Free Trade Area of the Americas - FTAA


Trade Negotiations

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1.International Agreements

a. 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.

Guatemala is a party to the New York Convention, which was ratified by Executive Order No. 9 - 84 and Governmental Accord No. 60 - 84.

Guatemala incorporated the following reservations:

1. The State shall only apply the Convention to the recognition and enforcement of awards issued in the territory of the Contracting State.

2. The State shall only apply the Convention to disputes derived from juridical relations, contractual or otherwise, that are deemed to be mercantile relations by domestic law.

The New York Convention governs the enforcement of arbitral awards, while matters of procedure are governed by the General Rules for the Conduct of Arbitration under the Panama Convention of 1975.

The Private International Law Code (the Bustamante Code), signed on 13 February 1928, was approved by the Legislative Assembly of the Republic of Guatemala by Decree No. 1575 on 10 April 1929.

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?

Guatemala is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID), which was signed by Guatemala on 9 November 1995.

The aforementioned Convention was approved by the Congress of the Republic through Decree No. 50-96 of 20 June 1996, and ratified on 3 April 2003.

Several Reciprocal Investment Promotion and Protection Agreements are currently in force in Guatemala. These have been entered into with the following countries:

Argentina, in force since 7 December 2002
Cuba, in force since 10 August 2002
Chile, in force since 13 October 2001
China-Taiwan, in force since 1 December 2001
France, in force since 28 October 2001
Korea, in force since 17 August 2002
Netherlands, in force since 1 September 2002

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?

Guatemala is a party to the aforementioned Convention, which was approved by the Congress of the Republic of Guatemala by Decree No. 35 - 86 of July 1986.

The New York Convention and the Panama Convention have both been incorporated into Guatemalan law by Executive Decree No. 67 - 95, the Arbitration Law, which entered into force eight (8) days after publication in the Official Gazette of 17 November 1995.

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

The Bustamante Code, approved by Law No. 1575 of 10 April 1929, provides for a procedure for the Enforcement of Foreign Arbitral Awards.

Recently, the Council of Ministers for Economic Integration (COMIECO) adopted the Commercial Dispute Settlement Mechanism through Resolution No. 106-2003 of 17 February 2003.

2. Arbitration

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

The source of law for arbitration is the Arbitration Law, Law No. 67 - 95, of the Congress of the Republic of Guatemala.

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

The primary objective of the Arbitration Law, as contained in Law No. 67 - 95 of the Congress of the Republic, is to modernize alternative dispute resolution procedures, bringing them into line with international arbitration procedures and eliminating any significant differences between local and international arbitration. In this regard, our country has entered a new era of alternative dispute resolution.

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

The following may not be submitted to arbitration:

1. Matters on which a binding court ruling has been issued, except issues relating to enforcement.
2. Issues that cannot be severed from other issues which the parties have no power to resolve.
3. Matters expressly prohibited by law or in respect of which special procedures have been prescribed.
4. Labor disputes are also excluded.

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

There are no specific rules governing arbitration; rather, what are referred to as “terms of reference” are used. These are contained in a document drawn up by the arbitral tribunal in collaboration, where practicable, with all parties to the dispute. This document sets forth the nature of the dispute, the respective claims of the parties, and the legal issues to be resolved.

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

National courts may intervene during arbitration proceedings and, where such proceedings are subject to objection or challenge, the courts may intervene before or during arbitration proceedings. The courts, however, may only intervene in matters governed by the Arbitration Law to the extent and in the circumstances provided for by that Law.

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

Any party to a dispute may request that the competent court order protective measures as deemed necessary for the proper protection of the party’s rights.

Any party making such request before a court does not imply a rejection of the arbitration agreement or of arbitration proceedings.

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

The following persons may be appointed as arbitrators:

1. Private persons who, on the date of their acceptance, are in full possession of their civil rights.

2. Unless otherwise agreed by the parties, nationality shall not be an impediment to such appointment.

3. Members of the Judiciary may not be appointed as arbitrators, nor may persons who are connected to the parties or to the dispute.

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

The Arbitration Law embodied in Decree No. 67 - 95 of the Congress of the Republic establishes, for the purposes of international arbitration, that the parties may freely agree on the language or languages in which international proceedings are to be conducted. Failing such agreement, the arbitral tribunal shall determine what language or languages should be used in such proceedings. Unless otherwise specified by the parties, this agreement or determination shall apply to all documents submitted by the parties, all hearings, and any award, decision, or communication of any kind issued by the arbitral tribunal.

The arbitral tribunal may, nevertheless, order that any or all documentary evidence be accompanied by a translation into the language or languages agreed upon by the parties or selected by the tribunal.

i. Does the law contain mandatory provisions for selecting a specific set of rules for arbitration proceedings?

The parties are free to agree on the procedure to be followed by the arbitral tribunal in its deliberations, subject to the principle of equitable treatment, in that all parties must be treated equitably and given ample opportunity to assert their rights in accordance with the basic principles of the right to be heard, the right to speak in one’s own defense, and equality between the parties. In the absence of an agreement between the parties and subject to the equitable treatment thereof, the arbitral tribunal may conduct the proceedings in the manner it deems appropriate. This includes the power to rule on the admissibility, relevance and materiality of evidence.

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

Chapter VI, Article 36, of Decree No. 67-95 of the Congress of the Republic, Law on Arbitration, establishes norms that are applicable to the merits of the case.

