FINAL ARBITRATION PAPER.copyrighted

© 2009 Diana R. Miller
COMPARATIVE LATIN AMERICAN LAW
Arbitration: Latin
American Style
(A Practitioner’s Resource in Preparing for
Arbitration in Latin America)
Diana R. Miller
Dm27629
1
This paper discusses various key international conventions and historic doctrines which are currently are
influencing and shaping the growth of arbitration in Latin America. It advises as to potential pitfalls in
Latin American arbitration, and provides insight into considerations which will assist an attorney in
advising his or her client in the election and drafting of an arbitration agreement involving a Latin
American party and/or commercial transaction.

INDEX
Page
I. INTRODUCTION 4
II. EVOLUTION OF ARBITRATION IN LATIN AMERICA 5
A. Latin America’s Historic Rejection, and Current Reception, of Arbitration 5
B. Latin America’s Calvo Doctrine: its Effect on Arbitrability 6
1. The Calvo Doctrine’s Background 6
2. The Calvo Doctrine’s Effect on Arbitration of
International Disputes 8
a. Republic of Ecuador v. ChevronTexaco Corporation
(NY Dist. Ct. 2007) 8
b. Icenhower v. Icenhower, 398 B.R. 902 (2008) 9
c. The Calvo Doctrine’s Effect on Latin American
Arbitral Proceedings 11
C. Use of the Writ of Amparo to Avoid, or Support, Enforcement of
Arbitration Agreements 12
D. The Recurso de Quejo – Another Challenge to the Enforceability of Arbitration
Agreements in Latin America
13
III. LATIN AMERICAN APPLICATION OF THE NEW YORK & PANAMA CONVENTIONS 15
A. The New York Convention 16
1. Use of the UNCITRAL Model Arbitration Law 17
2. Latin American Application of the New York Convention 19
B. The Panama Convention: the Second Most Utilized Arbitration Convention
in Latin America 21
C. Application of Latin American National Law in the Context of Arbitration
Disputes 23
2

IV. FUNDAMENTAL CONSIDERATIONS: DRAFTING INTERNATIONAL
ARBITRATION AGREEMENTS 25
A. Assess the Client’s Risk Ahead of Time to Avoid Including
Inappropriate Language 25
B. Fundamental Elements to Include in a Latin American Arbitration Provision 26
C. Fundamental Considerations to Discuss with Local Counsel 30
V. CONCLUSION 32
ADDENDA A-C
ADDENDUM A – SAMPLE ARBITRATION PROVISIONS 33
ADDENDUM B – ARBITRATION RULES 35
ADDENDUM C – EXAMPLES OF DISPUTE RESOLUTION BODIES UTILIZED BY
LATIN AMERICAN LITIGANTS 36
3

I. INTRODUCTION
International commercial arbitration is fast becoming an attractive alternative to court
adjudication of international business disputes. It is often perceived as a more flexible, and less
expensive, way to resolve a dispute, unattached to either party or any governmental authority. 1
Arbitration is gaining popularity for resolving international commercial disputes primarily when the
agreement to arbitrate and the arbitration award will receive worldwide enforcement and recognition
more readily than foreign court judgments.2
Moreover, a well-drafted arbitration clause generally
permits consolidation of all pending disputes between the parties in a single forum, thereby avoiding
the expense of multiple proceedings.3
While difficulties and uncertainties in Latin American economies due to the current global
financial crisis have reduced the availability of capital, and thus foreign investment, worldwide foreign
direct investment (“FDI”) flows are predicted to only increase over time. For example, according to the
United Nations Conference on Trade and Development (“UNCTAD”) 2008 World Investment Prospects
Survey, Brazil was one of five top foreign direct investment destinations.4
Prior to the 2008 global
financial crisis, nine different Latin American countries saw at least triple-digit percentage growth in the
outward flow of foreign direct investment: Argentina, Belize, Brazil, Colombia, Costa Rica, Honduras,
Paraguay, Peru and Venezuela.5
Latin American countries’ long-term preeminence as major investment
destinations demonstrates the need for viable and workable alternative dispute resolution (“ADR”)
procedures.
ADR procedures, in particular international commercial arbitration, undoubtedly will play a
major role in facilitating and attracting foreign investment once global FDI inflows again increase.
However, since privatization in Latin America is fairly recent, there is minimal precedent for resolving
conflicts involving foreign investments in the region. Investors are wary of unknown legal frameworks
and, indeed, where the legal and political landscape is subject to flux and change until ADR precedent is
created over time and more settled, investors will remain concerned regarding whether they can obtain
fair resolution of disputes and follow-through enforcement of their rights in the foreign Latin American
1
This perception is not unchallenged, however. Critics point out that an arbitration proceeding involving a $1
million dispute conducted under the International Chamber of Commerce in Paris will result in an administrative
charge of $14,500 and fees per arbitrator ranging from $7,450 to $30,000. These charges and fees increase with
the amount at issue: cases involving $100 million cost approximately $50,500 in administrative charges and
$51,450 to $188,000 in arbitrator fees. See, Am.Jur.POF 3d, Invalidity of Foreign Arbitration Agreement or Arbitral
Award, (December 2008) at 5-6.
2
Am.Jur.POF3d, Invalidity of Foreign Arbitration Agreement or Arbitral Award (December 2008) at 6.
3
Id. at 6.
4
UNCTAD 2009, Investment Brief: Global FDI in Decline Due to the Financial Crisis, and a Further Drop is Expected,
http://unctad.org/templates (last visited Feb. 22, 2009).
5
UNCTAD 2007, World Investment Report 2007: Transnational Corporations, Extractive Industries and
Development – ‘Major FDI Indicators’ Direct Investment Abroad (FDI Outward) Flow, http://stats.unctad.org/FDI .
4

market.6
In some instances, arbitration will not be appropriate.7
Arbitration is most effective when the
parties would seek damages in the event of a breach of their agreement. However, there are instances
where the attorney will want to omit an arbitration agreement entirely from his or her client’s
transaction, such as when immediately enjoining the other side’s breach is more important than
collecting a monetary award.8
Deciding to omit the arbitration provision, however, is the easy part.
Determining the issues which might affect an arbitration provision’s validity and enforceability is more
complicated.
This paper thus discusses the following: (1) the historical backdrop effecting the recognition and
enforcement of ADR in Latin America, in particular arbitration as a means to resolve commercial
business disputes, (2) current legal doctrines directly impacting the utilization and enforceability of
arbitration awards in an international commercial context, (3) potential pitfalls to avoid when drafting
international arbitration agreements, and (4) strategy and language considerations to consider in order
to minimize potential client exposure, including basic model arbitration provisions approved by
international dispute organizations, attached as Addendum A.
II. EVOLUTION OF ARBITRATION IN LATIN AMERICA
A. Latin America’s Historic Rejection, and Current Reception, of Arbitration
Originally Latin American countries were hostile toward arbitration as a method of dispute
resolution. That hostility has been attributed to a number of factors, including large foreign-owned
corporations’ exploitation of natural resources, the French invasions of Mexico in 1838 and 1861, and
colonialism.9
The 1990’s, however, saw Latin’s America’s increased acceptance of arbitration due to the
global movement from nation-states as the only actors in the international system to multi-actors in the
international system, primarily in the many supranational trade agreements concluded in recent years.
6
Frank C. Shaw, Reconciling Two Legal Cultures in Privatizations and Large-Scale Capital Projects in Latin America,
Law and Policy in International Business (Winter 1999) at 5.
7
Interview with Martin T. Lutz, Senior International Business Attorney, DuBois, Bryant & Campbell LLP in Austin,
Texas (April 28, 2009).
8
Examples given by Martin T. Lutz, Senior International Business Attorney at DuBois, Bryant & Campbell LLP in
Austin, Texas, illustrate why an arbitration agreement is not always appropriate. For example, if Whole Foods
Market, Inc. (“Whole Foods”) were the client entering into a contract with a Swiss sanitary expert to evaluate fish it
was purchasing from a Latin American country, Whole Foods would be most concerned with its ability to go into a
local court and enforce the confidentiality of both its contract and the study performed by the expert (in the event
the fish were contaminated), rather than go through an arbitration and seek monetary damages and risk
dissemination of the information about the contamination in the interim.
9
Juan M. Alcala and Joshua Briones, Arbitration in Latin America: a First Look at the Impact of Legislative Reforms,
Law and Business Review of the Americas, Fall 2007, at 1.
5

Arbitration is increasingly included as an ADR mechanism in treaties.10
For example, the 1994 North
American Free Trade Agreement (“NAFTA”) provides that nationals of member states can resort to
international arbitration to resolve certain disputes with member states.11
B. Latin America’s Calvo Doctrine: its Effect on Arbitrability
1. The Calvo Doctrine’s Background
The Calvo Doctrine, named after Argentine jurist Carlos Calvo, is one of several potential
impediments to Latin American arbitration. It holds that governments have a right to be free of foreign
intervention, and that aliens are not entitled to rights and privileges over and above those held by
nationals. The Calvo Doctrine was included in various Latin American constitutions, and thus formed the
basis for rejecting arbitration clauses and procedures.12
The Calvo Doctrine holds that a state need compensate aliens only to the extent that it would
compensate its own nationals. Latin American countries’ establishment of the “Calvo Clause”, based on
the “Calvo Doctrine”, began after the 1838-1840 French military intervention in Buenos Aires,
undertaken to grant French citizens the same privileges as those enjoyed by Englishmen who were
exempted from military duties. France blocked the Buenos Aires harbor, destroying many Argentine
ships, and the population of Buenos Aires retaliated by attacking the French population.13
The
hostilities led to the signing of the Arana-Mackau Treaty, Article 1 of which provided for arbitration to
determine compensation for the French residents of Buenos Aires harmed by the uprising. The origins
of arbitration in Latin America thus are closely linked to the practice of gunboat diplomacy by Western
nations. Arbitration was viewed as a response to force.14
The Calvo Clause became a required contractual stipulation for foreign investors doing business
in Latin American countries for over a century.15
There are three primary elements to a Calvo Clause:
(1) equal treatment of nationals and foreigners, (2) exclusive jurisdiction of the host country, and (3)
limitation of diplomatic protection. The following is an example of a Calvo Clause from a contract
between the Venezuelan government and a foreign investor:
10
Denise Manning-Cabrol, The Imminent Death of the Calvo Clause and the Rebirth of the Calvo Principle: Equality
of Foreign and National Investors, Law and Policy in International Business, Summer 1995, at 2.
11
Daniel E. Gonzalez, et al., International Arbitration: Practical Considerations with a Latin American Focus, The
Journal of Structured and Project Finance, Spring 2003, at 33.
12
Juan M. Alcala and Joshua Briones, Arbitration in Latin America: a First Look at the Impact of Legislative Reforms,
Fall 2007, Law and Business Review of the Americas (Fall 2007) at 1.
13
Id. at 1.
14
Id. at 1.
15
Denise Manning-Cabrol, The Imminent Death of the Calvo Clause and the Rebirth of the Calvo Principle: Equality
6

