’ system like other common law jurisdictions. This means that a treaty does not become part of the domestic law unless national legislation is enacted to give effect to it. Therefore, regardless of whether the state is a contracting state to an international treaty, domestic law is critical in establishing the enforcement regime for arbitral awards.
Implementation of the New York Convention
The national arbitration legislation in the English law-influenced Caribbean can be grouped into three categories: recently modernised legislation; outdated legislation, but that which still gives effect to the New York Convention; and outdated arbitration legislation that does not implement the New York Convention.
Recently modernised arbitration legislation
- BVI – the most recent and high-profile modernisation of national arbitration law in the Caribbean is the enactment of the BVI Arbitration Act No. 13 of 2013, which was followed by the territorial application of the New York Convention by the UK in February 2014. These developments are part of BVI positioning itself as a centre for international arbitration in the region, including the recent creation of the BVI International Arbitration Centre. However, in terms of the legislative framework for enforcement of arbitral awards, little has changed. The predecessor to the 2013 BVI Arbitration Act implemented the New York Convention regime, notwithstanding the fact that at that time the New York Convention had not been extended to the BVI.
- Cayman Islands – while the Cayman Islands’ national arbitration law was revamped in 2012 with the enactment of the Arbitration Law that year, this legislation only applies where the seat of the arbitration is in Cayman. The Foreign Awards Enforcement Law 2007, which implements the New York Convention, continues to apply to the enforcement of foreign arbitral awards.
- The Bahamas – the national arbitration legislative framework was updated in 2009 and is much like that which exists in the Cayman Islands. The Arbitration Act 2009 applies to arbitrations seated in the Bahamas and the Arbitration (Foreign Arbitral Awards) Act 2009 incorporates the New York Convention regime for the enforcement of foreign arbitral awards.
- Barbados – the International Commercial Arbitration Act 2007 incorporates the New York Convention enforcement regime. However, the Act specifically applies to ‘international commercial arbitration’ only, as defined under the Act – a reservation envisaged by the New York Convention (article I(3)).
- Bermuda – the International Conciliation and Arbitration Act 1993 is based on the 1985 Model Law and consequently adopts the New York Convention enforcement regime.
- Anguilla – Arbitration Act Chapter A 105 is included in this category, not because it is itself a piece of modern legislation but rather because it incorporates one of the world’s most modern national arbitration legislations; namely the English Arbitration Act 1996. The Anguillan Arbitration Act is the shortest arbitration act within this group, and is rumoured to be the shortest act on the Anguillan legislative books. It simply declares the English Arbitration Act as amended from time to time to be in force in Anguilla. The English Arbitration Act 1996 includes a modern enforcement regime, including specific provisions dealing with the enforcement of foreign arbitral awards under the New York Convention.
Outdated legislation that gives effect to the New York Convention
Other legislation is less recent and may be criticised for other reasons, but as far as enforcement is concerned, still incorporates the New York Convention into domestic legislation.
Belize (Arbitration Act No. 21 of 1980), Dominica (Arbitration Act No. 6 of 1988) and Jamaica (Arbitration (Recognition and Enforcement of Foreign Awards) Act No. 20 of 2001) have national arbitration legislation that essentially adopts the New York Convention wholesale, including the text of the convention as a schedule. While Belize is not a party to the New York Convention, the Caribbean Court of Justice has confirmed that this was no impediment to Belize legislating to give effect to the New York Convention domestically in this way.
Non-New York Convention enforcement regime
However, at the other end of the spectrum there are examples of legislation that are extremely outdated. They can be grouped together into two further subcategories: legislation that incorporates the Geneva Protocol on Arbitration Clauses 1923 (the Geneva Protocol) and Geneva Convention on the Execution of Foreign Arbitral Awards 1927 (the Geneva Convention), which together formed the enforcement regime prior to adoption of the New York Convention; and legislation that is silent as to the basis of enforcement.
All of the states in this category, apart from St Lucia and St Christopher and Nevis, are parties to the New York Convention. Having failed to legislate domestically to give effect to the New York Convention, they are in breach of their obligations in international law.
Geneva Protocol and Convention enforcement regime
Antigua and Barbuda (Arbitration Act (Chapter 33) No. 12 of 1975), Guyana (Arbitration Act (Chapter 7:03)), (Monserrat Arbitration (Foreign Awards) Act (Chapter 3:02)), St Christopher and Nevis (Arbitration Act No. 7 of 1976, which incorporates the English 1950 Arbitration Act in its entirety that in turn implemented the Geneva Protocol and Convention), and St Vincent and the Grenadines (Arbitration Act No. 10 of 1952) all implement the Geneva Convention and Protocol.
