Free Trade Area of the Americas - FTAA


Trade Negotiations

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1. International Agreements

Is the jurisdiction a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958 (New York Convention). If so, are there any reservations? Name the domestic law that implements these commitments.

Costa Rica is a Party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention). Said Convention was ratified by Law No. 6157 of November 15, 1977. Costa Rica did not incorporate any reservations.

b. Is the jurisdiction a party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, done at Washington on 18 March 1965 (ICSID Convention)? Is there a domestic implementing law? Is the jurisdiction a party to any bilateral investment treaties providing for settlement of investment disputes between a state and a national of another state?

Costa Rica is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of other States, by which ICSID was established. This Convention was ratified by Law No. 7332 of March 30, 1993.

Costa Rica also has current bilateral treaties on the promotion and reciprocal protection of investments with the following countries: Germany (Law No. 7695 of November 5, 1997); Canada (Law No. 7870 of May 25, 1999); Chile (Law No. 7748 of March 23, 1998); Spain (Law No. 7869 of April 13, 1999); France (Law No. 7691 of November 4, 1997); the United Kingdom (Law No. 7715 of October 31, 1997); Switzerland (Law No. 3725 of August 12, 1966); Chinese Taipei (Law No. 7994 of February 21, 2000). A new agreement is also in the process of approval with Switzerland, as well as agreements with the following countries: Argentina (Draft Law No. 13119 of June 11, 1998); the Netherlands (Draft Law No. 13713 of September 29, 1999); Paraguay (Draft Law No. 13138 of June 17, 1998); the Czech Republic (Draft Law No. 13503 of March 23, 1999); the Republic of Korea (Draft Law No. 14238); and Venezuela (Draft Law No. 3004 of November 10, 1997).

c. Is the jurisdiction a party to the Inter-American Convention on International Commercial Arbitration, signed in Panama on 30 January 1975 (Panama Convention)? Is there a domestic implementing law?

Costa Rica is a Party to the Inter-American Convention on Commercial Arbitration. This Convention was ratified by Law No. 6165 of January 30, 1977.

The Conciliation and Arbitration Center of the Chamber of Commerce of Costa Rica is the National Section of the Inter-American Commercial Arbitration Commission (ICAC).

d. Is the jurisdiction a party to any other international agreement related to international commercial arbitration?

No. Costa Rica is not a Party to other international conventions on international commercial arbitration.

2. Arbitration

a. What is the source of law for international commercial arbitration within your jurisdiction? Please cite.

The source of law for international commercial arbitration would be comprised of the New York Convention, the Inter-American Convention on Commercial Arbitration, to which Costa Rica is a Party, as well as the corresponding provisions of domestic legislation established in the Law on Alternate Conflict Resolution and the Promotion of Social Peace (hereinafter, Law No. 7727).

b. Does the law contain different rules for domestic and international arbitration?

There are no significant differences between the law that regulates domestic and international arbitration.

c. Are there limitations on the types of disputes that may be arbitrated?

Law No. 7727 establishes that only economic disputes can be submitted to arbitration. Disputes may be present or future, pending or not before courts. They should be based on fully actionable rights of the parties and the subject matter capable of being excluded from the jurisdiction of ordinary courts.

d. Does the law specify rules for arbitration or do the parties have autonomy to set their rules?

The parties are fully free to establish the rules of procedure governing the arbitration process and to submit to the provisions contained in the rules of institutions dedicated to administering arbitral proceedings. Law 7727 only governs if the parties have not agreed to specific rules of procedures.

e. What is the role of the courts during an arbitration? May courts intervene prior to or during the arbitration process?

Courts may intervene in the arbitration process in the following conditions:

1. Handing down interim relief before or during the process, without this constituting a renouncing of the arbitration process (see Article 52 of Law No. 7727).

2. Jurisdiction of the Tribunal: in Costa Rica, the arbitral tribunal has exclusive jurisdiction to decide on objections relating to its own jurisdiction and on objections with respect to the existence or validity of the arbitral agreement (see Article 37 of Law No. 7727.

There is recourse to setting aside the decision of the arbitral tribunal. Moreover, the dissenting party may file directly before the arbitral tribunal within three days of the notification and on reasoned grounds, an appeal that must be decided by the First Chamber of the Supreme Court of Justice, see Article 38 of Law 7727.