Disputes and controversies which may arise with regard to the interpretation or
execution of this contract shall be resolved by the tribunals of the Republic in
accordance with the laws of the nation, and shall not in any case be considered as a
motive for international reclamations.”16
(emphasis added).
The Calvo Doctrine has various definitions and applications, depending upon the sources one
consults. In Republic of Argentina (NML Capital, Ltd.) v. Republic of Argentina (Banco Central De La
Republica Argentina) (2nd
Cir. 2007), in which holders of defaulted Argentine bonds attempted to attach
funds held in an account of the Banco Central de la Republica Argentina and other banking authorities,
the court described the Calvo Doctrine as follows:
[The Calvo Doctrine, simply stated, . . . means that foreigners do not enjoy more rights
or protection than nationals. The Calvo doctrine thus posits that foreigners’ claims
based on a purported violation of the state’s international obligations must first be
submitted to the courts of that state, and only in the case of a denial of justice could
such claims be elevated to the level of diplomatic protection or interstate arbitration.
(emphasis added).17
The leading arbitral case accepting the validity of the Calvo Clause is North American Dredging
Company of Texas (U.S.) v. United Mexican States, IV R.I.A.A. 26 (1951), a case brought under the
authority of the U.S.-Mexican General Claims Commission which dealt with application of a Calvo Clause
in Mexican law. The U.S. government asserted a claim for $233,000 on behalf of a U.S. corporation for
breach of a contract for dredging a Mexican port. The contract contained a Calvo Clause which provided
that the U.S. company would be considered a Mexican national, that it would not claim any rights or
means to enforce rights other than those granted to Mexican citizens, and that diplomatic intervention
was not permitted.18
The complication was that Mexican law applied the Panama Convention19
which
created the Claims Commission – Article V of the Convention contained a waiver of [jurisdictional]
necessity for the parties or citizens to exhaust local remedies as a condition precedent to asserting their
claims, yet arbitration by law was only allowed after exhaustion of those remedies. The arbitration
panel thus held that the U.S. claimant was precluded by the Calvo Clause from presenting its claim and
dismissed the claim. The panel carefully noted that its decision applies only to the individual parties’
decision and not to a nation’s remedies under international law, and that an individual citizen against
16
Id. at 2.
17
Alexis Mourre, Perspectives of International Arbitration in Latin America, American Review of International
Arbitration (2006) at 2.
18
The Calvo Clause has been tested primarily in ad hoc claims commissions, created to resolve property disputes
resulting from revolutionary damage or expropriation. See, Denise Manning-Cabrol, The Imminent Death of the
Calvo Clause and the Rebirth of the Calvo Principle: Equality of Foreign and National Investors, Law and Policy in
International Business, Summer 1995, FN 47 at 4.
19
After the New York Convention, the second most important legal development in the field of international
commercial arbitration is the Inter-American Convention on International Commercial Arbitration, adopted in 1975
at the diplomatic conference of the Organization of [Latin] American States. See discussion, infra, page 21.
7

whom a Calvo Clause has been applied may have personal standing to assert a denial of justice under
international law in its own courts.20
In that situation, the claim would not be for breach of contract, but
for denial of justice under international law.21
United States decisions following North American Dredging have confirmed its holding and
further defined the scope of the Calvo Clause: it applies only to matters connected with the contract, it
must involve an agreement with the central government and not merely with an individual of the host
country, and it must be included as an express contractual provision, i.e., a “Calvo Clause”. 22
2. The Calvo Doctrine’s Effect on Arbitration of International Disputes
a. Republic of Ecuador v. ChevronTexaco Corporation (NY Dist. Ct. 2007)
American courts have dealt with the Calvo Doctrine in national or international litigation settings
on at least nine occasions.23
More recent cases include Republic of Ecuador v. ChevronTexaco
Corporation (NY Dist. Ct. 2007) 499 F.Supp.2d 452, Icenhower v. Icenhower (US Bankr. Ct. 2008) 398 B.R.
902, and Republic of Argentina (NML Capital, Ltd.) v. Republic of Argentina (Banco Central de la
Republica Argentina (2007) 473 F.3d 463. Those cases dealt with the relevancy and application of the
Calvo Doctrine in modern disputes. As one court summarized the Doctrine, it is “a 19th
century theory
which posited that disputes with foreigners in Latin American countries should be decided not by guns
or by unsympathetic foreign courts but by submission of the foreign nationals to the courts of the Latin
American country.”24
Republic of Ecuador v. ChevronTexaco Corporation (USDC NY 2007) is an example
of the current effect of the Calvo Doctrine and how it can be inserted unexpectedly into international
affairs.
In Republic of Ecuador, the Calvo Doctrine prevented Ecuador from being forced to arbitrate a
dispute between it and ChevronTexaco Corporation (“Chevron”) in New York, despite the fact that
Chevron claimed Ecuador was bound to do so contractually. The underlying matter originated in 1993
when indigenous people of Ecuador filed a lawsuit in the Southern District of New York (the “Aguinda
litigation”) to compel Chevron to clean up their community’s environmental resources damaged by
20
North American Dredging, IV R.I.A.A. at 28, cited by Denise Manning-Cabrol, The Imminent Death of the Calvo
Clause and the rebirth of the Calvo Principle: Equality of Foreign and National Investors, Law and Policy in
International Business, Summer 1995, at 4.
21
R. Doak Bishop, King & Spalding, International Commercial Arbitration in South America, 2008, at 11-5.
22
Denise Manning-Cabrol, The Imminent Death of the Calvo Clause and the rebirth of the Calvo Principle: Equality
23
Among the nine cases produced by a Westlaw search for “Calvo Doctrine” and Calvo Clause” are: Republic of
Ecuador v. ChevronTexaco Corporation (USDC NY 2007) 499 F.Supp.2d 452; Republic of Argentina v. The Republic
of Argentina (2nd Cir. 2007) 473 F.3d 463; Novich v. McClean (2001) 172 Or.App. 241; Banco Nacional de Cuba v.
Chase Manhattan Bank (2nd
Cir. 1981); Reavis v. Exxon Corp. (1977) 396 NYS 2nd 774; and Icenhower v. Icenhower
(US Bankr Ct 2008) 298 B.R. 902.
24
Republic of Ecuador v. ChevronTexaco Corporation (USDC NY 2007) 499 F.Supp.2d 452 at 464.
8

years of oil drilling. The Aguinda litigation was dismissed on forum non conveniens, and the plaintiffs
renewed the Aguinda litigation in Ecuador courts which resulted in a 1995 settlement.
The primary issue was whether the Calvo Doctrine in the Ecuadorian Constitution prevented the
parties from submitting to arbitration in New York. Seeking indemnification of any adverse judgments
which could arise out of the Aguinda litigation, Chevron had instituted arbitration with the American
Arbitration Association (the “AAA”) in New York pursuant to the arbitration agreement in its 1965 Joint
Operating Agreement (the “JOA”) which Ecuador’s predecessor, Gulf Oil, had signed with Chevron.25
Chevron contended that PetroEcuador was bound by the agreement as Gulf Oil’s successor, but
PetroEcuador, which had nationalized Gulf Oil after execution of the JOA, contended it was not a
signator to the JOA.
Under Fed.R.Civ.P. 44.1 the applicability of foreign law became a question of law. The court
noted that if it found that an Ecuadorian court would determine that PetroEcuador had assumed the
rights and obligations under the JOA, then the 1974 arbitration before the AAA in New York should be
mandated. However, if the Ecuadorian court would say that PetroEcuador did not assume
responsibilities under the JOA, then instead of the JOA’s arbitration provision the general Ecuadorian
law in effect at the time – which general law included the 1945 Constitution imported by a coup d’etat
and containing a Calvo Clause – would govern the situation and negate arbitrability of the dispute.
Ecuador argued that this was the case and thus arbitration would be unconstitutional under its national
laws.
Ultimately the court found in Ecuador’s favor, holding that under Ecuadorian law Chevron could
not have reasonably expected that the JOA would bind PetroEcuador. The U.S. court found that there
was not a genuine issue of fact as to whether the JOA bound PetroEcuador, and arbitration was not an
available remedy under Ecuadorian law. Ecuador’s motion for summary judgment on Chevron’s
counterclaims was granted, foreclosing the possibility of the New York arbitration.
b. Icenhower v. Icenhower, 398 B.R. 902 (2008)
The most recent published United States case where the Calvo Doctrine interfered with
enforcement of a judgment is Icenhower v. Icenhower, 298 B.R. 902 (2008). In Icenhower, a successor-
in-interest to a Chapter 7 trustee had obtained a judgment against Mexican landowners for avoidance
and recovery of a fraudulent transfer and a post-petition transfer of debtors’ beneficial interest in a
“fideicomiso” trust holding title to coastal real property in Mexico. The successor to the trustee
requested that the court issue a foreign anti-suit injunction permanently enjoining landowners from
taking any actions to attack, vitiate, or nullify the judgment except for filing a direct appeal therefrom in
the United States.
25
Gulf Oil was the predecessor to PetroEcuador. Gulf Oil had sold its interest to PetroEcuador, an Ecuador-owned
company, when in 1972 Ecuador’s military assumed control and nationalized the state’s oil industry. PetroEcuador
did not re-execute the JOA and thus was not an original signatory. The court was called upon to determine
whether PetroEcuador, as a non-signatory, could be bound by the arbitration agreement in the JOA.
9

