International Commercial Arbitration at Paraguay
Certainly! Here’s a detailed overview of International Commercial Arbitration in Paraguay:
🔷 International Commercial Arbitration in Paraguay
1. Legal Framework
Paraguay’s arbitration law is governed by Law No. 1,165/97, known as the Arbitration and Mediation Law, enacted in 1997.
This law is based on the UNCITRAL Model Law on International Commercial Arbitration, ensuring compliance with modern international arbitration standards.
Paraguay is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, having ratified it in 1986. This allows for recognition and enforcement of foreign arbitral awards in Paraguay and Paraguayan awards abroad.
2. Scope and Applicability
The Arbitration Law applies to both domestic and international commercial disputes.
It allows parties to choose arbitration to resolve disputes arising from commercial contracts.
It covers a wide range of commercial matters, including trade, investment, construction, and services.
3. Arbitral Institutions
Paraguay does not have a highly prominent international arbitration institution based locally.
However, parties often choose arbitration administered by major international institutions such as:
International Chamber of Commerce (ICC)
Centro de Arbitraje y Mediación de la Cámara de Comercio Paraguaya (CAM-CCP) – a local institution affiliated with the Paraguayan Chamber of Commerce.
Centro Internacional de Arbitraje de la Cámara de Comercio de Asunción (CIAC)
Ad hoc arbitration under UNCITRAL Rules is also commonly used.
4. Recognition and Enforcement of Awards
Paraguayan courts generally uphold arbitration agreements and arbitral awards.
Enforcement of awards is governed by the Arbitration Law and the New York Convention.
Courts can refuse enforcement only on limited grounds consistent with the New York Convention, such as procedural irregularities or public policy violations.
5. Choice of Seat
Parties have the freedom to agree on the seat (place) of arbitration.
Asunción, Paraguay’s capital, is a common seat for arbitration in Paraguayan-related disputes.
For international cases, parties may also select neutral locations like Miami, Panama, or international hubs like Paris or Singapore.
6. Practical Considerations
Paraguay’s arbitration regime is modern and aligned with international standards.
Local courts generally support arbitration but judicial expertise in complex international commercial arbitration is still growing.
Paraguayan legal system respects party autonomy in arbitration agreements.
Paraguay’s strategic location in South America makes it a practical forum for regional trade and investment disputes.
🔷 Summary Table
| Aspect | Details |
|---|---|
| Governing Law | Arbitration and Mediation Law No. 1,165/97 (based on UNCITRAL Model Law) |
| New York Convention | Ratified in 1986 |
| Arbitration Institutions | CAM-CCP (local), ICC, CIAC, ad hoc arbitration |
| Enforcement of Awards | Courts enforce awards consistent with New York Convention |
| Common Arbitration Seats | Asunción (Paraguay), or international neutral venues |
| Main Arbitration Industries | Trade, commerce, investment, construction |
✅ Conclusion
Paraguay offers a robust and internationally recognized framework for commercial arbitration. Its adherence to the UNCITRAL Model Law and New York Convention ensures that international arbitral awards are enforceable and arbitration agreements respected. While local institutions exist, parties often rely on international arbitral bodies for complex disputes. Paraguay’s legal system supports arbitration as an efficient dispute resolution mechanism in the region.
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