Moreover, the Secretary General of the Supreme Court of Justice, the Bar Association and institutions dedicated to administering arbitration, may name arbitrators at the request of parties (See Articles 26, 27, 29 of Law No. 7727).

Finally, it should be highlighted that there exists an express prohibition in Article 25 of Law No. 7727 in the sense that jurisdictional bodies may not serve as de jure or ex aequo et bono arbitrators.

f. Can the courts grant interim relief pending the outcome of an arbitration?

At any stage of the proceedings, the competent judicial authorities may grant interim relief at the request of the parties or the arbitral tribunal. Interim relief will not be considered incompatible with the arbitral process, nor a renouncing or revoking of the arbitration agreement.

g. Does the law require citizenship or a particular bar membership for participation in an arbitral proceeding, as arbiter or representative of a party?

Pursuant to Article 19 of Law No. 7727, arbitration may be decided based on law or on equity.

An arbitrator may be any physical person who can fully exercise his/her civil rights and who does not have any ties whatsoever to the parties or their legal representatives and attorneys. In cases of arbitration based on law, arbitrators shall always be attorneys and they must be members of the Bar Association for at least five years. In cases of arbitration based on equity, any person may be a member of the tribunal without any requirements as to occupation or profession, with the exception of those established by the parties for this purpose.

With regard to representation or counsel of the parties, Law No. 7727 does not establish any restrictions related to the nationality of the attorneys or representatives.

h. Does the law require that the proceedings be conducted in a particular language?

Arbitration shall be conducted in Spanish. Any writing or documentary evidence submitted in any other language during the proceedings shall be accompanied by a translation.

i. Does the law have mandatory choice of law provisions?

No. There are no mandatory choice of law provisions for arbitration.

j. Does the arbitration law prescribe rules for decision making by the arbiters and the form of an award?

Costa Rican arbitration law does not prescribe any substantive rules for resolving the merits of the dispute. Article 22 of Law No. 7727 states:

Article 22.- Application of the Law

The arbitral tribunal shall apply the substantive law that the parties have chosen. If the parties have not done so, the arbitral tribunal shall apply Costa Rican law, including conflict of law rules.

In all cases, the arbitral tribunal shall decide in accordance with the stipulations of arbitration agreement y and shall into account, moreover, usage and custom applicable to the case, even on written rules, if appropriate.

Law No. 7727 stipulates that the parties may establish the terms and conditions that shall govern the arbitration among themselves if they so stated expressly. If no specific rules are established, it shall be understood that the parties shall submit themselves to the rules established by the arbitral tribunal, subject to the law mentioned above. The provisions have more to do with procedural than substantive law.

k. Is the confidentiality of arbitral proceedings and awards protected by law?

The proceedings are protected during the arbitration. Nevertheless, it is possible to make public the proceedings if they are presented before a court. An example would be an action filed to nullify an arbitral award. The First Chamber of the Supreme Court of Justice would settle that matter. Article 60 of Law No. 7727 stipulates that once signed, the award shall be public unless the parties decide otherwise.

l. On what grounds will the courts set aside or decline to enforce an award?

The provisions of Article V of the New York Convention and Article 5 of the Inter-American Convention on International Commercial Arbitration would apply in cases that involve the recognition and enforcement of foreign arbitral awards.

m. What is the procedure for the enforcement of an award?

The arbitral award is binding and unappealable. Law No. 7727 stipulates that the award shall be final, binding for the parties and unappealable. The special remedies of nullity and review can be filed solely for specific grounds established by law. Once the award becomes final, the respective judicial authority would be responsible for enforcing it, in accordance with the provisions of Article 12 of the Code of Civil Procedure.

n. Please list any institutions available within your jurisdiction that provide international commercial arbitration services. Provide internet address where available.

The Conciliation and Arbitration Center of the Chamber of Commerce of Costa Rica and the Costa Rican-American Chamber of Commerce (AMCHAM) are the only entities authorized by the Ministry of Justice to intervene in international commercial arbitration.

  • Conciliation and Arbitration Center of the Chamber of Commerce of Costa Rica: <>


3. Alternate forms of Dispute Resolution

a. Are other forms of alternative dispute resolution (mediation, conciliation) available for the resolution of commercial disputes within your jurisdiction?

Law No. 7727 regulates other alternative mechanisms for the resolution of commercial disputes, such as mediation and conciliation.

b. Does the law or do the courts mandate or encourage the use of ADR in commercial disputes? Are there any legal impediments to using ADR for the resolution of commercial disputes?

