The Constitutional Court recently annulled an arbitral award based on grounds that are not listed in the Arbitration Law as causes for such action. To reach that outcome, the court made an expansive application of certain constitutional guarantees dealing with due process. The ruling has created troubling uncertainty regarding the enforcement of arbitral awards.
After the National Assembly passed a law regulating agreements for public-private partnerships involving foreign investors, the executive branch promulgated a decree establishing regulations to facilitate the law's implementation. Some of the new regulations deal with arbitration in the context of public-private partnerships with foreign corporations. Although this is a positive step in the recognition of arbitration as an efficient dispute resolution mechanism, the regulations contain some shortcomings.
A UNCITRAL tribunal has found Ecuador to be in breach of the 1996 Canada-Ecuador Bilateral Investment Treaty for the unlawful expropriation of the investment of a Vancouver-based company. The expropriation was the result of a resolution passed by the 2008 constituent assembly. According to Ecuadorian jurisprudence, the powers of constituent assemblies are considered unlimited and are therefore not subject to judicial review.
The Constitutional Court recently annulled a National Court of Justice ruling that had denied a petition to review a sentence issued by the president of the Guayaquil Court on a nullity action against an arbitral award. According to the Constitutional Court, the National Court's decision was unconstitutional because it deprived the plaintiff of his right to appeal.
In order to attract private investment, Ecuador recently adopted a new law that regulates the establishment and operation of public-private partnerships. One of its features is that parties to these partnerships may submit their disputes to international arbitration. This is a positive step, but certain conditions may dissuade companies from entering into this type of partnership.