Legal framework
For over a century the legal framework for arbitration in the Dominican Republic remained almost unchanged. The relevant regulations were set out in Articles 1003 to 1028 of the Civil Procedure Code 1884, until the ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Inter-American Convention on International Commercial Arbitration, and the enactment of the Commercial Arbitration Law (489-08) on December 30 2008.
The Commercial Arbitration Law was enacted to modernise domestic arbitration law and was based on the Model Arbitration Law of the United Nations Commission oon International Trade Law, with a few minor reforms taking into consideration the existing legal system. The main adjustment was the implementation of a single-tier system making the law applicable to both domestic and international arbitrations conducted within the Dominican Republic.
Article 1 of the Commercial Arbitration Law establishes that an arbitration is considered to be international if:
- the parties, at the moment of entering into the arbitral agreement, have establishments in different states;
- the parties have their domicile outside the Dominican Republic; or
- the place of execution of or compliance with a substantial part of the obligations is different from that where the parties have their domicile.
Arbitrability
The Commercial Arbitration Law states that all disputes can be submitted to arbitration in accordance with civil and commercial law. However, the following cannot be submitted to arbitration:
- conflicts relating to the civil status of individuals, donations and legacies, marital separation, custody matters and interdicted or absent individuals;
- matters of public policy; and
- disputes that cannot be subject to settlement.
Formal requirements
In general, arbitration agreements are established as contract clauses or separate agreements. However, the Commercial Arbitration Law recognises the validity of arbitration agreements contained in letters, faxes, emails or any other document that can be used for evidence and reference.
In addition, the domestic law recognises as an arbitration agreement an exchange of statements during the arbitration proceedings where one party alleges the existence of an agreement and the other party fails to deny it.
Enforceability
Pursuant to the Commercial Arbitration Law, all arbitration agreements included in contract clauses shall be considered to be independent agreements. If the contract is declared non-existent or annulled, the arbitration agreement will not be considered to be invalid. However, if the whole contract is annulled, the arbitration agreement will not stand.
Procedure
The parties are free to choose the procedure to be followed by the arbitral tribunal. However, in the case of institutional arbitrations, the procedure will be governed by the rules of the institution. In the absence of agreement between the parties, the arbitrators can choose the proceedings that they deem appropriate in accordance with the law.
The Alternative Dispute Resolution Centre of the Chamber of Commerce and Production of Santo Domingo (CRC), which was created by Law 50-87 of the Chamber of Commerce, is the most renowned arbitral institution in the Dominican Republic. CRC arbitrations are governed by the centre's procedures and the parties choose the arbitrators from the list of arbitrators approved by the CRC. Further, the parties can agree on the language and place of arbitration.
Arbitrators
The parties can agree on the procedures for appointing the arbitrators, but the law establishes an appointment mechanism in case no agreement is reached. In the case of institutional arbitrations, the arbitrators shall be appointed in accordance with the rules of the institution. For ad hoc arbitrations, the arbitrators shall be appointed by the first-instance court of the place of arbitration.
The law imposes no restrictions on who may be an arbitrator; however, the parties should take into consideration the impartiality and availability of the candidates.
Jurisdiction and competence
Where an arbitration agreement exists, the court should send the dispute to the arbitral tribunal. However, the tribunal has the power to rule on its own competence.
In accordance with the Commercial Arbitration Law, the lack of jurisdiction of the tribunal should be raised before the parties present their defences. If no objection is raised before discussion of the merits of the case, no action for lack of jurisdiction can be brought.
The tribunal's decision can be challenged only by an action for annulment of the award.
Hearings and evidence
Pursuant to the Commercial Arbitration Law, the parties can agree on the following aspects of the proceedings:
- the time and place of the hearings;
- the presentation of evidence; and
- whether the proceedings will be conducted with documents or any other evidence.
If the parties agree that no hearings will be held, the arbitrators will conduct a hearing only at the appropriate stage of the proceedings and if one or both parties so request.
However, if the parties fail to agree, the arbitrators shall decide on the admissibility, value and relevance of the evidence in accordance with the law.
Court involvement
Under the Commercial Arbitration Law, the intervention of the national courts in the arbitral proceedings is limited to providing assistance and supervision in the matters detailed in the law (eg, the arbitral tribunal may request help with the examination of evidence, the holding of hearings or the hearing of a witness).
Interim measures
Before or during the arbitration process, the parties can ask the courts to order interim measures (eg, the preservation of assets or funds, the designation of guardians or the sale of perishable goods). If the measures are ordered before the beginning of the arbitration, the party that requested the measure must submit its claim within 60 days of the order. The arbitrators can order the suspension or termination of interim measures adopted by a court; in such case, the arbitral decision will prevail.
According to the Commercial Arbitration Law, in arbitrations where there is more than one arbitrator, the decision is reached by a majority of the votes or, if no majority is reached, decision of the president of the arbitral tribunal, unless otherwise agreed by the parties. In addition, the president will decide on the agenda and timing of the process.
An award is made in writing, is signed by the arbitrators and includes the date of the decision and the place of arbitration. The award may also include the arbitration costs, professional fees and arbitrators' expenses, the administrative costs of the institution and other expenses of the proceedings.
Once the award has been issued, the parties have 10 days to request the correction of miscalculations or typographic errors, or any clarifications. The arbitrators can correct or clarify parts of the award on their own initiative.
Challenge of awards
In the Dominican Republic, awards are not subject to appeal. They can be annulled only in the following instances, as set out in the Commercial Arbitration Law:
- One of the parties was incapacitated or the arbitration agreement was invalid;
- The right of defence of one of the parties was violated;
- The award exceeded the scope of the arbitration;
- The procedure was not that agreed by the parties;
- The matter of the dispute was not arbitrable in accordance with the Commercial Arbitration Law; or
- The award conflicted with the public order.
An annulment action must be requested within one month of notice of the award.
Enforcement of awards
The recognition and enforcement of an award shall be granted by the first-instance court of the place of arbitration. In order to obtain recognition of the award for the purpose of enforcement, the original award and arbitration agreement must be summited to the relevant first-instance court. Foreign awards may be enforced after grant of an exequatur by the Civil and Commercial Chamber of the Court of First Instance of the National District.
For further information on this topic please contact Fabiola Medina Garnes at Medina Garnes Abogados by telephone (+1 809 683 4422) or email ([email protected]). The Medina Garnes Abogados website can be accessed at www.mga.com.do.
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