Defendants’ argument against the injunction rested on Mexico’s version of the Calvo Doctrine.
In Mexico, the Calvo Doctrine holds that judgments rendered by foreign courts purporting to affect title
to real property in Mexico are unenforceable as against the public interest, and contrary to the exclusive
sovereignty of Mexico over its realty. Defendants contended that their status as Mexican nationals
afforded them special protections in the purchase transaction, and that the Calvo Clause required that
any actions by the parties challenging title to their Mexican real property must be litigated in Mexico
and exclusively governed by Mexican law.
The U.S. Bankruptcy Court refused to grant the anti-suit injunction. The court stated that to
grant the anti-suit injunction under the circumstances would send a message to Mexico that the court
had little confidence in the Mexican courts to adjudicate this dispute fairly and efficiently, and would
eliminate reciprocity between the two countries.26
The court held the successor trustee’s request not
only failed to satisfy the threshold requirements for a foreign anti-suit injunction, but even if the
threshold criteria were satisfied, concerns of international comity weighed against an anti-suit
injunction. The court was aware that the defendants intended to take refuge behind the Calvo
Doctrine, and that the Calvo Doctrine would play a major part in the Mexican litigation which would
adjudicate the status of title to the property under the Mexican statutes and the Mexican Constitution.
While this is not an arbitration case, the court’s denial of the anti-suit injunction in the face of
the potential impact of the Calvo Doctrine, which would in all probability preclude the American plaintiff
from enforcing judgment against the defendant’s real property in Mexico, has significant implications for
international commercial arbitration agreements. U.S. companies seeking to do business with Latin
American businesses must be aware of the potential effect of the Calvo Doctrine and think twice before
signing an arbitration agreement believing it is air-tight and never subject to challenge. In a country
which adheres to the Calvo Doctrine, especially if it is written into its civil code or constitution, there is
the possibility that if a dispute arises as to enforceability of the arbitration agreement the forum court
might decide that, under the Calvo Doctrine, the arbitration agreement was unenforceable. This is most
likely to occur when the Calvo Doctrine language is expressly incorporated into the country’s laws and
the national company invokes the “public policy defense” permitted by either the New York or Panama
Conventions, which may be used to invalidate the arbitration agreement (discussed infra).27
26
Icenhower, 398 B.R. at 915.
27
The “public policy defense” found in both Conventions holds that a foreign country may refuse to recognize or
enforce an arbitral award if it is against the public policy of the enforcing country. See, Invalidity of Foreign
Arbitration Agreement or Arbitral Award, American Jurisprudence Proof of Facts 3d, December 2008 at 23.
10

c. The Calvo Doctrine’s Effect on Latin American Arbitral Proceedings
One by one, Latin American countries invoked laws recognizing and enforcing arbitration as a
way to resolve disputes. In several of those countries arbitration is taking preeminence over the
traditional Calvo Doctrine protectionism.
For example, Argentina, which like many Latin American nations traditionally opposed
arbitration, now embraces it (at least prior to the most recent economic crisis). This view has
substantially changed in part due to a general dissatisfaction with the judicial system, and in part due to
the imposition of a three percent tax on the amount in dispute before a court even hears the lawsuit.
Argentina is now party to the New York Convention, the Panama Convention and the ICSID Convention
(discussed infra). It also entered into bilateral investment treaties with over 36 countries, including
Bolivia, Chile, Ecuador, El Salvador, Peru, Venezuela and the United States.28
According to at least one
author, the 1994 United States-Argentina Bilateral Investment Treaty (the “BIT”), represents Argentina’s
final abandonment of the Calvo Doctrine because it provides for the settlement of investment disputes
through international arbitration without prior exhaustion of local remedies.
Likewise, prior to 1996 Brazil was not receptive to commercial arbitration, but then adopted a
new commercial arbitration law more favorable to arbitration, particularly for international disputes.
Importantly, that law recognizes and enforces arbitral agreements and foreign awards.29
Brazilian
arbitration law distinguishes between foreign and domestic arbitrations, and domestic arbitral decisions
now have the same effect as decisions rendered by the courts. They are not subject to appeal and do
not require the judiciary’s recognition. The procedure for enforcing foreign awards, however, is
different. Any arbitral decision awarded outside the national territory of Brazil will be considered
“foreign”, and in order to be recognized or enforced in Brazil, a foreign arbitration award is first subject
to any international treaties, with due regard for Brazilian legislation. In the absence of such a treaty, a
foreign award is subject only to confirmation by the Brazilian Federal Supreme Court. The Brazilian
Federal Supreme Court now can refuse homologation only in limited circumstances, including when the
arbitration deals with matters which, according to Brazilian law, can only be decided by a court, and
when the award is offensive to Brazilian public order.30
Other Latin American countries including, but not limited to, Chile, Ecuador, Peru, and
Venezuela, have enacted national arbitration codes and have ratified the New York Convention, the
Panama Convention and the ICSID Convention. Moreover, many Latin American countries have entered
into bilateral investment treaties which include arbitration mechanisms. Arbitration provisions pursuant
to these BITs, in the absence of a fundamental change in national law or politics – such as occurred in
28
R. Doak Bishop, King & Spalding, International Commercial Arbitration in South America, 2008, at 11-8.
29
Id. at 11-8.
30
Id. at 11-10.
11

the coup d’etat in Republic of Ecuador, supra – should have little problem of enforceability.31
The
practitioner is advised, however, that understanding the history and political direction of the country in
which he is considering placing an arbitration is crucial, since a change in the law such as a new
constitution containing a Calvo Clause could negate his client’s future opportunity for arbitration.
C. Use of the Writ of Amparo to Avoid, or Support, Enforcement of Arbitration Agreements
The petition for a Writ of Amparo (“Amparo”) is a remedy available in Latin America to any
person whose right to life, liberty and security is violated or threatened with violation by an unlawful act
or omission of a public official or employee, or of a private individual or entity. 32
The Writ of Amparo
has been used in totalitarian countries to protect the rights of victims of disappearances, along with a
writ of habeas data, to compel governments and military officials to allow families of victims access to
official documents, and is having increasing influence in civil law countries.33
The party who initiates an Amparo proceeding in commercial matters asserts either the
constitutionality of the laws (Amparo contra leyes) or challenges a judicial decision (Judicial Amparo). In
Mexico, the Judicial Amparo constitutes more than 80 percent of Amparo proceedings. A claimant
initiating the Judicial Amparo can assert both procedural errors and substantive errors which affect the
court’s final decision. With a Judicial Amparo, the claimant does not directly challenge the
constitutionality of the law, but requests that the reviewing court determine whether the lower court’s
decision was based on unconstitutional law, which results in a violation of the federal supremacy
clause.34
The significance of Amparo to the enforcement of arbitration agreements should not be
underestimated. Latin American courts have, at times, refused to enforce arbitration awards under the
New York or Panama Conventions due to either: (1) the alleged supremacy of not only their own
procedural law, but (2) also based on Amparo. While a party cannot directly invoke Amparo to vacate
an arbitral award because an arbitrator is not a public authority and the award is not an act of authority,
it can be invoked to challenge the resolution of a judge in an action for setting aside an award, since the
ruling is an act by a public authority.35
Cases where Latin American courts have refused to enforce
31
Id. at 11-21.
32
Use of the Amparo is spreading, but often is intended to prevent further human rights violations. For example,
In 2007 the Philippines incorporated the Writ of Amparo and writ of habeas data into their Civil Code as Rule 102,
Revised Rules of Court, to solve the extensive Philippine extrajudicial killings and forced disappearances since
1999. See, Supreme Court Finishes Draft Rules on ‘Writ of Amparo’, September 23, 2007, www.newsflash.org (last
visited April 9, 2009).
33
Supreme Court Finishes Draft Rules on ‘Writ of Amparo’, September 23, 2007, www.newsflash.org (last visited
April 9, 2009); see also, Writ of Amparo and Habeas Data (Philippines) http:/een.wikipedia.org (last visited April 10,
2009).
34
Id. at 8.
35
Andrew P. Tuck, supra at 7.
12

arbitration awards and held their right to review arbitral awards superior to that of the New York
Convention and Panama Convention, have serious consequence with regard to the general application
of those conventions. A few of such cases directly follow.
For example, in 2004 the Argentina Court of Appeal in Odgen Entertainment Services Inc. v. Eijo,
Nestor E., before rejecting an arbitration award between Argentine citizens and a U.S. company relating
to unpaid commissions on public policy grounds, utilized the Argentine Code of Civil Procedure without
reference to the New York Convention.36
In the 2006 Venezuelan case Haagen-Dazs International Shoppe Company, Inc., the
Constitutional Chamber of the Supreme Court in Venezuela held that its right to review a foreign arbitral
award rendered in Miami, through the Amparo Constitucional, was supreme. The court reasoned that
such a decision was necessary to preserve constitutional rights. The president of the Chamber
dissented, stating that the court was encouraging use of inappropriate means of recourse against
foreign awards and not acting in accordance with the Venezuelan legal system nor the provisions of the
New York and Panama Conventions which limited the role of Venezuelan courts in connection with
arbitral awards rendered abroad.
In Mexico, at least two cases using the Writ of Amparo have been brought since 1996 to
challenge enforcement of an international arbitration award. In the first decision – the “Nordson case”
– the court held that the grounds under the New York Convention are very restrictive and judges are not
allowed to review the merits of the decision contained in the arbitral award. In the second decision the
court reached the same conclusion and held that the court did not have power to review the substance
of an award under the New York Convention.37
A broad reading of articles and cases relating to enforcement of arbitration awards in Latin
America leads this author to believe that Mexico and Brazil are preeminent in deference to international
conventions and thus enforcement of international commercial arbitration agreements. Other
countries, however, while making strides in enforcement, as noted above, have refused enforcement on
various grounds, often through legal mechanisms such as Amparo, the Calvo Doctrine and the Recurso
de Queja (discussed infra).
D. The Recurso de Queja: Another Challenge to the Enforcement of Arbitration Agreements in
Latin America
The Recurso de Queja, or a complaint appeal, is another potential challenge to the
enforceability of an arbitration agreement. An example of this potential impediment to international
arbitration is found in Chile. While Chile is a party to the New York Convention, the Panama Convention
and the Convention on the Settlement of Investment Disputes of 1965 (the “ICSID”)38
, in addition to
36
Id. at 4.
37
Id. at 4.
38
The ICSID is limited to investment disputes between signatory governments and nationals of another signatory
state. It thus has limited value once a state-owned entity has been privatized. See, Frank C. Shaw, Reconciling Two
13