The ability to enforce an arbitral award under the Geneva Protocol and Convention is significantly more limited than under the New York Convention. This is primarily because few, if any, arbitral awards can now be enforced under the Geneva Protocol and Convention regime, even where the domestic legislation provides for it. In order to qualify as an award that could be enforced under the Geneva Convention, the award must have been made pursuant to an arbitration agreement falling within the definition of the Geneva Protocol. The Geneva Protocol only applies in circumstances where the arbitration agreement is made between parties that are subject to the jurisdiction of different contracting states to the protocol. This is to be contrasted with the New York Convention regime where an award will qualify if it is made in one of the contracting states. Significantly fewer states were signatories to the Geneva Protocol, than are signatories to the New York Convention, which now has some 156 signatories.
Aside from these qualification difficulties, there is likely to be a real question as to whether the Geneva Protocol and Convention enforcement regime would be available. The Antigua and Barbuda, Guyana, St Christopher and Nevis and St Vincent and the Grenadines arbitration acts all provide that an award must be made in one of the contracting states to the Geneva Convention and that one party is subject to the jurisdiction of one of the contracting states to the Geneva Convention. Article VII(2) of the New York Convention provides that the Geneva Convention ceases to apply when a state becomes bound by the New York Convention. Given the large number of states that are signatories to the New York Convention, by operation of this provision, few states will remain bound by the Geneva Convention. By extension, many arbitral awards (if any) will be able to meet the necessary criteria to qualify. (Assuming that there is no room for arguing that domestic legislation still recognises the Geneva Protocol and Convention enforcement regime, even if it is no longer binding at the international level.)
In circumstances where the Geneva Protocol and Convention enforcement regime is not available, it should still be possible to enforce an arbitral award as an action at common law. Any action would based on the arbitration agreement between the parties including an implied obligation to perform the resulting award, and failure to do so would be a breach of the arbitration agreement.
Legislation silent as to the basis of enforcement
In this case, the legislation is the following: Grenada (Arbitration Act No. 2 of 1989); St Lucia (Arbitration Act No. 29 of 1955); Trinidad and Tobago (Arbitration Act No. 5 of 1939 amended by No. 22 of 1981 and No. 36 of 1997); and Turks and Caicos (Arbitration Ordinance Chapter 4.08, No. 7 of 197).
The above legislation is silent as to the basis of enforcement; although the usual power of the court to order that an award may be enforced in the same manner and to the same effect as a judgment of the court is recognised. In the absence of any specified basis for enforcement of a foreign arbitral award, an award would need to be enforced by way of an action at common law.
Implementation of the ICSID Convention
For a significant number of Caribbean states, the ICSID Convention was given effect to domestically under the UK Arbitration (International Investment Disputes) Act 1966 as extended to former colonies of the UK, namely Antigua, the Bahamas, Grenada, St Christopher and Nevis, St Lucia, St Vincent and the Grenadines and the following British overseas territories: Bermuda, BVI, Cayman Islands, Montserrat and Turks and Caicos. However, since then the former colonies of the UK have become independent states in their own right. It would therefore be necessary to check whether this pre-existing legislation was saved and adopted as legislation at the time of independence.
The states of Anguilla, Barbados, Dominica, Guyana, Jamaica, and Trinidad and Tobago have not given effect to the ICSID Convention domestically, placing all in breach of their obligations as contracting states to the ICSID Convention.
In which courts do enforcement proceedings take place?
Court system in Central America, the Dominican Republic and Cuba
All states in the Spanish-speaking Central American and Caribbean states, except Guatemala and the Dominican Republic, provide that only the highest court of their respective countries have jurisdiction over enforcement actions. By applying directly to the highest courts of their respective countries the region has taken positive steps to overcome some of the challenges with respect to the enforceability of awards; namely first instance judges unfamiliar with arbitration and with limited expertise in applying international treaties.
- Costa Rica – a foreign award can be directly enforced by application to the First Chamber of the Supreme Court of Justice.
- Cuba – an award rendered by the Cuban Court of International Commercial Arbitration or any domestic award can be enforced by application to the courts of ordinary jurisdiction; and an action to enforce foreign awards can be made by application to the Economic Chamber of the People’s Supreme Court of Cuba (Law No. 241 on Administrative, Civil and Labour Proceedings).