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

Domestic law makes no provisions for the confidentiality of arbitration proceedings or awards; however, Article 30 of the Political Constitution of the Republic of Guatemala stipulates that “All administrative actions shall be public. Interested parties may, at any time, request and obtain statements, transcripts, copies and certificates and may request the production of any file that said party may wish to examine, with the exception of military or diplomatic documents relevant to national security, and information provided by persons under guarantee of confidentiality.”

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

Article 47 of the Arbitration Law, Law No. 67 - 95, provides that recognition and enforcement of arbitration awards made in any country may only be refused in the following circumstances:

a) At the request of the party against whom the award is being invoked, where that party proves to the satisfaction of a competent court of the country in which recognition or enforcement is sought:

i) that a party to an arbitration agreement referred to in Article 10 was under some incapacity or said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

ii) that the party against whom the award is being invoked was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings; or

iii) that the award deals with a difference not included in the arbitration agreement or contains decisions on matters that go beyond the terms of the arbitration agreement; provided that, if the decisions on matters submitted to arbitration can be separated from those that were not, part of the award that contains decisions on matters submitted to arbitration may be recognized and enforced;

iv) that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country in which that award was made; or

v) that the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which that award was made, under the law of said country.

b) When the Court finds:

i) that the subject matter of the dispute is not one that may be submitted to arbitration under Guatemalan law ; or

ii) that recognition or enforcement of the award would be contrary to the public policy of the State of Guatemala.

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

Article 48 of the Arbitration Law governs the procedure for the recognition and enforcement of arbitral awards, to which the following rules apply:

1. Upon the expiration of the period of one (1) month, specified in Article 43(3), if the terms of the award have not been complied with, an application to a competent court for compulsory enforcement may be made under Article 46(1). Said application for enforcement shall be supported by the documents listed in Article 46(2).

2. Where relevant, a certified copy of the ruling of the court made upon determination of any application for judicial review, should also be attached.

3. Upon receipt of an application for enforcement, the court shall grant three-day hearing to the party against which enforcement is sought. The party may oppose the application only on the grounds of a pending appeal. This must be established by documentary evidence forming part of a written objection. In these circumstances, the court shall order forthwith the suspension of enforcement pending the outcome of the application for judicial review. If the appeal is successful, the court, upon receipt of a certified copy of the decision, shall issue an order denying enforcement.

4. Where the circumstances described in the preceding item do not arise, and where the considerations listed in Article 47 do not apply, the court shall issue an order for enforcement instructing that the obligor be notified and, where applicable, that the obligor’s property be attached.

5. There shall be no appeal from, or review of, any determination, whether procedural or substantive, arising from proceedings for recognition or enforcement of an arbitral award.

6. In respect of matters concerning the recognition and enforcement of awards for which no specific provision has been made, these provisions shall be supplemented by the provisions applicable to the enforcement of domestic judgments, provided that the application of domestic law does not interfere with the timely and effective enforcement of an arbitral award.

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

Centro de Conciliacion- CENAC- (Guatemala Chamber of Commerce Center for Arbitration and Conciliation).

Comisión de Resolución de Conflictos de la Cámara de Industria de Guatemala -CRECIG- (Dispute Settlement Commission of the Guatemalan Chamber of Industry)

3. Alternative Forms of Dispute Resolution (ADR)

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

Chapter IX of Law No. 67 - 95 of the Congress of the Republic, the Arbitration Law, provides for alternative methods for resolving disputes between private parties, such as 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?

Decree No. 67 - 95 of the Congress of the Republic, the Arbitration Law, does not mandate but encourages ADR as an option for parties, on the basis that conciliation is a non-judicial mechanism or alternative for the dispute resolution through which the parties, or those between whom a commercial or other type of dispute occurs, may attempt to resolve their differences with the active assistance of an objective and impartial third party. The outcome of the conciliation process should therefore be reduced to writing whether in the form of a public record, a private document authenticated by a notary, or a notary’s certificate. In any judicial or arbitral proceedings, that document shall constitute conclusive evidence.

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

The outcome of the conciliation process must be reduced to writing, whether in the form of a public record, a private document, a document authenticated by a Notary, or a Notary’s deed. In any arbitral or judicial proceedings, such document shall constitute conclusive evidence.

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

Center for Arbitration and Conciliation of the Chamber of Commerce of Guatemala -CENAC-

Commission for Dispute Settlement of the Chamber of Industry of Guatemala - CRECIG-

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

The parties may agree upon the procedure to be observed by the arbitral tribunal in its deliberations. In the absence of such agreement, and provided it ensures equitable treatment for all parties, the tribunal may conduct proceedings in such manner as it considers appropriate. This includes the power to make determinations as to the admissibility, relevance, and materiality of 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?


5. Bibliography

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

RIVERA NEUTZE, Antonio Guillermo. El Proceso Práctico Arbitral (The Practical Arbitration Process). Imprenta y Fotograbado Llerena, S.A. Guatemala City, 1996

CALDERON RODRIGUEZ, Ana Karina, La Solución de Conflictos entre Particulares por medio de Arbitraje Comercial (Dispute Settlement between Individuals through Commercial Arbitration). Universidad Rafael Landivar. October 1995 (Graduate thesis)

Revista de la Asociacion de Gerentes de Guatemala (Manager’s Association of Guatemala Magazine), Revista Gerencia. Number 283. April 1994.

CASTELLANOS HOWELL, Alvaro Rodrigo. El Arbitraje Como medio Alternativo para la Solucion de Conflictos entre Particulares, situación Actual y sus perspectivas (Arbitration as an Alternative Means of Dispute Settlement between Individuals: Current Situation and Perspectives). Presentation prepared for the XV Legal Conference of Guatemala.

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