having entered into over 40 bilateral and free trade agreements between investors and state parties39
— all of which provide for arbitration as a mechanism to resolve investor-state disputes — Chilean
parties may have a right under the Chilean Constitution and the Organic Code of the Judiciary to directly
challenge arbitration awards via the Recurso de Queja.40
The Recurso de Queja is a mechanism that triggers the Supreme Court’s exercise of its
supervisory powers over all Chilean courts, including arbitral tribunals. It is a means whereby parties to
a dispute can petition a higher court to correct errors or grave abuses committed in the issuance of
judgments. The Recurso de Queja is available as against final judgments issued by arbitrators. Hence,
despite the explicit wording of the 2004 Chilean Arbitration Act, a Court of Appeals decision either
confirming or vacating an international arbitral award rendered in Chile is likely reviewable by a Recurso
de Queja before the Supreme Court with the losing party claiming a serious error or abuse in
judgment.41
The Chilean Supreme Court has, pursuant to the Recurso de Queja, modified arbitral
awards on grounds of procedural errors or abuses, but also has set them aside when the arbitrator or
arbitral tribunal did not “appropriately ponder” the evidence rendered or misapplied the law. For
example, in In Re Guillon Cuevas, Pedro y Otra the Supreme Court vacated, as contrary to the evidence
rendered by the parties during the arbitration proceeding, the valuation of a piece of land made by the
arbitrator for purpose of determining the compensation owed to the plaintiff.42
Thus, the Recurso de Queja is yet another Latin American doctrine of which an international
attorney needs to be wary due to its potential impact on the arbitrability of disputes involving a Latin
American party to a contract or potential litigant.
Legal Cultures in Privatizations and Large-Scale Capital Projects in Latin America, Law and Policy in International
Business (Winter 1999) at 6.
39
Chile has signed free trade agreements with Canada, China, and Mexico. See, Frank C. Shaw, Reconciling Two
Legal Cultures in Privatizations and Large-Scale Capital Projects in Latin America, Law and Policy in International
Business (Winter 1999) at 6.
40
41
Andrew P. Tuck, supra at 6-7.
42
14

III. LATIN AMERICAN APPLICATION OF THE NEW YORK & PANAMA CONVENTIONS
There are nine major Latin American international conventions which include arbitration
provisions as dispute settlement mechanisms.43
The two of primary importance to international
arbitration are the 1958 United Nations Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (the “New York Convention”) and the 1975 Inter-American Convention on International
Commercial Arbitration (the “Panama Convention”).44
As of January 1, 2009, 143 states had adopted the New York Convention, at least 14 of which
were Latin American countries.45
Of over 30 Latin American national court decisions on the
enforcement of foreign arbitral awards, the majority have dealt with enforcement of foreign arbitral
awards pursuant to the New York Convention, revealing a clear tendency towards application of that
Convention as the exclusive legal instrument to allow enforcement of foreign arbitral awards.46
As of
August 1, 2005, 17 Latin American countries have ratified both the New York and Panama Conventions,
including Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala,
Honduras, Mexico, Nicaragua, Panama, Peru, Uruguay and Venezuela.47
If both the New York and
Panama Conventions are applicable, the parties must choose the New York Convention if they wish it to
apply.48
43
The other seven conventions are: the Inter-American Convention on the Legal Regime of Powers of Attorney to
be Used Abroad (Panama, 1975); the Inter-American Convention on Extraterritorial Validity of Foreign Judgments
and Arbitral Awards (Uruguay, 1979), published in the Official Newspaper on August 20, 1987 (applicable only to
judicial judgments); the Inter-American Convention on Jurisdiction in the International Sphere for the
Extraterritorial Validity of Foreign Judgments (Bolivia, 1984), published in the Official Newspaper in 1987; the Inter-
American Convention on Letters Rogatory (Panama, 1975), published in the Official Newspaper in 1978; the
Additional Protocol to the Inter-American Convention on Letters Rogatory (Montevideo 1979); the Additional
Protocol to the Inter-American Convention on the Taking of Evidence Abroad; and the Convention on the Taking of
Evidence Abroad in Civil and Commercial Matters (published in the Official Newspaper on February 12, 1990). See,
Baker & McKenzie, International Treaties: Their Constitutional Hierarchy, Dispute Resolution Around the World
(last updated August 2006), www.bakernet.com (last visited February 11, 2009).
44
Baker & McKenzie, International Treaties: Their Constitutional Hierarchy, Dispute Resolution Around the World
(last updated August 2006), www.bakernet.com (last visited February 11, 2009).
45
Argentina, Costa Rica, El Salvador, Brazil, Chile, Colombia, Cuba, Guatemala, Paraguay, Mexico, Nicaragua,
Panama, Peru and Venezuela are member states of the New York Convention. Belize is not.
www.en.wikipedia.org, Convention on the Recognition and Enforcement of Foreign Arbitral Awards (last visited
April 24, 2009) at 1-2.
46
Cristian Conejero Roos, The New York Convention in Latin America, Global Arbitration Review,
www.globalarbitrationreview.com (last visited February 21, 2009), at 3.
47
Russell J. Weintraub, International Litigation and Arbitration , 97.
48
Weinbraub, id. at 104.
15

A. The New York Convention
The New York Convention covers enforcement of arbitration agreements as well as abitral
awards.49
It is widely recognized as a foundation instrument of international arbitration and requires
courts of contracting states to give effect to an agreement to arbitrate, and also to recognize and
enforce awards made in other contracting states, subject to specific limited exceptions.50
According to
Article II(3) of the New York Convention, the existence of a valid arbitration agreement prevents courts
from entertaining jurisdiction when faced with an action on the merits.51
A party’s obligation to
participate in arbitration is enforced indirectly: a claimant attempting to breach the arbitration
agreement by initiating court proceedings is prevented from doing so under the New York Convention
by the court’s obligation to stay such proceedings. If the stay is granted, the claimant may not pursue its
claim in court.52
The respondent’s obligation to participate is also enforced indirectly: if it does not
participate, it may be faced with a binding and enforceable default award.53
For these and other
reasons, the New York Convention has proved the most effective and popular.
The New York Convention compels a court to conduct a limited four-part inquiry when deciding
whether to confirm an award: (1) whether there is written agreement to arbitrate the dispute, (2)
whether the agreement provides for arbitration in the territory of a signatory to the Convention,
(3) whether the agreement arises out of a commercial legal relationship (contract or otherwise), and (4)
whether a party to the agreement is “foreign”, i.e., not an American citizen or, if not, whether there is a
commercial relationship that has some reasonable relation with one or more foreign states.54
Enforcement of an award under the New York Convention is subject to limited defenses,
including:
1. incapacity of a party;
2. the arbitration agreement was not valid under its governing law;
3. a party was not given proper notice of the appointment of the arbitrator or of the
arbitration proceedings, or was otherwise unable to present a case;
49
Id at 97.
50
UNCITRAL, 1958 – Convention on the Recognition and enforcement of Foreign Arbitral Awards – the “New York”
Convention (www.uncitral.org/en/uncitral_texts/arbitration/NYConvention.html ) (2008) at 1 (last visited
2/14/09).
51
Lew et al., supra at 159.
52
53
54
Invalidity of Foreign Arbitration Agreement or Arbitral Award, American Jurisprudence Proof of Facts
3d, December 2008 at 6-7.
16

4. the award deals with an issue outside the scope of the agreement (subject to the
proviso that an award which contains decisions on arbitrable matters may be enforced to the extent
that its matters can be separated from those outside the scope of the arbitration agreement);
5. the composition of the arbitral tribunal did not accord with the arbitration agreement;
6. the award has not yet become binding upon the parties, or has been set aside by a
competent authority (either in the country where the arbitration took place, or pursuant to the law of
the arbitration agreement); or
7. the subject matter of the award was not capable of resolution by arbitration, or the
enforcement would be contrary to “public policy”.55
As can be seen by the discussion in Section II, supra, one of the most dangerous defenses under
the New York Convention is the “public policy” exception. This exception allows a Latin American
litigant to challenge enforcement of the award on the basis that it contravenes public policy of the
relevant country — often successfully — once it has access to the courts through Writ of Amparo, the
Recurso de Queja, or by virtue of the Calvo Doctrine.
1. Use of the UNCITRAL Model Arbitration Rules
One of the ways in which international arbitrations can be classified is as either ad hoc or
institutional. The most popular rules for ad hoc arbitrations are the 1976 United Nations Commission on
International Trade Law (“UNCITRAL”) 56
Arbitration Model Arbitration Law (the “UNCITRAL Rules”). The
UNCITRAL Rules were developed in response to a need for arbitration rules for use in ad hoc
arbitrations, and have been adopted by many arbitration institutions. UNCITRAL’s main purpose is to
promote development of international trade, removing obstacles and uncertainties caused by the use of
electronic media in the formation of international contracts.57
UNCITRAL promotes the New York Convention, and deals with every aspect of arbitration from
formation of the tribunal to rendering an award. Many Latin American countries have included
variations of the UNCITRAL Model Rules into their arbitration systems,58
and in fact the UNCITRAL Rules
were created as a suggested pattern for lawmakers to consider adopting as part of their domestic
legislation. Countries enacting the UNCITRAL Rules may depart from the text, so it is important to
consider each member country’s legislation in order to identify any deviation from the model in the
55
www.wikipedia.org, Convention on the Recognition and Enforcement of Foreign Arbitral Awards (last visited
April 26, 2009).
56
Julian DM Lew, QC, Loukas A. Mistelis, and Stefan M Kroll, Comparative International Commercial Arbitration
26-27 (Kluwer Law International 2003).
57
Lisandro A. Allende and Mariana A. Miglino, Internet Law – International Electronic Contracting: the UN
Contribution, Internet Business Law Services, March 6, 2007, www.ibls.com (last visited March 19, 2009).
58
17