- the Dominican Republic – a party seeking enforcement of a foreign award must request an exequatur for the enforcement of the award by application to the Civil and Commercial Chamber of the Court of First Instance of the National District in Santo Domingo. In accordance with article 44 of the Law, the court may ‘examine’ the award within the limits established by the applicable international treaties. An exequatur order can be appealed by the Appellate Court. The decision by the Appellate Court is final.
- Guatemala – a foreign award can be enforced in Guatemala by application to the court of first instance.
- Nicaragua – an application to enforce a foreign award must be filed with the Civil Chamber of the Supreme Court of Justice.
- Panama – the enforcement of foreign awards requires the involvement of two courts. First, an application for exequatur must be filed before the Supreme Court. Once the exequatur is rendered, civil circuit courts will then assume control of the process in order to enforce the award.
Court system in the Caribbean
Applications to enforce a foreign arbitral award are commenced before the first instance courts in the English law-influenced Caribbean.
English judgments are of highly persuasive authority in the Caribbean. One of the reasons that the Caribbean states have been strongly influenced by English law and continue to be so is the fact that, for the majority, the Judicial Committee of the Privy Council (which is comprised of judges who also sit in the English Supreme Court) remains the final court of appeal.
The Judicial Committee of the Privy Council, which sits in the English Supreme Court building in London, was formerly the final court of appeal for all the English law-influenced jurisdictions in the Caribbean and Belize, which are either members of the British Commonwealth or British overseas territories. However, towards the end of the last century the Caribbean Community was established by key Caribbean states; known as CARICOM. As part of this increasing cooperation among the Caribbean states, it was decided that the region should have its own final court of appeal to be known as the Caribbean Court of Justice (CCJ). In 2001 the agreement establishing the CCJ was signed by the CARICOM states of: Antigua and Barbuda; Barbados; Belize; Grenada; Guyana; Jamaica; Saint Christopher and Nevis; Saint Lucia; Suriname; and Trinidad and Tobago. Dominica and Saint Vincent and the Grenadines signed the agreement in 2003. The Bahamas and Haiti, though full members of the CARICOM, are not yet signatories. The CCJ was inaugurated on 16 April 2005 in Port of Spain, Trinidad and Tobago – the seat of the court.
To date, only Barbados, Belize, Dominica and Guyana have taken the necessary steps to replace the appellate jurisdiction of the Privy Council with the CCJ. In June 2011 Grenada approved legislation to replace the Privy Council with the CCJ but a referendum is required to confirm this change.
There is further commonality in the court system at lower levels of appeal. Common jurisprudence is developed through the Eastern Caribbean Supreme Court (ECSC), which is the superior court for the Organisation of Eastern Caribbean States; namely Antigua and Barbuda, Dominica, Grenada, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Anguilla, Montserrat and BVI. The ECSC includes two levels of appeal; High Court (first instance) and Court of Appeal (first level of appeal). Judgments from the ECSC are also widely referred to elsewhere in the Caribbean.
Hurdles to enforcement of foreign arbitral awards
Central America, the Dominican Republic and Cuba
Despite significant progress achieved towards an arbitration-friendly region, uncertainties and ineffectiveness remain regarding the enforceability of foreign awards.
First, judicial formalism and increasing workload of the courts in the region can make the enforcement process time-consuming. For example, according to reports, in Costa Rica enforcement actions can take two to four years. In Guatemala it could take up to a year to obtain a final order of enforcement if no challenge to the award is filed. In Panama, if the award is not challenged by the opposing party, the enforcement process may take up to eight months.
Second, there is uncertainty over the interpretation of the public policy exception that would justify the refusal of an application to enforce awards under the New York Convention. This is typically more of an issue where the respondent is a state entity; not least as a result of the fact that there is generally a public interest element to transactions entered into by states that may be the subject matter of the relevant arbitral awards.
Third, some courts in the region have been willing to undertake a broad review of the decision of the arbitral tribunal on enforcement. In particular, the use of the constitutional writ called amparo is common practice. This is a legal remedy for challenging the decision of a state entity. It is typically filed by a party opposing enforcement of an arbitral award and sought to be used as a basis for reviewing the decision of the arbitral tribunal. When confronted by amparo actions, most national courts in the region tend to dismiss such actions stating that arbitral tribunals cannot be considered ‘authorities’ as defined by amparo laws. However, filing of amparo writs remains common practice causing delay to enforcement proceedings.
Certain states have taken steps to address the disruption caused by amparo actions. On 20 November 2011, the Constitutional Chamber of Costa Rica issued a ruling that amparo actions are not admissible against arbitrators because they are not a ‘legally controlling organ’ in dispute resolution proceedings. Panama included a provision in its 2013 Arbitration Law explicitly stating that arbitrators are not equivalent to public servants. It may be that other jurisdictions will follow suit.
