International Commercial Arbitration at Costa Rica
Certainly! Here's a detailed overview of International Commercial Arbitration in Costa Rica:
International Commercial Arbitration in Costa Rica
1. Legal Framework
Costa Rica has a well-established legal framework for international commercial arbitration.
The main laws governing arbitration include:
Law No. 7983: Law on Arbitration and Conciliation (2000), which is based largely on the UNCITRAL Model Law on International Commercial Arbitration.
Costa Rica is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, facilitating international enforcement.
2. Arbitration Law Highlights
The Arbitration Law No. 7983 covers both domestic and international arbitration.
It regulates:
Validity and enforceability of arbitration agreements.
Appointment and challenge of arbitrators.
Arbitration procedure (flexible, party autonomy is emphasized).
Recognition and enforcement of arbitral awards.
Grounds for setting aside awards (very limited and in line with international standards).
3. Institutional and Ad Hoc Arbitration
Parties may choose institutional arbitration or ad hoc arbitration:
Institutional arbitration is commonly administered by the Costa Rican Center for Conciliation and Arbitration (Centro Costarricense de Conciliación y Arbitraje - CCA).
International institutions like the ICC, LCIA, and SIAC are also frequently used.
Ad hoc arbitrations are allowed and governed by the Arbitration Law, especially when parties want more control over procedures.
4. Advantages of Arbitration in Costa Rica
Modern legal framework: Compatible with international standards, promoting trust and efficiency.
Neutral and stable jurisdiction: Costa Rica is politically stable, with an independent judiciary supporting arbitration.
Enforceability: Arbitral awards are enforceable domestically and internationally (due to New York Convention membership).
Confidentiality: Arbitration proceedings are private.
Flexibility: Parties can choose the rules, number of arbitrators, language, and place of arbitration.
5. Arbitral Institutions in Costa Rica
Costa Rican Center for Conciliation and Arbitration (CCA): The main local arbitration institution.
Others: International arbitration bodies are commonly chosen for cross-border disputes.
6. Enforcement of Foreign and Domestic Awards
Costa Rican courts generally enforce both domestic and foreign arbitral awards.
Under the New York Convention, foreign awards are recognized unless the court finds:
The arbitration agreement was invalid.
Due process was violated.
The award conflicts with Costa Rican public policy.
The award was issued beyond the scope of the arbitration agreement.
7. Practical Considerations
When drafting arbitration agreements involving Costa Rica, parties should specify:
The seat of arbitration (Costa Rica or other jurisdictions).
Governing procedural rules.
Number of arbitrators.
Language and applicable law.
Costa Rica’s arbitration law favors party autonomy, allowing a high degree of flexibility.
Costa Rican courts are supportive of arbitration and limit their intervention to procedural fairness and enforcement issues.
Sample Arbitration Clause (Costa Rica)
“Any dispute, controversy or claim arising out of or relating to this contract, including the breach, termination or invalidity thereof, shall be finally resolved by arbitration administered by the Costa Rican Center for Conciliation and Arbitration (CCA) in accordance with its Arbitration Rules. The seat of arbitration shall be San José, Costa Rica. The arbitration shall be conducted in Spanish and the award shall be final and binding upon the parties.”
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