legislative text that was adopted.59
Latin American countries which have enacted the UNCITRAL Rules
include Chile (2004), Guatemala (1995), Mexico (1993), Nicaragua (2005), Paraguay (2002), and Peru
(1996). Within the United States, the following states have adopted the UNCITRAL Rules: California
(1996), Connecticut (2000), Illinois (1998), Louisiana (2000), Oregon (2000), and Texas (2000). Spain also
adopted the UNCITRAL Rules in 2003.60
&61
Prior to adoption of the UNCITRAL Rules, there were essentially three different modern
arbitration “situations” which developed as a result the New York Convention and use of UNCITRAL
Rules. Some courts sought to control and supervise arbitrations taking place in their jurisdictions, other
countries took a minimalist approach seeking to provide support for the arbitration process while
refusing to intervene or interfere, and the third group utilized old or out-of-date arbitration laws. The
UNCITRAL Rules exemplify the minimalist approach, helping to harmonize the concepts of party
autonomy and the supportive role of courts to the arbitration process.62
A practitioner should be aware that differences in interpretation of the UNCITRAL Rules and
their application exist because key terms may be given varied interpretation, depending upon the
country’s law which governs the proceedings. For example, when determining whether a dispute is
“commercial” and thus arbitrable, interpretation of the term “commercial” in the UNCITRAL Rules may
be given wide latitude by countries which have adopted the Rules, covering matters arising from all
relationships of a commercial nature, whether contractual or not. Other countries may interpret it
more narrowly. Most countries which have adopted the Model Law based on the UNCITRAL Rules have
expressly incorporated that broad definition. Others, however, have adopted their own characterization
of commercial disputes.63
Then, countries which have not adopted the UNCITRAL Rules yet have
arbitration laws have invariably not defined “commercial” in the context of arbitration, which impliedly
means the term is defined by that country’s domestic law.64
As a result, those adopting the UNCITRAL
Rules have a more unified regulation (albeit some cover a broader array of disputes), while the others
differ in that the international or domestic character of commercial arbitration in their countries is
subject to a different set of rules for domestic and international arbitration.65
59
United Nations Commission on International Trade Law, Status 1985 – UNCITRAL Model Arbitration Rules on
International Commercial Arbitration (2009), www.uncitral.org (last visited March 19, 2009), p2.
60
Id. at 1.
61
Note that dates of enactment are not necessarily effective dates of enforcement. United Nations Commission
on International Trade Law, Status 1985 – UNCITRAL Model Arbitration Rules on International Commercial
Arbitration (2009), www.uncitral.org (last visited March 19, 2009), at 2.
62
Lew et al., supra, at 27-28.
63
Lew et al., supra at 52-53.
64
65
18

Beginning in the early to mid-1990’s, many Latin American countries (including but not limited
to Argentina, Guatemala, Brazil, Colombia, Costa Rica, Honduras, Mexico, Panama, Peru, and Venezuela)
passed new legislation modernizing their domestic arbitration laws by either modifying or replacing
existing statutes, and three of them (Mexico, Guatemala, and Peru) have incorporated UNCITRAL Rules
into their arbitration laws, a positive step toward international arbitration. Other countries, such as
Argentina and Chile, are considering adoption of the UNCITRAL-based arbitration laws.66
2. Latin American Application of the New York Convention
The majority of Latin American national courts which have dealt with enforcement of foreign
arbitral awards have applied the New York Convention alone, or jointly with another convention or
national law. Some, however, have come to a contrary conclusion and held that the New York
Convention was not binding. In this regard, the following cases are particularly noteworthy.
Mexican courts have primarily recognized the applicability of the New York Convention. In the
Mexican case Nordson Corporation v. Industrias Camer SA de CV, Nordson, a U.S. corporation, obtained
an American Arbitration Association arbitral award and sought to enforce it in Mexico pursuant to the
New York Convention. Enforcement was granted. Camer then filed an Amparo action before the Sixth
Civil Court of the First Circuit to overturn the decision. The court affirmed the lower court’s decision,
basing its decision on both the New York and Panama Conventions. 67
Enforcement in Mexico of an International Chamber of Commerce ( “ICC”) award was at issue in
Presse Office SA v. Centro Editorial Hoy SA, wherein the Presse Office SA sought enforcement of the ICC
award rendered abroad against Centro Editorial Hoy SA. The Superior Tribunal of Justice of the Federal
District of Mexico decided to grant the enforcement based solely on the provisions of the New York
Convention and stated that, pursuant to the Mexican Constitution, international treaties take legal
precedence over the Mexican Code of Civil Procedure and, on this ground, refused to apply the
provisions related to enforcement of foreign judgments invoked by Centro Editorial.68
In contrast Colombia has refused to enforce awards under the New York Convention,
determining that the awards were outside its scope either definitionally or due to national law. The
Supreme Court of Colombia, in Merck & Co. Inc. v. Tecnoquimicas SA and Empresa Colombiana de Vias
Ferreas v. Drummond Ltd., refused to recognize arbitral awards on the basis that the ICC interim arbitral
award on jurisdiction was not enforceable under the New York Convention since the awards under
Colombian law were merely decisions on the jurisdiction of certain claims, and did not settle the dispute
on the merits as required by Art. I(1) of the Convention. The court’s view was that independent of its
label in the country of origin, since the awards were simply preliminary interim decisions subject to
66
Daniel E. Gonzalez, International Arbitration: Practical Considerations with a Latin American Focus, The Journal
of Structured and Project Finance, Spring 2003, at 34.
67
Cristian Conejero Roos, supra at 3.
68
Cristian Conejero Roos, supra at 3.
19

further decision in Colombia, they were outside the scope of the Convention.69
Where, however, the
award meets both the Colombia Code of Civil Procedure requirements for enforcement and specific
conditions of the New York Convention, the Colombian Supreme Court has upheld enforcement of a
foreign award rendered in the United States against a Colombian entity, see Sunward Overseas v.
Servicios Maritimos Limitada Semar.70
Similarly in Argentina, in Milantric Trans SA v. Ministerio de la Produccion – Astillero Rio
Santiago, the La Plata Court of Appeals (whose jurisdiction was in principle limited to deciding on the
costs related to enforcement) overturned the first instance court’s decision overruling a public policy
objection (the defendant argued that it was against public policy to enforce an award of compound
interest. The trial court said there was no violation of public policy since compound interest was
allowed under Argentine law). Even though the court’s original jurisdiction was limited to cost issues, on
appeal the Court of Appeals delved into substance and refused to enforce the award, holding that the
New York Convention was not applicable as the underlying contract involved a state party and thus
could not fall under the definition of a commercial agreement, that procedural matters were not
delegated in the government federal powers, and that since the New York Convention was a procedural
treaty it was not binding upon the province of Buenos Aires. 71
Despite the result of Milantric Trans SA, supra, Argentina has, in fact, generally led the process
of accepting ADR in Latin America. Argentina has ratified both the New York and Panama Conventions,
in addition to the ICSID. Other Latin American countries are moving in this direction, but results are
mixed. While Bolivia, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Paraguay, Peru and Uruguay all
accept arbitration as a dispute mechanism, Brazil has not signed the ICSID. Nicaragua, on the other
hand, has not signed either the New York Convention or the Panama Convention, although it has ratified
the ICSID.72
In Peru, in Dist Corporation v. Cosmos International SA, a Korean corporation obtained an
arbitral award in Seoul against Cosmos International SA, a Peruvian entity, for payment of money. Dist
Corporation sought to enforce the award in Lima, but Cosmos opposed on grounds but its opposition
was dismissed by the Superior Court of Justice based on both the provisions of the New York Convention
and the Peruvian Civil Code regarding recognition and enforcement of judicial decisions. 73
69
Decision of 16 January 2001, Yearbook Commercial Arbitration, A.J. Van den Berg (ed.), vol. XXVI (2001), p 755
cited in Cristian Conejero Roos, supra, at 3-4.
70
Decision of 20 November 1992, Yearbook Commercial Arbitration, ed A J van den Berg, vol. XX (1995), p 651 as
cited in Cristian Conejero Roos, supra, at 4.
71
Decision of 24 February 1977, Yearbook Commercial Arbitration, ed. P Sanders, Vol. IV (1979) p 301 as cited in
Cristian Conejero Roos, supra, at 4 & 13.
72
Frank C. Shaw, supra, at 6.
73
Cristian Conejero Roos, supra, at 4.
20

In Brazil, the use of both domestic and international arbitration has grown substantially in the
recent decade. The Brazilian Arbitration law (the “BAL”) became effective in 1996, and the New York
Convention has been ratified, both of which have facilitated the use of dispute resolution procedures.
Pursuant to Resolution No. 9/2004 of the Superior Tribunal of Justice, foreign arbitral awards are
regularly homologated and regularly enforced in Brazil. In the Brazilian legal system, the Superior
Tribunal of Justice will analyze the request for homologation of a foreign arbitral award, without
examining the merits of the decision. The analysis is limited to the fulfillment of the formal
requirements established in Articles 38 and 39 of the BAL, as well as Resolution No. 9/2004, and
requests for injunctive relief going to the merits of the decision have been strongly rejected by the
Superior Tribunal of Justice.74
B. The Panama Convention: the Second Most Utilized Arbitration Convention in Latin America
After the New York Convention, the second most important legal development in the field of
international commercial arbitration is the Inter-American Convention on International Commercial
Arbitration (the “Panama Convention”), adopted in 1975 at the diplomatic conference of the
Organization of [Latin] American States (the “OAS”). The U.S. ratified the Panama Convention in 1986,
and Congress enacted legislation to bring its provisions into domestic effect in the United States in
1990.75
Latin America’s implementation of the New York Convention is fairly recent.76
Although in the
majority of cases Latin American courts now rely on it as the exclusive basis for deciding on exequatur
requests dealing with foreign arbitral awards, Latin American courts increasingly resort to the Panama
Convention. Moreover, at least 16 Latin American countries have modernized their arbitration statutes
to include provisions dealing with enforcement of foreign arbitral awards. This can lead to confusion as
to which statute is to be applied, but the majority of cases reveal a clear tendency towards application
of the New York Convention. 77
The text of the Panama Convention is substantially similar to the New York Convention. Both
provide that arbitration agreements are valid, whether the dispute arises in the future or is an existing
dispute, and that Article II(1) of the New York Convention, the agreement to arbitration, must be in
writing. 78
Grounds for refusing to enforce an arbitral decision under the Panama Convention are
comparable to the seven grounds in the New York Convention (supra, Sect.III.A)79
, and can be broken
74
Fabiano Robalinho Cavalcanti, The Arbitration Review of The Americas 2009, Global Arbitration Review
(http://www.globalarbitrationreview.com/handbooks) at 1-2.
75
Am.Jur.POF3d, supra, at 9.
76
Cristian Conejero Roos, supra, at 1.
77
Cristian Conejero Roos, supra, at 1-2.
78
79
21

