International Commercial Arbitration at El Salvador
Here’s an overview of International Commercial Arbitration in El Salvador:
International Commercial Arbitration in El Salvador
1. Legal Framework
El Salvador’s arbitration is governed by the Code of Civil Procedure, specifically provisions on arbitration introduced by reforms aligned with international standards.
Additionally, El Salvador has ratified the 1958 New York Convention on the recognition and enforcement of foreign arbitral awards.
The country has incorporated principles from the UNCITRAL Model Law on International Commercial Arbitration into its legal system, although the adoption is partial and local procedural rules also apply.
2. Arbitration Institutions
El Salvador does not have a widely recognized dedicated arbitration center akin to large international centers.
Arbitration often takes place ad hoc or under rules of international institutions such as:
International Chamber of Commerce (ICC)
Centro de Arbitraje y Conciliación de la Cámara de Comercio e Industria de El Salvador (CAC-CCIES) — The Arbitration and Conciliation Center of the Salvadoran Chamber of Commerce and Industry is the main local institution.
Parties can also opt for regional arbitration centers in Latin America, like the Centro de Arbitraje de Costa Rica or CIAC (Centro Internacional de Arreglo de Diferencias Relativas a Inversiones) for investment disputes.
3. Key Features
Arbitrability: Most commercial disputes are arbitrable. However, disputes involving public order or certain administrative matters might be excluded.
Arbitration Agreement: Essential for valid arbitration. It must be in writing.
Procedural Flexibility: Parties have freedom to agree on the arbitration procedure, language, and seat.
Court Intervention: Salvadoran courts have a limited role, mainly to support arbitration by enforcing agreements and awards, but may intervene in annulment or procedural issues.
4. Enforcement of Awards
Awards issued in El Salvador are enforceable under local law.
Foreign arbitral awards are generally enforceable under the New York Convention, which El Salvador has ratified.
Courts may refuse enforcement on standard grounds such as public policy violations or improper notice.
5. Advantages
Arbitration offers a quicker, more flexible alternative to Salvadoran courts.
Confidentiality and expertise of arbitrators.
International recognition and enforcement of awards through treaty obligations.
6. Challenges
Relatively less developed arbitration infrastructure compared to other Latin American countries.
Occasional delays or judicial interventions during enforcement or annulment phases.
Limited local precedent or jurisprudence on complex arbitration issues.
Summary
El Salvador provides a functional framework for international commercial arbitration, supported by its adherence to the New York Convention and local arbitration rules under its civil procedure code. Arbitration is often conducted under international institutional rules or the local Salvadoran Chamber of Commerce’s arbitration center. It is a practical dispute resolution mechanism for commercial parties, though local infrastructure is still evolving.
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