Outside the amparo context, different approaches have been adopted to the scope of review permitted in the context of enforcement. El Salvador has taken a ‘pro-review’ approach. In 2009 its national arbitration legislation was amended to allow parties to appeal an arbitral award in the Salvadoran courts (article 66-A). The constitutionality of this amendment was contested in 2010. In 2012 the Salvadoran Supreme Court ruled that the amendment was constitutional and declared that de jure arbitrations are subject to appeal in El Salvador unless there is an agreement between the parties to the arbitration waiving their rights to any appeal against the award. Other courts have been more restrictive in their approach, in keeping with a more modern approach. For instance, the Supreme Court of Guatemala has consistently held that arbitral awards are not subject to review at the enforcement stage. In a decision rendered in March 2008, the Supreme Court of Guatemala stated that in accordance with article 47 of the Arbitration Law, a first instance judge’s authority is only ‘limited to the analysis of the authenticity’ of the arbitral award and was therefore prohibited from conducting any analysis as to the merits of an award at the enforcement stage. It also instructed judges to strictly apply article 5 of the New York Convention.
There are no reported cases of non-compliance with investment treaty awards against any state in the region. In fact, the states in the region have consistently complied with unfavourable investment treaty awards (whether final award or annulment decision) or have entered into post-award amicable settlements with investors such as Honduras in the Elsamex case. Traditionally it has been unusual for Central American states to enter into amicable settlements during the arbitral process owing to anti-corruption practices that limit settlement agreements during the pendency of legal proceedings.
Notwithstanding some of the concerns expressed above, enforcement of awards in the region is the norm, not the exception. This is likely to continue in the future since judges’ awareness of their role in arbitration is improving as a result of a growing number of talented arbitration specialists practicing in the region and the active role of the local chambers of commerce in promoting arbitration.
As previously noted, the Caribbean closely follows English law that is widely regarded as being modern in its approach to enforcement of foreign arbitral awards.
The breadth of the definition of ‘public policy’, applied as a ground for refusing enforcement the New York Convention, is always a flash point when it comes to testing whether a jurisdiction is pro-enforcement. The Privy Council remains robust on this (see, eg, the 2014 BVI decision in Cukurova Holding AS v Sonera Holding BV dismissing a public policy objection related to natural justice issues). The CCJ has not had a sufficient number of enforcement cases yet to set an established record. In 2013 it was called on to consider the enforcement of its first arbitral award in the case of BCB Holdings Limited and the Belize Bank Limited v the Attorney General of Belize. While reaffirming that a restrictive approach should be taken regarding the interpretation of the public policy exception under the New York Convention, the CCJ went on to set the arbitral award aside. The basis for this was that the agreement between the parties and the government of Belize purported to create a unique tax regime and this could have only been done by the legislature, rather than by contract only. While in reaching its decision the CCJ undertook a full review of the tribunal’s decision and reached a different conclusion, it is likely this decision will be confined to the unique set of facts found in this case.
In terms of procedure, there is typically no summary without notice process for recognition and enforcement of an arbitral award. That being the case, the first stage in enforcement proceedings can take a long time; a year would not be unusual. If enforcement cases are appealed through all three levels appeal, three to four years would not be unusual.
Looking to the future
Typically, in Central America, the Dominican Republic and Cuba there is a modern framework for the enforcement of arbitral awards through the widespread adoption of the UNCITRAL Model Law. Enforcement of arbitral awards is also the norm. There remain some risk factors, such as the use of amparo actions and willingness to review arbitral awards, as well as an overly broad interpretation of the concept of public policy. However, there are also key jurisdictions that have followed a modern international approach to these matters. In addition, as international arbitration becomes more widely used and judges become more familiar with the development of arbitration, it is hoped that there will be an increasing trend in the near future towards arbitrating disputes in Central America, the Dominican Republic and increasingly Cuba.
While the Caribbean broadly follows the modern English law approach to the enforcement of foreign arbitral awards, its arbitration legal framework suffers from being seriously outdated in a number of jurisdictions. This has led for calls for modernisation. In December 2015, Sundra Rajoo, Director of the Kuala Lumpur Regional Centre for Arbitration and President of the Chartered Institute of Arbitrators, called upon states in the region to enact the UNCITRAL Model Law. Whether such calls will be heeded, remains to be seen.
The authors would like to thank Stacey Castillo, intern at Courtenay Coye LLP (Belize), for her significant assistance in collating the arbitration legislation for the English-speaking common law jurisdictions.