down into problems with the conduct of the arbitration itself and state sovereignty issues. Conduct-of-
arbitration issues include: incapacity of a party; failure to give proper notice or the inability of a party to
present her case; the award was outside the scope of the arbitration agreement; the selection of
arbitrators violated the agreement or the law; and the award was set aside or annulled. State
sovereignty issues include: the law of the country in which enforcement is sought prohibits arbitration
on the subject matter of the issue in dispute; or the recognition or enforcement of the award is contrary
to public policy.80
There are several primary differences between the Panama and New York Conventions, and
many believe those differences make arbitration under the Panama Convention superior to arbitration
under the New York Convention. First, the Panama Convention specifies that the parties can establish
the procedural rules which will govern their arbitration, but in the absence of an express agreement the
rules of procedure of the Inter-American Commercial Arbitration Commission (the “inter-American
Commission”) must be followed. Article 3 of the Panama Convention fills in the gap that exists in the
New York Convention in that it provides for a set of fall-back procedural rules (promulgated by the Inter-
American Commission) for conducting the arbitral proceeding in the event the parties fail to agree on
which rules apply. Second, under the Panama Convention the arbitral award has the force of a final
judicial judgment. Finally, the Panama Convention is clearer than the New York Convention that an
arbitral award is not appealable and has the force of a final judgment.81
Even with the parallels between the Panama Convention and the New York Convention, Latin
American countries, with their distrust of arbitration, historically have favored the regional Panama
Convention and only more recently some are starting to prefer the New York Convention. Of the 18
countries which are parties to the Panama Convention (Bolivia, Brazil, Chile, Colombia, Costa Rica,
Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay,
Peru, Uruguay, Venezuela and the United States), seven are not members of the New York Convention
(Bolivia, Brazil, El Salvador, Honduras, Nicaragua, Paraguay and Venezuela).82
Several cases in the United States have dealt with the applicability of the Panama Convention.
An example is Progressive Casualty Ins. Co. v. C.A. Reaseguradora Nacional de Venezuela (S.D.N.Y. 1992)
802 F.Supp. 1069, 1070, rev’d, 991 F.2d 42 (2nd
Cir. 1993), where the Circuit Court held that in a
controversy between multiple international parties, the Panama Convention applied over the New York
Convention under 9 U.S.C. Sect. 305, which provides that if both Conventions could apply and a majority
of the parties to the arbitration agreement are citizens of states that have ratified the Panama
Convention and are members of the OAS, then the Panama Convention applies. Plaintiffs were U.S.
companies and defendant, a direct insurer which reinsured the risk involved, was a Venezuelan
corporation. The court held that since both the U.S. and Venezuela were members of the OAS and had
80
www.osec.doc.gov, International Arbitration (last visited Feb. 20, 2009) at 12.
81
Am.Jur.POF3d, supra at 10.
82
Am.Jur.POF 3d, supra, at 9.
22

ratified the Panama Convention, but only the U.S. was a member of the New York Convention, the
Panama convention applied.83
In general, U.S. courts have held that the Panama Convention takes precedence over the New
York Convention when a majority of the parties to the arbitration agreement are citizens of states that
have ratified the Panama Convention and are members of the OAS, and that the standard for
enforceability of arbitration agreements is the same for both the Panama and New York Conventions.84
C. Application of Latin American National Law in the Context of Arbitration Disputes
Despite the fact that a certain harmonization has been achieved through adoption of the
UNCITRAL Rules, the question of the law applicable to the arbitration agreement has not lost its
importance.85
A practitioner still must determine which law will apply among multiple possibilities. For
example, where national laws differ as to formal and substantive requirements for the validity of the
arbitration agreement, it may be a question of national applicable law whether or not a dispute is within
the scope of the arbitration agreement and can and must be referred to arbitration.86
Such a
determination will be made under the national law governing the dispute. In Mexico, for example,
treaties have priority over ordinary laws of the Mexican Republic and deference will be given first to an
international treaty such as the New York Convention. In other countries where deference is given to
national law, the determination will be made under the nation’s applicable civil code and constitution.87
In an arbitration context, a Latin American country’s law may apply if a party to an agreement
seeks interim relief from a Latin American court to enforce a dispute resolution clause either because an
arbitral tribunal has not enforced the clause or a claim has been filed with a court when the pre-dispute
resolution mechanisms have not taken place. For example, in such a situation in Mexico the courts
would look to Mexico’s Commercial Code which governs commercial matters, including commercial
litigation and arbitration.88
Since many dispute resolution clauses used in Latin America are “multi-
tiered” — meaning that they provide for distinct stages and involve separate procedures for dealing
with and seeking to resolve disputes 89
— it is particularly important for a practitioner to understand
that particular Latin American country’s law which may be utilized to determine the enforceability or
83
R. Doak Bishop, supra, at 11-24.
84
R. Doak Bishop, supra, at 11-27.
85
Lew et al., supra, at 108.
86
87
Baker & McKenzie, supra.
88
Andrew P. Tuck, supra, at 6-7.
89
Eduardo Palmer and Eliana Lopez, The Use of Multi-tiered Dispute Resolution Clauses in Latin America:
Questions of Enforceability, American Review of International Arbitration, 2003 at 1.
23

validity of a dispute resolution clause or agreement.90
As in the case of Mexico, a country may defer first to international conventions in determining
the validity of an arbitration agreement. If a country first defers to an international convention, the
applicable law will depend on rules contained in the convention. Many Latin American countries will
thus look first to the New York Convention or the Panama Convention to ascertain whether the dispute
is arbitrable. However, the New York Convention does not clearly define the scope of the arbitration. 91
The courts have taken two different approaches to determine the scope of the New York
Convention in relation to arbitration agreements: first, Article II of the New York Convention applies
only to arbitration agreements where the arbitration is to be in a different “foreign” state or involves
“foreign” parties, i.e., agreements providing for arbitration in the state itself or in a non-contracting
state are not covered. Second, any international element is sufficient to bring an arbitration agreement
within the ambit of the New York Convention, i.e., a situation where the parties have their principal
places of business in different countries or the place of arbitration is set in a third country.92
Thus, the validity and existence of an arbitration agreement may be subject to the following
issues, any or all of which may be distinctly and determinatively decided by local courts under the
applicable national law:
1. Various and closely related factors which affect the existence and validity of the
arbitration agreement may be subject to different laws;
2. The issue of the existence of a valid arbitration agreement may arise in different
stages of the proceedings; or
3. The scope and applicability of some of the relevant provisions, in particular
those of the New York Convention, may not be clear, aggravating the complex interplay
between the international conventions and international laws.93
(see discussion, supra at III.A.1
regarding interpretation of key provisions such as “commercial” to determine the arbitrability of
a dispute).
In terms of enforcement of an award, it is imperative to understand whether any national laws
will be an impediment to enforcement. A court may find that the subject of the dispute cannot be
settled under the law of the recognizing state or that recognition of the award would be contrary to
public policy. The public policy exception is by far the most potent tool available to a domestic court for
90
Eduardo Palmer and Eliana Lopez, supra, at 5.
91
See the study prepared by the UNCITRAL Secretariat for the drafting of the Model Law, Secretariat Study on the
New York Convention, A/CN9/168 (20 April 2979), paragraph 16 et seq., reproduced in Holtzmann & Neuhaus,
Model Law, 307 et seq.
92
93
24

non-enforcement of, or to vacate, an arbitral award. Under the public policy exception a court may
refuse to enforce an arbitral award, for example, on issues involving public law or a state-owned
company which might be viewed as a public policy matter. Despite the progress that has been made,
there are still judges hostile toward arbitration. Parties need to be aware that the public policy
exception potentially provides them considerable latitude to foil enforcement of an award and reclaim
jurisdiction over the matter.94
For all these reasons, it is evident that national law may be determinative on the validity,
defined scope and/or enforceability of the arbitration agreement. Before choosing a forum, a
practitioner must consider the historic treatment of arbitration by local courts in light of the country’s
national law in order to be fully informed of issues necessary to draft a thorough and thoughtful drafted
arbitration agreement.
IV. FUNDAMENTAL CONSIDERATIONS:
DRAFTING INTERNATIONAL ARBITRATION AGREEMENTS
As noted, it is essential that an attorney fully understand all potential landmines in the arbitration
landscape before proceeding into uncharted territory. The following is a beginning point for drafting a
contract containing an arbitration provision involving a Latin American client or other party.
A. Assess the Client’s Risk Ahead of Time to Avoid Including Inappropriate Language
One of the most important factors to be considered by foreign investors is the degree of legal
risk present in the targeted country. Lenders and equity investors are especially interested in the
governing laws relating to the various agreements that form the basis of the anticipated project,
including financing documents, environmental regulations and governmental approvals. Domestic and
regulatory requirements will shape the terms and conditions of such agreements, thereby shaping the
performance and viability of the project.95
Particularly important is the anticipated degree of legal risk to an investor, as any change in
regulatory laws will directly affect the viability of the project. Thus, lenders and equity investors will
generally seek to have the government agree to limit its own regulatory powers with regard to the
project, submit to arbitration to resolve disputes, and guarantee the obligations of publicly-owned
companies. This risk is particularly thorny for outside investors, because the investor necessarily is
dealing with the government and its various ministries, regulatory bodies and municipalities as the
counter-party, as opposed to the private contracting process in which two parties freely negotiate with
the government acting as a neutral referee.96
94
Jeanne M. Cook, International Arbitration in the Latin American Context – A Comparative Look at Arbitration in
Mexico and the United States, Vindobona Journal of International Commercial Law & Arbitration, 1999, at 10.
95
Frank C. Shaw, Reconciling Two Legal Cultures in Privatizations and Large-Scale Capital Projects in Latin America,
Law and Policy in International Business (Winter 1999) at 2.
96
Id. at 3.
25