Alternate dispute settlement mechanisms are optional in Costa Rica law. Law No. 7727 encourages the use of these alternate mechanisms by recognizing the right of all persons to recourse to said mechanisms. The courts are also authorized to promote conciliation or mediation hearings at any stage of the judicial process.

Moreover, Law No. 7727 limits the use of alternate dispute resolution mechanisms to disputes concerning disposable assets.

c. Can courts enforce agreements to mediate or use other forms of non-binding dispute resolution in commercial disputes?

No, alternative dispute resolution mechanisms are voluntary in Costa Rica law.

However, if an arbitration agreement exists, through filing under the exception for the arbitration agreement, courts must refer the parties to resolve their disputes via arbitration. They cannot do the same with conciliation, but yes with arbitration.

Pursuant to Article 9 of Law No. 7727, conciliation/mediation agreements (recognized under Costa Rican Law, see Article 4) shall have the force of res judicata and be enforced immediately.

Are there any organizations that specialize in ADR for commercial disputes not already mentioned?

  • The Conciliation and Arbitration Center of the Chamber of Commerce of Costa Rica

  • the Costa Rican-American Chamber of Commerce (AMCHAM)

  • the Federated Association of Engineers and Architects

  • the Ministry of Labor

  • the Mediation and Conflict Management Center, teaching and research

  • the inns of the Latin University, ULACIT, municipality of Puntarenas, Santa Cruz, Pérez Zeledón and municipality of Mora.

  • Conciliation and Arbitration Center for the National Registry of Copyright and Related Rights

e. What rules govern confidentiality and admissibility of evidence in other proceedings?

As established by Article 13 of Law No. 7727, the duties of conciliators and mediators include the duty to maintain the confidentiality of the documents and actions of the parties in the mediation or conciliation proceedings and on the compensatory acts in compliance with the conciliation agreement. Article 14 of said Law also establishes the absolutely confidential nature of the content of the preparatory activities, conversations and partial agreements of the conciliation agreement. Costa Rican law also establishes that the mediator or conciliator may not reveal the content of the discussions or the partial agreements of the parties and that, in this sense, it is understood that the mediator or conciliator shall guard trade secrets. The law also stipulates that the parties may not relieve the mediator or conciliator of this duty, and that testimony or admission by the parties or mediators about what occurred or was expressed in the mediation or conciliation hearings may not be used in evidence.

4. Legal Sources and References

In addition to the references above is there an authoritative Internet site containing up-to-date information on dispute resolution facilities available in this jurisdiction?

No information is available.

5. Bibliography

Please list respected reference works relating to arbitration and ADR in your jurisdiction.

Artava Barrantes, Sergio. El Arbitraje en el Derecho Costarricense. San José, Editorial Sapiencia, 2000, 584 pp.

Artava, Sergio. Nueva ley de arbitraje de Costa Rica. Aciertos y Desaciertos. Revista Ivstitia. No. 151-152, July-Aug. 1999, pp. 22-26.

Baudrit, Diego. Bases teóricas y prácticas para un sistema de resolución alternativa de conflictos de derecho privado en Costa Rica. San José, AID, 1995.

Bolaños Céspedes, Fernando. Arbitraje Comercial en Costa Rica. Revista Judicial, No. 48, December 1989, pp. 71-111.

Costa Rican Bar Association. Justicia Alternativa en Costa Rica. (San José, 1995.

Garita, Victor. Arbitraje: un nuevo horizonte para la búsqueda de un mejor justicia. San José, Costa Rica, AID, 1995.

Gómez Rodas, Carlos. Apuntes sobre arbitraje comercial internacional. Revista de Ciencias Jurídicas, No. 64, Sept-Dec. 1989, pp. 11-20.

Morera Alfaro, Francisco. Costa Rica: del sistema de justicia tradicional a la justicia accesoria. Revista de Ciencias Jurídicas, No. 77, Jan-April, 1994, pp. 9-17.

Paris, Hernando. Resolución Alternativa de Conflictos: diseño y estrategias Revista Ivstitia, No. 100, April 1995, pp. 8-14.

Yglesias Mora, Roberto. Comentarios sobre el RAC. Revista Ivstitia, No. 92, August 1994, pp. 4-6.

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