Thus it is crucial that a practitioner understand the national law and policy with regard to any
country in which an arbitration may be sited – either by forum selection or default. A properly drafted
arbitration provision which considers these matters may enhance enforceability.
The foregoing discussion demonstrates some crucial considerations in drafting, selecting and/or
deciding to execute an arbitration provision, if the intent is that it be enforceable if ever needed, and
presents potential additional issues for consideration by the attorney involved in an international
transaction. The attorney should use these questions as a jumping-off point to converse with
knowledgeable co-counsel who are native to the country which is or may be situs of an arbitration.
B. Fundamental Elements to Include in a Latin American Arbitration Provision
The following fundamental elements should be considered for inclusion in any arbitration
agreement:
1. Identify and Select the Optimal Place of Arbitration: This considers the signatory
countries’ status vis-à-vis the New York or Panama Conventions. The jurisdiction ultimately selected will
have direct impact on the parties’ rights of appeal and review (or not) of an arbitration award.
Frustration of these rights can negate any advantage of international arbitration, which is predictability
and neutrality as to forum.97
2. Scope of Arbitration: Confirm that the subject matter of your client’s arbitration
agreement is a permissible arbitrable matter under the laws of the countries of the signatories to the
agreement and/or under the choice-of-law provision in the contract. For example, under Chilean law,
certain matters fall under national law and thus are non-arbitrable. 98
3. Choice of Location: A forum country should be selected that is a signatory to either the
New York Convention or the Panama Convention. The location determines the extent of potential
assistance, or even interference, by national courts during an arbitral proceeding and may affect
enforcement of the award. Practical features such as facilities, communications and transportation
systems, freedom of movement of persons, documents and currency, and support services should be
considered. The choice of location in the arbitration agreement should include the name of both city
and country.99
There are mitigation measures which can be taken to address uncertainties regarding
settlement of disputes concerning investments in Latin America. Foreign investors often have sought
the certainty of alternative forums and mechanisms for settling investment potential disputes, and
many will first seek to resolve disputes by using forums and laws of their home or neutral jurisdictions
97
The Finality Question: Appellate Rights and Review of Arbitral Awards in the America, Law and Business Review
of the Americas, Summer 2008 at 1.
98
99
www.osec.doc.gov (last visited 4/20/09), International Arbitration, at 6.
26

such as New York or England. However, obtaining the consent of the Latin American sovereign in some
situations may be difficult. For example, some Latin American countries, particularly Panama and
Colombia, restrict this possibility for government contracts or contracts with government-owned
entities. In those instances, it is safest for investors to choose ADR in Latin America.100
Other issues that investors must consider when determining the location of potential arbitration
proceedings include: the desired arbitrators may find it burdensome to travel long distances, arbitrators
may be concerned about rendering an adverse judgment against the government of another country if
the arbitration is venued outside the country of investment, and finally even alternative dispute
resolution under the auspices of an applicable convention may still be set aside by local courts.101
4. Choice of Language: Parties may designate one language as the official language of the
proceedings and allow simultaneous interpretation into another language.102
5. Ad hoc v. Institutional Arbitration: Institutional arbitrations (such as ICC arbitrations)
often are more expensive than UNCITRAL arbitrations, which are ad hoc. The downside to ad hoc
arbitration is that it is not closely administered (i.e., controlled) by an organization such as the ICC, so it
is often less predictable. This can be a major disadvantage if the situs of the arbitration is in a foreign
country. However, if the arbitration is located in the United States or London, then the control issue
may not be such a concern for an American company. As to costs, the costs of the arbitration under
UNCITRAL Rules are to be borne by the unsuccessful party but are subject to the tribunal’s discretion.
Under ICC rules, the parties’ costs are at the discretion of the arbitral tribunal unless agreed otherwise
by the parties.103
6. Choice of Rules: Parties should specify the rules of procedure which will govern the
arbitration process.104
Whether an ad hoc arbitration is selected versus an institutional arbitration may
be determinative. Consideration should be given to the rules set forth in the applicable convention(s)
and national and local laws relating to: site selection, assessment of costs, selection of arbitrators,
powers given to the arbitrator, language in which the proceeding will be conducted, substantive law to
be applied, use of experts, time allowed to arbitrators to make awards, power of any administering
authority over the awards, availability of provisional relief, and flexibility to allow parties to opt out of
certain provisions.105
100
101
Frank C. Shaw, Reconciling Two Legal Cultures in Privatizations and Large-Scale Capital Projects in Latin
America, Law and Policy in International Business (Winter 1999) at 6-7.
102
103
A Comparison Between the ICC Arbitration Rules and the UNCITRAL Arbitration Rules (www.alway-
associates.co.uk/legal-update (last visited 4/20/09) at 4-5.
104
105
www.osec.doc.gov (last visited 4/20/09), International Arbitration, at 6-7.
27

The procedure to be followed is often covered by reference to the rules of a specified arbitral
institution such as the ICC, the American Arbitration Association, the London Court of Arbitration (with a
Barbados office for Latin America), or the Inter-American Commercial Arbitration Association.
7. Interim Relief: This important component may affect the applicability and enforcement
of the arbitration agreement, as explained above in Section III C, supra. Some arbitration rules
specifically address matters of interim relief, e.g., whether the parties may apply to a court for a
preliminary injunction, an order of attachment or other order preserving the status quo until the
arbitrator(s) decide the case.
Consider that the parties may want the right to get immediate interim relief from a foreign
court, such as when a U.S. company providing intellectual property to a foreign company is afraid that
company might illegally transfer or sell the intellectual property. If that occurred, an arbitration clause
would ordinarily prevent the U.S. company from seeking interim relief unless an exception in the
arbitration agreement provided for it.106
The rules of most arbitration institutions provide that resorting to a court in such circumstances
is not incompatible with, or a waiver of, the right to arbitrate under their rules. Moreover, most rules
allow the arbitrators to order relief.107
For example, unless otherwise agreed the parties under the ICC
Rules state that the arbitral tribunal can “order any interim or conservatory measure” that it deems
appropriate, while under the UNCITRAL Rules the tribunal is restricted to taking interim measures “in
respect of the subject matter in dispute”.
8. Discovery Provisions: Typical common law notions of discovery are contrary to civil law
notions of legal propriety and in most cases would be contrary to public policy (for example in Mexico).
Thus, it should be recognized that an arbitration taking place in Latin America or with arbitrators of
more of a civil law bent than that of the common law tradition may be adverse to what a U.S. attorney
contemplates as occurring in an arbitration setting. Thus, an attorney should draft an arbitration
agreement with this in mind and either specify for the allowance of such procedures or incorporate
rules which allow for such procedures.
9. Scope of Arbitration: The parties should explicitly state the matters which they want
the arbitration agreement to cover. However, they should be aware that local law may restrict issues
that may be subject to arbitration108
, and should confer with local counsel in this regard.
10. Choice of Arbitrators: Their selection process (or the statutes or rules which may fill any
gaps), and an arbitrator’s requisite special skills should be clearly defined.109
106
TX (April 28, 2009).
107
Id. at 7.
108
Id. at 5.
109
Id. at 6.
28

11. Choice of Law: The parties should designate the substantive law which will be applied in
the arbitration, including the procedural law. If they do not, the procedural law of the place where the
arbitration occurs will apply.110
Furthermore, a choice-of-law clause should expressly include time
limitations or the parties should agree to time limits to bring suit or arbitration. While most U.S.
jurisdictions regard time limitations for instituting suit or arbitration as procedural and therefore not
covered by a choice-of-law clause, civil jurisdictions do not and it is important to include the time
limitations in the agreement itself.111
12. Fees and Costs: The arbitration agreement should provide for allocation of fees and
costs.112
13. Award of Tribunal: The agreement should specify that a majority of the arbitrator panel
members must agree on an award and that it must be based on applicable law. The parties should also
specify items such as currency for payment of the award, and that the reasons and legal basis for the
award be referenced if it is to be enforced internationally (including reference to the process by which
the legal basis was selected).113
14. When Contracting with a Sovereign: Finally, when entering into a contract with a
sovereign (a likely situation for investors in Latin American countries) two items should be included in
any ADR clause: (1) waiver of the sovereign’s immunity from both the jurisdiction of the ADR mechanism
and the enforcement of the ADR award, and (2) the sovereign’s agreement that it will neither challenge
any potential ADR award nor encourage or support a third-party challenge to the ADR award.114
While
these provisions are obviously not fool-proof — as can be seen in Republic of Ecuador v. ChevronTexaco
Corporation (NY Dist. Ct. 2007), supra where a coup d’etat imported an old constitution containing a
Calvo Clause after the original JOA was executed — the Calvo Doctrine can unexpectedly become an
issue in a proceeding. Especially in economic times such as at present, where protectionist tendencies
increase, it is important to guard against its application to any extent possible.
C. Fundamental Considerations to Discuss with Local Counsel
Additionally, the following considerations are important in contemplating a thought-through
arbitration agreement which will have the highest chance of enforceability:
1. Consult with Local Counsel: Given the varied approaches to ADR throughout Latin
America, it is important for foreign investors to tailor ADR clauses in their contracts to avoid judicial
110
Id. at 6.
111
Weintraub, supra at 102.
112
Id. at 7.
113
Id. at 7.
114
29

interference and ensure enforceability. Investors must choose among ADR mechanisms approved by
the host country. This means an attorney must be aware of which conventions the host country is a
signatory to, what challenges have been previously made to the enforceability of these conventions in
an ADR context, and the outcome of any challenges thereto.115
For these reasons, it is imperative that
local counsel be consulted with regard to the ultimate language of the arbitration provision, despite the
fact that one is fairly confident of the language which may have been provided by an international
arbitration association.
According to Martin Lutz, Senior International Business Attorney at DuBois, Bryant & Campbell
LLP in Austin, Texas, it is not advisable to have local counsel draft the arbitration provision; instead, just
use him or her to advise of local issues. Mr. Lutz has seen some very problematic arbitration
agreements and believes that no one will know the client’s goals and needs like its own counsel, thus its
own counsel should be the one drafting the agreement.
Local counsel, however, would be very helpful in reviewing the contract to help define what
could potentially be considered a violation of public policy, which is an exception to enforceability under
both the New York and Panama Conventions. For example, arbitrability of an anti-competitive clause is
considered under many countries’ laws to be a public policy issue and hence not arbitrable, and local
courts would not enforce an arbitration award relating to an anti-competition clause.116
2. Know the Judiciary: Latin American judiciaries are subject to flux and change, and are
notoriously slow; cases can easily exceed two years in the event an arbitration agreement or award is
set aside. Moreover, a study has found that between 73% and 79% of Latin Americans distrust their
domestic judicial systems, including distrust that their judicial resolves and enforces decisions
neutrally.117
In addition to the above factors, it is imperative that an attorney understand the courts’
“historical” tendencies. Are members protectionist, or not? What are the judges’ history on
enforcement of Calvo Clauses? Is the Calvo Doctrine incorporated into the country’s code or
constitution? Have the relevant judge(s) done or said anything which would lead local counsel to
understand they favor the Calvo Doctrine or any other potentially limiting doctrine relevant to
enforcement of the arbitration contract?
3. Know the Applicable Country’s Contract Law: A practitioner’s knowledge of the validity
of an arbitration agreement may be instrumental to a well-drafted arbitration agreement, which in turn
may depend upon the applicable national law of contract. For example, under Colombian law, an
arbitration agreement may be included in the main contract or can be appended to it as a separate
contract. The validity of the agreement and its enforceability depend upon elements of contract law
115
116
Texas (April 28, 2009).
117
30

(capacity of the parties, mutual consent, consideration, and the legal purpose and good-faith
requirements). If a practitioner is doing business in Colombia, in this example, his client may have to
demonstrate that these elements are met for the Colombian court to recognize the validity of the
arbitration agreement.
4. Choose a Country that Has Ratified both the New York and Panama Conventions:
Recognize that, although the New York Convention is increasingly the convention of choice among Latin
American courts when enforcing arbitration agreements, some countries still prefer the Panama
Convention. Moreover, in the current economic crisis regionalism may at least temporarily surge,
meaning that a preference may increase for the Panama Convention given that it is a regional
convention among Latin American states. Thus, a practitioner may determine it to be in the best
interests of his or her client to select arbitration pursuant to the rules of the Panama Convention, or at
least consider it as an alternative procedure.
The ideal situation, however, is to choose a member country that has ratified both the New York
and Panama Conventions. This will make it harder to challenge enforcement of an arbitration award, as
the attorney makes the argument that the member-country needs to recognize its international
obligation under either convention. When a country has ratified both conventions, it precludes the
argument that the country’s unique issues should be prioritized over its obligation to work out its
constitutional issues in the context of its international commitments.
5. Know the Economic Fundamentals for Investor-clients: Investors need always pay
attention to economic fundamentals of the transaction, and avoid deal structures that invite future legal
conflict. One author notes that a sure-fire way to create a legal conflict is to structure revenue streams
into a contract with fixed prices significantly out of alignment with actual market fluctuations. A
contract that is too far above or below market prices invites renegotiation, which is problematic enough
when only private parties are concerned, much less with governmental entities as usually are present in
a Latin American venture. A contract that tracks market prices, at least in part, is much less likely to
create such problems.
6. Work with Local Business Partners: Investor-clients should work with strong local
business partners, including experienced domestic legal counsel. While the temptation is great to just
rely on the national partner involved in the transaction, that party is not objective and may not have the
necessary connections with political and legal authorities in the region where the project is to be
developed.
V. CONCLUSION
International investment and business may always be a risky proposition, but it will be less so if
the attorneys involved in the deal strategize, ahead of time, the best way to resolve disputes should
they arise. In some instances, arbitration is not the answer. But when it is, the information in this paper
will help the U.S. lawyer avoid potential pitfalls and address concerns when his or her client is doing
31

business in Latin America or with a Latin American entity. As can be seen from a brief look at cases
involving the Calvo Doctrine, Writ of Amparo, and Recurso de Quejo, there are numerous legal doctrines
unique to Latin America which are relevant and which may affect the validity or enforceability of an
arbitration agreement. Hopefully, the attorney and his client will have made a thorough and thoughtful
analysis regarding the business proposition at hand, including issues unique to Latin American which
may affect eventual arbitration of any dispute. Once the decision is made and business is proceeding
forward, care should be taken to analyze all factors which may potentially arise relating to the
recognition of the arbitrability of a dispute and its ultimate enforcement, as set forth in this paper.
32

ADDENDUM A
SAMPLE ARBITRATION PROVISIONS
The following are basic arbitration clauses which have been published as model clauses for
various arbitration associations:
1. Model Contract Clauses for WIPO (World Intellectual Property Organization) using UNCITRAL
Rules (as Appointing Authority and Administrator):118
“Any dispute, controversy or claim arising out of or relating to this contract, or the
breach, termination or invalidity thereof, shall be settled by arbitration in accordance
with the UNCITRAL Arbitration Rules as at present in force.
The WIPO Arbitration Center shall act as appointing authority and provide
administrative services in accordance with its administrative procedures for cases under
the UNCITRAL Arbitration Rules.
NOTE: Parties may wish to consider adding:
(a) The number of arbitrators shall be [one or three]
(b) The place of arbitration shall be [town or country]
(c) The language(s) to be used in the arbitral proceedings shall be [language of choice]”
2. International Centre for Dispute Resolution (AAA):
The following is an ICDR model “short form” arbitration clause. By incorporating the short form
clause, parties’ agreements include the following critical aspects of the arbitral process (notice, for of
claim, interim and/or emergency relief, appointment of arbitral tribunal, arbitrators’ conflicts of interest,
scheduling, place of arbitration, jurisdiction–powers of the tribunal, conduct of the arbitration including
taking of evidence, proceedings in the absence of a party’s participation, costs, form and effect of the
Award)119
:
“Any controversy or claim arising out of or relating to this contract, or the breach
thereof, shall be determined by arbitration administered by the International Centre for
Dispute Resolution in accordance with its International Arbitration Rules.”
118
World Intellectual Property Organization, WIPO Arbitration Center, WIPO Services Under the UNCITRAL
Arbitration Rules (Geneva 1995) at 17.
119
International Centre for Dispute Resolution, Arbitration, Mediation and other ADR, at 1-2.
33

The parties should consider adding:
(a) the number of arbitrators shall be (one or three);
(b) the place of arbitration shall be (city of country);
(c) the language(s) of the arbitration shall be ___”
3. NAFTA Advisory Committee on Private Commercial Disputes:120
“(a) Any dispute, controversy or claim arising out of, relating to, or in connection with, this
contract, or the breach, termination or validity thereof, shall be finally settled by arbitration. The
arbitration shall be conducted in accordance with [identify rules] in effect at the time of the arbitration
except as they may be modified herein or by mutual agreement of the parties. The seat of the
arbitration shall be [city, country], and it shall be conducted in the [specify] language. The arbitration
shall be conducted by [one or three] arbitrators, who shall be selected in accordance with [the rules
selected above].
(b) The arbitral award shall be in writing and shall be final and binding on the parties. The award
may include an award of costs, including reasonable attorney’s fees and disbursements. Judgment upon
the award may be entered by any court having jurisdiction thereof or having jurisdiction over the parties
or their assets.”
120
www.osec.doc.gov, International Arbitration, supra, at 5.
34

ADDENDUM B
ARBITRATION RULES
International Arbitration Rules:
American Arbitration Association (AAA) International Centre for Dispute Resolution Arbitration Rules
(www.adr.org)
United Nations Center for International Trade Law (UNCITRAL) Model Rules (www.uncitral.org)
International Center for the Settlement of Investment Disputes (ICSID): Rules of Arbitration and
Conciliation (www.icsid.worldbank.org)
London Court of International Arbitration (LCIA) Rules (www.arbitration-icca.org)
International Chamber of Commerce (ICC) Rules (www.iccwbo.org)
International Bar Association (IBA) Rules on Taking of Evidence in International Commercial Arbitration
(www.ibanet.org)
Legal Data Base Resources:
LEXIS: Mealey’s International Arbitration Report, International Arbitration and Dispute Resolution
Directory
WESTLAW: World Arbitration and Mediation Report, Dispute Resolution Journal, American Review of
International Arbitration
35

ADDENDUM C
EXAMPLES OF DISPUTE RESOLUTION BODIES UTILIZED BY LATIN AMERICAN LITIGANTS
A. Intellectual Property Uniform Dispute Resolution Policy (“ICANN”)
Arbitration is particularly effective for international commercial disputes because foreign court
litigation is expensive, a foreign court judgment may be difficult or impossible to enforce, and because
the court may be partial to the home party.121
The World Intellectual Property Organization (“WIPO”)
Arbitration and Mediation Center is particularly appropriate for technological, entertainment and
intellectual property disputes.122
Many Latin American legal practitioners in the Intellectual Property
and New Technologies fields have finally realized the benefits of arbitration procedures to recover the
property of domain names. Within seven years of operation, the case load of WIPO’s Arbitration and
Medication Center has exceeded 25,000.123
WIPO’s Arbitration and Mediation Center’s mediation and arbitration are appropriate for all
commercial disputes. They contain confidentiality, technical and experimental evidence provisions that
are particularly relevant to intellectual property disputes. 124
WIPO promotes itself as having arbitral
procedure and nationality of an arbitrator which is neutral to the law, language and institutional culture
of all parties.125
It promotes itself as an impartial institution which will act as appointed authority in
cases involving intellectual property that are conducted under UNCITRAL Arbitration Rules.126
B. The International Centre for the Settlement of Investment Disputes (“ICSID”)
The International Centre for the Settlement of Investment Disputes specializes in investment
disputes (www.icsid.worldbank.org). Created in 1966 to facilitate the settlement of investment
disputes between member governments and foreign members who are nationals of other member
121
Features – A Selective Guide to Online International Arbitration Procedures, www.llrx.com (last visited March
19, 2009) at 1.
122
Features – A Selective Guide to Online International Arbitration Procedures, www.llrx.com (last visited March
19, 2009) at 2.
123
Leopoldo Graterol, Internet Law – CCTLD of Venezuela (.COM.VE): more WIPO Arbitration on the Run, March 6,
2007 (www.ibls.com, p. 1.
124
World Intellectual Property Organization, WIPO ADR Procedures, www.wipo.int (last visited March 19, 2009), p.
1.
125
World Intellectual Property Organization, Why Arbitration in Intellectual Property?, www.wipo.int (last visited
March 19, 2009), p. 1.
126
WIPO Arbitration Center, WIPO Services Under the UNCITRAL Arbitration Rules (Geneva 1995), p6.
36

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